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Used house prices rising too fast

By tovarichpeter   2013 Jan 22, 1:31am   4,925 views   29 comments   watch (1)   quote      

http://www.cnbc.com/id/100397644

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1   Peter P   78/78 = 100% civil   2013 Jan 22, 1:36am  ↑ like (1)   ↓ dislike   quote    

It is a boom bust cycle. A classic example of reflexivity.

2   David9   1/1 = 100% civil   2013 Jan 22, 1:50am  ↑ like   ↓ dislike   quote    

Peter P says

A classic example of reflexivity.

I learned a new word, thanks.

As I mentioned once before, the cash investor house flippers are out in full force here in Southern California, all the way to Fontana!

Locally, in the San Fernando Valley and Los Angeles the same, flip, flip, flip, and people are buying. Go figure.

3   PockyClipsNow   60/60 = 100% civil   2013 Jan 22, 2:29am  ↑ like (2)   ↓ dislike   quote    

David9 says

Peter P says

A classic example of reflexivity.

I learned a new word, thanks.

As I mentioned once before, the cash investor house flippers are out in full force here in Southern California, all the way to Fontana!

Locally, in the San Fernando Valley and Los Angeles the same, flip, flip, flip, and people are buying. Go figure.

Yep its as designed. In investing it sometimes seems like there is no free will , rhe feds push a button, rates go down again, flippers and landlords buy and first time buyers get scared and buy if they can outbid the others. Its planned central economy forevermore.

4   Philistine   13/13 = 100% civil   2013 Jan 22, 2:36am  ↑ like   ↓ dislike   quote    

David9 says

Locally, in the San Fernando Valley and Los Angeles the same, flip, flip, flip, and people are buying. Go figure.

We're done with it. The last three houses we looked at were flips. In various states of good, bad, worse "improvement". They all had recorded sales within the last 9 months, and now relisted for 30-40% higher.

That is all the LA market (south of valley, north of I-10) seems to be right now--or total dumps in need of a gut and remodel. No in between.

5   David9   1/1 = 100% civil   2013 Jan 22, 2:49am  ↑ like   ↓ dislike   quote    

Philistine says

We're done with it.

Same here in all respects. I have looked at 3 properties in the last two weeks. The only reason to buy would be to bet the price will go up, which it very well may! Doesn't fit my life right now. How many properties could 'really' have sold if 1.) they were bought for cash at the court house steps 2.) Someone did buy for less in the last two years and is flipping now ??

6   edvard2     2013 Jan 22, 3:12am  ↑ like   ↓ dislike   quote    

I was on a plane a few weeks ago and the people behind me were real estate investors coming from LA to the Bay Area to look at "Investment" properties. Somehow people seem to have totally forgot the mess we're still getting our of and how it was driven by way too many people viewing houses as mere investments and not simply as a place to live.

I remember when we were looking this spring: As soon as I walked into a house that obviously had big box home improvement store furnishings, cabinets, and so on, I walked out. Most had clearly been bought, slapped back together, and put back on the market. Honestly it would have been better if some of these had simply been left alone and re-sold instead.

7   APOCALYPSEFUCKisShostikovitch     2013 Jan 22, 3:19am  ↑ like (4)   ↓ dislike   quote    

A house is not worth living in unless it has been flipped 100x before you moved in and therefore you can be safe in the knowledge there will always be another asshole who will take it off your hands for 100x what it is actually worth.

8   David9   1/1 = 100% civil   2013 Jan 22, 3:26am  ↑ like   ↓ dislike   quote    

edvard2 says

coming from LA to the Bay Area to look at "Investment" properties.

Not one of the properties I saw, but one advertised as a 'standard investment flip', The owner on Property Shark was from New Jersey !

9   edvard2     2013 Jan 22, 3:42am  ↑ like   ↓ dislike   quote    

When we bought things were pretty bad and there wasn't a whole lot for sale then. That was in the summer. I don't really pay a huge amount of attention but it seems like there's even less for sale around here now. Makes me curious if the Spring will be better.

