San Diego REO / Short Sale Prevalence above 50%
Submitted by
CalculatedRisk on Sat, 02/02/2008 - 11:49am (91 comments)
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At least they are selling. Do they also make up 50% of inventory or are they selling in greater numbers because they're more affordable?
What's the total volume of sales and median REO sale price?
Without that you can't really tell how much of it is knife catching.
I'm still with the UCLA guys and their flat home prices.
The key to a healthy economy in the long-term is militant denial of reality.
50% REO and short sale? AND agents complaining the banks aren't realistic on their pricing?
THat is a bloodbath. Bigtime.
OT a bit, I apologize but I don't remember really reading anything about this on CR before.
I was thinking today about my personal debt which as of now is only tied up in student loans. I logged in my account and noticed my rates dropped to 6.5% (they were approaching 9-10%) before.
Then it clicked.
My student loan is just like those ARMs. Nooo! It kinda got me thinking...
"A Shaky Season for Student Loans"
Yahoo! 404 - Page Not Found
Fortunately, this was all priced into financial stocks weeks ago. Up we go! Weeeeeeeee!!!!
The percentage of inventory is a really, really good question. Anybody know how to get that?
And is it just me, or when you read the shaded quote box at the top, do you get in your peripheral vision an optical illusion of the bars marching downward toward your left??! LOL.
I posted this in the last thread. It fits better here...Wait till SD catches Florida and REO exceed sales. Remember we are just a year into this unwind...With sales falling off a cliff how long till months of inventory reach 10 years??? We are at 5+ in areas of Florida.
I am starting to see the January numbers for the SW Florida. All I am going to say is UGLY.
Charlotte County-
Dec07-450 sales/450 REO
Jan07-210 sales/770 REO!!!!!!!!
Lee County-
Dec07-750 sales/approx 1k REO
Jan08-1700+REO,no updated sales numbers yet.
Sarasota County-
Dec07-970 sales/710 REO
Jan08-380 sales/490 REO
Sales in Florida usually drop Dec to Jan but not this large of drops.
The increases in REO are frankly scary and getting larger. The "hidden" inventory out there is really staggering. I have a feeling "Spring bounce" will refer to the increase in inventory.
Hey Jas,I am on the same page as you pertaining to deflation
Chris
LOL "militant denial of reality". San Diego specializes in that. A prime example would be Qualcomm. Those folks had absolutely nothing to do with a cellular standard called WCDMA, much less did they invent the basic CDMA technology. Heck, they were founded 40 years after it was invented. And now they are getting burned in litigation all over the world. If your biggest employer is such a fraud, what can you expect. The surfing's decent though...
Qualcomm did not invent CDMA either. The US military did. Qualcomm just ptented some of it.
First. Wow. This is staggering news. San Diego always leads...
50% REO and short sale? AND agents complaining the banks aren't realistic on their pricing?
Nicholas Weaver, I agree. Its long been the talk of housing blogs how hungry Realtors (tm) would demand price reductions to stimulate volume. Its here and will only get more interesting over the next two years.
Got popcorn?
Neil
Terrible selling environment.
And, the pressure to put homes on the market has not even ratcheted up, as San Diego employment is still holding up:
Notice: Data not available: U.S. Bureau of Labor Statistics
It is going to be ugly here.
take it on the run
nuf said
And, the pressure to put homes on the market has not even ratcheted up, as San Diego employment is still holding up:
I'm impressed how well the employment has done in San Diego. I can only imagine the downward trend once there is a job loss...
I'm dumbfounded by how long MEW persisted; but someday MEW will drop to sane levels... With so much of CA's small business growth funded by MEW, its going to be painful to watch that unravel. 
San Diego is leading... so its a fascinating case study.
Got popcorn?
Neil
ok... more
50% of a lower total...
if we were selling at 2005 volume
the reo % would be .... 10%?
Is San Diego employment holding up?
Is employment ANYWHERE holding up?
