patrick.net

Nomograph says

It’s very difficult to get a loan without meeting these requirements

amen .... it is proctology-ish

thomas.wong1986 says

If Joe six pack decides to move out there will be little left for the ‘elite’ landlords as rental revenues decline.

Not if Jose Seis pack decides to move in.

You know, people doubling, tripling, or quad'ing up to share on the rent in what a different poster derisively referred to as a "starter" home, working 2 or 3 low wage jobs, it is still a very high standard of living conditions compared to much of the world. As long as there's money and elites in The Fortress for service employees, there's gonna be tennants.

rewrew7 says

How’s this for a crazy view point: it’s a good time for investors to buy but not a great time for a would be owner to buy.

This makes sense to me. The article made the point that it is a good time to buy some houses in SD now if you are going borrow money and hold for a long time. If you need to sell in 5 yrs, it might not be a good time to buy. This is pretty clear from the high price but low payments (relative to historic levels) due to low interest rates.

The only bad thing for the long hold leveraged buyers would be deflation in rent coupled with price declines.

The first plot has monthly mortgage payments as a fraction of annual per capita income. The typical value is around 0.06. Multiply this by 12 months, and the mortgage payments to income ratio per year is 72%. The high in 1981 was 0.11, which is 132% of per capita income. If there are two wage-earners per house @ 25%tax rate, that means that the mortgage was 88% of the total take home pay. I can't imagine there was much buying and selling going on at that time. The current low value of 0.035 is 42% of per capita income. That's still pretty high.

There used to be a HUD rule against refinancing a property that has been re-sold within the past 90 days -- it was an effort to stop illegal flipping. It also hurt legal flipping. In 2010 HUD waived the rule and as a result the FHA insured more than 21,000 mortgages worth over $3.6 billion on properties resold within 90 days of acquisition -- in other words, deals that would have been banned before the waiver.

The waiver continued until December 31, 2011.

For details see:

http://www.ourbroker.com/mortgages/hud-dumps-fha-90-day-anti-flipping-rule/

and

http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2011/HUDNo.11-007

As for the county’s top sale in Coronado, which was on the market for 158 days, the original asking price was $14.8 million before it was sold for $10.5 million.

Yes, when million dollar homes take massive haircuts, they start selling :shocker:

I hear when Levi's has a 30% off sale they sell more of those too. Of course, there's nothing to say they won't have a 40% off sale anytime soon either.

Million dollar homes is not what makes the market, it's the mid-high. There are vastly more of them which cater to a vastly higher amount of people. Will the mid-high where I live keep crashing? Yeah, you bet.

right along with:

Over 10% of the houses in US are empty:
http://patrick.net/?p=618167

I went to my account today to sell some SLV, and I can't stop looking at the chart.

WTF is going on today?

Okay, I am ready to buy a home for 1 million that was listed at 2 million. Just to make Nomo happy. :)

The low-end and middle markets have begun to recover? Prices are down, not up, and will continue to fall lower for some time. Yes, real estate prices are going to keep crashing.

Nomo - better buy yourself another property.

Nomo, it is time for you to invest in multi million $ properties, screw the low end. LOL.

bubblesitter says

Talk about optimism that Nomo talked about on other thread.

Optimism to counter what most realtors or those in RE business perceive as
"lost confidence" in the market place by buyers ...
Nomo is probably listening to some motivational tapes or something on that
subject matter...

tatupu70 says

reality into the doom and gloom/world is ending crowd.

Oh is that what you call it... seriously did you ever consider missionary work
in some third world nation ? I hear the soup lines downtown are taking volunteers!

Are you really trying to make a difference here ?

thomas.wong1986 says

tatupu70 says

reality into the doom and gloom/world is ending crowd.

Oh is that what you call it… seriously did you ever consider missionary work
in some third world nation ? I hear the soup lines downtown are taking volunteers!
Are you really trying to make a difference here ?

Are you?

Mr.Fantastic says

Never been a better time!

