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JodyChunder
2013 Feb 24, 7:56am
Now I imagine it must be over 700 though I haven't bothered paying the 20 bucks to find out.
Trust me...it matters. Go try and qualify and see if it doesn't come up.
TechGromit
2013 Feb 25, 3:45am
This is another reason why this so called housing "recovery" isn't sustainable. The first time home buyers are squeezed out by the cash investors.
I can't say I understand this statement. If the first time buyers are being squeezed out by investors, they don't stop existing, do they? If we ever run out of investors, the first time buyers will still be there to prevent any significant price slide.
This bubble has the full faith and deliberate backing of the federal government and our central banking nexus. We are probably witnessing the build-up of the most massive speculative bubble in human history, and when it pops, I think that it will make the last incident pale in comparison. 2000-2006 was just a practice run. Wall Street saw how pathetically easy it was to rape the general public with housing in the 2000's..
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or is it Politicians playing to the public for the vote... no more than what we had with the GSE for all the prior years... getting people easy access to home.
The fact is .... since the 30s we hadnt had a full market economy in residential RE... it was supposed to end by 1966 with passage of GSE reforms during the Eisenhower years decade earlier... but it didnt happen.
I see FTHB got squeezed out of the sub $500k market by investors. It's pretty amazing the see FTHB buying houses in the $750k-$1M range in the Bay Area.
LOL, somehow the $1M starter home doesn't quite fit the mental image of a starter home. BTW, people buying $1M single family houses are not investors but gamblers; there is very little chance a $1M single family can collect $10k/mo rent or even $5k after tax. The buyer is gambling on price appreciation not rental income. Either that or the cash buyer just really like the area for bragging rights.
IMHO, the Chinese buying in really expensive neighborhoods are making the same mistake that the Japanese made buying top CA and NYC properties in the late 80's and early 90's. Even 50% cash down can still be foreclosed, like how Mitsubishi lost every cent it spent on buying the Rockerfeller Center, and then some. Mercedes paid $80B for Chrysler, and a few years later had to pay to give it away!
My advice to first time home buyers, or any American buyers, is to stay the heck away from those areas, unless you are fond of losing money.
evilmonkeyboy
2013 Feb 25, 10:03am
I can't say I understand this statement. If the first time buyers are being squeezed out by investors, they don't stop existing, do they? If we ever run out of investors, the first time buyers will still be there to prevent any significant price slide.
Really, so if investors stop buying houses then 1st time buyer magically qualify to buy the overpriced homes????? Most 1st time buyers can't buy because they are priced out, the only way they get priced in is by having a drop in price.
That's it... the investors are buying the "low hanging fruit" with cash which eliminates many of the cheaper homes for the first time home buyers. If a seller has two offers sitting in front of him, one for all cash and one with a mortgage contingency, which one do you think they accept?
Is your beef with cash home buyers or investors? If an investor bids cash offer price that would have 3.5% rental yield on the house (that's how high the borrower can bid with PITI becoming the same as the rent he is paying), that's not much an investor, is it? That would be a money loser.
In reality, many of the so-called "low hanging fruits" are not mortgageable because they are in such poor shape. The house is not livable without being fixed first, and of course the home borrower doesn't have the income to pay the mortgage and pay for current rent at the same time during repairs of unknown duration.
My whole premise is that this is a "artificial" housing recovery being spurred by a larger than normal investor purchase environment. If you look back over past decades where the true foundation of housing growth came from, it wasn't from investors looking to make a few bucks on rentals.
That's because a larger than usual proportion of sellers (actually selling) are not in a position to fix up houses before selling, such as bank REO's. That means someone has to have the cash either to fix the house before owning or to buy the whole house on cash. There is no out-bidding there against first-time home borrowers, simply because the borrower wouldn't be able to borrow against such a house at all.
For houses that can be borrowed against, Investors looking for rental income can not realistically outbid home buyers that can borrow at 3.5% interest rate unless the "investor" is willing to accept 3.5% rental return, in which case the "investor" is little more than a gambler or money loser.
An investor isn't going to invest in a house like an owner would. They're in it to keep their costs to a minimum. They don't do nice upgrades and maintain a house like a young couple would.
Investors are going to invest in a house a heck lot more than a home squatter who quit paying mortgage long time ago, and a heck lot more than a home borrower who do not have the saving habits necessary to fix leaking roofs and broken furnace.
