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Missed the bottom again ?


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by steady market watcher     💰tip   follow   2009 Oct 5, 2:04pm  

Something crazy has gone on for the last couple of months. A lot of people who have been waiting years to take the plunge into home ownership have finally done so. Here are some of the points that were made by the newly crowned home debtors....

- We have been hoping too for prices to fall, but leave alone offering asking price, we have been outbid on offers several times and were finally having offers accepted only if we offered more than 10% above asking price.
- Interest rates are the lowest they have been in years. We are not going to miss our opportunity to buy Bay area real estate. It hurt missing the boom last time and we cannot go through that again.
- Kids are growing and if we wait for homes being 3X ( or even 5x) times AGI, it will never happen.
- Peer pressure. All my friends who have waited have bought homes. Surely all cannot be wrong...
- I do nto care if real estate goes down. I want to live in my own place and I am not looking to flip.
- Restaurants are full these days. Looks like all the stimulus is working.
- Rents are going up. I just got a 10% increase for my 2 bed 2 bath. Heck, with all this money pumping, what is the guarantee that your rent stays steady, especially when you are in a good school district ?
- The $8K incentive
- Lots of Indians especially buying. These guys spend 60% on housing and for dual income husband wife software engineers, $500K mortgages are cheap considering their inclination to save and spend on property.

Looking at how the Fed and the govt. have manipulated the market and offered all sorts of outlandish programs to aid home debtors, it does feel like I am being short-changed here. Are there options available to sue the government for discrimination based on choice of housing ?

#housing

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70   homeowner_for ever_san jose   2009 Oct 7, 5:26pm  

The index has already returned close to the mean ( 100 - 110) in 2009.
anything more or less is irrational. It can happen but will be as irrational as the bubble was. i won't count on it.

71   P2D2   2009 Oct 7, 5:43pm  

homeowner_for ever_san jose says

The index has already returned close to the mean ( 100 - 110) in 2009.

The above statement is not valid for all the areas in all the tiers. As the SF 3-Tier chart shows, the top tier is nowhere near 100.

72   homeowner_for ever_san jose   2009 Oct 7, 5:46pm  

ofcourse its not true for all tiers but in many areas, the index returned to mean ..esp in areas outsite bay area.
do you have the long term C-S index for Sf bay area to find where we stand W.R.T the mean ( which could be different than 100). i could only find the national C-S graph.

73   P2D2   2009 Oct 7, 5:59pm  

C-S index is always normalized to 100 - even Tier-ed index.

BTW, C-S index is composite index for either 10 or 20 cities. It's not national index.

74   Leigh   2009 Oct 7, 11:50pm  

Bap33 says

in case you missed it the first time around … “how-much-a-month” was a very big part of the first bubble. Never - EVER - buy anything based on that. Step 1) stay within budget. 3X HH income is the absolute max .. MAX .. so shoot for 2X to 2.5X of HH income. Step 2) do not pay anywhere near “asking” price. 1998-99 prop-tax assessed amounts are fair for a live-in ready REO home. Subtract from there for repairs. Step 3) Do not buy anything built in the last 10 years unless it is absolutly EXACTLY where you want to live. There’s more coming, just wait. The bottom will not be going anywhere but flat, so relax. Save more money.

I am a professional bubble sitter. I have been trying to grasp all this since around 2003-2004 when I saw prices were way out of line with Portland incomes but we can partially thank California and their truckloads of cash for some of it. My statement indicating it would be a stretch, ie $1,600, taxes, insurance , etc is how 95% of homebuyers think. This is what I am up against. We will be sitting for at least another 18 months and then see what has happened to our country and it's financial system. The spouse and I got burned the first time around buying too much mortgage in 1999, we will be buying something that only needs one income, comfortably. And since we are buying late, I am 38, we will be buying something that can be paid off by age 67, there are MANY factors to be considered as you mention, ie repairs, routine maintainance.