Miami babe! Sunny weather nice beaches... property discounted by 50% or more and yet couple clowns are tied down with property in the Bay Area... Shame that just cant jump on a plane and head to FL pick up half a dozen properties on the cheap.

tatupu70 says

Are you?

The people here know what they are doing!

Is this reality?

http://www.redfin.com/CA/San-Carlos/101-Club-Dr-94070/home/2052341

Previous sale, 4/9/1981 $171,000. Four way stop intersection, the front driveway could be mistaken for a shortcut. Looks a lot like a modular (trailer) home. From what I can tell, it's been sitting empty since early 2007.

Meelion dollas. $750 a square foot.

Dream on.

pkowen says

Meelion dollas. $750 a square foot.

$1,185,000 at 6% = $71K in commission.... They dont give a rats ass!

thomas.wong1986 says

tatupu70 says

reality into the doom and gloom/world is ending crowd.

Oh is that what you call it… seriously did you ever consider missionary work

in some third world nation ? I hear the soup lines downtown are taking volunteers!
Are you really trying to make a difference here ?

Speaking of soup lines I'm a volunteer. They need a lot of help; there are many people in need.

bad karma for the elite to “in your face” to the rest of us who are left behind
Sybrib, Perhaps I'm mistaking you for another poster, but is there any reason you could not employ the same strategy as duckie? Even I'm considering a refinance to the 'normal' conforming limit to give this a try at a much more modest level. As someone from GenX, this will be a once in a lifetime buying opportunity (the nineties bust was too early for me). Not sure I have the stomach to be a landlord, though.

Nomograph says

terriDeaner says

I’d like to see these sales records

Zillow, Redfin, and a variety of other online sources provide sales records. It’s a matter of public record.
Keep in mind that foreclosures are listed as sales since it’s a change of title, but those are easy to weed out.

Nomo just a heads up. For whatever reason sales records often do not match county assessors sales records. Accuracy isn't always there. You are better off checking with the assessor for real data.

EBGuy says

bad karma for the elite to “in your face” to the rest of us who are left behind

Sybrib, Perhaps I’m mistaking you for another poster, but is there any reason you could not employ the same strategy as duckie? Even I’m considering a refinance to the ‘normal’ conforming limit to give this a try at a much more modest level. As someone from GenX, this will be a once in a lifetime buying opportunity (the nineties bust was too early for me). Not sure I have the stomach to be a landlord, though.

By "left behind" I don't mean locked out of ownership. It was not the best choice of words. I meant left behind in wealth accumulation. In another thread a poster named Troy made his moral argument against Land-Lord-ism, and gave an example of a landlord he rented from in Japan who he thought was doing good by landlording. Gaming the system to exploit people and using moral hazard as an exit-plan backup strategy is not my cup of tea.

EBGuy says

bad karma for the elite to “in your face” to the rest of us who are left behind

As someone from GenX, this will be a once in a lifetime buying opportunity (the nineties bust was too early for me). Not sure I have the stomach to be a landlord, though.

Once in a lifetime, now? I am not sure. I am siding with the "slow grinders". I think that this opportunity will be with u s for a while and getting slightly better as time passes. My parents owned 6 or 8 rental properties when I was a kid. I would be happy to follow that path, but I just don't think this is the time to jump in.

0utside Party says

What a buyer really needs is two things:

1) About 6 months of steady upward home price movement nationwide to determine an upward trend is in place (with no govt manipulation)

2) A sizeable down payment saved up to help bypass the effect of higher interest rates
Trying to time the exact bottom likely means you are also interested in timing the exact top. Statistically, traders who do this are committing financial suicide. The trend is your friend. Latch onto the trend after it is established, and then jump off when you are profitable (well before it reaches the train station).

I would agree with you...if we apply this to the stockmarket. A house should not be an investment but a place to live. By the time, houses trend upward, you are back in a sellers market and good luck to negotiate anything with a seller that has 6 backup offers ready to rock.

Very different with stocks...you could wait until you buy a stock because it doesn't cost you anything to wait - where with housing, it does. You have to live somewhere and renting costs money - so while you are waiting for the bottom to set in and prices to turn around, you are wasting money on rent.