That doesn't help home values in a neighborhood. Plus, sticking renters in a neighborhood of homeowners doesn't help home values either. Most renters don't give a shit about keeping a house neat and clean or care about the rest of the neighborhood.
The landlord does, much more than home squatters and the nobody in an empty house. The home borrower simply can not borrow against houses with major defects, so the "out-bid" is a non-issue.
These new investors will find out that the ROI on these rentals won't give them what they originally hoped, and I predict they will bail if housing prices stop rising along as their costs for repairs from shitty tenants goes up.
What do you think the home borrower did so the house became foreclosed to begin with?
In the mean time, many first time young couples wouldn't have had the chance to buy a low cost house to start their "home ownership" path, because the affordable houses were grabbed by the investors.
That's nonsense. Almost all post-foreclosure sales offered by Fannie, Freddie and FHA have exclusive period when only owner-occupant can bid on, investors are excluded. Beyond that, owner-occupants qualify for all sorts of loans that enable them to bid price to a level that would not make any sense for the investor.
This current artificial "recovery" IS NOT the path to a sustained housing recovery!!
I can agree with you on this one, and the cause for the price rise was due to artificially restricted supply! Not due to investors buying. If investors don't buy them, the houses would stay empty because home borrowers can not borrow against those houses. Investors buying and fixing them up actually make the houses available to the rental market, or even buying market if the "investor" is doing a flip, so that the house actually becomes part of real supply instead of sitting outside the market becoming more and more dilapidated. How would an empty dilapidated house be good for a neighborhood?
LOL, somehow the $1M starter home doesn't quite fit the mental image of a starter home.
No they certainly are not.. and certainly were chicken feed before the bubble..
all it did was give some a quick way out of town + early retirement.
IMHO, the Chinese buying in really expensive neighborhoods are making the same mistake that the Japanese made buying top CA and NYC properties in the late 80's and early 90's. Even 50% cash down can still be foreclosed, like how Mitsubishi lost every cent it spent on buying the Rockerfeller Center, and then some. Mercedes paid $80B for Chrysler, and a few years later had to pay to give it away!
Sorry R, no one every heard of it... i tried telling some the same 10 years ago..
all you get is blank faces.. they never heard of Japanese buying RE in NYC or
down in Monterey and getting taken to the cleaners...
An investor isn't going to invest in a house like an owner would. They're in it to keep their costs to a minimum. They don't do nice upgrades and maintain a house like a young couple would.
and once there is a better investment with higher returns like the stock market,
they are out in a second...
Some of you don't understand. First time buyers are out because they consider prices to be too expensive. Their wages have been flat while the Feds money printing has nearly doubled the price of most essentials in just the last four years. Their paycheck buys 50% less than it did. Meanwhile they are faced with ever increasing insurance and property taxes. Many counties even jacked up property taxes to make up for the drop in values. And many single family homes are away from the work hubs and one must commute. Gas and auto insurance have never been higher, making that trip a paycut.
The first time homebuyers also see how they got shafted by the system. How they were responsible and didn't take on a mortgage they couldn't afford, while their neighbor did and has been living for five years without paying his mortgage, taxes, hoa or insurance. That is bound to make your blood boil. Then the first time buyer saw the banks get bailed out. See how they have homes on every street sitting empty yet refuse to list them. The collusion and Fed manipulation doesn't give them confidence.
Further, the first time buyer has seen this latest bubble over the last year. They saw what happened last time. They also note that most of the properties being bought up are by speculators. Ones who think they will make a killing being a landlord. The renter sees a rental bubble and oversupply of units. Millions of new rentals coming on the market. Millions of new apartment buildings coming up. He knows his rent will be falling like a rock within time. He can wait for this latest batch of speculators to lose and buy up their bad bet a lot cheaper.
"....and once there is a better investment with higher returns like the stock market, they are out in a second..."
Or once their "profit" starts slipping away and they try to cash out with the millions of other "investors". A stampede for the doors.
Investors buying and fixing them up actually make the houses available to the rental market, or even buying market if the "investor" is doing a flip, so that the house actually becomes part of real supply instead of sitting outside the market becoming more and more dilapidated. How would an empty dilapidated house be good for a neighborhood?
