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Spring Broke 2007!


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2007 Apr 24, 6:40pm   20,604 views  190 comments

by HARM   ➕follow (0)   💰tip   ignore  

Typical specuvestor sobering up after the party

So far, looks like SP wins the "best successor to Robert Cote's 'Silent Spring, 2006' award! (Well, technnically he has to share some of the credit with Nathaniel Welch, but his applying the term to the housing market is original.)

Aside from that story about sales taking their worst plunge in 18 years, does anyone have any local observations from their own neighborhoods? How are things holding up in your neck of the woods? Has the fear and panic started to sink in a little, or are most sellers still drinking The Amerikan Dreamâ„¢-flavored Kool-Aid?

HARM

#housing

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46   sbg   2007 Apr 25, 5:24am  

Sales here in our West San Jose neighborhood seem brisk. Two homes were listed and sold in under a week (one in the low $800k range, the other $900k). Very depressing......

CG

47   DinOR   2007 Apr 25, 5:26am  

"How to make 100k extra in 1 year? Wait and buy in 08!"

Hello Kitty,

I'm making money just blogging. One thing is for sure. Sellers keep trying to execute the same sort of "exit/entry" strategy that j_u_s_t i_s_n_'_t w_o_r_k_i_n_g!

It isn't. That's why we're seeing all these cheap ploys on the sell side. We love to kid about "equity locusts" but in truth most of these punks are scared sh!tless to move out of the neighborhood (let alone out of state). They know prices have plummeted and they are frantically trying to get to the BUY SIDE! Tell Prof. Numbnuts to pound sand, will ya?

48   HARM   2007 Apr 25, 5:27am  

I just made a very "toned down" post on that "SDCIA Jeff" thread. My goal was to educate, not flame, gloat or ridicule. Perhaps, some of what I said will sink in for other SDCIA members (hey, it's a long shot I know, but there's always hope ;-) ):

http://www.websitetoolbox.com/tool/post/sdcia/vpost?id=1854186&trail=60

49   DinOR   2007 Apr 25, 5:40am  

HARM,

If that's "toned down" I don't want to see "fired up"!

Seriously, the only thing the guy can say to that is:

Yes Dad. :(

I suggest everyone high tail it over before they take it down in 3, 2, ...

50   skibum   2007 Apr 25, 5:55am  

He leaves a really really nasty letter at my house (where im renting) complaining about how this is thier ‘prime window’ to sell and how trashy I make the neighborhood look by working on my truck and/or motorcycle where they can see out their kitchen window! How dare I own a truck and motorcycle.

El Jefe has some good ideas. I've got a few more to add:

If you have a tricked-out car stereo, start blasting it during the guy's open houses. If you don't own one, borrow a friend's pit bull, get a lawn chair, some 40-ouncers in paper bags, break out your best wife-beater tshirt, and sit in the front lawn during said open houses and stare down every BMW-driving yuppie who pulls up to visit whilst grabbing onto your crotch.

51   DinOR   2007 Apr 25, 5:58am  

SFBB,

Similar situation w/HK's greedy (probably b**mer) neighbor. Just itchin' to get to the BUY SIDE! Sellers that are real touchy now will turn into savages (if) they can get to the BUY SIDE! Now that they know how the game is played. Pffftt.

52   HARM   2007 Apr 25, 6:01am  

@DinOR,

:lol: Well... at least I was trying to be toned down!

But, honestly I didn't gloat or insult. Just tried to stick to the facts as I saw them. If that came off as harsh, then maybe, just possibly, it's because reality's a total b*tch. :twisted:

53   skibum   2007 Apr 25, 6:03am  

HARM and DinOR,

I thought HARM's post over at the SDCIA site was quite genteel. If anything, it useful, helpful advice for a bunch of folks who seem to have lost their way...

54   DinOR   2007 Apr 25, 6:31am  

Well HARM certainly didn't mince words, now did he!

I'll agree, it was the same level of sobriety one "should" expect when wrapping a sports car around a telephone pole, crawling from the wreckage and asking where the next BAR is!

Uh... dude, don't you think you need a hospital right now, not another bar?

You have to admire the restraint!

55   HARM   2007 Apr 25, 6:42am  

I’ll agree, it was the same level of sobriety one “should” expect when wrapping a sports car around a telephone pole, crawling from the wreckage and asking where the next BAR is!

Dude, when I was on jury duty, this describes almost the *exact* scenario we were deliberating over. Except in my case, the defendant had also plowed into a pedestrian and killed him.