I think the time to buy is when you can afford something that works for you. Period! It doesn't matter if the market trends down or up...because it always will go up and will go down, that's why everybody in this forum will at some point be correct in their prediction.

This retarded investment mentality with housing is the #1 reason why we are in trouble. Also the reason why landlords never spend a dime in their rental properties. Horrible mindset! It's always about turning every aspect of life into a profit. And look at where that greedy mindset has gotten us as of today as a society.
Europe has so much more stable prices in real estate (especially germany), why? - because people don't speculate with houses like we do. If you have enough money to buy 2,3, 4 and pay them off and then rent them - GREAT!! There is your return. But if you don't have that kind of money, buy a place for your own family to live in - then pass it on to your kids, so they have it easier than you because they are getting a head start with a house they can either live in for free or rent out for additional income.

Stop speculating. Get a job, work hard, pay the mortgage, save money for rainy days, raise your kids and be happy! And stop worrying about if your house is worth more than when you bought it.

Nomograph says

terriDeaner says

I’d like to see these sales records

Zillow, Redfin, and a variety of other online sources provide sales records. It’s a matter of public record.
Keep in mind that foreclosures are listed as sales since it’s a change of title, but those are easy to weed out.

I didn't find Zillow or redfin to be too helpful for this - at least in terms of the summary data they provide. Short of checking individual listings one-by-one, the only useful index I found was Zillow's foreclosure resale rate, which should to some degree track flipping. It's only useful back to ~2007 since foreclosures were much less common back then.

On the other hand, DataQuick had this information summarized nicely in a recent report:

http://www.dqnews.com/Articles/2011/News/California/Bay-Area/RRBay110217.aspx

Provided their analysis is correct, their conclusions support your assertion that most BA investors that are currently buying property are not flippers. They also indicate a weak uptick in investor activity (at ~23% which is ~3-4% m/m and y/y), which is higher than the historical monthly average since 1988 (16.5%). I'd like to see what investor activity was at the peak (2005-2007), however, for comparison.

So again, why the sharp spike in BA asking prices (well, at least $/sf from redfin) at this time of year with broadly weak demand already baked into the mix? Wishful thinking for the spring?

Actually, it just occurred to me that this could simply result from declining inventories around the BA:

If the 'low-end' properties are the main ones selling, and they are getting purchased by the majority of buyers, what's left on the market is the overpriced 'high-end' places. Thus the distribution of prices is skewing to the higher end BECAUSE the low end is being depleted, AND NOT because (substantially) more higher-priced stock being added to the mix.

This idea should be relatively straightforward to evaluate. It predicts that avg/median current sale prices should be well below avg/median asking prices (would need info on pending sale prices), and that recently added listings (say last 1-2 months, I'm not exactly sure about the time period) are not 'high-end', high priced houses. These predictions are supported to some degree by the DQ report... Jumbo loans and houses sold above 500K make up the minority of the market (both ~ 30%). Any suggestions on an better, but easy was to check these predictions?

Nomograph says

dunnross says

Nomo, you want facts. Just read Dr. Housing Bubble Blog:
http://www.doctorhousingbubble.com/
Isn’t rising shadow inventory, rising interest rates, highest unemployment rate since the great depression, Southern Cal housing prices still in bubble according to price/rent & price/income, not enough facts for you? If after reading all that, you still think that housing prices will go up in the next 10 years, then, definitely the picture of the guy with his head stuck in the sand, is a picture of you.

You are making assertions, not posting facts. For example, the term “shadow inventory” refers to houses that will “probably” enter the market, and is a meaningless and undefinable term. Post actual numbers, figures, and statistics and then we can talk.
You haven’t made your case any more than the guy who tries to refute an argument by posting “LOL”.

Do you want me to cut and paste the entire Dr. Housing Bubble blog for you, because you are too lazy to read it over there? Or maybe, you don't want to see all the facts, statistics, graphs & actual data which Dr. presents, because they remind you, once again, how much money you are already losing with all the investments you've made so far.