Thank goodness for the investers! Without them the first time house buyers would have nothing (nothing) to rent.
How many first time home buyers are all-cash buyers? Extremely rare! That's why the government offers all those near-zero percent down payment loans. In the case of those houses that I'm talking about, the loans are simply not available for those houses because the houses have major defects that make them non-morgageable! Banks don't usually issue a loan for a house that can not be lived in . . . because buyer doesn't have the money to pay for the mortgage, the repair and rent at a different place all at the same time!
For houses that loans are available, there's simply no way a rational investor can beat a first-time home buyer willing the pay the rent that the investor would have to charge in order to maintain a reasonable return. The 3.5% interest rate with near-zero down is far lower than any metric for a reasonable rental return. The 1st time home buyer can always outbid the investor buying to rent to the same occupant, when the house is mortgageable. Here's a simple numbers illustration: a house that rents for $1000 can be bid up to nearly $300k by a first-time home buyer with 3.5% interest and near-zero down requirement. The same $1000/mo would only justify a $100k to $150k price for the investor. The two numbers are not even close to each other.
So the whole argument of investors outbidding first time homebuyers is simply nonsense. The first-time homebuyers can't buy these houses because the houses don't allow loans due to the sorry conditions that they are in, thanks to the previous home borrower / first-time or otherwise! Someone has to buy it with cash, fix it up, then put it on the market to make it available to first time home buyers, who are almost all home borrowers.
It seems as though rents are going up. The first time buyer could be spending PITI and maintenance cost and still have a spendable excess that they would spend in the consumer economy every month. Instead they are forced to pay "double the PITI" to an invester who takes that money and hoards it into more investments.
I caught you on this "double the PITI" nonsense last time, and you admitted to be exaggerating, then why are you repeating it here? If the house is at all comparable, there is nothing preventing the renter to buy the house. With government subsidized 3.5% interest rate with near-zero down for first time home buyers, a $1000 monthly payment translates to nearly $300k bid upper limit for the house! The same $1000/mo rent income would only justify a $100k-$150k bid from an investor (I wouldn't pay more than $75-100k!) There is no snowball's chance in hell any rational investor can outbid a first-time homebuyer who is also the prospect renter for a comparable house.
What you are missing in two consecutive transactions for the same address is all the repairs and risks that investor undertook, making a house that was previously not available to first-time homebuyers or renters due to defects in the house making it non-habitable, into something that is now available to the first-time home buyers and renters alike. Your complaint is about as silly as accusing the baker of ripping people off because he is not selling his bread at the price of the dry flour that went into it.
Sure there is. The first time buyer needs an APPRAISAL, and even though he/she may be wiling to pay more, the loan won't get approved.
Get another appraisal, or wait for this one to close then go after the next one citing this sale. In any case, appraisal getting in the way is not exactly the successful buyer's fault; whoever wins such a price at significantly above appraisal is taking a huge risk. In any case, we are talking about getting good deals here (and allegedly stealing good deals), not about competing to be the latest sucker. If one can't even get an appraisal higher than the bid price, the bid is probably already too high.
Also, the 1st-time home borrower only needs to put up the difference between the appraisal and bid price to get the loan approved.
So, a cash offer doesn't have to even match what a first time buyer offers. You can be lower, and convince the selling agent you will close with no headaches.
Is such a time advantage worth tens of thousands of dollars? especially in a rising market? Like the numbers I gave, the 1st time homebuyer can literally outbid the investor by a factor of 2x!
I even do my inspections up front, and wave the inspection period to make my offer stronger than all the others, except for price.
I do that for every bid as well, yet I still got routinely outbid by 1st time homebuyers. It was when the house came back due to non-mortgageability that I got a second chance. I have pretty much given up on houses that can be mortgaged. There's no point bidding against first time home borrowers.
I have seen worse bathrooms, and bought and fixed worse ones. Some were missing all copper pipes throughout the house. It would cost the home borrowers a bloody fortune to get FHA home repair loans in order to get the same repairs done after bouncing between several contractors and estimates. Heck, some houses needed $20-50k repairs even when I was paying all cash and calling the shots and doing part of the work myself.
That's why I was pointing out to the Prof, the investors are actually bringing uninhabitable houses onto the for-sale and rental market. It's ridiculous to think just because it's the same address, it must be the same house unchanged.
