patrick.net

OT, but IIRC some Google employees frequent this site.

So I'll just point out here that Blogger, for whatever reason, just doesn't work from the PC I use (a Public Access machine in a club, with a LOT of functionality switched off, but it shouldn't affect simple text).

I just tried to create an account, so I could post some replies on another blog. All went fine, I thought. Create account; set up dummy blog (which I was thinking I might actually try using later to post about the local RE market); sign out; cross to the thread where I want to post and type in a reply.

"Username and password do not match". WTF? Go back to the dummy blog, yes it's there. Try to sign in; same error message.

When this happened with my old account last year, I thought I had simply misremembered my password and wrote it off to experience.

Not this time; we are literally talking 60 seconds between typing a password in (twice) when creating the account, and having that password rejected.

Where the PNW is concerned I was a little surprised that we fared so well in the CME Housing Futures? WE'RE a "bright spot" for residential RE?

Wow. What's amazing is that no matter where I go, no matter who I talk to virtually NO ONE is talking about RE! The only thing I *haven't seen in our market (Portland metro) has been "cash back" deals. Other than that from a marketing perspective it's all fair game. One builder in Happy Valley was offering 1 year no payments on "high end" homes.

We've continued to see an influx of equity locusts although distant markets like Ashland, Medford and Bend are seeing price decreses already. The wild card in all of this is if NAR-style data can be challenged in the rest of the nation (you can basically toss it out the window here). OR's are the original DIY crowd and you've got to imagine our FSBO/CL listings dwarf just about every other mkt. on a percentage basis.

Bidding wars are gone and flipping is petering out. It's weird b/c over the last 5 years if we're not talking about RE, we're not talking. Right now, nobody is talking.

OMG you guys, I love this role reversal. This isn't a realtor quote but the last sentence to me marks a turning point.

"As a potential 'victim' in the fall of 2005 I was amazed that the mortgage brokers and banks were trying to sell me insane loans in hope of making a sale," writes Ed Dergosits of Mill Valley. "Now they want relief funds. I say let the banks and the homeowners (like they really own the home) take the loss. They took the gamble. Why should taxpayers bail them out? I am still a second-class 'renter' but I do not have to ask for public assistance to pay for my rent."

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/04/24/BUGC8PE0FC1.DTL&ref=patrick.net Article reference

There is a small tract going in across the street here. They finished about 5 houses, and a few more are in process. Then a bunch have not even been started. Days go by when I don't see any activity. I think they are running out of money because the progress is painfully slow. With some experience in this, I would guess that they are stretching their construction loan to cover normal daily costs, but doing the bare minimum to demonstrate to their lenders that someone is swinging a hammer. I'm telling you I think I could finish some of those houses by myself faster than the couple of guys that come out every few days and walk around the properties with their little hard hats.

BTW, the sign in front of that tract still says, coming in 2006.....new luxury homes!

RoweMoore,

If your true intent was to BUY then I suppose that is something you should have done 18 months ago?

The fact that you're aware such a "silly blog" even exists tends to indicate that you question prices as well.

New homes sales are out... the east bounced back a little from their horrendous Feb weather, but it's still weak weak weak, and below forecasts.

Foreclosures are up again...

Talk about a sticky situation! I'm revising my 'projected buy time' from 2008 to 2009. Shh... don't tell my wife!

Malcom,

Sounds like LV last year. My retired friend went shooting south of town nearly everyday and as he passed south on I-15 there were HUGE condo complexes that never seemed to get beyond the framing stage. There was like 2 guys on the entire job site. (Must be very productive workers?)

I actually agree with RoweMoore, there is a huge demand to buy, unquestionably. I believe if you could still fabricate a scheme where you could buy a million dollar home for 2500/mo you would have a line of people. I also believe that the drop will not be a straight line because of the price skimming phenomenon where different people have a different value in mind and will call the bottom differently.

HOWEVER, with that said, it all becomes irrelevant because the final straw is the tightening of credit which returns everyone back to 2002 whether they like it or not.

Where's LV? Is that towards Riverside?

Or is it OR? I keep forgetting you are up there.

Malcom,

Las Vegas.

Construction lenders are going to have to really watch out for these guys. Next thing you know your borrower runs out of money because his management salary for running the construction site drains the budget. As soon as someone realizes that they won't make a profit selling the houses they do this.

We've been reading about some Vegas whoppers. Did Trump's ex back out of that project she was going to do?

Malcom,

Absolutely true! Sure, they'd rather have outrageous fortunes but "until the market gets turned around" this will do. It's the ugly side of construction lending. Builders live off of borrowed money so they're comfortable with this arrangement.