What I find frustrating is that unless people do start buying w/in their means we will be living in a much smaller home than we want, we do NOT want a McMansion;O) It irritates me to no end that there are bidding wars for starter homes which leads to people spending more than they planned to. I'm tired of the hype that is skewing a basic part of life. Everything has to be about making money and looking good in front of the neighbors/friends no matter what the debt load.

And I agree, don't buy anything built in the last ten years. There have been three condo complexes in my neighborhood that have been stripped to nearly the bones. The lawsuit settlement didn't cover all the costs so owners are stuck w/ the difference.

75   Bap33   2009 Oct 8, 12:36am  

"Professional Bubble Sitter"..... lmao ... me too!!

""there are bidding wars for starter homes""
The next time your REALturd tells you there are "multiple offers" ... "bidding war" ... "it will go way above asking" ... "now's the time" ... "this is the bottom" ...... slap them right across the face with a rolled up collection of printed out facts from the Patrick.net front page. "Starter Home" = "A REALturd needs to dump this unrentable POS with Section8 renters on both sides that are in opposing gangs"

Do not believe there are any other offers until you are sitting at a desk with your offer and the other offers all spread out infront of you. Here's why, REALturds are liars. Just like usedcar salesmen are liars, only worse --- much much worse.

Just do not fall for the "keeping up with the Jones'" crap. Find the history of the home, find proof of permits, look at police call records for that area, ... basicaly do the REALturds job and educate yourself about every aspect of the entire deal before you take a step. This is not the time to get lazy and relax. You can get good hostorical data off of Zillow for free. Do not even look at "zestimates", they are crap, but DO use the sales history to find activity and amounts. Also, check the nearby homes for sales history in the last 10 years .. if they have sold in the last 10 years and have not went REO, they soon will, so your neighbors are going to change and may even be renters for the REALturd that picks up that bargain down the street from you.

76   Tude   2009 Oct 8, 12:39am  

Well after last night I am just sickened. There's absolutely no hope for the future, the world (esp the Bay Area) is full of idiots.

Sitting around with a few people shopping for homes right now, listening to their total sense of urgency and desperation as they wailed "prices are going back up, we need to buy now or be priced out again!". I am dead serious, this is the mentality of many if not most of the people I work and socialize with.

Those that do have homes they want to sell? All sitting around waiting for the market to "come back". Which should be next year...

Seriously, we're doomed.

77   Leigh   2009 Oct 8, 1:14am  

Tude says

Well after last night I am just sickened. There’s absolutely no hope for the future, the world (esp the Bay Area) is full of idiots.
Sitting around with a few people shopping for homes right now, listening to their total sense of urgency and desperation as they wailed “prices are going back up, we need to buy now or be priced out again!”. I am dead serious, this is the mentality of many if not most of the people I work and socialize with.
Those that do have homes they want to sell? All sitting around waiting for the market to “come back”. Which should be next year…
Seriously, we’re doomed.

My sentiments exactly, only I'm in Portland, Oregon:O(

78   Done!   2009 Oct 8, 1:39am  

Fundamentals has all the time in the world, physics is on its side after all.

Eventually something else will capture the attention of those that seek to get rich quick flipping houses, and regardless of what anyone thinks their 4br 800 sq ft crap hole on MLK blvd. is worth. Economic gravity will prevail in the end. If there's a Bubble 2.0 along the way. Then there's just a greater chance that, that 2100 sq ft 4 br on a 10k sq ft lot that I'll eventually buy for 120K will also have the hardwood cabinets, floors and granite counter tops.

I just look at this period as Investors are out there making my house I'll eventually buy for pennies on the dollar, as a better place to live in.

Just do me a favor O.K!?

