patrick.net

thomas.wong1986 says

Its a shame we (public, media, and govt) are too busy trying to go after evil wall street and banksters to notice someone like realtors are scaming even today the public at large and giving lip service to govt regulators.

We were actually expecting that so our offer was quite low. Then again, their asking price was low. We still got a good price I feel. This house was 340kish around 1998 and 1999. If I factor in 33% inflation to it, it'd be $452k. I'm still paying a lower price than that.

tatupu70 says

Even if you accept that RE prices track inflation (which is somewhat dubious–I would expect them to track wage inflation), you have to admit that it doesn’t mean that every specific neighborhood or city will therefore exactly track inflation. Detroit, for example, clearly has signficantly lagged inflation. Does that mean Detroit is severely undervalued right now?

The fundamentals for housing prices are household income and leverage (loan types, rates, etc). Supply and demand tend to create a constant equilibrium though construction and population shifts/increases. Yes, wage inflation would be a more accurate measure if it is used on a local level. Detroit is a perfect example. Did it really overcorrect, or did the exodus of jobs in addition to the bubble make it only appear that way since the fundamentals tanked as well? Arguably, the fundamentals might support prices being that low. Las Vegas on the other hand is suffering a cyclical (but massive) unemployment which has deteriorated the market fundamentals, but it's a service-sector market for the most part, and unlike Detroit it could see a massive rebound.

tatupu70 says

You can’t look at a specific town and say that because it has outperformed inflation, it is overvalued.

Agreed. My area (nova) outperformed inflation. I don't use inflation to estimate the worth of houses, I use household income data for the areas I'm looking at. But I add one massive caveat to that which is that income levels in the DC region were largely a result of massive govt spending, something that might unwind over the years in proportion to its outperforming the national market over the past decade. I don't adjust how I see the value of houses based on it, but it gives me a lot of reason to doubt that prices will rise, or that the trend will continue.

klarek says

Agreed. My area (nova) outperformed inflation. I don’t use inflation to estimate the worth of houses, I use household income data for the areas I’m looking at. But I add one massive caveat to that which is that income levels in the DC region were largely a result of massive govt spending, something that might unwind over the years in proportion to its outperforming the national market over the past decade. I don’t adjust how I see the value of houses based on it, but it gives me a lot of reason to doubt that prices will rise, or that the trend will continue.

This quite is true I think and, is interesting point.

I am kind thinking about... what if we had government shutdown and it will last for 2 months?
As you know, 13% of fairfax resident, 10% of DC resident are fed workers, 10% of DC resident is DC government workers (which will also be closed if fed gov closed), and about another 10% of all people arround here are contaractors that depends on either fed or DC government. Let say 2/3 of those people can't work due to the shutdown, suppose many of them can't make their payment on time, and local business lose them for few weeks... well... things could've been quite interesting. Will we still can outperform inflation after that?

Another thing is, even if we were able to avoid the shutdown, federal government is not hiring. They don't hire another people when one left the office unless the position is absolutely necessary. And the enormous pressure from the congress the government is facing with now, they may have to cut some government positions in the future. That could affect people's life in DC metro in the future.

seaside says

I am kind thinking about… what if we had government shutdown and it will last for 2 months?

I was thinking more in terms of downsized departments and a lot of terminated contracts/programs. Nobody really thinks they would shut down the govt for that long. Unemployment would reach epic levels.

My less than asking offer was just accepted for my 2nd rental this year in South Puget sound. 3bd2bath 2365 sq ft, built in 2006 for 200k even(bank pays 2% closing costs). Asking was 205k. There were multiple offers supposedly and I was given an offer to give my "best and final" offer. I didn't budge and they still picked me, go figure. Am I proud of my investment. No. It's not an investment, it's my hedge against inflation and will be yet another incomes stream when I retire.

burritos says

Asking was 205k. There were multiple offers supposedly and I was given an offer to give my “best and final” offer. I didn’t budge and they still picked me, go figure.

I was asked to give a highest and best TWICE :(
But I gave in because our offer price was low.

A listing agent for an REO property once told me that the banks will counter you no matter what you offer. If they don't counter you, it's because you made a ridiculously high offer.

burritos says

My less than asking offer was just accepted for my 2nd rental this year in South Puget sound. 3bd2bath 2365 sq ft, built in 2006 for 200k even(bank pays 2% closing costs). Asking was 205k. There were multiple offers supposedly and I was given an offer to give my “best and final” offer. I didn’t budge and they still picked me, go figure. Am I proud of my investment. No. It’s not an investment, it’s my hedge against inflation and will be yet another incomes stream when I retire.