56   Peter P   2007 Apr 25, 6:46am  

Except in my case, the defendant had also plowed into a pedestrian and killed him.

I hope the defendant was found guilty of murder.

57   HARM   2007 Apr 25, 6:48am  

He was.

58   e   2007 Apr 25, 6:53am  

If you have a tricked-out car stereo, start blasting it during the guy’s open houses. If you don’t own one, borrow a friend’s pit bull, get a lawn chair, some 40-ouncers in paper bags, break out your best wife-beater tshirt, and sit in the front lawn during said open houses and stare down every BMW-driving yuppie who pulls up to visit whilst grabbing onto your crotch.

Karma warns that when one day you need to sell because some bad fate befalls you, that something like this may happen.

Just sayin...

59   e   2007 Apr 25, 6:54am  

Sales here in our West San Jose neighborhood seem brisk. Two homes were listed and sold in under a week (one in the low $800k range, the other $900k). Very depressing……

A peer of a friend was looking to buy in the Fortress area - 1.25m range. Overbid on 5 offers, and lost all of them.

Frickin Fortress.

60   HARM   2007 Apr 25, 7:00am  

FyI: No one has yet commented on my SDCIA post, but they haven't taken it down either. So far, they just seem to be ignoring it.

61   e   2007 Apr 25, 7:00am  

I also used a discounter (ziprealty) and its not worth it.

What's wrong with using ZipRealty? I was thinking about it. Did something bad happen?

62   DinOR   2007 Apr 25, 7:03am  

HARM,

That must have been hard to sit through. All the deliberation, the depositions, the cross examinations. Uh can't we just hang the bastard NOW?

I have heard paramedic stories (as I'm sure has skibum) where people have been in terrible accidents and don't quite realize they're missing limbs yet? Like the guy that's looking for his prized Rolex (TM) and isn't aware the wrist it was on is no longer attached to his body.

63   DinOR   2007 Apr 25, 7:06am  

"they just seem to be ignoring it"

Well, ignore it at your own peril. Perhaps he is still looking for his Rolex (TM)? :(

64   Randy H   2007 Apr 25, 7:07am  

If you have a tricked-out car stereo, start blasting it during the guy’s open houses. If you don’t own one, borrow a friend’s pit bull, get a lawn chair, some 40-ouncers in paper bags, break out your best wife-beater tshirt, and sit in the front lawn during said open houses and stare down every BMW-driving yuppie who pulls up to visit whilst grabbing onto your crotch.
--
Karma warns that when one day you need to sell because some bad fate befalls you, that something like this may happen.

Just sayin…

Possibly. My experience has been that most people who say they'd do this never actually would. And that those who actually would, aren't the sort which are likely to have the same done to them. In other words, you quite likely would end up getting your ass kicked if you tried to bestow "karmic justice" upon Mr. Wifebeatershirt yourself.

My lawyer once gave me very good advice when I was dealing with an ex employee who kept causing trouble a while back. He said, "Don't agitate crazy people. You have a lot more to lose than they do, and they usually don't even know if they have anything to lose at all."

65   HARM   2007 Apr 25, 7:11am  

@DinOR,

It wasn't too bad (deliberation only took a few hours), but I was kind of amazed that *anyone* could actually consider letting this clown off on a lesser charge. At least nobody considered letting him go scott-free, though. Our choices basically were: manslaughter or 2nd degree murder.

66   skibum   2007 Apr 25, 7:12am  

Karma warns that when one day you need to sell because some bad fate befalls you, that something like this may happen.

This neighbor toolbag started this whole process with an unwarranted nasty letter. This is HIS karmic retribution.

Speaking of karmic warnings, is there anything karmic-related that says not to be snotty and holier-than-thou?

67   Peter P   2007 Apr 25, 7:16am  

Speaking of karmic warnings, is there anything karmic-related that says not to be snotty and holier-than-thou?

Not necessarily.

68   HARM   2007 Apr 25, 7:20am  

Oh, the SDCIA site allows registered users to search for their previous posts. This is one I posted (responding to our friend, Jeff) BACK IN JULY, 2006:

7/26/06 at 12:49 PM
Forum: Discussion Board
Subject: SLC--Boy, do I need help with L/O
Posted By: HARM

[I AM QUOTING JEFF HERE] "Seven years ago, in July of 1999, the DOW was at 11,234.22. Today it is at 11,145.98...

