IHB needs a resident bull on board

NEW -> Contingent Buyer Assistance Program
<p>A unique property is one you fall in love with. At a price you can afford. If you love something and can afford it, what's the problem?</p>

<p>(crickets)</p>

<p>I have a different attitude, but to ignore that there are buyers out there now who can qualify and decide that they can afford a home isn't smart. There just aren't very many right now. Good times.</p>

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I just adore how Truthi has decided that Lansner's blog is hers. As someone who has long moderated BBs and comment threads recently said (emphasis added):





"The 'come and see the violence inherent in the system, help help I'm being repressed' crew are less of a puzzle than they initially seem. Their own online activity tends to be dull and disruptive, <u>but they think they're entitled to the kind of large audience for their behavior you can only get by being interesting. This is why they don't actually want free speech. All that would give them is the freedom to call the shots on their own websites. What they really want is someone else's audience.</u>"





That's Truthi to a "T." If she doesn't like the IHB, why doesn't she start her own blog? Oh yeah, no would be interested.
 
<p><em>"A unique property is one you fall in love with. At a price you can afford. If you love something and can afford it, what's the problem?"</em></p>

<p>I guess it is just personal. I fall in love with people and relationships. My puny experience has shown that falling in love with things is spiritually defeating and tends to lessen my commitment to the important people in my life. But, like I said, it is personal. Maybe, not everyone has that experience. I prefer some wood and stucco boxes to others, but they are still just wood and stucco boxes; nothing to fall in love with.</p>

<p>And my other small experience is what it felt like to owe more on a property than I could sell it for. I could afford it, had some bucks in the bank, and didn't need to sell, but I still didn't like it. Again, it is a personal feeling. Maybe others could care less if they owe more on a property than it could sell for, especially after they put 20% down, and their monthly expenses for owing are twice what it would cost for them to lease the same exact property. Maybe they don't care. Maybe they can "afford it".</p>

<p>I wonder if the folks who are not averse to falling in love with a unique property could just as easily fall in love with a unique property for lease? And at half the price, no down payment, and no risk for equity loss?</p>

<p>No problem. Just personal preference.</p>
 
<p><em>NSR - Are you an re agent?</em> </p>

<p>Ahem.</p>

<p> </p>

<p>The key is price and location. I suspect the discounts that are actually occuring in the market for completed sales are much steeper than the median or Case Shiller indicates due to lags and the nature of the reporting. Currently 90% of the sellers are out there with wishing prices. That leaves the remaining 10% actually competing for sales and looking attractive, relative to the wishing prices.</p>

<p>One thing I'd like to see, I can do it if someone can feed me the addresses, is to deconstruct a couple of Irvine zip codes, prior month sales to see what the real discount is that is occuring on the properties. With the credit crunch, the median quickly dropped 8%+, yet like prior months and other markets such as San Diego, the median doesn't tell the story of the quality shift.</p>

<p>If you strike a deal near or at rental equivalence and capture a good long term fixed rate, the deal may make as much sense and renting and waiting for bottom. Some properties never will have a decent rental equivalence, or readily available comparable rentals. That must be weighed in with the current market conditions, capital exposure, rent volatility and family needs.</p>

<p>Currently the market is flooded with unrealistic unwilling sellers with wishing prices. When they give up the ghost of their dreams, they'll remove themselves from the market or move their homes into the REO department unrealistic dreams. The remaining sellers both have the capability and the desire to sell. Sell at a steep discount and still a profit. Sell because they want to move on. Either to a new home, new location, from married to single life, etc.</p>

<p>Will the market likely continue down? Most probably. Will you get a better capital deal, most likely. Will you cash flow be different? Yes. Will it be better? Maybe, maybe not. Will there be less pressure on the willing sellers in the near future? Maybe. </p>

<p>There will be more REOs in the future, that will mitigate prices, but they won't pressure sellers like the current inventory pressures sellers. More importantly, REOs are often bad mojo. And as foreclosures continue, they will become more bad mojo and the debtors that give up the ghost later rather than sooner, IMO, are more likely to be bitter and disgruntled. In addition, the REO departments have squatted on their REO holdings for months, maybe in even year in some cases and likely a year plus by the time they get around to selling it. Empty untended houses do not age well. </p>

<p>Even in a city as safe and tidy as Irvine, squatter, vandals, and criminals will find their way to the empty REOs. You've already some of it with the theft of copper pipe from the construction sites.</p>

