patrick.net

Wifey and I have actually put a bid in on a house in Ventura. Very very funny, Realtors, man they just can't put the kool-aid cup down. "There's lots of interest in this house, but no other offers". Ok, so it there are no other offers, is there really any interest in the house?

They tried the whole "counter offer" bs, to which I curtly replied "we are not interested in making any counter offers". From Realtor, "ok, just counter offer with the same offer'. Funny thing is that when I got the counter counter offer form, which should have had the same information on it, it didn't. I called and said, "the counter counter offer doesn't have the closing costs included". Realtor replied "oh it's just a paper trail". I interrupted and said I would not sign without that on it. "ok, well just write it in". Don't know if they were trying to pull a fast one, but man, come on now.

My thoughts are that housing will continue to go down, this house has is down about 125K from last year. It will continue to go down, my guess is to about $425K or so. My "concern" is that while is prices are going to go down if the funding dries up, ie, no down payment via calhfa I couldn't buy anyways. Our goal is find a place we like, our requirements are low, small bungalow, good location walking distance to pubs and/or places to eat, yard with gate and a garage. Calhfa is pretty smoking funding, 100% at 5.625 with 12.5 basically free money, and they make your payment for 6 months when you get laid off*

As a knee pad wearing member of the laid off Gen-X set, I am certain of one thing, I will be laid off again sometime.

"House around the corner (in Willow Glen) went up for sale 30 days ago: $1.3 mil"

10 years ago tyical home goes for under 200K... you may swing 300K
which is on the upper range of 3x salary. $1 maybe if its in the Mountains of Los Gatos or LA Hills. There is no such thing as $1.3M Willow Glen home. Poor uneducated soul-less buyer out of state is paying for someone elses early retirement.

MtViewRenter,

I currently have a SEP and it allows up to 25% of comp. (or 44k) whichever is the lesser. Unless I add employees down the road it should suffice.

I just wondered if there were others out there that "intended" to set up a Charitable Remainder Trust (or whatever) and didn't follow up and what their strategies might be for '07. It's never too soon to start.

surfer-x I like the way you think and do.

surfer-x,

Cool - congrats (if it comes through)!

The DQ numbers show that Ventura (and SD) RE prices are leading the way down in our glorious state. Sounds like it's the right time for you guys.

surfer x putting in a bid on a home when there's only been a slight decline (to date). Not the surfer x "I" know!

DinOR, yeah, it has given me much headache, I've charted Ventura five ways to sunday, took all the sales in the past 2 years from Zillow, and got a R^2 value of .95 on a linear fit for median and mean sale prices. I know that the prices will under-cool and the stay flat for about 10 years. Our only concern is that funding will dry up. We have no outstanding debts a 780 FICO, good salary, about 0.625Haha, but no down, and with the mano-y-mano expenses of coastal ca the ability to save 100K for a down isn't there. So screw it. The tax advantages really aren't what people think they are but filing short form isn't the way to go either. So what's a brother to do? Plus Ventura has that smooth mellow vibe that I'm looking for. We'll need to get a place with an Avocado tree and some blue agave plants as we won't be able to afford guacamole or tequila.

"Then I said “I wonder how long until cupertino (she mainly works saratoga/cup) starts falling consistantly” and she immediately jumped in saying that properties were still selling with multiple offers there, and the prices wouldn’t drop. The schools are just too good!"

Children of rich parents rarely have the motivation of their poor parents.
Children of Saratoga and Los Gatsos grew up with lots of problems. Plenty I knew from my days in Saratoga had a Coke problem. Even today LGPD
busts on Meth are common. Rich kids with lots of money, not a good mix.
Cupertino was full of pot heads as well.

Saratoga is overrated if your thinking about your family. Its great if your single or newly married without kids. For my taste too boring.

Space Ace :)

surfer x putting in a bid on a home when there’s only been a slight decline (to date). Not the surfer x “I” know!

It is fine to put in bids...

@X,

Seriously? I've rented for about 3 years now and I haven't "gone short form" since high school. Hate to say it.... but I still got my doubts. That really you?

It's all about utility value. In the end, money is just a means to an end. I'm sure X and Ms X have weighed the balance.

People who've waited the past two years are better off than those who didn't, especially in X's area. They only person here who continually insists he's clairvoyant enough to recognize the *exact* bottom also screamed and yelled (2 years ago) that prices wouldn't and couldn't be sticky, and that only an idiot fool realtor shill could believe otherwise.