Do you have someone local to manage it?

vain says

burritos says

Asking was 205k. There were multiple offers supposedly and I was given an offer to give my “best and final” offer. I didn’t budge and they still picked me, go figure.

I was asked to give a highest and best TWICE

But I gave in because our offer price was low.
A listing agent for an REO property once told me that the banks will counter you no matter what you offer. If they don’t counter you, it’s because you made a ridiculously high offer.

Those were my thoughts exactly. Of course now I wish I had made a lower offer. However, I was originally going to make a full offer price, but my realtor suggested I offered lower with closing costs. I'm pretty certain I can get it rented out for 1650 maybe 1700 per month. My PITI is going to be around 1200. I've been following this market closely and houses of this size that were ready to move in were selling closer to 215-220. So a few thousand dollars here and there wasn't that big of a concern for me Honestly, both my realtor and I were shocked when we were told our offer had been accepted.

ch_tah says

burritos says

My less than asking offer was just accepted for my 2nd rental this year in South Puget sound. 3bd2bath 2365 sq ft, built in 2006 for 200k even(bank pays 2% closing costs). Asking was 205k. There were multiple offers supposedly and I was given an offer to give my “best and final” offer. I didn’t budge and they still picked me, go figure. Am I proud of my investment. No. It’s not an investment, it’s my hedge against inflation and will be yet another incomes stream when I retire.

Do you have someone local to manage it?

I have a property manager who is already managing 3 of my properties. Her cut is 10%. When I get to 4 properties she decreases her mgmt rate to 8%. If I can get to 10 properties(it'll be a while if ever) that rate goes down to 5%.

Very nice, burritos.

ch_tah says

Very nice, burritos.

Thanks.

burritos says

So a few thousand dollars here and there wasn’t that big of a concern for me Honestly, both my realtor and I were shocked when we were told our offer had been accepted.

burritos says

There were multiple offers supposedly and I was given an offer to give my “best and final” offer. I didn’t budge and they still picked me, go figure.

Kudos on standing ground on your price and congrads on winning. And as you quickly learned this whole notion of multiple best and final offers crap, and all the hype behind it must be taken with lots of salt. And I mean lots of salt. Fake offers will be the last leg of this bubble to fall.

And still today, this problem isnt being addressed by regulators.

American in Japan says

Is anyone buying this month or in May?

AIJ,

Won't that be a huge mistake? unless it is Las Vegas. :)

Tell that to whoever is buying in the overpriced areas...

American in Japan says

Tell that to whoever is buying in the overpriced areas…

Yeah, BA for sure.

I would never buy an expensive house right now but reality is some people have few other options in the bay area I have some insight because I interview a lot of tenants many of them in high tech starting families there are very few rental properties in areas where youd want to raise a family

Interest rates are low house prices are down so people buy because they can afford the payments

I have a contract down on a 2br 1 bathroom Chicago condo for $138k. The original asking price was $165k. I rent a tiny studio right now and wanted more space. If I need the extra income I figure I can rent the 2nd bedroom.

robertoaribas says

1. Are condos a worse investment than homes. Perhaps. I didn’t buy any of these for appreciation however. The average price for the 3 of them I purchased, with rehab and appliances is $40K. I am renting one for $750, one for $825, the third I anticipate $795. They are all close in, near the light rail and near centers of employment, i am much more concerned about future rent trends then future price trends. Factoring in a month of vacancy and $1000 for maintenance, i am making 12 to 14% on each of these, without loans.

Smart boy.

@toothfairy

Sorry about my ignorance here...
About starting a family, are they more concerned with schools, safety or other? (even if the children are under 6).

seems like folks want safety and cleanliness newness and updates not found in typical rental

So is summer *really* the worst time to buy a house in terms of seasonal effects on the price?

American in Japan says

So is summer *really* the worst time to buy a house in terms of seasonal effects on the price?

Depends on the area, but history shows that fall is the best time as people who tried to sell all summer get desperate. Winter is good too but normally the best houses have already been snatched up by then. The best day historically would be Christmas Day where your offer would likely be the only one.

Summer can still be good, you normally have lots of houses entering the market and the houses that have already been on the market will sometimes lower their prices to compete with the new wave of houses. But yes, the beginning of summer is usually the worst time to buy a house.

Is anyone buying a place in May or June??

We are planning on closing in June. Well see if it goes through or not.

American in Japan says

Is anyone buying a place in May or June??

Maybe.

After selling our Santa Barbara house in 2005 and renting since, we bought a house in the East Bay late last year...a fixer-upper on a great street in one of the best school districts. Subsequently, we sunk over 100k in the remodel (which came out great!) But lo and behold, after many years at the same employer, I was laid off (insert "ouch" here) and we decided to relocate for another job opportunity. Surprising to me, we had several offers after just a brokers tour and the offer we accepted was from a very qualified buyer that paid asking price, giving us all of our investment back as well as an $80k profit after all costs (including moving) are weighed in. I am pleasantly surprised about the resiliency of some local markets, have a great appreciation for good school districts, and am once again going to be a happy renter!