10   David9   1/1 = 100% civil   2013 Jan 22, 4:37am  ↑ like   ↓ dislike   quote    

Not singing the praises of Texas, but the State did avoid the first housing bubble and no evidence of the second housing bubble most are seeing here in CA:

"In 1998, following the Savings & Loan debacle, Texas enacted a law­—under none other than George Dubya Bush—limiting mortgage borrowing to 80 percent of the appraised value of a home. My awesome powers of deduction tell me this means that you can’t buy a house in Texas without putting 20 percent down. This shielded the Lone Star State somewhat from a housing bubble."

And

"But a major difference between Texas and other states during the boom was that Texas required any homeowner seeking to refinance a mortgage or take out a home equity loan to have at least 20 percent equity after taking out the new loan. Moreover, no one could refinance a home mortgage more often than once a year."

I am very happy the California budget is balanced now (So I hear) But is it in the best interest of Californians to have investors flying in from as far away as New Jersey ?

11   CMY     2013 Jan 22, 4:39am  ↑ like   ↓ dislike   quote    

Philistine says

We're done with it. The last three houses we looked at were flips. In various states of good, bad, worse "improvement". They all had recorded sales within the last 9 months, and now relisted for 30-40% higher.

A friend of mine has been going through the same thing. He's frustrated because these flippers aren't doing their own pre-sale inspections, and he's finding a lot of them have some time-related issues that aren't visible to the naked eye.

He tries to get them down on price, they refuse, and the cycle starts anew. I suggested finding a neighborhood he likes, researching every home on a particular street and sending out letters in the hopes that a well sorted and upgraded place may turn up on his radar, pre listing contract.

It's just a nasty time to be looking for a sub 700k home in SoCal.

12   lostand confused   225/225 = 100% civil   2013 Jan 22, 4:44am  ↑ like   ↓ dislike   quote    

David9 says

Not singing the praises of Texas, but the State did avoid the first housing
bubble and no evidence of the second housing bubble most are seeing here in CA:

Funny isn't it-regualtions saved the Texans!!! I will be moving back finally next month-just in time for a massive bubble . I mentioned before, my colleague here in the mid-west just bought a 50k house(it is a foreclosure) and it is an individual house that rents for 900 bucks a month. About 5-10k of maintainance needed-but otherwise good to go.

Of course today morning was in the negative F with a minus 15-25 wind chill in some places. Minneapolis has a -5F as the high temperature of the day-and Lord only knows what the wind chill is. That I won't miss!!

13   David9   1/1 = 100% civil   2013 Jan 22, 4:58am  ↑ like   ↓ dislike   quote    

robertoaribas says

never needed 20% down to buy in Texas

Um, I think you do need 20% down, according to ehow:

http://www.ehow.com/list_6793167_texas-mortgage-laws.html

And my first paragraph was from this article:

http://reason.com/blog/2011/08/15/dont-mess-with-the-texas-housi

Possibly changed in 2012? (Wouldn't be bad for me he he)

14   David9   1/1 = 100% civil   2013 Jan 22, 5:02am  ↑ like   ↓ dislike   quote    

lostand confused says

Funny isn't it-regualtions saved the Texans!!! I will be moving back finally
next month-just in time for a massive bubble .

Well, welcome back to California ! New bubble n All. Yes, here in El Ay, we have had some of those awesome California sunny, bright, mid 70's days, just perfect, it is.

15   Gragorin     2013 Jan 22, 5:29am  ↑ like (1)   ↓ dislike   quote    

This reminds me of a shithole I saw in San Jose this weekend. It was posted for $360k for a 3/2 at about 1300 square feet. However, after you get there they tell you it has $80k I liens, has. 1% short sale fee attached, and oh yeah.. The current residents are chain smoking hoarders and the house needs about $50 in repairs. I even heard the realtor say that the bank, a German one, was expecting offers in the low $400's at least. I just couldn't believe it.