My point is, everyone should buy if and when it fits their life. Just try to make sure you can afford it and it's worth the risk. But remember, in the long run, we're all dead.

Congrats X. I'm sure you don't need to be warned that it ain't over until the overweight Austrian sings. Back in 2002 we had a solid purchase offer for a home in Emerald Hills, contingencies removed, done deal fall apart 4 days before closing because the builder/owner/rehaber decided he would rather take an under the table all cash offer. His response to all involved "sue me". No one did (though we got our earnest deposit back with 5x interest).

Saratoga has nice trees though.

Tree is the universal indicator. Companies with good trees will do well. Neighborhoods with good trees will thrive.

"Saratoga has nice trees though"

They were nice 10 years ago as well.
Are they nicer 2-3x more since many are
paying 2-3x more 10 years ago.

"Neighborhoods with good trees will thrive"

LOL! I guess they should have never cut down the
orchards in Sunnyvale and Mountain View.

I do get a kick out of many out of state transplants.
Truly blinded by their own hype.

FAB was looking at the LX570, right?

Space Ace,

I think Peter has a point. Trees in a neighborhood = good.

Not 2x3 times good, but EVERYTHING in the bay area did 2x3 times over the last 10 years. If you can buy the exact same house in two different neighborhoods with the exact same school system, same town, etc... but one had a lot of trees and the other didn't... you could expect a slight premium (say 5%) for the tree lined neighborhood. And you'd see a slight premium in rent there, too. And the poorest people in that city won't pay 5% premium for trees for the most part, so you will end up with a slightly 'nicer' neighborhood as far as being well kept, etc.

It's not a huge influence, but it's definately an influence.

I do get a kick out of many out of state transplants.
Truly blinded by their own hype.

Huh?

Some of the trees in Stanford and along Sand Hill are really beautiful. My theory is that trees reflect the essence of their surroundings.

Peter P - "It is fine to put in bids…

...in fact, this correction requires them.

Imagine what would happen if more lowball, (say, 30% or more below asking) offers were being made?

We're already seeing examples of Buyers being less worried about offending sellers with an offer, 10-20% below asking. If it is truly a buyer's market, and you are dead set on buying now, then its time to cowboy up!

My wife and I are considering a 40% below lowball offer on a place that we see keep popping up on craigslist.

I will pay a 10% premium for trees. But I will not pay any premium for the schools.

Imagine what would happen if more lowball, (say, 30% or more below asking) offers were being made?

Very true.

My wife and I are considering a 40% below lowball offer on a place that we see keep popping up on craigslist.

Ideally, you want something that is just below your range and have them chase the price down. Give them false hope. Then take it down one notch. Repeated until their minds play games with them.

Children of rich parents rarely have the motivation of their poor parents.
Children of Saratoga and Los Gatsos grew up with lots of problems. Plenty I knew from my days in Saratoga had a Coke problem. Even today LGPD
busts on Meth are common. Rich kids with lots of money, not a good mix.
Cupertino was full of pot heads as well.

Is this a California of the 70's specific story?

I knew a lot of rich kids from NY/NJ metro area - they all turned out quite well. Most of them were lawyers, doctors, IB, etc. The high school I went to was in a tony part of the east coast - it had a 80% 4-year college rate.

www.fast-growing-trees.com

Some of these babies grow upwards of 12' a year and cost about $15-$30 per. Windbreak? Shade? Color? Whatever you're looking for they got it! I've used Arbovitaes and they suck! They take forever to grow and when they reach a certain height they take over like a mutant weed.

I wouldn't let a lack of trees keep me from the house I really wanted, and we shouldn't pay a big premium either with all the options that are out there.

Maybe the question some should be asking … Is 800K really gonna stick?
And we all know what the answer is to that. Its real value will go down reall deep and hard.

"deep and hard" are pretty relative terms. But I doubt they're going to go back to $150k of 10 years ago (which isn't true to begin with since in 1997, prices were already at $350+ plus range for a house around here.) Inflation alone would ratchet it up.

BEAR CAPITULATION ALERT!!!:
Surfer-X just put in a bid on a CA POS. Wow 8O.

X-Man,

I hope you're pulling our legs here. If not, I hope you *really* low-balled them. If funding really dries up as you say, what do you think that's going do to future prices and sales? Seriously man, think it over before you close.