<p>In the end, it comes down to price, rates, rent and your family needs. If you look at the real sellers in the market, and not Home Builder Executive wishing prices, you see a very different market. The only problem is they are so hard to find because of the noise of sellers wanting out, needing out, but not being able to price to get out. Personally, I'd rather have a lower price and a higher interest rate on my mortgage. That's not our market. That may not be our market for a few years. In the interim, if the price and the rate makes PITI comparable to rent and my family stability leads to a trade-off in risks.</p>
 
<em>"NSR - Are you an re agent? </em>

<p><em>Ahem."</em></p>

<p>I don't get it. Does ahem mean my question was too personal? I am an Enrolled Agent and a land surveyor. If you disclose your occupation, will you compromise your anonymity? Or is there some other reason you do not care to identify yourself as an realtor?</p>

<p><em>"There will be more REOs in the future, that will mitigate prices, but they won't pressure sellers like the current inventory pressures sellers"</em></p>

<p>In all likelyhood, it will pressure sellers to lower their prices further and quicker.</p>
 
<p>Oh, I misunderstood. I took it as a slam since so many tend towards sayings like "realtard" regarding agent mistakes or any bullish position. I'm not in RE, I'm in IT. </p>

<p><em>In all likelyhood, it will pressure sellers to lower their prices further and quicker.</em></p>

<p>I think willing and able sellers will actually lower faster than REOs, particularly when clueless listings like today's blog entry become the one-off again instead of the majority. The willing sellers will be those that bought mid-80s, mid-90s and still can take $100K, $200K out of their house when sold even after slashing prices 40% or 50%.</p>
 
<p><em>"Oh, I misunderstood. I took it as a slam since so many tend towards sayings like "realtard" regarding agent mistakes or any bullish position"</em></p>

<p>No, not a slam. Your discourse sounded much like what I hear from realtors. Sometimes I think they go to sales meetings where they are given their talking points. I read some posters comments with their coloration in mind sometimes based on their occupational bias.</p>

<p>I do not for a second mind slamming a particular position or the reputation that an occupation may warrant, but I prefer not to denigrate a person. I may needle or provoke a poster or two, but hopefully I do not make personal comments. And very often I will question or directly oppose an opinion that is presented as fact, even if I agree with the opinion.</p>

<p>Personally, I find little or nothing to be bullish about as regards residential real estate, and I like real property. I was bullish in the past, and I would guess that I will be bullish again sometime in the future.</p>

<p>Interesting comment about the willing sellers lowering faster than the REOs.</p>
 
<p>If you're trying to make lender pricing on REOs make sense, stop now. It doesn't.</p>

<p>They (lenders) will (if my experence is any indicator) hold the line, pricing themselves just behind the market as it falls or just above when it levels out. </p>

<p>Then they will run out of patience and just DUMP a whole bunch to somebody who can take a huge bundle of REO's at 60 cents on the dollar.</p>
 
<p>Re "Even in a city as safe and tidy as Irvine, squatter, vandals, and criminals will find their way to the empty REOs."</p>

<p>I don't really believe that. Let's say there are empty houses all over LA and OC. If one wanted to take advantage of them, why go to Irvine? Irvine is the land of a zillion cops. Why bother with the hassle? Why not go somewhere where no one will hassle you? It's like the old making sure your place is harder to break into than your neighbors. Criminals are lazy.</p>
 
<p>Awgee, probably why I thought it seemed out of character. </p>

<p>Yep, my points are pretty typically of RE Agents. I suspect because that's all they've got. I don't think there will be appreciation in the market for a long, long time. Making cashflow work for real estate is just that, work, and typically a fair amount of it. From an investment standpoint, agreed, no reason to be bullish in the short term. From a life standpoint, the right deal, as amorphous as that is, may make sense.</p>
 
NSR - I ran accross a property on Redfin today and posted it in "Losses other than Irvine". It looks tasty, and even had me thinking for a minute. But, only a minute.
 
