patrick.net

mike2 says

I have lived in the SFBA all my life 50 plus years.

Statistically, then, if you live another 50 you will experience a wallop of a city crash. Nothing destroys value faster than the ground shaking. ;) Be ready for it. We live on borrowed time in the SFBA.

mike2 says

It is worth $135k right now

It is worth what you can actually sell it for. Not what you think you can sell if for. In many ways these number are far different. Selling it is really the only way to know the number.

mike2 says

Who cares a damn about what the CAR or NAR says about starter homes etc.? WTF does that have to do with what we are talking about?

pnet is about individual consumers.. not investors. but frankly there is some things an investor might teach a consumer when buying a home. long term matix like price trends and affordabilty does make a difference.

as far as CAR/NAR ... bad data does lead to bad decisions.. that is why the FED has dropped using NAR data and switched to S&P case shiller index.

You are right on that.I know the market extremely well and I own other properties that I have recently sold withn a few blocks. The same floor plan across the street just sold for $133k and was not as updated. That was 2 months ago and mkt has increased 5% since then. I am not worried either way... I keep collecting the rent since I do not owe anything on the house. For the next 18 months I will continue to rent it. No one knows where the mkt will be in 2 years buty my guess is more of the same or at least a leveling off. We bottomed 18 months ago.

mike2 says

F SFBA continues with job losses? Hell, that has been happening all my life but people keep coming here and buying and buying and buying!New jobs are created?

we are down to people migrating out of state along with jobs... so the great inflow in CA is actually turned into the great outflow....

mike2 says

No one knows where the mkt will be in 2 years buty my guess is more of the same or at least a leveling off.

that is why you start to learn to use leading/trailing indicators not to mention expectations.. so you can do predictions.

To much thinking..to much over analyzing..Investors and individual owners have a common thread. All are effected by the ultimate cost. Don't over analyze. It is cheaper to buy a property already built than to build one from ground up. That should telly you something. A few years back there were lots of Individual contractors buying small fill in lots and building causing lots to escalate in value. Now that is not happening except for huge builders like K and B homes who buy acres of land at a time very cheap.I have noticed small iindividual lots increasing in price quickly in inner city areas indicating to me that "SOON" the small builder will be back trying to make a profit and some money. Why build when you can buy a property fo 50-70% of the cost of building it. Don't over analyze...It messes with Reality!

Been hearing that all my life now also. So now we have 38 Million people in Calif now instead of 37 million? There is not a great Exodus out of the state. Drive the freeways, go to the malls, go to the baseball games, go anywhere. Packed with people!

I know the indicators.. I can see it and I know what people say and you can see what they are doing. I have done this over 30 years and never lost any $$ selling or buying a property.

I have bought and sold over 75 homes myself.
Some I kept for rental cash flow.

If you listen to the "experts" they are usually 6 mos- 1 year behind the curve. They all contradict each other.Don't over analyze.

Not crying here.

All the crappy, defective, undesirable condos I could have bought the last 3 years are for rent on Westside Rentals ! And have been for the month I have been a member. Let's review:

1.) Undesirable location in the complex, i.e. looking at other condos closely or the first floor where people can walk past and look in.
2.) High HOA cost
3.) 1 car parking even for a 2 bedroom
4.) Plain or damaged enough even the lipstick applied makes no difference.

http://realtytimes.com/rtpages/20060818_worsenafford.htm

hings have changed since the California Association of Realtors (C.A.R.) first started producing their annual Housing Affordability Index in 1984. At that time, the index used was very different. Fixed-rate mortgages were the norm, along with 20 percent down payments, and it was assumed that the monthly payments for principal, interest, taxes and insurance would be no more than 30 percent of a household's income. Since then, mortgage products have expanded and underwriting criteria has relaxed, but affordability hasn't increased accordingly.

Explains Robert Kleinhenz, deputy chief economist for C.A.R., the index criteria has changed according to what's more normal today. First-time homebuyers no longer put 20 percent down on houses they can afford on 30 percent of their income. They no longer overwhelmingly choose fixed-rate mortgages.

Today, first-time homebuyers, as reflected by the Housing Affordability Index, buy 85 percent of the median price in the area. They put 10 percent down, the qualifying ratio is 40 percent, and they get adjustable-rate mortgages.

robertoaribas says

Thomas wrong, you have been 100% wrong on here forever. You spent the past three years predicting a housing collapse, that never happened.

