patrick.net

too bad - realtors made a killing until the crash so ...no sympathy here. The easy money is gone and now they have to work for a change by showing properties/waiting/hanging in there with the client. No sales done on the roof of a car right after the first showing.

Hope you saved money when it was easy easy easy.

SubOink says

too bad - realtors made a killing until the crash so ...no sympathy here. The easy money is gone and now they have to work for a change by showing properties/waiting/hanging in there with the client. No sales done on the roof of a car right after the first showing.

Hope you saved money when it was easy easy easy.

Yup. Sales is a tough job when market conditions are normal. Conditions are certainly abnormal now, and in a way that is bad for folks in the RE services field. During the bubble, wasn't something like 1 in 3 people in the US making money in some direct way from the RE industry? I had a lot of coworkers (engineers) that were taking calls during work hours because they were, "getting into RE," and playing-realtor on the side. It would be my assumption that they are all focusing more on their real jobs these days, and leaving RE sales to those that started out with it as their real job.

Low sales volumes + plethora of sales people = lots of unhappy sales people

Wow, realtors are fighting bulk REO sales from Fannie/Freddie in California(mostly in a self serving manner since they are fighting to not be cut out of the transaction):
http://www.inman.com/news/2012/04/10/california-lawmakers-object-bulk-reo-rental-sales

But, dare I say I am on the side of the NAR/CAR here?

robertoaribas says

right now in Phoenix, having a buyer is just about useless for an agent. There just isn't any inventory, and anything reasonable gets multiple offers, many of which are cash... I don't typically work with buyers, but right now even the agents I know who do almost nothing buy buyer's agency are having a hell of a time of it...

Wonder if the realtors in trouble on the income side should just sell their house for all cash. Easy solution. They could even get their own commission. No pity here.

Looked at a duplex here in Portland this morning and asked the agent about this and he was frustrated. Its to the point where every viable property gets 8-10 offers, so instead of writing 1-2 offers to get a property, you have to write 10-20 in order to get one. On the selling side, you still have to drop your price pretty low to get people interested, and then you have to wade through 10 offers, then do the whole multiple offer thing and wade through their 'highest and best' offers again. It drags the process out over weeks and has got to be at least doubling (or more) an agents' work to buy and sell a property.

A friend at work's wife is a part time agent and she is horribly frustrated. She has written something like 100 offers over the past 3 months and only 1 actually went through to closing. After her companies' take, she got something like $400 commission. That's a lot of driving and writing for a measly $400.

Man, I miss last summer when you could walk a property in the am, and by close of business have the offer accepted by the bank.

How many people actually know the Forgiveness Act is going to expire this year?

It's not exactly a hot topic on the news waves.

I'm not saying it couldn't be a catalyst, but the laymen probably doesn't even know that it's set to expire, or of its existence at all.

What's low inventory?
Below 2005/2006

Wealthy Regions... inventory climbing up.

For La Jolla, CA (San Diego Suburb), it's basically up slightly from June 358/372 now), down from 500+ a couple years back
Same for Rancho Santa Fe (31/36)
Pacific Beach is up (204/212)
Downtown too, (274/290)

Call it Crazy says

That might be why so many continue to pay their underwater mortgages (like in my chart) because they don't know about it. When they default next year they will get that nice 1099 from the IRS...... Surprise!!!

Let's start the Facebook campaign.

just someone says

What's low inventory?

I've heard anything under 6 months of sell able inventory. For instance in Irvine, my city, there are about 400 home on the market, and last month homes sold at a 200/month pace. That says there is a 2 month supply of homes, which is considered really low.

Not sure what it's like for La Jolla.

robertoaribas says

Also, if people have survived over 5 years of being underwater, what makes you so sure they will suddenly give up?

Because foreclosure starts and inventory is rising?
http://www.ibj.com/national--state-foreclosure-starts-on-the-rise/PARAMS/article/35991

In terms of inventory, i think you also need to qualify what that means. There's a bizillion houses for sale here above $350k, none of which me or anyone else looking for an investment is going to touch. They just languish on the market forever.

Start talking about inventory where the cap rate is say >8% and its very slim pickings.

1) Answer; YES

There has been only one other time that we've had even close to this low of supply in the last 6 years in Irvine/Orange County in general and it was the middle of winter. (under 450 properties in Irvine)

It's the busiest time of the year and we have the lease amount of supply, hunderds of hours are being wasted with 10+ offers on every deal.