Seven long years with NO gain! Zero!" [END QUOTE]

Yes, but hindsight is always 20-20. How many people (yourself included) would have predicted back THEN that the DOW would be flat-to-negative 7 years later?

You would have been ridiculed for even suggesting something as "crazy" as the idea that one of the greatest bull markets in history might soon be coming to an end. You would have been laughed at and insulted for even suggesting that a stock market bubble existed. You might say, "I'm no Warren Buffett, but even I can see that 100+ PE ratios combined with negative cash flow and highly questionable "business models" is just not sustainable". Then your bullish friends and co-workers might tell you, "It's a New Paradigm, tech stocks will never go down, it's a growth industry, unlimited upside, can't lose, it's no-brainer", etc., etc...

In fact, you might have been ridiculed and dismissed the way many people here ridicule and dismiss bloggers from all those nasty "Gloom and Doom" housing bubble blogs, right?

Jeff,

You've had an excellent run in one of the greatest bull markets in RE history. For the sake of your family, you may want to consider diversifying out of housing and into some other assets. No trend lasts forever.

69   DinOR   2007 Apr 25, 7:45am  

"This toolbag neighbor started this"

He certainly did. Besides his beef (if he has one) is w/ HK's LL, not HK personally.

Isn't this so typical of all the sellers attempting to cash out? The whole freaking neighborhood is supposed to be on their best behavior until they get their check. Then ya'll can start killing each other for all they care (as they're rolling in Big Fat Stacks) heading down the road!

70   DinOR   2007 Apr 25, 7:47am  

Muggy,

Easy fix. The Sacramento Bee has decided it would simply be easier for them to list the homes that are *not* for sale!

71   Huntington Moneyworth III, Esq   2007 Apr 25, 7:47am  

HelloKitty and DinOR -

Thanks for the welcome. Just to clarify my earlier comment, I am currently renting, and when I buy it will be as a First Timer. So I am truely on the buy side. And my encounters two years ago with lying/thieving real estate agents gave me a bit of a grudge.

I have been told so many things that I have terrible difficulty knowing the truth about real estate. I have been told that approaching a listing agent and asking for a purchase discount is illegal. I've been told that using online services like ZipRealty and Buysiderealty are also illegal. I've been told that I need to sign up exclusively with a mortgage broker before I can even make an offer. I've been told all of these things in the past month! (I'll save my stories from two years ago for another day.)

I don't work in the Real Estate industry, so I have difficulty knowing fact vs. fiction. (Nor do I work in law).

Anyways, I'm really enjoying these comments. I can't believe Professor Jerkwad. Amazing.

72   Paul189   2007 Apr 25, 7:51am  

Condo auction in Chicago yesterday -

17 units offered & only 13 sold. I did not attend the auction because of the high assesments, taxes and disrepair of the building. The auction house would not disclose prices of those that sold.

73   e   2007 Apr 25, 7:59am  

Isn’t this so typical of all the sellers attempting to cash out? The whole freaking neighborhood is supposed to be on their best behavior until they get their check. Then ya’ll can start killing each other for all they care (as they’re rolling in Big Fat Stacks) heading down the road!

Hm, I dunno about that. Maybe its my east coastness again. Back where I'm from, there would be these absolutely insane wars between neighbors about curbside parking, lawn care, etc. Like, they'd video tape each other constantly, call the police constantly, etc. Regardless of whether or not properties were for sale/not.

74   e   2007 Apr 25, 8:01am  

Wow, there's a lot of results on this topic:

http://www.google.com/search?q=videotaping+neighbors+parking

75   sfbubblebuyer   2007 Apr 25, 8:24am  

J. Pake, get pre-approved through a credit union. They usually hold their mortgages instead of reselling them, and have more 'conservative' lending standards, consequently, they have fewer retard loans out there, so they actually have money to loan. Also, they don't make you sign 'exclusivity' crap, etc.

As for the realtors... ugh... while they don't all blow, a good number of them do. My wife and I went through a lot of open houses before we ran into one we weren't repulsed by. Are really, I was repulsed by some of them and their oily smarm. I actively wanted to leave the house because they were there.

76   Randy H   2007 Apr 25, 8:25am  

Now what im trying to figure out is it legal? Are they aloud to sit there at night and record my husband coming home from work and my daughter's boyfriend leaving the house and every move we make.

Say it aloud with me: "people are allowed to do things that annoy you, learn to live with it".