Trump's ex,

Michael Jordan,

George Clooney

to name a few. It sure was good to see Steve "The Shill" Bottfeld finally admit that just "maybe" something could be wrong in Vegas!

They need hotel rooms, not condos.

On some of the deals I invested in, the broker would maintain 'fund control' and literally would write the checks to the subs as the project proceeded.

That is a nightmare scenario for a lender because not only did you lend on a project that is not worth as much as you thought, to run out of money and not have it finished, and to then end up with the property is a disaster.

My scavenger instinct is really watching this project closely as I believe there will be an opportunity there. The thing that sucks is it is a typical bubble construction where a strip of homes literally have their front door 10 feet from a busy street with the parking in back. There are of course no amenities, but the houses are cute. They look like doll houses, almost like the SF painted ladies.

"My scavenger instinct"

This is what's left at the end of the cycle. Timing your entry point to where everyone else has exhausted their resources and you get to pose with the slain dragon! (Is this my good side?) :)

God that guy is a jerk. So typical. He could sell the good ones to cover the bad ones, but his sleezy atitude is that the good ones are his lifeline, and the bad ones should be someone else's problems. Sure, he should get a bail out. It is actually fun to watch people like him squirm.

Ha DinOR, that is funny. Yup, I'll get Patrick to post a picture of me smuggly standing next to the half finished project with the auctioned deed in my hand. ha ha ha

I do think that I would have an interest bidding in its current state and finishing it. Obviously I would calculate the homes in the 300K selling range not the 600K currently advertised.

Bail Out,

What kind of investment property makes sense when it loses $1,000/mo when it IS rented? We just had a thread about wealth disparity and starving Americans. I can't understand how this guy and people like him don't starve to death. The safety net should have holes just big enough for him to fall through.

The safety net should have holes just big enough for him to fall through.

LOL :lol:

Malcolm,

I bet his 'good' properties are losing money while they rent, too, just not as much. And his little eyes go 'kaching kaching' when he reads the zillow estimates of the appreciating properties.

Appreciation investors are just like dot-com investors. When the bubble popped, I lost some dot com money, but the majority of my investment was still in companies with P/E ratios closer to 30 than to 300. And I sold a half of my dot coms whenever they doubled, so I only really lost on the last few I bought that never hit the double mark. Live and learn.

If any of these 'investors' would do a P/E before buying the houses, they'd know how risky a property was. A slightly negative income property in a place growing jobs in a strong economy might not be a bad long term investment, but you need to figure how you'll carry it. HELOCing your primary residence for carrying costs means you're a damn idiot.

In my hood (San Ramon) the lawns are littered with real estate signs. It's dizzying the number of brightly colored "I'm gorgeous inside" signs. I lost count driving at 25 mph....I need a passenger to count 'em all. This last weekend is when the frenzy began. And the sign twirlers are out in force (still).

We can all go with anecdotes about RE signs, listings on MLS for your local neighborhood and what not, which are fine. However, the real crux is in the true numbers, and looking at the listings numbers at a site like housingtracker.net, the inventory in the SF and San Jose areas continue to go up every week, and they are significantly higher than they were at this time last year. Asking prices remain stable, declining slightly, but are significantly lower than this time last year.

Anecdotally speaking, I will say though, the Peninsula seems stable. There's no dearth of available properties, but on the flip side some places do seem to linger, while some seem to go quickly.

Check i tout - one of my favorite sites now shows data for the Bay Area:

http://www.propertyshark.com/mason/ca_santa_clara/index.html

The amount of detail they reveal is awesome.

"with the auctioned deed in my hand"

Back a few years some golf course developers tired to build south of Oregon City (county seat and end of the historic Oregon Trail). First two guys went belly up. Used to drive by and the rubber tires were literally rotting off the earthmovers. 3rd guy (actually "the city") picked up from there and was able to make it a success! I think about it every time I drive by.

Check it out, the Chronicle has an article just out about the statewide home sales numbers:

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/04/25/BUGAOPELMV35.DTL

The article is a lot less RE rah-rah than I would have predicted. They even have a nice quote from Thornberg (stating what we here have known all along):

Christopher Thornberg, a principal with Beacon Economics in San Francisco, put it bluntly.

"The median price is a bunch of hogwash," he said. "You can have prices looking like they're up when they're down, because it is incredibly subject to where slowdowns are occurring. If there is more slowdown in a (lower-priced market), then you could show the median price going up just because there is a shift in the type of product being sold."

skibum,

Sorry about the anecdotes. (I thought this was a "Spring Time, Feel Good" thread).

Sorry about the anecdotes. (I thought this was a “Spring Time, Feel Good” thread).