Nomograph says

dunnross says

Do you want me to cut and paste the entire Dr. Housing Bubble blog for you, because you are too lazy to read it over there?

You really can’t expect people to run all over the Internet trying to prove your argument for you.
Post some data that refutes my position about the San Diego market, and then we’ll talk. LOL.

1 link is not "All over the internet".

As a psychotherapist I find it fascinating to watch this guy have psychotic break on television for all to see. What has changed in our social consciousness that allows a mentally ill person who is actually experiencing active psychosis to become an authoritative commentator for public consumption? What is it about this particular actively psychotic person that convinces conservatives to not only have any faith in or give any credibility to his insane ranting but to give him millions to give them these psychotic disorganized rants? I'm just asking questions. But I digress...

I find it endlessly fascinating that the conservatives actually welcome and encourage this gravely disabled man and support him when they constantly work to oppress marginalize, and impoverish this man's fellow disabled people, especially others like him who are living with severe mental illness. What up with that? Oooooo weee... What up with that? What up with that? Again, I'm just asking questions.

Then again, maybe conservatives are natural enablers. I mean, look at their choice for Speaker of the House. He's an extremely active alcoholic who does much of his legislating under the influence. But that's ok because at least he's not a pot head or coke fiend, right? I'm just asking questions that They just don't want us to ask.

The funny thing is that they willingly follow Glenn and John into their fantasy worlds riddled with inconsistencies, outrageous lies, distortions, criminal disregard for anyone but themselves, and disorganized thinking. What is this about? Ooooo weee... What up with that? All I'm doing is asking the questions that They want you to avoid.

Why is it that conservatives are so willing to dismiss, oppress, marginalize, degrade, and impoverish the disabled while supporting and encouraging an actively psychotic gravely mentally disabled person and an extremely actively drinking alcoholic? Perhaps it's because conservatives are mentally ill and disabled through active drug abuse. Often you hate and persecute others who have the same exact qualities that you hate about yourself. Hmm, could that be why conservatives are so active in persecuting and oppressing gay people? Well, I'm just asking questions.

SubOink says

you could wait until you buy a stock because it doesn’t cost you anything to wait - where with housing, it does. You have to live somewhere and renting costs money

I think there's more to it than that, because there's a sizeable "equivalent rent" in the PITI. You either pay the rent through your rent or you pay it through your PITI, but either way, you pay rent.

The point that anybody that posts a positive outlook here is trying to sell real estate, is a realtor or a mortgage broker is such a moot point. I could argue that all the bears are landlords trying to convince everyone not to buy but instead rent their properties...a silly argument.

I am loving reading thru this thread, like an old couple bickering...very funny indeed!

SubOink says

The point that anybody that posts a positive outlook here is trying to sell real estate, is a realtor or a mortgage broker is such a moot point. I could argue that all the bears are landlords trying to convince everyone not to buy but instead rent their properties…a silly argument.
I am loving reading thru this thread, like an old couple bickering…very funny indeed!

That's because most sane people on this blog can't understand why somebody would predict prices going up when we have 18 months of inventory in most areas (not even counting shadow inventory which is going through the belly of the python). Either they are indeed mortgage brokers or be in some way associated with NAR.

The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails

dunnross says

SubOink says

The point that anybody that posts a positive outlook here is trying to sell real estate, is a realtor or a mortgage broker is such a moot point. I could argue that all the bears are landlords trying to convince everyone not to buy but instead rent their properties…a silly argument.

I am loving reading thru this thread, like an old couple bickering…very funny indeed!

That’s because most sane people on this blog can’t understand why somebody would predict prices going up when we have 18 months of inventory in most areas (not even counting shadow inventory which is going through the belly of the python). Either they are indeed mortgage brokers or be in some way associated with NAR.

It's a lot about perspective.