I don't believe it.
I dont have the metrics percentage of sales that were REO or short sales as a percentage of sales but I do have the number of trustee sales and notice of defaults for LA and ventura county as a percentage of sales
2007-Q4 :
LA county (NTS / sales) : 34%
Ventura county (NTS / sales) : 32%
LA county (NOD / sales) : 102%
Ventura county (NOD / sales) : 91%
For LA county last quarter more houses went into default than sold, I thought that would make a good headline in a newspaper somewhere.
With sales slowing so dramatically the ratios really get high. But since the market is made in the margins it is clear the asset managers will be the ones defining the market for 2008.
For up here in Simi I have seen a dramatic increase in the number of foreclosures going pending in just the last 2 weeks.
I think the increase in foreclosure sales has a bit to do with the dramatic (though brief) drop in rates early last week, Seasonality and the rumor that GSE SISA is going away soon. I think some borrowers are under a "use it or lose it" time pressure. As well as the fact that the asset managers are becoming much more likely to cut a deal.
Hazard, Econbrowser had a discussion of San Diego employment, see: A San Diego-style recession
With unemployment hovering near 5 percent and home foreclosures surging, the local economy has probably dipped into "the San Diego equivalent of a recession," according to an economic index released yesterday by the Burnham-Moores Center for Real Estate at the University of San Diego.
All, I'll try to get more data from Ramsey - he just sent me the summary.
Best to all.
AC The key to a healthy economy in the long-term is militant denial of reality.
It's hard to execute the militant denial thingamabob without a bunch of buyers.
The true inventor of CDMA was not the US military, but . . . Hedy Lamarr! One helluva brilliant and beautiful woman who could act and play piano. The piano and music was the source of her invention. Then it was taken up by the military.
On the REOs in SD: no code hopping there, just a big LOOK OUT BELOW!
Joe
Out sales numbers for Colorado Colorado Springs sale report for Jan 08 is out.
01/07 673 sales 01/08 534 -20.7%
Average price down 7.1% yoy.
Median price down 5.3% yoy.
6300+ homes on MLS
The thing I don't understand is the lack of REO sales here. I see very few bank owned properties for sale but we had 3800 forclosures last year. I am wondering what the banks are waiting for. The housing Easter Bunny ain't coming again this year. Was there a similar lag in other areas or is this area different?
As someone who will be buying in San Diego again in the future, I have been following the market very closely.
In markets with lots of sales from 2004-2007, things are truly scary. REO are the ONLY thing selling and at up to 45% off peak price. REOs selling at low prices are fueling more REOs. Real owners can't price at REO level in those areas because they would be underwater. Its like a "china syndrome" style melt down. See http://www.sdlookup.com/Property-C3D795A1-864_Hunters_Ridge_Pl_Chula_Vista_CA_91914#13447
Markets where there was not much turnover in the peak years are at a standstill. There aren't many REOs killing prices, owners with equity want 2006 prices, and buyers (like me) are content to wait them out.
I would guess that REOs are only about 10-20% of the total current inventory. It just that no one else is willing to price as agressivly as the REOs, hence 50% of sales.
A few days ago at Jim the Realator site (the guy who is one of the few honest RE agents blogging about San Diego) he had a post about the lasted official list of homes to hit the court house steps -- I remember him pointing out that the most recent list is something like 10 x the length of prior months.
So if you think this is bad now just wait....
I've been working at startups the last eight years.
Some folks get to be founders and employee number one; at my last startup, I was the last employee standing. We could not raise a round of financing during 2003. We shut the company down in July 2003, and I immediately put my McMansion on the market, closing on the sale three months later.
Financing and exits for startups dries up in recessions and remains depressed for some years, based on data that I compiled over '96-'06.
We have entered a recession. Financing and exits will be drying up (January M&A was way down compared to one year ago). The folding of technology and biotechnology startups in San Diego, which pay great salaries, and which provide the feedcorn to legions of attorneys, VCs, consultants, and building owners, is going to be like a neutron bomb here in San Diego.