Please for the love of GOD! do not put any exterior McMansion appointments and accouterments. Like those gaudy faux Greek columns people trim the front door with. That are only a third of thickness in a cross section. I can look at it and tell it's not marble, nor does it fit the architecture of Urbandale Ranch style house you morons.
Then there's that stucco pin striping about four feet off the ground runs the length of the front of the house ONLY, and trims the windows. Then just in case you missed it, they paint the house Turkey shit green and that stucco trim in creme.
And if you destroyed Art Deco architecture to inflict your Home Depot credit card justification on said structure with such abominations, I swear I will haggle another 50K off the price of the house, no matter how sweet the deal is.

Now enjoy your manipulated RE market while it's in Vogue.
But don't waste your time trying to convince me, I'll be priced out for ever.

79   Leigh   2009 Oct 8, 1:39am  

So when the folks buy way too much mortgage and can't afford healthcare, can't afford savings, can't afford retirement DON"T come whining to me...

So what are YOU getting at nowhere but up from here?!?!?! Despearate realtor?

As for those freaking out about prices taking off ask yourself what caused prices to take off 5-7 years ago? Are any of those factors in play now? Look at foreclosure rates. Look at unemployment. Then grab some popcorn and sit back and watch this debacle. We ain't no where near bottom yet! The fun will certainly take off when this $8K prop expires, add to it the seasonly slow period, the spike in foreclosures....oh, my. And prices are still WAY out of line with incomes...basic fundamentals...

80   ch_tah2   2009 Oct 8, 1:45am  

nowhere but up from here says

The graphs….the charts….the opinions……sheer entertainment. There are those that will….those that want to….and those that never will……I can only surmise what the bulk of the pundits here are…….
HAHAHAHAHHAHAHAHHAAH….Patrick.net……I Loooooooove You

You left out those that had everything handed to them by mommy, daddy and gramps.

81   david1   2009 Oct 8, 2:20am  

Case Shiller Composite is around 140-145 right now. It still has a way to go to get to 100-110.

The question that those who are vested in RE bottoming now and going back up can never answer is, who is going to buy their house for these inflated prices? Incomes are what they are, and granted some areas have higher incomes than others, they should also have higher house prices. But the fact remains that if someone like me, who has a household income that is roughly double the area median and is in the top 15%, AND has 20% cash down for a house that I could afford on a 30 year fixed even at these low interest rates can only barely afford a house that is around the MEDIAN listing price, then who is going to buy a house for double the median? i.e. Someone who has roughly double my income and double my downpayment. The important thing is double my income. That would be four times the median income for my area (Jacksonville), the population of which in Jacksonville is less the 3% of the total. I'll never buy a median house on my income, because frankly, I wouldn't live in those neighborhoods. Either they are small bungalows in neighborhoods struggling with the gentrification process or mid sized homes in the exurbs that would give me an average one hour commute each way. Especially not when I can rent a home in a good neighborhood with a 15 minute tops commute (like I am currently doing) for about 60% of what it would cost me to buy and pay the mortgage, insurance and taxes on the home that is for sale right next door.

That is a home that only a family that makes 3-4 times the median could afford. About 160-215K per year, less than 5% of the population here. I'm sorry to say but I bet close to 5% of the homes in Jacksonville are waterfront. Not all of it would be desireable, but a significant portion of the waterfront homes here are. I guess my point is if you are trying to sell a house that only the top 5% of the population could afford, then it better be close to one of the nicest 5% of houses in the area.

82   KurtS   2009 Oct 8, 3:47am  

There are those that will….those that want to….and those that never will...yada, yada, yada

"Marina is Prime"--is that you? I recognized the same old "haves vs have-nots" banter that will somehow keep RE stratospheric. So, how is bubbly Marina doing these days--not quite as uppity in 2009? No surprise...not even SF can subsist on leverage and parental trickle-down economics forever.

83   chrisborden   2009 Oct 8, 4:10am  

Dear rblack or whoever commented on my loan: I still have my amortization table for my original loan in 1994 (117K at 8.75%). It shows that at the end of the 30 years I would have paid $232,574 total for the loan had I stayed in it. I don't know where or how you got $1.5 million, but it is definitely ridiculous. I have the proof.