Please, tell us what leading predictors you use, so I can use the opposite of them! You have unmitigated gall to say anything about housing, given your completely wrong track record,

You might want to check with that as i said.. it was a good time to buy in Miami...
certainly not in SFBA... so that makes me wrong... it certainly makes you look clueless if not a liar... care to try again...

Real Estate is LOCAL. Roberto’s experience in Maricopa County, Arizona is not necessarily repeatable in other areas. It is good to be a landlord in Arizona. It is a lot less good to be a landlord in California where a renter can get away without paying rent for 18 months.

‘Multiple Offers’ are now common in many areas of California. The reduction in inventory is causing ‘bubble like behavior’.

Bulk sales by the GSEs are happening in Ventura County, Riverside County, Sacramento County, and San Bernardino County. Prices asked have risen by 10% or more at the low end in just two months. But there are also cases where prices are dropping and investors are selling to buy elsewhere.

Inventory is low for many reasons besides foreclosures being held off of the market.

Cash buyers (like me) are losing bids to other cash buyers well over asking.

Asking prices in many areas are now just to bait the hook. At the higher end (400K+ in Socal and 800K+ in Norcal) homes can sell at a discount to asking. The first time buyer is finding California to be “unaffordable”.

Even at Phoenix’s recent price rise, California retirees will likely make Roberto rich.

fedwatcher says

Bulk sales by the GSEs are happening in Ventura County, Riverside County, Sacramento County, and San Bernardino County. Prices asked have risen by 10% or more at the low end in just two months.

Sounds like Bubble II is progressing much faster than Bubble I in CA. The general feeling in the public is already at 2006 frenzy levels, and we are only about a year in. This one is going to be SPECTACULAR. The last one was merely a practice run.

Roberto is lucky he got in when he did. If he can time things right, he can unload everything he bought at 2x what he paid, wait for the next crash and then buy twice as many rentals. Double that cash flow for NOTHING. Just keep an eye on those hedge funds though.....when the big players move, it's going to be swift and without warning.

I'll start out by saying I am a homeowner and bought last year. So theoretically I should be tickled as punch right? Not so fast. If anyone looks at the overall buying demographic, the market is missing a large factor, and that would be first time buyers. The market is being heavily controlled by investors, speculators, and large funds sopping up all the inventory, which then of course makes the leftovers seem precious and thus highly desired.

All its going to take is an exit of the investors ( which will eventually happen because shortly the numbers aren't going to work as well) and then we'll likely see either a decline or a normalization of the market.

So I'd avoid getting smug or cozy just yet.

edvard2 says

All its going to take is an exit of the investors

It could get interesting if the effects of the sequester start being felt this summer and investors pull back. Will there be enough demand from first time buyers at those prices? Or will the prices start to dip and cause a panic by all of those investors who just bought at inflated prices?

In theory another dip shouldn't cause an investor to lose the place (if their numbers made sense). But I think a lot of the newbie investors out there are starting to factor appreciation back into their calculations, which IMHO is a foolish move. For them.. It will end badly.

edvard2 says

So I'd avoid getting smug or cozy just yet.

Doesn't mean you can't be happy with your purchase though, especially as it sounds like it was for you and your family (as was mine back at the end of 2011). There is no real reason for house prices to shoot up and I'm sure things will settle down soon enough, but it also looks like they aren't going to drop down substantially either (and even more so from the prices paid back in 2011).
Monterey prices appear to have gone up a little in the last 18 months, but the number of sales is so minimal I don't really see much difference in the comparables even though the graphs show a pretty meaningful up tick. That's fine with me. I like the house. It's going to be mine for a long time. If its price tracks inflation, then that will be a bonus.

There was no housing bubble

There was a mortgage bubble

If there were a housing bubble, then houses would have been built at such surplus that they'd be giving them away now.

I laugh at these simple folk that generalize, and confuse terminology, to the point that they believe that its possible to have a housing bubble, immediatlly followed by a housing shortage. Ha!

Ha ha ha hahahahahaha

In order for something to be defined as a bubble, the elevating prices have to dupe the market into over producing whatever it is that is being bubbled, which is what brings on the crash. In its aftermath, there would be massive surplus of "housing". There doesn't seem to be any over there on the left coast.