I feel terrible for the folks who own homes here in San Diego and who work at startups. Unless they are unusually perceptive, they may not see the freight train barreling down the tracks, heading their way.
Serious question:
How well does "pending" sales describe actual sales? I can imagine that if (for some reason) REO and short sales take longer, then they might be a higher percentage of pending sales than they are of actual sales. Does anyone know if that's the case?
01/20/2009 end of an error | 02.02.08 - 3:54 pm |
I heard from a appraiser that less than 10% of the REO is actually on the market in SW Fl.
I have also seen a bunch of homes dropped from the MLS and when I checked the title the banks still owned em. On my street alone I have 5 REO's with only one actively listed and no discount in price(178k loan/178k asking).
Nobody seems to know why banks are sitting on properties. When they do start hitting the market its going to get even uglier...
Chris
an anecdotal observation about pending sales statistics: watching the Los Angeles MLS listings for a big chunk of the westside I have seen steadily increasing trickle of houses that go into escrow and then fall out. In many cases I suspect the prospective buyer could not get a loan. Sometimes that is the reason given in the renewed listing.
The significance of this is magnified by the exceedlingly small number of listing going into escrow. I couldn't hazard a guess at the percentage that fall from escrow, but it seems non-trivial.
If Hedy Lamarr were here then she could do the math . . .
Joe
Mitch,
In general, Short sales take a long time, REOs are quick.
Short sales are handled through a different department at the servicer and they have much more steps to go through (checking if the borrower really cant afford it, negotiating with multiple people if there are several leans, etc). From what I've seen and heard, REOs are just empty waiting to be occupied, you can actually close pretty quickly if the asset manager is responsive.
Thank you Cobradriver,
I have been scratching my head for a while on this. My thought was they were not wanting to mark to market. However the carrying costs have to be killing them. Also when they do start dumping huge numbers of homes the prices will fall like a rock.
This is OT but earlier today somebody asked for a link to today's NY Times article on Merrill/MA.
Here it is.
From Making the Cases to Challenging Them - NY Times
Well your top RE agent is now finally admitting to what Stephen Roach has been saying for some time i.e. Americas inflated asset prices must fall !!!
The US has been the main culprit behind the destabilising global imbalances of recent years and its massive current account deficit absorbs about 75 per cent of the worlds surplus saving
A sharp decline in asset prices ( first and foremost with homes ) is necessary to rebalance the US economy.
This battering is probably just in the 3rd inning and will get more bloodly as the US economy tumbles into deeper recession.
End I think yu are right,if a bank sells at 40% off in a particular zip code it would be hard to not write down every other lon in that zip code,current or not.I a high price area like SD that would be a BIG hit.But hey, if the Raiders win the Superbowl tomorrow maybe the market will turn around!
A freind in the SD area tells me that the 1,500 homes burned by last October's wildfires are boosting construction employment and "protecting" home prices. I rather doubt that's the case but he so desperately wants to believe it. . .
--
Great stuff, CR!
But, how bad could things go from here? The worst for San Diego, I believe, is down 89% during late 1800s. There was another instance of down 79%, if my memory serves me right.
Jas
Cobra--where did you get your figures for SW Florida? Do you have figures for Miami-Dade or Brevard?
Thanks a lot.
"In a sign of more consumers losing access to loans, Citigroup Inc. has told some 161,000 credit-card customers in the U.K. that they can use their cards until the first week of March and then they'll no longer be able to tap the New York bank for credit."
Citigroup Cutting Credit To Some U.K. Customers - WSJ.com
I've been in San Diego in this home for 23 years, and I don't remember it being that bad in the 80s drop. And certainly prices didn't fall off nearly as steeply here.
Wow.
Is it correct that sales prices of REO transactions are not included in the data used to compile mean and median sales prices of used homes?