This is from the actual loan document dated 10/7/1994:
Loan Amount: $117,000.00 Term of Loan: 30 years Interest Rate: 8.750% Monthly mortgage payments: $920.44 Total interest paid over the life of the loan: $214,358.21.

Do the calculation yourself, and please tell me how you came up with $1.5 million total cost of loan over 30 years. I am dying to know.

84   chrisborden   2009 Oct 8, 4:14am  

Sorry, typo. Total loan cost $332,574.

85   justme   2009 Oct 8, 5:06am  

Oooh, NBUFH -- Marine Prime of yesteryear(s)? Could very well be.

86   homeowner_for ever_san jose   2009 Oct 8, 5:26am  

Use this to calculate how much you pay at the end of 30 years
http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx

87   pkowen   2009 Oct 8, 5:39am  

Bap33 says

“Professional Bubble Sitter”….. lmao … me too!!
“”there are bidding wars for starter homes”"
The next time your REALturd tells you there are “multiple offers” … “bidding war” … “it will go way above asking” … “now’s the time” … “this is the bottom” …… slap them right across the face with a rolled up collection of printed out facts from the Patrick.net front page. “Starter Home” = “A REALturd needs to dump this unrentable POS with Section8 renters on both sides that are in opposing gangs”
Do not believe there are any other offers until you are sitting at a desk with your offer and the other offers all spread out infront of you. Here’s why, REALturds are liars. Just like usedcar salesmen are liars, only worse — much much worse.

Bap33, you speak the truth.

- Professional Bubble Sitter #3

88   pkowen   2009 Oct 8, 5:42am  

Tude says

Well after last night I am just sickened. There’s absolutely no hope for the future, the world (esp the Bay Area) is full of idiots.
Sitting around with a few people shopping for homes right now, listening to their total sense of urgency and desperation as they wailed “prices are going back up, we need to buy now or be priced out again!”. I am dead serious, this is the mentality of many if not most of the people I work and socialize with.
Those that do have homes they want to sell? All sitting around waiting for the market to “come back”. Which should be next year…
Seriously, we’re doomed.

Well, just don't become one of those poor fools you are talking with, and you'l be ok!

'waiting for the market to "come back"'. Yeah, sure, just tell 'em, "good luck with that".

89   LandShark2847   2009 Oct 8, 5:55am  

a lot of people do not know the the housing bubble. they think there are problem with the market, and the government is trying to fix them so that the prices can go up again.

i have a friend who bought a 2BR condo in Daly City for 500K. he is underwater now, and paying only the interest.

his ARM will reset in 2 years, and he is hoping he can see before that, which means "the market will come back" before his loan resets

90   crash-olah   2009 Oct 8, 6:50am  

Tude says

Well after last night I am just sickened. There’s absolutely no hope for the future, the world (esp the Bay Area) is full of idiots.
Sitting around with a few people shopping for homes right now, listening to their total sense of urgency and desperation as they wailed “prices are going back up, we need to buy now or be priced out again!”. I am dead serious, this is the mentality of many if not most of the people I work and socialize with.
Those that do have homes they want to sell? All sitting around waiting for the market to “come back”. Which should be next year…
Seriously, we’re doomed.

you seriously speak the truth! its absolutely RIDICULOUS the mentality of most people looking to buy/sell. Literally 98% of them have no idea what's going on with the market, economy, etc. I listen and watch my friends participate in this housing frenzy that still exists. I can only sit back and watch, with my jaw dropped at their comments/actions...

maybe in 30 years things will be back to normal, however, I'm starting to doubt that even...

91   Leigh   2009 Oct 8, 12:05pm  

Nowhere but up from here, if you haven't figured it out yet 99% of us are serfs. Do yourself a favor and educate yourself about the hx of banks, ie, the Federal Reserve.