<p><em>Criminals are lazy.</em></p>

<p>Crime is opportunistic. An empty house, an unemployed neighbor and an empty middle class neighborhood in the middle of the day make a bad combo.</p>

<p>That same house, 3PM in the afternoon, the kids need a place to be out of sight of the parents...</p>

<p> </p>
 
<p><em>It looks tasty, and even had me thinking for a minute. But, only a minute.</em> </p>

<p>I did the same thing this morning on my walk, saw a flyer in the complex, picked it up, was surprised to see it broke below the $500K mark for a 3/2.5. Looked at the photos and saw it was not wrecked and looked recently remodeled. Still too high, but that's a far cry from the high-600s of spring and the 700s wishers.</p>
 
<p> </p>

<p>No Such Reality - I walk around during the daytime, and the neighbourhood is far from empty. Plenty of landscapers and young mothers out with kids, people walking dogs, etc. Not an easy place to go unnoticed. There is a reason that it's the places with a lot of foreclosures (ex. a street where almost all the houses are foreclosed) where the bad stuff goes on.</p>
 
<p><em>Plenty of landscapers and young mothers out with kids, people walking dogs, etc.</em></p>

<p>Do you live in the same Irvine I do? I see landscapers, and nannys and professional dog walkers during the day. I also see some grandparents with kids that usually have very limited english skills. Almost all of these people look the other way when I say hello. Very few, if any of them, know if I belong in the neighborhood. What I don't see are the homeowners; most of them need a double income to afford the houses they are living in. </p>

<p>I agree there are people out and about, but how many of them have a vested interest in keeping the neighborhoods safe? </p>
 
<p>Hello and <strong>HAPPY HOLIDAYS!!</strong></p>

<p>This has become an interesting thread. As I said earlier I have left SoCal but am still working with a partner for my previous clients. We just opened escrow on a transaction representing the buyers. I will not be too specific for obvious reasons but can give you all a first hand look at the current market from a buyer's perspective. There is a differance between commenting on the big picture and really being prepared and ready to find a specific home in a certain area at a price that meets ones needs.</p>

<p>The clients are well informed, well qualified, and have personel reasons to purchase at this time. We have been seriously looking since June 2006. In early November we made offers on 3 homes with multiple counter offers in order to get a compromise between product, location, and price. I have no problem making offers up to $100K under list price on a mid $700K price point. The clients wanted a single level detached home with low dues so right away the availability was limited. On all three offers the listing agents let us walk away when we reached our max price. They all waited a few days and called back with modified counter offers. My attitude to the sellers is, "There are lots of houses and few quality buyers.We will keep looking."</p>

<p>The offer on the second home was accepted after 5 counters. The sellers have considerable equity and it is not a distress sale. We had looked at over 30 homes in the last month so the buyers have seen most of the single levels in their price range. It was also interesting to see how agressive the listing agents were on the homes that were showed in doing follow up calls to see what our buyers thought. My response was usually that we thought the sellers were way too high priced in todays market. </p>

<p>My thoughts are that there will be transactions in any market. Today a qualified buyer does have the power to negotiate but most sellers still have not adjusted to the reality. Remember that not everyone has to sell. I was surprised that some of the sellers didnt want to negotiate in good faith on our offers. I explained that going into the holiday period along with the tighter loan standards and amount of inventory that their next offer may be in the spring at even a lower price. Several agents told me that their sellers "had to have a certain price" and my answer was, "Exactly why is that my buyer's concern?"</p>

<p>Another family that I worked with sold their home 2 years ago and were renting. They recently decided to relocate out of California into the area where I moved to. They went through the same thing in that they made offers well below asking and were turned down only to have the sellers come back a week or so later to meet the lower price.</p>

<p>At that point they were in escrow on the 3rd offer and we told the other 2 sellers that they were a day late and several thousand dollars overpriced.</p>

<p>No rose colored glasses here but also a little reality check that for real buyers who are informed and motivated to buy. There are opportunities out there. The sellers have to face reality or just sit and chase the market down. Another note is that the better homes will be purchased on the way down and when prices do bottom out many of the homes in the better locations, school districts, and with the better amenities will not be available.</p>

<p>Just one man's opinion.</p>

<p>Enjoy!</p>

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<p>Shay, one day when I went on a little walk killing time looking all the world like a solicitor (I wasn't - but I was toting some school stuff that made me look like one), I got many dirty and suspicious looks from the passers by. My look was wrong - they knew I didn't belong there. Given that, I think if there was any really suspicious stuff going on (ex. why is that scruffy looking guy carrying a TV on the street), the cops would be called and there in a matter of minutes.</p>
 
<p>Anon, you aren't getting it. It won't be shady people. It won't be a couple shifting gangbangers from Santa Ana dropping by. It won't be a couple thugs from the bad part of Long Beach coming down. It will be a neighborhood teenager that sees some easy pot money. A guy living in the subdivision just "checking" things out. Get it, the majority will be done by people living in the sub-division.</p>

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