I believe I read this on CR some months ago. If this is the case it implies that the home price trends are weaker than the data indicates.
As I was reading today's NY Times article about Merrill and Massachusetts, I was getting vibes that Merrill might not survive in its present form.
It's not like them to settle a claim like Springfild so fast, without arbitration, and it indicates they are very afraid of a bad PR snowball that would encourage an avalance of other claims and suits.
Merrill can only survive and prosper if they are perceived as honest and trustworthy. Their reputation is their greatest asset. But can they survive if everybody big who bought CDOs from them has a put back to Merrill? It's almost like, they have to buy back their reputation.
The more foreclosures, the lower CDOs go, the worse it gets for them.
"Citigroup cuts off some U.K. credit cards"
We should extend the stimulus package to include UK. Whatever it takes!
rich - I've got a boatload of March $50 puts on Merill, purchased before this news broke.
These guys are dirty; I hope they go down.
I agree with calhousingbear that Jim the Realtor has been on top of the San Diego situation for a while. He's at bubbleinfo.com
and has some nice zip code specific information for some of the pricier coastal areas. Also, Rich Toscano at Piggington's Econo-Almanac | San Diego Housing Bubble News and Analysis has been plotting the foreclosures versus sales for awhile.
Both have good San Diego specific information. And watch out below because of the avalanche of foreclosures arriving at the courthouse steps for San Diego. The ratio of foreclosures to sales isn't going to be improving anytime soon.
These guys are dirty; I hope they go down.
central_scrutinizer,
Wow, March puts.
Let's cheer for lots of BAD MER news...FAST!
"It's not like them to settle a claim like Springfild so fast,...."
Yeah, Rich. That only took a few weeks, didn't it? That's really pretty amazing!
Somehow, I'm beginning to think that the pace of this whole thing is accelerating. In a big way.
Merrill settled because its a political issue. They last problem they need is to INVITE some AG to sue and scream bloody murder.
"They last problem they need is to INVITE some AG to sue and scream bloody murder."
By settling so quickly, they've chummed the waters. This will get interesting.
Popcorn, anyone?
CR,
I've been reading this site daily since your epochal "Virtuous Cycle" analysis. You and Tanta have explained most of the dynamics, but unemployment is still a puzzle. Its surprisingly low for a recession, at least in San Diego, San Francisco (my location), New York, etc. There are a lot of open reqs in the Silicon Valley.
Perhaps these are factors:
1. Workers as a group have accepted lower wages in recent years because of housing (and before that stock) wealth effects.
2. Companies cannot pay workers more because pricing power is at the limit, due to reachable consumers already spending their free cash flow on debt service.
3. Layoffs used to be the fastest way to conserve cash, but those expenses have already been reduced through outsourcing and automation. Companies have utilized cheap money for capital expenditures, resulting in a higher ratio of fixed costs (debt) to variable costs (labor.)
In other words companies cannot raise prices, so they cannot pay people more, who cannot spend more. On the other hand, companies cannot lay off too many people because they still have high fixed costs, and people owe too much to work less. Its a deadlock.
The stimulus package isnt going to help; it will just subsidize payments on debt, or purchases so essential the prices are already risinglike food, energy, and healthcare. Wed be better off waiting until a substantial portion of debt is written off, allowing discretionary spending of the stimulus money.
I think we'll see more abrupt closings of companies or specific lines of business as positions become untenable. Only then will the unemployment figures really start rising rapidly.
"San Diego REO / Short Sale Prevalence above 50%"
Sounds like the foundation for a bull market, as consumer wealth and lender capital is being destroyed. No wonder the builders, lenders & the S&P are shooting up. Only on Wall St.
Terry I agree they have set precedence and the slide just got steeper. Everyone thought they got the crap off the books and sold. Looks like the chickens are coming home to roost.