It's ridiculous to think just because it's the same address, it must be the same house unchanged.
Yes, but it's interesting that most of the flips I have seen are sold 6 months prior for $200k less. You can't tell me that a $50k trip to Lowe's = $200k on the open market (maybe it does? maybe home buyers are this stupid?). The real joke is that the majority of these houses are still far in excess of comps on the street, even compared to other remodeled units.
These ass hats are not happy to gross 33% margin, they get all greedy and many of these buyers are more than happy to play footsie with them. OTOH, I have seen plenty of houses like this that are still sitting after 8 weeks or even pulled back off the market.
Eman
2013 Feb 28, 1:17pm
The question for me is post-FC seasoning. My credit never tanked after a FC in May 2011, it did take a hit but 6 months later FICO was in the 690 range. Now I imagine it must be over 700 though I haven't bothered paying the 20 bucks to find out. I know FHA is 3 years seasoning for FC (2 for BK, now that makes sense). The real estate Sunday talk show on the radio said you can actually do conventional is you have a large downpayment (40-50%). I have yet to verify this.
Yes. You can buy with 40% down. The interest rate is slightly higher, about 5.25%-5.5% for a 5/1 ARM. The lender is East West Bank. They don't sell their loans to Fannie & Freddie so they don't have to follow their guidelines.
I believe East West bank only lends to 3 counties in the Bay Area with Santa Clara County being one of them. Check them out.
Eman
2013 Feb 28, 1:20pm
LOL, somehow the $1M starter home doesn't quite fit the mental image of a starter home.
Well, starter or not that's not my problem. I'm reporting what's happening on the ground. It's amazing that everyone wants a SFH as a starter home instead of a condo or even a townhouse. Entitlement attitude????
Yes, but it's interesting that most of the flips I have seen are sold 6 months prior for $200k less. You can't tell me that a $50k trip to Lowe's = $200k on the open market (maybe it does? maybe home buyers are this stupid?). The real joke is that the majority of these houses are still far in excess of comps on the street, even compared to other remodeled units.
$50k cash now plus labor of 3-4 people over 6 months is probably worth more than $200k borrowed at 3.5% over 30 years. The payroll for 3-4 employees over 6months cost $60-80k. So we are already looking at $110k-130k outlay. The fair market borrowing cost is 7-12% for small businesses. Borrowing $130k at 7% actually cost more than $200k at 3.5%! That's why there is such a huge arbitrage between cash vs. borrowing. Cash is worth a lot more in the market place than the 3.5% government subsidized rate. Don't forget if the market is appreciating 20% a year, 10% gain over 6 months would be baseline. Of course, the investor is also taking the risk that if the market tanks, he'd lose his shirt. I didn't see any buyer offering to pay more because the house used to cost more when the market crashed.
These ass hats are not happy to gross 33% margin, they get all greedy and many of these buyers are more than happy to play footsie with them. OTOH, I have seen plenty of houses like this that are still sitting after 8 weeks or even pulled back off the market.
There's nothing ass hat about grossing more than 33% over 6 months. I made more than 33% profit today on my option trades, in a matter of less than 2 hours! To the risk-taker the spoils (and the losses). It's only fair, and it's the only way that the price discovery process can proceed efficiently, and the consumers can get the best bang for their buck. I'm right now actually squeezing hard on a couple houses where the would-be flippers ran out of money and their projects went into hiatus. The cash burn (tax, insurance, interest) must be painful for them, so I'm negotiating and dragging my feet for as low a price as possible so that my future tenants can get a low rent price from me.
6 months is enough to tear a whole house down and build a new one. The replacement cost for a 3000sqft house in many parts of the country can cost more than $600k. It's entirely possible to build such a house from ground up, including tearing down the previous one, in 6 months. In fact most builders would take even less time, as every day cost them money in interest on the original purchase and the material plus labor.
During the boom, it was quite common to see a $500k house get torn down and a new house built for sale in the $1.5M-$2M range in 3-4 months.
making a house that was previously not available to first-time homebuyers or renters due to defects in the house making it non-habitable, into something that is now available to the first-time home buyers and renters alike. Your complaint is about as silly as accusing the baker of ripping people off because he is not selling his bread at the price of the dry flour that went into it.
Thank goodness for the investers! Without them the first time house buyers would have nothing (nothing) to rent.