77   Randy H   2007 Apr 25, 8:42am  

J. Pake

If you're in CA then a lot of that is false information, probably given by people with a vested interest.

You don't have to use a realtor at all. You can ask for anything you want in the purchase deal. Of course you can ask for a discount if you're not going in with an agent. What's the difference between asking for a discount equal to say 1.5% (because the listing agent will collect both sides) versus offering 1.5% less in purchase price, and telling the agent you're discounting because they're getting both commissions?

By the way, the agent will lean on the seller to take the deal, even though you've offered less, because (s)he will get more, even at a lower price, since they get more %.

It's *not* illegal to use a discount broker. It's probably illegal for them to tell you it's illegal, if anything. But lots of selling agents will blacklist/boycott you if you do. That *is* illegal, by the way; and against their "code of ethics"; and something they theoretically can lose their license over.

Friggin realtors.

Whether you use a realtor to buy or not, I VERY STRONGLY RECOMMEND also engaging a real estate attorney on your side. At least the first time you buy, you should have a lawyer represent you, so you learn how it works.

Warning, the realtor will squeal like a stuck pig when you inform her you've got an attorney. She'll cry about how you're wasting money. About how all the forms are standard. About how the seller might get spooked.

I suggest you scan through the archives here for horror stories about how people have been royally screwed, and a lawyer would have probably caught the problem before hand. Regardless, I take the attitude: if there's nothing hiding in these hundreds of pages of fine print, then you have nothing to fear if I pay a professional actually *read* them for me. It's my money, I'll spend it on whatever professionals make me feel better.

By the same token, when buying a house on a slope in a slide-prone area I always bring in my own, independent engineer to assess the soil stability and structural risks. We actually had a seller balk and refuse to allow access unless we agreed to keep the findings "secret" -- ahhh, something else illegal under CA disclosure rules as I understand it. Anyway, that told me what I needed to know without even paying the engineer.

Buying a home is a big deal. Not something you do like you're bidding on artwork at your kids' silent auction school fund raiser, regardless of what most realtors will push you into. Another hint: never bid in multiple bid situations. Just politely excuse yourself and move on. See http://en.wikipedia.org/wiki/Winner's_curse

78   e   2007 Apr 25, 8:46am  

As for the realtors… ugh… while they don’t all blow, a good number of them do. My wife and I went through a lot of open houses before we ran into one we weren’t repulsed by. Are really, I was repulsed by some of them and their oily smarm. I actively wanted to leave the house because they were there.

Seriously - I went to a few lately and it's just so disgusting. It's WORSE than walking into a car dealership - in that if they're not trying to sell you the house, they're trying to sell you on being the buyer's agent.

It's still not clear to me, however, what the best way to buy a house is. I thought ZipRealty was a good approach, but it sounds like that might not be the case. It sounds like working directly with the listing agent might be a good approach, but that feels gross too.

80   Peter P   2007 Apr 25, 8:49am  

RE: winner's curse

Yep. Emotion and incomplete information is a loosing combination.

81   Randy H   2007 Apr 25, 8:50am  

eburbed

I'm still firmly of the opinion that you don't need any agent to represent you whatsoever when BUYING. An attorney will cost a couple thousand $, and you can do everything with him/her. And a good lawyer will take a little time to teach you the process, so you only pay fees when you actually have her review your documents.

Tell the listing agent to do what they will, assuming they keep all the commission contracted with the seller.

Don't sign any kind of representation contract with the lister either, unless it's subordinate to the deal, and terminates if the deal terminates.

82   Peter P   2007 Apr 25, 8:50am  

Another hint: never bid in multiple bid situations.

I agree. Be greedy only when others are fearful.

83   e   2007 Apr 25, 8:57am  

Whether you use a realtor to buy or not, I VERY STRONGLY RECOMMEND also engaging a real estate attorney on your side. At least the first time you buy, you should have a lawyer represent you, so you learn how it works.

At what point do you bring the real estate attorney into the deal? Is it at the very beginning when you pre-qual for a mortgage? Is at the end for closing?

In the east coast, using a real estate attorney is practically standard. I was really surprised to find that its not here.

Of course, there's the question on where to find a good attorney. On the east coast, there were a lot of not great ones. :(

84   Peter P   2007 Apr 25, 8:57am  

Of course, there’s the question on where to find a good attorney.

What is astrid?

85   Peter P   2007 Apr 25, 8:57am  

s/What/Where

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