The stimulus package isnt going to help; it will just subsidize payments on debt, or purchases so essential the prices are already risinglike food, energy, and healthcare. Wed be better off waiting until a substantial portion of debt is written off, allowing discretionary spending of the stimulus money.
Yeah. I tend to worry that until the monster is dead, any kind of stimulus just runs the risk of making it stronger.
Our markets are broken and deliberately misrepresent value (for the profit of the few at the expense of the many). I believe that the longer this situation continues the more damage is done.
barely,
Its tough to compete with wall st. - they eat retail like me and you for lunch. the relentless buying on Fri afternoon was like a big FU to every retail short who thinks he/she is smart enough to time this F'd up market. only in the USA.....
Back on topic - I have to believe that a lot of the real estate jobs aren't showing up in the employment numbers yet - possibly because of independent contractor status?
Unless they are all suddenly working in the healthcare industry.
when I checked the title the banks still owned em
Chris,
These were loans that the bank held in its own portfolio ? Or did the properties get pushed back to the originator for some interesting reason ? Also be nice to know the vintage of some of those, just to get a feel for when the loan was originated.
Ray
lawyerliz | 02.02.08 - 4:32 pm |
lawyerlz,
I use the counties website. I just checked Brevard and Dade and frankly the counties site sucks. The counties I follow you can track total sales for the entire county. Most counties break ares down so small its a major pita to track all the sub areas.
To try it go to the counties website and look under/for property appraiser.
Then search under sales records. It takes some digging but a lot of this crap is online now.
Here is a way I like to track inventory. I go to realtor.com and always use Port Charlotte as the city.
This covers 80% of the county or so. I track total inventory,SFR,condos and raw lots for sales. I also break down lots under 10k(rocketed past 250 this week),homes under 100k(470 up from 50 or so last year) and track the cheapest homes just for kicks.
A recent 2/1 on a large lot just was pulled from the MLS. Sat at 25k with no offers. I looked at the house. With 5-7k in repairs it would be a nice little old school Florida home. Decent hood. US Bank still holds title. It's pretty horrible when a home will not sell for 10k above what the counties impact fees are for new construction!!!!
Chris
Sorry for rambling everyone !!!
"No wonder the builders, lenders & the S&P are shooting up. Only on Wall St."
Not to worry, Barely. Corrective rallies don't go on forever.
Since Case-Shiller index does not count distressed sales at all and since the rest of the market apparently froze, it seems that the C/S index price decline is significantly understated.
Regarding builders- They are mostly building just beyond the homes they built in 2004-2007. Those 2004-2007 vintage homes are the ones being cycled through the REO process at the highest rates, with the biggest losses.
So when you hear about national price drops of 10% or citywide drops of 20%, these really underestimate the drops being felt in the neighboorhoods where builders are trying to sell houses. They are trying to sell to folks who drive past a massive REO inventory to get to the model homes.
I can't imagine why people think builder stock is a buy.
Corrective rallies don't go on forever.
But they can go on long enough to bankrupt you.
Those short interest statistics are your friend.
LawyerLiz, tell me what you want to know about Brevard. (I have access to their MLS) and also I know the area fairly well.
RayOnTheFarm | 02.02.08 - 5:44 pm |
Ray I wasn't looking at origination much but after looking just now, HOLY SHIT. I just checked 20 or so homes and the spread is pretty even from,get this,2002-2006. I didn't find any 07's.
One on my street shows as a 1997 vintage but I am 99% sure she had a huge second of recent vintage.
Most of the banks are listed as "Trustee" so I am a guessin they are just servicers...
Where are you at in Florida Ray?
Chris
You all forgot the uncounted employment in SD. The conveniently close illegal immigrant construction workers weren't counted on the way up and they're not being counted on the way down. Hence the allegedly "stable" employment. Not for long.
Broker | 02.02.08 - 6:18 pm |
Any idea on the REO trends in Brevard?
I am guessing they they are climbing because some of the building there made me scratch my head(500-700k condo towers facing the Indian River?) My brother just moved away...I sure miss the indoor gun range!!!