What did bubble, is credit. Credit collaterized by the housing stock. The market became super saturated with this funny money, and that is what caused the bubble to form, and to burst. Mortgage debt is what we're left with in over supply. Not houses.

So get it straight, skippy. It was a motgage bubble,,,,not a housing bubble. If you can't take the facts, best stay out the kitchen.

Well if everyone agrees, they must be right!

sincerely, the dipstick whose boarders pay his mortgage, while he stays at his sugar mommas house for free, working 30 hours per week, and wouldn't be caught dead in a coffee shop. Jackass!

Lmao at conventional wisdum and low iq folk like roberta whom follow it

errc says

Lmao at conventional wisdum and low iq folk like roberta whom follow it

Whom is an object relative pronoun. Just saying.

Bigsby says

Doesn't mean you can't be happy with your purchase though, especially as it sounds like it was for you and your family (as was mine back at the end of 2011). There is no real reason for house prices to shoot up and I'm sure things will settle down soon enough, but it also looks like they aren't going to drop down substantially either (and even more so from the prices paid back in 2011).

Yes- it was a house to live in and whatever its value is of less concern. But if you live in California like I do ( Which I see you do) then you're also well aware of what happens when bubbles get out of control: It wrecks the economy and that in turn is bad for stability and bad for owners and renters alike. So while I 'am' happy we purchased, I am also more akin to like a situation where prices rise only modestly and the market is able to offer a stable entry point to first time homebuyers which in turn keeps the market healthy and predictable. As it is now, things are off the chart.

edvard2 says

So while I 'am' happy we purchased, I am also more akin to like a situation where prices rise only modestly and the market is able to offer a stable entry point to first time homebuyers which in turn keeps the market healthy and predictable. As it is now, things are off the chart.

In small pockets. It's not the case for the country as a whole. And even the price of real estate for much of California isn't that bad when compared to many other countries, so it's all relative.

Its pretty bad here in the East Bay. Seems to me that if we were to have waited to buy now we wouldn't be able to do so, which is crazy seeing as how we bought less than a year ago. For the market to change that dramatically in that short a time seems to indicate that the market is screwy. It just sort of makes me feel uneasy because I went through the last bubble, waiting for that thing to deflate, and it seems like we're almost right back to where we were in 2006 again, and this time it only took about 1/3rd the time to get there. Definitely not normal.

robertoaribas says

Housing bubble is defined as a price bubble.

During the housing bubble builders build more home than they would have due to the price bubble. This is well documented. You are the one that chooses to define a housing bubble as what you want to believe it is.

yup1 says

During the housing bubble builders build more home than they would have due to the price bubble. This is well documented. You are the one that chooses to define a housing bubble as what you want to believe it is.

Is that not a consequence rather than a definition?

edvard2 says

Its pretty bad here in the East Bay. Seems to me that if we were to have waited to buy now we wouldn't be able to do so, which is crazy seeing as how we bought less than a year ago. For the market to change that dramatically in that short a time seems to indicate that the market is screwy. It just sort of makes me feel uneasy because I went through the last bubble, waiting for that thing to deflate, and it seems like we're almost right back to where we were in 2006 again, and this time it only took about 1/3rd the time to get there. Definitely not normal.

You should sell in a year, capture your tax free gain, and wait for it to pop again in the East Bay.

robertoaribas says

Ok, you guys win. Then I guess we didn't have a housing bubble. Cool.

(It's fine, I can handle all of you loser morons single handedly yup1, how is
that housing prices are going down thing working out for you? It's been six
months... They must be so much cheaper for you now!!!!!)

I don't pretend to KNOW as a fact what will happen with house prices Roberto. Do you?

As a short term investment decision in Maricopa county AZ, you made a good decision buying last year, as of now. Was it a good time for a non-investor to buy? I don't know. We will know in a few years. In a few years, your short term investment might be great, or it could be terrible.

Maricopa County sales are down year over year, listings are up year over year, and prices are way up year over year. Listings up and sales down does not sound like a good market but maybe it is.

Bigsby says

Is that not a consequence rather than a definition?

It is what happened. So you tell me.

robertoaribas says

(It's fine, I can handle all of you loser morons single handedly yup1, how is
that housing prices are going down thing working out for you? It's been six
months... They must be so much cheaper for you now!!!!!)