Or to buy, as the original house is not purchasable by the new first time home borrower in its broken state left behind by the previous home borrower. A house that is not habitable is not eligible for owner-occupant primary home mortgages.
The net effect of investors is driving down rent and purchase price for habitable houses, as their action increase supply of habitable houses.
A lot of people are hoping for that change. My research in Co Co and Alameda County has shown rental price going up and inventory going down.
San Francisco Bay area and NYC rents have gone up largely because companies in these areas are the primary beneficiaries of the loose money policy: tech and financial firms. Also REO sales did not out number foreclosures and new delinquincies until the 2nd half of 2012, approximating a change from net reduction of habitable houses to (soon to be) a net increase. It takes time for the late 2012 REO's to be fixed up and marketed properly.
Maybe as more of these "previously not available to first-time homebuyers or renters due to defects in the house making it non-habitable, into something that is now available to the first-time home buyers and renters alike" will make rents come down.
I'm counting on the increasing supply, and making appropriate provisions. Whether nominal rents actually come down despite government money printing, that depends on how much money they print. I'm guess a 60% chance of actually seeing a nominal rent decline for a couple years, to the tune of 10-25% depending on market segment, similar to what happened between 2001 and 2003.
RentingForHalfTheCost
2013 Feb 28, 10:17pm
Yes those Chindians with suitcases full of cash are driving out new first time home buyers from the RBA. I would need to make 500k plus to buy a decent home in the RBA radius of 100 miles!
Mostly dirty money if you ask me. Either from illegal child manufacturing overseas, or from white collar crime. So much for the American dream. The real honest people are chumps.
Mostly dirty money if you ask me. Either from illegal child manufacturing overseas, or from white collar crime. So much for the American dream. The real honest people are chumps.
Most likely not. Depending on the market segment. The multi-million dollar single family market segment may involve some overseas official corruption money. The $500k range is attainable by the middle class over there working for American companies or even American embassies. A 1000 sqft condo in Shanghai or Shenzhen costs more than $500k USD. The typical new middle class there makes $20-30k USD a year but can save or pay $15-25k USD mortgage per person, more than double that for a working couple living together (i.e. as much as $50k a year in savings or mortgage payment, after needing only $10k a year to pay for everything else as a young couple living reasonably good middle class life), because they have very little taxes to pay and the cost of living besides mortgage there are very low; the house price to rent ratio there is somewhere between 500:1 to 1000:1. Obviously they expect double-digit annual salary increase to continue there, a belief that I think will be proven sadly mistaken. There are over 60 million people over there fitting that profile or making more. If the bilateral trade really can't balance in the years to come, selling houses, condos and timeshares as vacation homes to them may well help repatriating dollars . . . but for now sucking the even richer among foreigners into buying into the over-priced segment might burn the money faster.
IMHO, the Chinese buying in really expensive neighborhoods are making the same mistake that the Japanese made buying top CA and NYC properties in the late 80's and early 90's. Even 50% cash down can still be foreclosed, like how Mitsubishi lost every cent it spent on buying the Rockerfeller Center, and then some. Mercedes paid $80B for Chrysler, and a few years later had to pay to give it away!
Sorry R, no one every heard of it... i tried telling some the same 10 years ago..
all you get is blank faces.. they never heard of Japanese buying RE in NYC or
down in Monterey and getting taken to the cleaners...
LOL. Yup, most people have to learn their own lessons, the hard way, unfortunately . . . but very fortunate for Americans looking for a cushy retirement after consuming more than producing all life. It's a mystery why Mercedes still sells cars for dollars after giving what amounted to 2,000,000 brand new Mercedes cars to Americans for free! It's like their entire sales over two decades or more, not just profit but they had to pay for all the steel etc. out of their own pockets for the gift. Yet, the foreigners still do, both Europeans and Asians. We are just lucky, I guess.
David Losh
2013 Feb 28, 11:02pm
The net effect of investors is driving down rent and purchase price for habitable houses, as their action increase supply of habitable houses.
I have been in the business of fixing properties since I was in high school in 1968. I worked for one Real Estate company who owned tons of cheap stuff. Over the years i worked for some investors who only bought foreclosures, and our job was to make them bank financable. It was a pretty sweet gig.