Irvine is competitive at nearly every price point, unless one is prepared to get in a bidding war and pay a premium to the most recent comparable sales it's useless to even try to purchase right now. That said, even in a more normal market circa 50% of buyers that start in Irvine that I work with end up buying outside of Irvine when they see how much more that they can get. Generally, those that buy in Irvine are 110% sure that Irvine is the only place for them and would not even consider living elsewhere, it's very rare that someone with any other mindset buys in Irvine because there are normally buyers to compete with that have this mind set.

Most markets, even outside of Irvine are extremely competitive right now due to lack of supply. I just had a listing in the low $200's that have over 50 offers including circa 20 cash offers. It's sad to see the affect that the market manipulation is having on the market and the people that just want to own a place for their family.

robertoaribas says

right now in Phoenix, having a buyer is just about useless for an agent. There just isn't any inventory, and anything reasonable gets multiple offers, many of which are cash... I don't typically work with buyers, but right now even the agents I know who do almost nothing buy buyer's agency are having a hell of a time of it...

To me this is a sign of a really bad market. What does it tell you when sellers of a product are more important than the buyers?

I think there are huge structural problems there with manipulative supply and demand side in this market and something is going to crash sooner or later. That kind of market can't sustain itself simply.

Orange County Realtor Akason Realty Consulting says

including circa 20 cash offers.

Bingo.

20 cash offers tells me "investor speculation".

I completely agree. The market manipulation is terrible.

That said, I think that there is less speculation in most markets, areas like Phoenix now have cap rates of circa 8%, interest rates are circa 4%, in my opinion, that's a nice return, circa 8% cap rates with leverage 15%+ cash on cash returns.

Buyers that buy properties with 3% cap rates and borrow money at 4%+ are speculating.

Even in some areas of OC, many of the cash buyers prefer to an asset returning 4% than to stay liquid at circa 1% or less. Is that a bad choice? Time will tell.

Orange County Realtor Akason Realty Consulting says

Is that a bad choice? Time will tell.

I don't think it's a question of "bad choice" or "good choice", I think market conditions have investors chasing for the only choice. Unfortunately, history has shown us (most recently 2000-2006), investor lead speculation only leads to big crashes.

If the fundamentals were there for true price recovery (growing job market, wages, lower unemployment, etc), I'd say otherwise, but we both know they aren't there.

roberto, instead of trolling my threads, shouldn't you be getting ready to buy an island in the Pacific with your $6,000 a month rental income?

Call it Crazy says

That's it in a nutshell!!!! Without strength in those areas, true recovery will be tough. Mini bubbles can be "blown" in certain areas like Phoenix

Phoenix has only had rising prices since late last year, following a plunge of 3 years. The thing is, inventory is actually growing in Phoenix (up about 7-8% month-over-month, and sales are down about 3-4% over the same period.

That tells me that the Phoenix bull trap is starting to fade, but I suppose we'll see what happens to prices more concretely this winter.

robertoaribas says

Also, if people have survived over 5 years of being underwater, what makes you so sure they will suddenly give up?

Because there is a dead-cat bounce going on and people think that prices are going back to 2006-7. Once prices start heading south, again, the mad rush for the exits will begin. Also, 5 years of waiting is not that much. Many renters waited for 10-15 years before they bought. Many FB's will have to wait that long, before they give up and sell.

robertoaribas says

Yes, you should wait till unemployment is less than 2%,

It should be pretty clear that this will not happen any time, soon, because most of those jobs are never coming back. There has been a dramatic change in the structure of the economy, where, in the global jobs marketplace, companies are becoming more profitable with less workers and outsourcing workers. In fact, since the 1980s we've seen job recoveries get slower and slower with every recession, and has greatly accelerated with the last recession, all because of this phenomenon.

Goran_K says

That tells me that the Phoenix bull trap is starting to fade, but I suppose we'll see what happens to prices more concretely this winter.

The fact that this was a bull trap and it is now over is more than obvious in places like Palo Alto, where asking prices are already down more than 20% since this summer.

Roberto, what are the month-over-month statistics?

If you look at data points one by one, how can you possibly make any determinations about trends, or even a pattern?

robertoaribas says

Goran_K says

Roberto, what are the month-over-month statistics?

If you look at data points one by one, how can you possibly make any determinations about trends, or even a pattern?

Goran, month after month you find reasons in the data for Phoenix prices to drop... But month after month, prices despite your intense proofs that they are and will drop, keep going up...

3 months ago, in theat less than 140k search around my home, there were over 60 for sale. the next month, it dropped to 40. For the last month it has bounced between 20 and 30, and I mean literally bounced, there were 19 on it 3 days go, today, there are 27... So, you'll go running your mouth off sans brain about "how bad the 3 day trend is..."