Chris
"Not to worry, Barely. Corrective rallies don't go on forever."
I certain of that. The rally did get me to cover my shorts though. My strategy was to maintain the size of my short position by replacing my shorts with put options. One day out of nowhere we will see 40+pts down S&P and I would hate not to be there for it.
In re: Merrill and MA
During litigation, private parties often get fed up with their own attorneys' fees and settle.
Once DA's start spending taxpayer money looking for wrongdoing, they tend to keep spending it until they find some. Admitting that you've wasted taxpayer dollars when there was no wrongdoing is just not the sort of thing that helps a DA keep his/her job. Think Duke lacrosse.
This could be a long, painful process for Merrill, even if "everyone else was doing it." Plus, once the DA goes through the trouble and expense of gathering evidence, a whole bunch of private parties are likely to follow up with piggyback suits of their own...
Dunham - The loss of construction jobs did show up in the jobs report on Friday. However I don't think we'll ever know the whole story - because a lot of construction workers in various parts of the US are illegals - they weren't "on the books" to start with.
Liz - The Florida Association of Realtors puts out statistics like this:
http://media.floridarealtors.org/statistics/2007/Year%20End%202007%20home%20chart.pdf
You can get building starts for any county in the country from the federal government here:
Censtats Database?
Lots of other data elsewhere. What are you looking for? Roby
Merrill can only survive and prosper if they are perceived as honest and trustworthy.
If we small investors have learned anything in the past 10 years, it's that financial institutions are not "trustworthy." That's not the same as saying they are dishonest. But they are not your friends, they are not your "financial advisors." They are trying to sell you something. They are not preoccupied with your financial well-being.
When we go to a used car lot and talk to a salesman, both parties know what the game is. The salesman doesn't call himself a "transportation advisor."
"Those short interest statistics are your friend." ac
I was under the impression that short interest data is reported 2 weeks after the fact. Am I wrong? If not - that's not particularly useful data for a short term trader. Roby
Cobra, I talked to a good friend of mine in Brevard (whos been doing REOs for a long time) and acording to him there are hundreds of REOs in the pipeline. The beachside is in free fall. In Indialantic, IHB, Melbourne Beach there are quite a few REOs for way under $200,000. To give you an ideea a 4-2-2, pool, 1880 sf under air in IHB is listed for $174,900.(looks decent) You couldnt have bought a garage in 05 for that.
I was looking at a blog this afternoon (which usually doesn't have anything to do with real estate) - and it mentioned this blog.
Irvine Housing Blog - Irvine Real Estate and Resale Homes
I reccomend clicking if only to look at the BB breakfast cereal cartoon.
Can some of you people in California explain Irvine to me - what kind of place is it? I don't get the impression that it is a posh place - like Beverly Hills. So the prices kind of floored me - about double our prices - maybe a bit more. I know people in California in general make more than they do here in NE Florida - but not that much more. Roby
@Broker: OK, there are houses in Melbourne Beach, FL which I could buy with 50% down.
Is there any reason to live in Melbourne Beach, or are these houses no more relevant to someone who wants a job in high-tech industry than the even cheaper houses far away from any kind of employment that I can find by dozens dotting the Masurian Lake District in Poland, or from one side of the Carpathian mountains in Romania to the other?
watching the Los Angeles MLS listings for a big chunk of the westside...
Ahh. . . fortress LA.
As someone who might actually buy a reasonably priced house here (currently none exist!) it is terribly frustrating to read all the bad (good) news about price declines in SD, FLA, central CA, ad infinitum.
Here on the westside, while sales are slow and prices are coming down a bit, there are no "insiders" like Jim & Ramsey in SD who honestly talk about real weakness here. It's "just a soft spot" we are told, and sellers believe it and new listings come on at a premium to 06 prices. And for the most part sit. And there are still people looking to buy these "bargains" who believe it too.