Ducky,
I see that the house(s) on Victory Lane near the park have been scooped up. But hope springs eternal below $200k. How about the short sale at 1111 Carey? Let us know if you are thwarted by the RE Cartel.

You can add me to the 'bought in 2011' list. I just closed escrow today.

$440k for a place that rents for $2500/month. Year 2000 price.

vain says

You can add me to the ‘bought in 2011′ list. I just closed escrow today.

$440k for a place that rents for $2500/month. Year 2000 price.

Ok so the tenant is you paying around $2200 a month then. I've never heard of a 2/1 in daly shity renting for that much. I had good friends who rented for $1400 in 2001 -2006, for a skinny 1/1 with the bay windows and the garage downstairs. bart was right there across the main street. Love SF!

Katy Perry says

vain says

You can add me to the ‘bought in 2011′ list. I just closed escrow today.
$440k for a place that rents for $2500/month. Year 2000 price.

Ok so the tenant is you paying around $2200 a month then. I’ve never heard of a 2/1 in daly shity renting for that much. I had good friends who rented for $1400 in 2001 -2006, for a skinny 1/1 with the bay windows and the garage downstairs. bart was right there across the main street. Love SF!

It's a 3BR/2BA. Purchased with cash. I'll take a $200k loan against it soon, have a payment of $1050ish, and rent out the downstairs for $1200. I will live upstairs for free. Cash flow $_$.

If prices fall, cool, we'll be in position to buy another with cash. If prices rise, I can't complain there.

vain says

It’s a 3BR/2BA. Purchased with cash. I’ll take a $200k loan against it soon

why would you take out a loan against the house that you just paid for in cash? if you buy another house with that loan how is that buying in cash if it's borrowed money?

I wish I had parents who gave me money also.

Vain are you a realtor/broker?

Katy Perry says

vain says

It’s a 3BR/2BA. Purchased with cash. I’ll take a $200k loan against it soon

why would you take out a loan against the house that you just paid for in cash? if you buy another house with that loan how is that buying in cash if it’s borrowed money?
I wish I had parents who gave me money also.
Vain are you a realtor/broker?

Bought it in cash because the home didn't qualify for a loan due to a missing water heater. Nobody is giving me any money. The loan against the house would be to repay members of the family. I probably dodged a few thousand dollars of extra fees for not using a loan to purchase. You're probably going to mention income soon too. I can be unemployed after I get the loan and will still be fine since I'd just resort to living in the bottom unit and rent out the top unit for $2k.

We use a broker in our immediate family.

Summer is almost here...but traditionally not the best time to buy...
This year...

American in Japan says

Summer is almost here…but traditionally not the best time to buy…
This year…

I agree. Prices have inched up on the MLS. And folks that got foreclosed on previously can actually buy again.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/05/31/MNIL1JKERQ.DTL&tsp=1

vain says

I agree. Prices have inched up on the MLS. And folks that got foreclosed on previously can actually buy again.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/05/31/MNIL1JKERQ.DTL&tsp=1

Debt slaves will always find ways to go into debt. This article certainly encourages living in credit.

after horrible new england winter went down to florida to check out the market. Total impulse purchase and closing soon. Will use it as a vacation/winter home for the next few years.

Bought a 4/3 townhouse 1/2 mile from the beach with rooftop deck that has panoramic view of the ocean. Place is 10 years old and in good shape. Can still walk my kids to school (1 block). Paid $799,000 and mortgage is $3,382; $/sq foot is $379. Neighboring properties sold for $880K (two and not as nice) and one across the street is going for $1.1M. I was paying $3800 in rent so after tax deduction, insurance, and maintenance (I itemize a lot as a small business owner), Im about $300 less/month. This isnt including the money I collect off investments I didnt put down on the house (about $400) and money towards principal ($800/month). Typical rent for this place would be $3800-$4000.

I am in South Fl.Had the contract done with owner today.
Will go mortgage shopping starting Monday and closing in September.
This is a 2X 2 condo.May be it might still go down..but I liked the unit..its in the same wing where I rent now but on diff floor.corner unit.
Paying around the market price,HOA is the biggest expense @320 pm
Price is 62.5K for 1100 sft condo that is 32 year old

If prices aren't going up much in the summer, what are they going to do from September?

American in Japan says

If prices aren't going up much in the summer, what are they going to do from September?

If you are referring "they" to government then they are going to come up with more money to give away struggling irresponsible people. :)