Some of us are just trying to figure out how to live a moral, ethical, comfortable life. Hard to do when you get stomped on by the greedy, the ignorant, and the top 1%. And then we get to bail them all out.

92   chrisborden   2009 Oct 8, 1:36pm  

Bankers and other thieves have ruled the globe for centuries. Their aim is to control and conquer, and such has been the course of history and the fate of nations for thousands of years. It's our turn now.

93   someone else   2009 Oct 8, 1:58pm  

Yes, and there's a great insight about that in the book "Who Rules America": what they really want is control over labor.

They want you to control you, make you work for them, do things for them, serve them. Money is just a proxy for that.

94   thomas.wong87   2009 Oct 8, 2:28pm  

homeowner_for ever_san jose says

The index has already returned close to the mean ( 100 - 110) in 2009.

Oh you havent seen anything yet. While only one has corrected the declines have crept from the east and south
taking out future buyers from buying in Santa Clara and San Mateo. LOL! not even close to the mean!

95   thomas.wong87   2009 Oct 8, 2:45pm  

Real Estate Market May Show `Irrational Exuberance' Bloomberg 2003.

http://news.infoshop.org/article.php?story=03/09/22/3969212

And this was before the toxic loans.

96   Leigh   2009 Oct 8, 11:49pm  

Foreclosures spiking, personal bankruptcies spiking, unemployment continues to climb...this party is still swinging!

97   bubblesitter   2009 Oct 9, 12:14am  

Leigh says

Foreclosures spiking, personal bankruptcies spiking, unemployment continues to climb…this party is still swinging!

Even after all of these starts to turn around it's going to be a while...... to get back to party mood.

98   chrisborden   2009 Oct 9, 2:38am  

Yes, the opportunity of a lifetime to lose money. Gotta admire stupidity.

99   P2D2   2009 Oct 9, 2:40am  

nowhere but up from here says

The only thing you can do is carve out your own piece of the pie with wits, guts, savvy and lots of luck.

Don't get priced out forever. Buy with GUTS.

Said by someone who inherited (with GUTS) most of the properties he owns.

100   ch_tah2   2009 Oct 9, 2:43am  

nowhere but up from here says

And all the charts, insight, blogs and babble here is not going to change a single thing….EVER!!! Right, wrong, moral, ethical or otherwise…..but I do enjoy the entertainment. The only thing you can do is carve out your own piece of the pie with wits, guts, savvy and lots of luck. For some, this has been the opportunity of a lifetime. I have never seen anything like it.

In what way have you taken advantage of the situation? You said your family handed you several houses (and probably a good amount of money) which you basically held on to, aside from one that you sold which you didn't even sell near the peak. Your rents are back where they were before. It seems like you haven't done anything other than sit on what you've been given. Where's the wits, guts, savvy? In your case, it was 0% wits, 0% guts, 0% savvy and 100% luck of being handed everything. If anything, you bring the comedy to this site by trying to be a hero when in reality you haven't accomplished more than a 5-yr old trust fund baby could accomplish.

101   ch_tah2   2009 Oct 9, 4:05am  

nowhere but up from here says

Cheesy…I mean Campy…how on earth do you know WHAT my rents are????

Based on what you said, genius. This is a quote from a prior thread:

nowhere but up from here

The last two homes in our rental property “area” sold and both have been moved into. Now there are zero homes on the market and I’m getting as much for rent as I did during the “boom” years in ALL my rentals…..yeah, it may suck in your world but mine is moving right along…..America…still the land of opportunity if you have the BALLS to make it work……

Sep 2, 8:05 AM — [ ] — Welcome To The Bottom: Housing Begins Slow Rebound (AP)

It's a good thing mommy and daddy gave you lots of money and houses. From your postings here, I don't see how you would have made it on your own.

102   Bap33   2009 Oct 9, 4:15am  

lol .... someone needs to let 'ol nowherebutup in on the secret .... when you die you leave all the paper and shiney rocks here. Good luck collecting.