We've done everything. Rot is one of my specialties. It's cheap, and easy to do, but people freak out at the sight of moisture ants.
I can attest that what you are saying is true. Many, many of these new investors are reaping profits today that are only adding to the housing supply. When you add in the new focus builders have for apartments it should add up to a ready supply of housing.
The other thing is that home buyers, or potential home buyers must be well aware that the job they have is tenious at best. Several people here in Seattle are on five year contracts for those high paying tech jobs. Many are willing to relocate if the price is right.
I kind of see renting as an alternative to buying if your job opportunities are greater when you are mobile.
RentingForHalfTheCost
2013 Mar 1, 12:40am
The typical new middle class there makes $20-30k USD a year but can save or pay $15-25k USD mortgage per person, more than double that for a working couple living together
Hard to accumulate 500K at that salary. If you don't have 500k to put down in the RBA then you are stuck buying a sugar shack and fighting hard to keep the rodents from stealing your groceries. A million here doesn't get you squat.
The typical new middle class there makes $20-30k USD a year but can save or pay $15-25k USD mortgage per person, more than double that for a working couple living together
Hard to accumulate 500K at that salary. If you don't have 500k to put down in the RBA then you are stuck buying a sugar shack and fighting hard to keep the rodents from stealing your groceries. A million here doesn't get you squat.
Don't forget to double that for married couples. If there are 30 million or more families capable of saving $50k or more a year, it only stands to reason that tens of thousands, if not hundreds of thousands, can save $500k or more a year. A few thousands of them showing up here is enough to result in what you see.
Also, let's keep down the hyperboles. The house that you are living in probably is worth less than $1M, and would take less than $300k down payment to make a very strong bid. There's no point trying to convince people that you are living in a rodent-infested house that ain't squat.
Forgot the more important source of legit cash among foreign buyers: when their own condos in Brazil, Russia, India and China are worth 1/4 to 1/2 million US Dollars each, having risen by 10 fold in the last decade, many of them can come up with half a mil, a mil or even a mil and half just by selling several of their own condos that they had bought for a total of $100k or so a decade ago.
$50k cash now plus labor of 3-4 people over 6 months is probably worth more than
$200k borrowed at 3.5% over 30 years
Sorry, but a bathroom remodel and new fake-wood flooring does not cost $200k. Not even if you repaint the walls and vacuum the indoor/outdoor carpet before I move in. There's a reason houses like this sit when other flips that are more reasonably priced go pending in 5 days.
it's the only way that the price discovery process can proceed efficiently
It's actually quite *inefficient*, since these house sit much longer. There's only one reason two flipper houses on my block have been sitting for 60+ days without selling, and it ain't because the thrice-a-week open houses weren't handing out enough popcorn and bouncy castle rides.
$50k cash now plus labor of 3-4 people over 6 months is probably worth more than
$200k borrowed at 3.5% over 30 yearsSorry, but a bathroom remodel and new fake-wood flooring does not cost $200k. Not even if you repaint the walls and vacuum the indoor/outdoor carpet before I move in. There's a reason houses like this sit when other flips that are more reasonably priced go pending in 5 days.
Goes to show that buyers having the right of choice among several sellers is a good thing. Sellers asks too much, it doesn't get sold, just like any other goods or service.
it's the only way that the price discovery process can proceed efficiently
It's actually quite *inefficient*, since these house sit much longer. There's only one reason two flipper houses on my block have been sitting for 60+ days without selling, and it ain't because the thrice-a-week open houses weren't handing out enough popcorn and bouncy castle rides.
So why didn't you buy the houses several months ago when they were non-habitable, put in mahogney floors and then try to sell them at the same prices that you bought them? The point you are making makes about as much sense as accusing the local grocery store of pricing too high causing their food sitting on the shelves unsold.
Personally I don't flip houses, but if someone else wants to take the risk for a short term gain, I don't mind buying them out at a low price if and when they fail. The house would be in better shape than how the previous home borrower left it and how the bank maintained the house.
David Losh
2013 Mar 1, 9:08am
For some reason I'm liking Realty today, he's making a lot of sense.
In Spain, if you bought in after 1998 and sold before 2007 you quadrupled your investment.
Brazil ditto only a little later, and still selling today, Peru ditto, Mexico even has a little housing boom. Many Asian markets are good, and look at Vancouver BC for God's sakes.