I know it's not different here. I just wish everyone else would hurry up and realize it.
Sticky on the way down is right...
Can some of you people in California explain Irvine to me - what kind of place is it? I don't get the impression that it is a posh place - like Beverly Hills. So the prices kind of floored me - about double our prices - maybe a bit more.
Heh... wanna be really floored? go to realtor.com and type 90048, or 90069, or 90211, or... well, you'll get the idea...
i just wanted to know the REO ratio like Cobra posted above. And I'd like to know how many (few) sales there were in Miami Dade, especially yoy.
I'm trying to decide whether to just retire. There aren't any closings. i do some litigation, but I don't like it.
I wasn't looking at origination much but after looking just now, HOLY SHIT. I just checked 20 or so homes and the spread is pretty even from,get this,2002-2006. I didn't find any 07's.
For some reason I'm not at all surprised by that. I lived in Sarasota between '80 and '86, saw a bit of that same stuff going on back then.
Where are you at in Florida Ray?
The Realitters(tm) and the Chamber of Commerce people call it "The Nature Coast", the weather service refers to it as the Big Bend (for approaching tropical storms) or the Suwannee valley (for stalled out cold fronts). West of Gainesville, east of Perry, 3rd cow pasture on the left, then straight on til morning
Tom Womack - I live a couple of hours north of the Melbourne Beach area. It's in the Titusville area - home of the Kennedy Space Center. There are undoubtedly some high tech jobs there - but not enough IMO to support a large number of expensive houses. IMO - the location in general is basically a lower middle class retirement area. And an area where people from Orlando can buy a small weekend beach condo or the like. Titusville does have one of the best seafood restaurants in Florida though - Dixie Crossroads - old cracker style Florida seafood. I recommend it to anyone passing by on I-95 (it's the only reason I ever stop in the area). Roby
lawyerliz,
bk law.
A kindler gentler bk lawyer always is a big help to folks who need some hand holding.
You just shark the collection agencies and mortgage companies for violating the Fair Debt Collection act and state laws.
One guy in Tucson basically charges 2k and then makes it up by nailing the not nice folks.
Someday this war's gonna end...
Tom, there are quite a few high-tech jobs in Brevard County. I couldnt say the same thing about Poland or Romania. I just happen to know a little bit about these 2 countries. And BTW dont think the real estate is cheap overthere anymore. It is not.
Robyn, dont take me wrong, but I wouldnt compare Melbourne Beach with Titusville.
JBR
I think you'll be able to give your patience the long deserved rest it is due come fall 2008.
Foreclosures are starting to mount from all sorts of sources: flippers, scammers, people who got in over their head, and, sadly, if you read through the weekly Notice of Default listings you'll find no shortage of houses owned for decades (you can tell by the low assessor values) who refinanced cash out in 2005 and 2006.
Inventory up, foresclosures up, sales down to snail's pace, no No Doc., no 100%, no Option ARMs, higher priced Jumbos (Fannie and Freddie can't change that without going bankrupt, which means they can't change it) and everything else you've read on this web site . . . plus a recession!
My guess is that by the end of summer prices in LA will be off 15% from peak and then the plummet will begin fall 2008. By spring 2009 I think LA will down 25% to 30% from peak. And it may still have another 10-20% to go after that.
This will be known as GWB's Great Disappearing Act, making all that paper equity just disappear.
Joe
These are most of the current flips in my N. Dallas neighborhood 8 mi from downtown. When I bought in May 1995 prices ranged from $225,000 to $175,000. I paid $182,000 for 3,342 sf 1963 2 story 4/4/2 (rental)that needed work. Prices have risen in certain Texas markets regardless of what you have heard or read about Texas real estate. And, other Texas markets remain flat or are in decline. It's a very big mixed bag...