I found for myself for example that when I am personally having a financial bad year and I am a little in the funk for that reason, everything feels just terrible. I start to ignore the fact that there are a lot of people that are doing well. I then go to the doom and gloom mindset because its rational for me that things are just friggin' bad...because I AM doing bad myself. And the same thing happens when I am doing well...I feel up and positive and look at the bright side of things. The fact is, there is always a bright side and always a dark side, you choose how you want to look at it. Glass is half empty or half full - both times the fact remains that there is only 50% of water in the glass...

If you go back to 1930-1934, do you think there was anybody that would have told you that things are going to be better? At that point, in the midst of a depression, everybody was beat down, jobless and hopeless...no future prospects. And if you were the insane person that would have said...ok, I think things will be better soon, everyone would have called you an idiot.

The world is just too complex for simple minded predictions alla inventory is 18 months so it has to crash, or jobless rate went from 9.8% to 9.0%..so we're going up from here - it just does not work that way. If it did, then you should be rich because you could invest all your money in the stockmarket and follow your own predictions, since they are SO obvious, easy thing to do, right?

There is something to be said about being a downer. Nothing good comes from negative thinking. An entire economy can go into the crapper because of it.

But at least there are some here that do offer perspective to the "other" side because there is always another side.

Ever think high end home sales are up because those who can afford them own 90% of the stock market and most likely have more money now then in 2007... Since the market rebound was so strong! Maybe high end home sales are more of a sign the rich are closing their positions in the stock market... I personally believe that in order to have a housing bubble again we would probably have to have a stock market crash... Everyone has all their money in the market.. I personally have more than 3/4 of my life savings in the stock market... When im ready to buy a house ill have to liquidate most of it... Even some of our retirement IRA money. If a rush into housing occurs... Too fast... The stock market will collapse again...

Well, if Glenn Beck hates Google, then I must blindly follow. Or did Nomo mis-spell and Glenn Beck has the Giggles? A Gaggle of goggles? It boggles the mind - does he have Bugles? Noodles? Blutos (from Animal House)?

I gotta go take my meds now. I mean, I'm a Glenn Beck follower...

>>>you could wait until you buy a stock because it doesn?t cost you anything to wait.

Maybe. If the price rises you then have a more expensive stock. The difference is the "opportunity" cost of waiting.

Nomograph says

Poking the bears is certainly interesting.

Long long way to go.... All the numbers we see posted by monthly sales/prices continue to support further price declines.

I doubt Glenn Beck is mentally ill. It's just an act. Meanwhile, he makes $32 million a a year, so at the end of the day he is having the last laugh (or the last cry).

Hi everybody. I just stumbled on this site and can't stop reading it.

I have owned a house since 1997. I saw it skyrocket in value during the bubble. It went from 204,000 to 630,000 or so. Now, it’s still apparently worth 550,000, although when I called Chase, they said it was worth just above 400,000 due to taking into account short sales and foreclosures when doing the comps. Last week I insured a real estate agent for auto insurance who said he works with investors who buy foreclosures and fix them up and resell them for a profit in a few short months. He said I needed at least 250,000 cash to get into the game, so I’m trying to refinance and get a loan for 380,000 at 4.875% on a 30 yr fixed, pay off the 130,000 I still owe on the house, and have around 245,000 to use to buy foreclosures and flip them. This website is scaring me, though. I need an additional source of income because my small business is having a hard time, so flipping properties seems like a good way to go, with prices on foreclosures being so low. I’d like anybodies opinion on if I’m doing the right thing. My mortgage payments will increase by about 300.00 per month, to 2,300.00.

On a side note, the real estate agent I’m “working” with lives in an apartment and drives an old car, and doesn’t at all appear to be up there financially . Also, I already sent all the docs the lending company asked for, such as mortgage balance, paystubs, tax returns, etc., and signed a short 4 page loan application. I just have to pay for the appraisal, about 350.00. It all happened so quickly. Does this mean I’m locked into the deal, or is there much more paperwork to fill out?

The agent made it seem like it’s so easy to make money flipping houses. Just buy the house for 50-100,000 below market value, and fix it up and re-sell it. But if prices are going to keep falling for years, maybe it’s best I just sell the house the house I live in and rent. Any suggestions you have will be appreciated.