16   David9   1/1 = 100% civil   2013 Jan 22, 5:52am  ↑ like   ↓ dislike   quote    

Gragorin says

the bank, a German one

Gragorin says

I just couldn't believe it.

Yeah, it's hard to accept the banks are running the show, in all regards as stated by PockyClipsNow below:

PockyClipsNow says

Its planned central economy forevermore.

Heck, I was looking at lower end properties than you were.
For 159.9k, a one bedroom one bath, 660 square feet, apartment conversion with wall air. Dirty, Dirty, Dirty, every cabinet, every closet, the shower door was broken, the balcony was literally turning into pebbles, and nothing was upgraded. It did have a peek a boo mountain view as it was on the 3rd floor which is why I wanted to see it. It sold right after the weekend, guess someone else didn't mind the thought of 30 years of payments plus money up front to make it nice.

17   David9   1/1 = 100% civil   2013 Jan 22, 6:20am  ↑ like   ↓ dislike   quote    

robertoaribas says

call a mortgage lender in texas.

I'll ask some people I know in Texas who help me with my property there.. tbc

18   David9   1/1 = 100% civil   2013 Jan 22, 6:48am  ↑ like (1)   ↓ dislike   quote    

robertoaribas says

maybe the new york times might reference things a bit better?

Yes, you're right ! Learned something else today. There is *Much* Sh*t on the internet.

Those two articles I posted contain incorrect information as I have found since that there are downpayments lower than 20% in Texas as well as down payment assistance programs.

19   errc   468/475 = 98% civil   2013 Jan 22, 7:44am  ↑ like (1)   ↓ dislike   quote    

Texas house prices remain more sensible because they don't suffer from the kind of nimbya ism that the left coast goof balls do, so they build to meet demand. Their more sane property taxes in place of stupid state income taxes allow for a healthier economy, and their education system is leap years ahead, so their people aren't so easily duped by whatever the next gold rush flim flam is

20   lostand confused   225/225 = 100% civil   2013 Jan 22, 9:02am  ↑ like   ↓ dislike   quote    

errc says

Texas house prices remain more sensible because they don't suffer from the kind of nimbya ism that the left coast goof balls do, so they build to meet demand. Their more sane property taxes in place of stupid state income taxes allow for a healthier economy, and their education system is leap years ahead, so their people aren't so easily duped by whatever the next gold rush flim flam is

Were you being sarcastic?

21   HEY YOU   642/642 = 100% civil   2013 Jan 22, 11:22am  ↑ like (1)   ↓ dislike   quote    

"Used house",that's great.

This house was owned by a little old lady who took excellent care of it.
It's just like a new one. You couldn't find a better deal. lmao

22   errc   468/475 = 98% civil   2013 Jan 22, 11:31am  ↑ like (1)   ↓ dislike   quote    

HEY YOU says

"Used house",that's great.

This house was owned by a little old lady who took excellent care of it.

It's just like a new one. You couldn't find a better deal. lmao

Or how about used house price appreciation. Try explaining that to someone that has been brainwashed to buy into the idea that a house increases in value over time, even as it decays away over time. In the year 2113, this shitbox will be worth a bajillion dollars

23   errc   468/475 = 98% civil   2013 Jan 22, 11:49am  ↑ like   ↓ dislike   quote    

robertoaribas says

errc says

Or how about used house price appreciation.

really? My home that I'm sitting in right now, was built in 1968. It sold then for under $30K.

Today, it is worth over $300K and climbing...

your tinfoil hats are on too tight!

You misunderstood my post. I was quoting hey you making a joke about used house as if a used car salesman were hocking it.