I will not be insulting your highness any longer. Let's see if you can have a rational discussion without name calling?

yup1 says

Bigsby says

Is that not a consequence rather than a definition?

It is what happened. So you tell me.

I think I did.

Prices are still dropping here in SE PA, and that's with interest rates cratering from 7.25% down to 3.5% over the past five years.. most anyone that hasn't waited out the lower rates along with the lower prices, has taken A BATH.

By brother will close on a house this Friday @169k, that first hit the market well over a year ago for (I think) 240k.

My gf agent bluffed that the owners wanted to sell, or try and sell with asking price 260k,,,the same house that they had on market a year ago for 245k. She just extended her lease out another year for the same 1350 she was paying

My neighbor two doors down just put a sign up out front their house again,,,was listed a year ago around 180k before two price drops and eventually pulling off the market

A house sold one block down where I walk my dog past enroute to the park. Asking was 189, sold for 180 (+ seller assist id wager)

I'm privy to info from the large apartment complexes in the area, and just saw a market study for the higher end properties. Rents are stable, but concessions abound. Large concessions.

Real. Estate. Is. Local

robertoaribas says

Roberto was 100% correct in his analysis

Didn't I just do that?

yup1 says

As a short term investment decision in Maricopa county AZ, you made a good
decision buying last year, as of now.

Clearly house prices have turned the corner, now the 'momentum traders' will be tits deep into RE for years.

Even Ivy Zelman and Calculated risk called a bottom last year.

http://www.calculatedriskblog.com/2013/03/zelman-nirvana-for-housing.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CalculatedRisk+%28Calculated+Risk%29

If I was still renting waiting for prices to go lower I might consider buying, relocation, or suicide. (or all three in that order! ha!)

The Professor says

I speculate that the hedge funds may be trading their paper for real assets in anticipation that their paper may be worth less in the future.

errc says

Real. Estate. Is. Local

Two good points, no Real Estate stampede in Dallas, still bargains in Las Vegas even with the investor flips.

But, here in Southern California it's a virtual wildfire, both a Tarzana short sale and a Calabasas one bedroom with one parking space, poof ! Gone in no more than 48 hours.

mike2 says

he made a hell of a lot of money the last 3-5 years while others called him stupid, arrogant etc. Bottom line to this point he has been right and his investments have soared.

How do you think people renting and investing in the stock market have done in the same time?

edvard2 says

But if you live in California like I do ( Which I see you do) then you're also well aware of what happens when bubbles get out of control: It wrecks the economy and that in turn is bad for stability and bad for owners and renters alike.

yep.. Adams Smiths magical hand of capitalism can bitch slap you ! ouch!

I don't get your list. Aren't 2 and 4 related, or the same? And whatever the reason 2 and 4 happen, then 1, 5, and 6 are a result? 3 might be related if the jobs are construction jobs, for example, but I agree that is generally a positive sign in the economy. Especially since unemployment has been so high in recent years.

I do see some of what you're seeing in that some people will argue there is a personally-tied aspect to the dynamics of society. That personal connection doesn't allow an objective view. Of course, just comprehension comes into play and it is a challenge for anyone to comprehend all of the factors leading to some of the real estate data.

Ahh, yes, I've seen you write that mix part of the situation elsewhere. I forget. I've read numbers on foreclosures and sometimes take the absolute numbers as a big percentage even when I haven't looked up the mix. Thanks.

Also get your number 6 for Phoenix. That's never worked-out in San Francisco. I could make it work out by moving, but I've never gotten the advantage of the freedom of owning a house when it means I have to move to a different area with few of the things I like about the area where I live.

robertoaribas says

've already written all the math you need, to see the next crash coming, my website, September archive, and get out right before the wave breaks...

lets have another Katrina and the Waves hit New Orleans...lets see how many will die this time.

Yes we are all going to be walking on sunshine...
https://www.youtube.com/watch?v=iPUmE-tne5U

LOL! of all things.. we should be looking at preventing bubbles ! and frankly with all the Govt regulations which wont prevent bubbles it still hasnt sunk into the recent govt or the public what Robert Shiller has been saying for a long time... appreciation occurs barely at rate of inflation. Your betting like as if you were in a Casino.. this is not a betting game we can afford.