It's almost as if wealth collection is his "compensation device" ... if you catch my drift.

103   Serpentor   2009 Oct 9, 11:38am  

don't feed the troll. don't feed the troll. don't feed the troll. don't feed the troll. don't feed the troll. don't feed the troll. don't feed the troll. don't feed the troll. don't feed the troll. don't feed the troll. don't feed the troll. don't feed the troll. don't feed the troll. don't feed the troll. don't feed the troll. don't feed the troll. don't feed the troll. don't feed the troll. don't feed the troll.

104   AltonS   2009 Oct 10, 9:10am  

Bah, finally setup the account for this board now that the old one appears totally toast. Amusing thread. I'm not seeing a bottom soon here in the mid willamette valley of Oregon (Salem). A couple of rentals I've looked at seem to be around 2004-05 prices. Rents are a bit higher than they should be I think but supply is low for quality. One place I looked at last month had just sold for 212k, its 05 price according to zillow. In 07 it was bought for 279k or so IIRC. 50k right off the top in 2 years. The owner mentioned he was glad it was done, it had taken a long time to get everything all negociated. Though he hushed up beyond the time factor, which I'm guessing meant short sale/bank issues.

I too see the bidding going for entry level stuff that stuns me somewhat. Its not too surprising as that part of the market was/has been going pretty well the past 2-3 years while anything 250-300k+ has been taking 1yr on avg to sell. Still, folks are buying into the emotional jargon and the "its a deal!" mentality. I'll look seriously when the market hits 2000 price levels or certainly mid 1990s levels. When family could buy a nice 3/2 home in Vancouver WA for 140k in 02 thats now at 212k and falling...

Oh and Nowhere, I was/am lucky in my fortunes and I'm not interested in buying, as much as it would provide me with more stability and ease in my life.

Oh and and hi to PDX housing blog folks. :)

105   Bap33   2009 Oct 10, 9:56am  

I'm betting the Cali bubble bux that ran to Oregon are going to raise hell there for a while

106   AltonS   2009 Oct 10, 10:10am  

Oh, they have Bap and prolly will continue. Last to start up, last to pop. Bend and Southern Oregon being the worst hit.

107   Leigh   2009 Oct 11, 4:38am  

Yeah, and the Portland area didn't party in the sub prime room, we'd much rather drown in the Alt-A kool-aid!

108   thomas.wong87   2009 Oct 11, 6:00pm  

Leigh says

unemployment continues to climb…this party is still swinging!

This came up from a headhunter. Read the last line..... Mfg, R&D, Accounting leaving our shores..
so much for the talk about high paid dual incomes couples....

Director of Philippines Accounting Operations Center
This outstanding opportunity is in the Philippines!
As Director of Accounting/Finance, you will be responsible for overseeing all aspects of the Accounting Operations Center located in the Philippines. These responsibilities include supporting both Philippines and U.S. operations.
The Philippines perspective of this position involves hiring, training and oversight for Accounting Operations Center employees; coordinating the month end, quarterly, and annual financial close processes with the Dallas and India accounting and finance staff; processing A/P, payroll, and all internal and external reporting of financial results and analyses of the Philippines operations on a consolidated basis; ensuring the Philippines operations are compliant with all reporting requirements and monitoring the adequacy of certain reserves.
Support of U.S. operations will involve certain invoicing, payroll, cash application and accounts payable functions for field operations and corporate accounting, process documentation, ad hoc projects, identification of additional processes to migrate and subsequent transitioning of those tasks to the Philippines.
This position also provides support to the company's independent auditors regarding transactions and accounting processes to ensure results are properly stated.
• Manage the Philippines Accounting Operations Center (U.S. support) – 70%
• Hire, develop and oversee the continuity of Philippines accounting department employees
• Oversee the transition of various accounting processes from U.S. to Philippines
So now your employers accounting will come from overseas....

109   thomas.wong87   2009 Oct 11, 6:02pm  

here is the link...http://monster.com

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