I know prices always go up,,,,I said good luck explaining why to somebody. Most things depreciate due to time decay, and houses are no different, but where real estate differs, is you get the land rights under the house as well, and governments that run perpetual growth ponzi pyramids are reliant on land values increasing into perpetuity as they are basal to the value of the currency

24   mell   63/63 = 100% civil   2013 Jan 22, 12:11pm  ↑ like (1)   ↓ dislike   quote    

robertoaribas says

Fair enough. However, in my world travels I had some severe shocks: homes similar to my home in nice parts of Bangkok, or Manila are much more valuable than they are here... Despite in the case of the philippines, a nearly 15 fold difference in average wages to US.

IF the US population keeps growing, and urban areas keep growing, there comes a point where a home with a yard becomes extremely valuable. they can build condos and apartments upwards forever, but there is truly only so much land in close in a major city.

even a 2 or 3% population growth over the years makes a huge change.

I think this has less to do with populations growth or land shortage (there is plenty of land in the US) but also with the attitude towards houseownership which has been and still is the 'American Dream' (also thanks to mucho lobbying). There are countries with much denser population for example in Europe where house prices are mostly flat over time and stay affordable - likely because houseownership is not that valued, not peddled by a lobby (agents make far less) and because the people may have less appetite for risk.

25   bob2356   494/498 = 99% civil   2013 Jan 23, 12:59am  ↑ like (1)   ↓ dislike   quote    

robertoaribas says

really? My home that I'm sitting in right now, was built in 1968. It sold then for under $30K.

In 1968 the price of gas was 20 cents a gallon and you could buy a brand new mustang for $2500.

26   bob2356   494/498 = 99% civil   2013 Jan 23, 1:14am  ↑ like (1)   ↓ dislike   quote    

robertoaribas says

However, in my world travels I had some severe shocks: homes similar to my home in nice parts of Bangkok, or Manila are much more valuable than they are here.

I was willing to believe you were a real estate investor until this post. There is no way to compare Bangkok and Manilla to Phoenix. They are both major port cities and capital cities. Both cities are their respective countries center for commerce, industry, government, education, tourism, culture, and transportation. Both are to some degree land locked. Phoenix is endless suburban sprawl in the middle of nowhere with limitless desert for expansion in every direction. SF or NY would be a valid comparison but Phoenix, no way.

27   lancedalton     2013 Feb 2, 2:08am  ↑ like (3)   ↓ dislike   quote    

Where are all the foreclosed homes??? Why are the lenders NOT releasing these into the market??? Because they are manipulating the current housing market. Get ready for a flood of REOs to hit the market. If you are a buyer, sit on the side lines, this market value increase is FABRICATED. Prices rising too fast, low inventory, high unemployment....all these are not the recipe for a healthy market. The banks are manipulating this market. A healthy market has a healthy inventory level. Investors are taking their cash from a bank that pays them nothing and then they move it into housing where rents fetch a better return. We need the banks to come clean and report on the backlog of REOs they are holding. Oh my neighbor has not paid his house payment or prop taxes for 18 months. He is just waiting for the sheriff to ring the door bell. BofA hasnt even forclosed yet, he simply is getting free rent which sould cost him 5,500 per month in Encinitas calif. The upper end market is soon to take a big dive out here.

28   New Renter     2013 Feb 2, 6:14am  ↑ like   ↓ dislike   quote    

The Professor says

lancedalton says

Oh my neighbor has not paid his house payment or prop taxes for 18 months. He is just waiting for the sheriff to ring the door bell. BofA hasnt even forclosed yet,

More anecdotal evidence of shadow inventory that is yet to see the light of day.

Why would a sane person continue to pay when their house is only worth a fraction of their loan?

Because of the greater fool of course!

29   inflection point     2013 Feb 2, 9:56am  ↑ like (1)   ↓ dislike   quote    

Robertoribas,

You are mistaken. Your house has not appreciated. Rather the dollar buys less today. Send your thank you to Ben Bernanke and the Fed.

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