If it were me, I'd pray for sellers to reject it and wait a bit longer. Either way, though, I wish you & Mrs. X the best of luck.

“deep and hard” are pretty relative terms. But I doubt they’re going to go back to $150k of 10 years ago (which isn’t true to begin with since in 1997, prices were already at $350+ plus range for a house around here.) Inflation alone would ratchet it up.

eburbed,

I don't think anyone here expects prices to revert back to 1997 levels. That's a page out of TOS's book - build a straw man argument to knock it down.

Ironic, this happens just as I get done with a thread about low-balling:

Evil Buyers Display Extreme Cruelty to Distressed Sellers

HARM,

What does a guy with a 780 FICO care if "funding dries up"? If it does, this person would have almost nothing to worry about as credit will always be extended to folks in this range. IMHO.

DinOR,

No kidding. I think it may be time for an "intervention". May have to stock up on tequila, gather the "team" and head over to $anta Barbara this weekend.

@HARM,

Now that my tax season concludes in about 4 minutes I can clear my desk and get headed south straight away!

I still have my doubts that "is" X or that he isn't pulling our leg? Prices in his area are likely higher than when I first started posting here or are only down slightly from 05's highs. I think the "give away" was mentioning "short form filing" and calfha.

"I don’t think anyone here expects prices to revert back to 1997 levels. That’s a page out of TOS’s book"

When prices decline in 1991, they rolled back to 1986 (Six years). Did we not have higher inflation back then? That was then this is now. There are no hardpressed rules that dictate prices cannot fall down to I say 1998-99 prices. Thats still in the cards.

Do you expect another wave of "6-millionaires a day" as it was back in 1999. No that game is over. You may have caught yesterdays Mercury News regarding top 150 SV employers. I been following it for long time. Do you relize many more companies are being taken out with M&A then new start-up created over even IPOs to the market.

Im still surprised by many of you who think even 600K is normal for Bay Area? If anything we are streaming into a period of deflation, which at the end will be far better off.

"BEAR CAPITULATION ALERT!!!"

LOL! no sin walking into an open house (asking $650K) and saying

I will give you $350K.
Realtor laughs and you show them the zillow chart of last sale at $200K in 1997 and ask,
"Oh! Whats changed in 10 years that warrents 200-300% increase?

LOL! Realtor may even want to sell you his Yahoo he paid $350/share.
Oh "Whats changed?"

600k is kind of a 'trigger' point for me and my wife. If we find a house we like for 600k, we'd buy it. That would require about a 25% cut in housing prices, based on what I see right now.

If prices stick, we'll keep saving for a downpayment until we can make a downpayment large enough that our debt/income is comfortably below 3. I'm willing to sacrifice 'investment opportunities' to have a happy wife in a house we like, can easily pay off in a few years, and wouldn't lose if we wound up on one salary.

Prices in his area are likely higher than when I first started posting here or are only down slightly from 05’s highs.

Ventura has taken quite a sch-lacking lately and it is within our budget now. I just don't know, way back when, in the mid 90's, just out of grad school 1, I was making decent coin but had no down, it just wouldn't work. I do have doubts in that if you don't have the down maybe you shouldn't sign the forms and make the payments. Mrs-X and I have no deductions, I think our only option to avoid the Uncle Sam man love each year is to go into debt. Either than or do the "my business loses money" thing but the stress might not be worth it. I figure if prices drop to 400K or so, this brings it into reach for those making about 80K, which is two earning 40K, which you can do at Trader Joes. It's the TJ metric. Just don't know. With the tax thingy it costs us about 300 more a month to "buy" in Ventura Vs. rent in $anta Barbara. Just don't know. DinOR, can I contact you offline?

SuCkIt

I charted the price from 10 years to now and the price we offered is dead nuts on what it "should" be now.

Space Ace,

I agree that there will be a period of deflation. The law of averages always wins. However, If you truly think prices can roll back to 1997 levels (I'd be delighted), you have to account for that in real, not nominal prices. In that case, the $350K "median" home of 1997 would be in the range of $500k to 550K, depending on the "true" inflation/appreciation rate you use. That's not that far off $350K.

Space_Ace,

There are other "M.O" indicators at play here as well. We've had countless "imposter surfer x's" at times. Typically X doesn't post during the day (1 if at all). Also the complete and utter lack of malice toward the seller is another give away.

hehehehe no, it's me DinOR, but at work I cannot "express" myself as fully as at home.