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Search Results - Dallas Real Estate
Search Results - Dallas Real Estate
At some point I want to buy in the La Costa/S. Carlsbad/N. Encinitas area. My recollection is that in the late 90's I could buy a nice 2K sq ft home for < 400K there, which more than doubled to about 900K-1M or in the peak of the bubble.
My hope is that I'll be able to snap something in the < 500K range once the dust settles by 2010.
Any locals from the Carlsbad/Encinitas area care to comment on what going on in those 2 cities anecdotally ?
Robyn writes:
I was looking at a blog this afternoon (which usually doesn't have anything to do with real estate) - and it mentioned this blog.
Irvine Housing Blog - Irvine Real Estate and Resale Homes
I reccomend clicking if only to look at the BB breakfast cereal cartoon.
Can some of you people in California explain Irvine to me - what kind of place is it? I don't get the impression that it is a posh place - like Beverly Hills. So the prices kind of floored me - about double our prices - maybe a bit more. I know people in California in general make more than they do here in NE Florida - but not that much more. Robyn
Irvine is in Orange County and is... well... not very nice. It started as mostly middle class families, but because it was so close to the O.C., RE prices spread. This resulted in the gentrification of Irvine by people that couldn't afford the O.C.
Of course, they couldn't afford Irvine either, but that's beside the point. I mean, I'm still getting no money down postcards from mortgage lenders every day...
The average income for a single person in Irvine is probably 35-45k annually. Scary when you do the math, isn't it?
PS: Robyn, the BB cereal box is BRILLIANT. Thank you for posting it.
Irvine is expensive for three reasons: First, it's a INTENSE job center. I think it has more jobs than residents, and a lot of good ones at that. Second, it's kind of a ne plus ultra for middle-class planned communities. The city has laws against boring-looking communities. I'm not kidding. A lot of people don't like the stringent rules of their HOAs but a lot of people do, and there are enough to make Irvine property very valued. Third, it was all owned by one company, which still owns most of the rental property, and they restrict and manipulate the market to hold up prices.
I don't get the impression that it is a posh place - like Beverly Hills
Irvine is the first suburban, non-deteriorated livable civilization past the rather sketchy South Central / Garden Grove / Anaheim / Santa Ana corridor.
The weather is great, it's got the UC job center, swanky neighbors towards the ocean and away from LA.
It's also got that master-planned feel to it so life in Irvine's got that "Truman Show" artificial cleanliness and safety thing.
It is the way all of "Edge City" America would be if we had our act together socially, and could control the weather.
got DSL PUTs ?
HERE IS SMEHING THAT CAN HELP
Lively Money: BUSH IS GIVING AWAY $600 SO HERE ARE TWO THINGS YOU CAN DO WITH THE MONEY!.
"This phenomenon is so negative, but ignored and under appreciated by analysts, economists and the media."
We absolutely need a new crop of analysts and economists and producers(media). The ones we have now clearly are the children of decades of negative selection... dumber than a stump!
Does the Irvine Co. still hold title to the land? My inlaws lived there in the 70s/80s with a 99 yr lease on the land. Could only buy the house.
"The average income for a single person in Irvine is probably 35-45k annually"
I seriously doubt that unless you are including the income of UCI students. During the mortgage company boom the average entry-level temp job paid $15/hr with a lot of 18-year-olds making at least 40,000 and 22-year old loan officers making $200,000.
Question: I don't know much about the foreclosure/REO process, but my understanding is that for a property to become REO, the lender actually has to technically "buy" it through the foreclosure auction. Does this transaction count as a "REO sale" or "short sale" in your data?
Does anyone realize that down 50% in housing prices is lower than the great depression. If you truly believe that home prices will fall 50%, then the majority of banks will be insolvent, at least in terms of their asset portfolio. If you truly believe that, then I'd expect you to be in 100% cash, and predicting Dow 5K. I'm not a realtor, just a bond trader, and unless you think rates will fall to Japanese levels (overnight cash at 0%), the down 50% argument is pretty extreme. In certain neighboorhoods, maybe, overall no way..