Guess what? I phoned the agents for the first 10 on the list, and 8 have multiple offers already...

Keeping inventory off the market, creating artificial demand with ultra-low interest rates, selling houses for discounts to the speculators are all mechanisms which eventually will backfire on the banks. Latent inventory just keeps growing, and will eventually burst with a loud thunder. Except, this time around, there won't be any more investors with cash, to pick up the remains of the sick market.

robertoaribas says

Goran_K says

Roberto, what are the month-over-month statistics?

If you look at data points one by one, how can you possibly make any determinations about trends, or even a pattern?

Goran, month after month you find reasons in the data for Phoenix prices to drop... But month after month, prices despite your intense proofs that they are and will drop, keep going up...

3 months ago, in theat less than 140k search around my home, there were over 60 for sale. the next month, it dropped to 40. For the last month it has bounced between 20 and 30, and I mean literally bounced, there were 19 on it 3 days go, today, there are 27... So, you'll go running your mouth off sans brain about "how bad the 3 day trend is..."

Guess what? I phoned the agents for the first 10 on the list, and 8 have multiple offers already...

Keeping inventory off the market, creating artificial demand with ultra-low interest rates, selling houses for discounts to the speculators are all mechanisms which eventually will backfire on the banks. Latent inventory just keeps growing, and will eventually burst with a loud thunder. Except, this time around, there won't be any more investors with cash, to pick up the remains of the sick market.robertoaribas says

In an area of town where I own 3 homes, bought for 46K + 10 repairs, 85K + 5 repairs, and 76K no repairs, the inventory of similar homes UNDER $140K = 27, and 55 sold in the past 30 days...

Yes, except for, you won't sell now, because you are a greedy. You will wait until prices drop back below $46K on all your houses, and your rental incomes will cease, completely, and then sell at a big loss.

robertoaribas says

I phoned the agents for the first 10 on the list, and 8 have multiple offers already...

Yes, and of course the guy who has "de plus" brains around here, always believes what RE agents tell him.

robertoaribas says

Let's see: I have them rented for $1000, $1000, and $1100 a month, so I truly live in fear...

No, you are not living in fear now. If you did, you wouldn't be the egg-man that you will once be, after you buy 30/40 more houses.

robertoaribas says

Yes. Agents are going to tell me they have multiple offers if they don't, because they don't want to sell the home and make a commission!

It's pretty obvious that you have never heard of the cognitive dissonance theory, you fool.

There is a simple formula in human nature.

increase money -> decrease honesty and integrity

If you want to deal with truly honest people then go to the volunteer shelters workers. If you want to find the truly dishonest then realtors are high up there on the list.

robertoaribas says

No, because I am calling to show the home, and they are saying "don't bother to show it, we already have multiple offers, many of them cash..."

But why should we even believe you, because you are a lying realt-whore SOB, yourself.

robertoaribas says

There is really no point to call you stupid, you prove it every time you post!

robertoaribas says

it is very hard to believe you guys were really conceived by the fastest sperm...

robertoaribas says

you really are the village idiot on patrick.net!

Weren't you recently complaining about how you were being treated? Maybe comments such as this is why you're being attacked.

Why don't you just ignore him (them)?

I agree with elliemae. I thought the conversation was sort of civil Roberto, then you chose to start calling people names, and insulting them out of the blue. I'm not the only one who is pointing this out, so maybe you can ponder upon that for a second.

Markets generally do not go up or down in straight lines-more like waves. Lets see if this is the bottom or just a temporary reprieve before crashing through the massive barriers put up by the FED.

The FED has the biggest arsenal of any in this world-but bigger empires have crashed and burned and smaller ones have limped along in history. Twelve years ago at the height of the dotcom boom-none would have predicted we would be here-yet here we are. lets see where it goes from here. Coastal CA is still massively overvalued- in my opinion though.

Goran_K says

Call it Crazy says

That might be why so many continue to pay their underwater mortgages (like in my chart) because they don't know about it. When they default next year they will get that nice 1099 from the IRS...... Surprise!!!

Let's start the Facebook campaign.

Yes, on Facebook! IMHO the perfect morons paradise.

FortWayne says

I think there are huge structural problems there with manipulative supply and demand side in this market and something is going to crash sooner or later. That kind of market can't sustain itself simply.

I think Wayne has it.

Structural problems will plague the industry for a long time.

Housing too expensive -> Can't qualify for loans -> Can't refinance -> Can't sell without coming out of pocket, etc

The banks also face a structural problem because of all the bad non-performing debt they own.