Hey, I'm not dissing them. They have their place, and I'm not trying to be a wet towel on the "Good Spring Times" vibe. Hey, let's break out the PBR, sit back, and watch the FBs go at it!

The safety net should have holes just big enough for him to fall through.

Malcolm,

Keep posting gems like this one, and you might just make a "convert" out of me. ;-)

Actually, I wouldn't want "SDCIA Jeff" to starve to death, but I DO think he should be prohibited from: (a) breeding, (b) ever buying another "investment" property again.

Rowemoore,

Funny, a couple little birdies who keep sharing their agency's sales sheets with me -- on in SF one in Mill Valley -- clearly show that more and more homes are going *UNDER* asking. In Feb., they weren't going under by much; just token amounts. But last month had quite a few going for more than $100K under.

Under is the opposite of _over_.

Just wanted to clear that up for you.

Interestingly, both of my informants have told me that their management have indicated they are to reassure everyone that "the market is red hot again". And the SF guys apparently told everyone there they'd be shot on sight if they so much as peeped a word about under-asking deals. They were told to blatantly lie, and talk about multiple bids and over-asking deals.

Oh yea, they were told to hit the blogs and local papers too.

"let's break out the PBR"

I got NO problem w/ that! Oh other than it's only Wednesday? :(

Kieth over at Housing Panic had Thornberg's presentation on a video link and all I could think about was "peak to trough" decimation. Just calculating the loss of "equity" in this country from say Oct. 2005 to Dec. 2009 is going to be mind bending!

Anyone notice the complete 180 degree change in SDCIA Jeff's attitude about his "investments" from a few short months ago? Back then, he was King of the World, top senior SDCIA member, confidently handing out sage advice to the "younglings". He would politely tolerate comments from us JBRs at arm's length, but it was obvious by his tone always that he was only feeling pity and disdain --for us.

Oh what a difference a few months (and hungry "alligators") makes. Here are the highlights:

"I own three terrible houses in Cape Coral..."
"a series of misjudgments and being taken advantage of (and lied to)..."
"I am losing ~$1000 on month on each of these houses... "
"I am just sick about them and often cannot sleep..."
"Anyway, what should I do?"
"I am too embarrassed..."
"I think about "walking away," but then I think about the credit score hit..."
"I am dizzy thinking of it."
"Please help me! What should I do!?"

HARM,

What's worse (if you read their posts at all) is that they have totally abandoned their "charter". When hot topics gravitate toward "making money in RE through "shorting" the home builders and selected lenders" you have got to know they are just LOSING IT over there!

Sellers are dropping their asking prices in northern Los Angeles, and they have been for a year now. For sale signs are flourishing in almost every neighborhood. Foreclosures are up to the same level as they were last fall.

The local MLS provides different results depending upon how you search. If you have regular Internet access, fewer homes show up. If you have Realtor MLS access, you see far more properties.

Zillow over values crap properties and under values (relatively) higher end listings.

The very same Realtors who wouldn't spit on me if I was on fire two years ago treat me like a King today. Realtors do become testy after I mention the collapsing boom, "I've been doing this for 28 years and prices are NOT falling ..."

Mortgage brokers have become extremely aggressive (I have good credit and a decent savings).

Open houses got little traffic during the previous four months, but since the passing of Easter people have been out in droves. Agents now have Mortgage Brokers at the open houses to greet visitors.

Sellers are rejecting my low ball offers (10-15% below list) outright. Some selling agents are blackballing my use of BuysideRealty. In these instances those homes have not sold since Jan and sit on the market. More listings appear in various places every day.

J. Pake,

You seem to represent the ideal buyer to these realtors b/c you are unencumbered (screwed) by a maxed out FICO and over leveraged property they know they can't sell for what is owed!

Welcome and great feedback!

He leaves a really really nasty letter at my house

If it is not nasty enough to be threatening, ignore it.

If it is threatening, call the police. There are a few ways a professor can lose his tenure.

Okay, that axehole over on the SD investment board pisses me off.

He has 3 properties he's underwater on and are losing money.

He has some SLC properties that are in the green.

He's trying to figure out how to get rid of the aligators without touching his SLC properties. He's talking foreclosure and short sales. WTF? He should sell his goddamn lousy properties AND his good properties, and use anything he makes from SLC to cover his losses in FL. It's so damn obvious a third grader could tell him what to do. Instead, he wants the banks to eat his losses while he keeps his gains.

If he takes any other route than selling and absorbing the cost himself, I hope the banks take his FL properties, his SLC properties, his primary residence, and garnish his wages to make up every last penny, including foreclosure/court costs.