The other thing is about the amount of flips that aren't really turning, but do add to the supply of housing. A couple of years ago it was a joke at the foreclosure auctions the number of repeats coming through. People bought, fixed, couldn't sell so sent them back to the bank that was stupid enough to lend on them.
More often hard money lenders ended up reselling failed projects.
;-) Thanks for the reminder to stay within the bounds of a friendly debate, 'cuz one never knows when two may agree on a different set of topics on a different day.
David Losh
2013 Mar 1, 2:41pm
so what do you have to point to this made up contention?
It was referred to as flopping, it was pretty big news in the last two years.
that isn't happening at all. EVER.
You should explore outside of the Phoenix market place.
I guess that explains why both rents and prices have been increasing nationwide for the past 1 to 2 years
You are a Real estate sales person without a doubt. The trend is called an equilibrium and you have noticed it in your own market place. It's coming to a reality near you, very soon.
Prices, and rents are increasing because of equalibrium. Six years ago was the Real estate market crash so when you compare to that everything looks like it is moving up, but it's actually equalizing.
Get some working knowledge about Real Estate before you spout off about how smart you are. You are in the same place now as millions of investors had been thousands of times before. There is nothing to see in you pontifications Charlatin Sheets.
The net effect of investors is driving down rent and purchase price for habitable houses, as their action increase supply of habitable houses.
I guess that explains why both rents and prices have been increasing nationwide for the past 1 to 2 years...
I guess, if you don't like reality, name yourself reality and make up your own!!!!
Do you always confuse correlation with causality like this?
Do you think rent and purchase price higher now than a year ago is because this winter we had much more snow fall across the country than the previous winter?
Do you not realize your own action is making previously non-habitable houses into habitable houses?
Whether that new supply translate into nominal price decline depends on how demand change at the same. However, if investors like yourself have not made previously non-habitable houses into habitable ones, rents and purchase prices would certainly be higher.
SJ
2013 Mar 1, 11:22pm
Homes in bay area are still unaffordable to 90% of single folks who do not make 500k a year salaries. I've been here 2 years and make good income but cannot see paying 75% of my salary to a home. Still way cheaper to rent an apartment than buy a condo here in bay area.
Do you think rent and purchase price higher now than a year ago is because this winter we had much more snow fall across the country than the previous winter?
So.... when rent and price don't due what you expect... it is because of snow? Hey we had one day of snow in Phoenix, I guess that is why our prices are up 30%!!!
You sure it wasn't the meteor over Russia that has caused the EXACT OPPOSITE of what you say should happen, to happen?
That's exactly what I was asking you! Are you so dumb as to think snow is the reason why price went up this year? Do you think firefighters showing up at the house is the reason why houses burn down? Fire truck showing up and house burning down are two well correlated events. That's exactly the sort of confusing correlation with causality that you were engaging in by claiming investors fixing up FHA UI properties causing price to increase.
dipstick, the homes I buy may have been ugly, but they absolutely were inhabited. So, you get one more home as a rental or for sale, and one more family looking for a place to live... It's a wash.
Were the houses previously borrowable for a first time home borrower with near-zero down payment? If it did not qualify to borrow for those zero-down loans, then it was not part of the supply available to the typical first time home borrowers nowadays. Were the houses previously occupied just before you bought them? Probably not, then it was not part of the rent supply either. Your fixing them up makes them available for rent or purchasing by first time home borrowers. That's turning non-qualfied supply into qualified supply.
Besides, rents have gone up, so your claim that this process is causing rents to drop, isn't even happening at all.
So how much energy do I need to expend to disprove the cause of something which isn't even happening?
Downward price pressure exerted by one party in the market does not mean immediate price drop. It's like during Hurricane Sandy, someone brings gasoline from Upstate NY to sell in NYC at even $10 a gallon has the effect of putting downward price pressure on the local gasoline price, simply because it is valid supply purchased by people otherwise would have to bid up gasoline price from some one else.
What do you teach? Wholesale Airheads? Do you not think home builders cause prices to be lower than otherwise would be even during the housing bubble before the crash? Do you not understand basic economic supply and demand?
David Losh
2013 Mar 2, 12:04am
And, you manage to not answer anything I actually said, since obviously real analysis is too difficult for you.
What didn't I answer for you there? What kind of further insight do you need?
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