The great Golden State continued to lose its housing luster in June, with single family detached home prices sinking 28.02% over the previous 12 months, the worst in the nation by far, says First American CoreLogic.
Our neighbors in Nevada were second, with single family detached home prices dropping at a 23.24% rate, followed by Arizona at 18.48%.
It’s hard to believe from our vantage, but there are states where prices are actually going up.West Virginia single family detached home prices rose at a 3.6% annual rate in June, best in the nation. Montana was No. 2 with a 2.84% increase followed by Mississippi, where homeowners saw prices up 2.74%.
Nationally, prices were down 10.66% in June over June ‘07. Thirteen states recorded home price increases over those 12 months. South Carolina was unchanged.Although First American CoreLogic’s analysts say the drop in prices has stabilized nationally, inflation is becoming a problem.
“As of June, nominal home prices declined 10.7% from a year ago,” said Mark Fleming, chief economist for First American CoreLogic. “Given our home price expectations for the remainder of this year, we expect 2.7 million pre-foreclosure and foreclosure filings in 2008, up nearly 50% from 2007. Nominal home price declines have stabilized in the 10 to 11 percent range for several months,” Fleming continued, “however, given the surge in inflation, real inflation-adjusted home prices are still declining at a faster rate. Between April and June home price declines were very flat, falling by an average of 10.8 percent, but real home price declines accelerated from April’s 15.3 percent to June’s 16.8 percent.”
For other real estate news…
- 4,600 job cuts at First Am since ‘07
- $7,500 home-buyer tax credit gets lots of public interest
- Tell us: Should U.S. drop capital gains tax on real estate?
- Homebuilder sees no relief through ‘09
- Wishful thinking on home values?
- Builders shave $430,000 off new O.C. house prices
- Demand for O.C. homes rises for 1st time in 4 weeks
We might be half way home, though I would not count on it. Warren Buffet was right: now that the tide is going out, we’ll see who was swimming without any trunks on. I cannot believe the amount of stupid money in the real estate market right now — I look forward to much of it continuing to be shaken out the next 12 to 48 months.
and to think were only about halfway
through this correction oy veh
I don’t care what this year vs. year’s percentage drop is. I want to see how much prices have gone down from May to June. This is a month by month thing. The price drops didn’t really accellerate until Spring of this year.
hey usuallywrong…the greatest drop is from the peak…this is what i enjoy watching.
This is such a proper balancing act…the lunatics that purchased from 04 thru next year need to be mandatorily tatooed with the phrase ‘waste of human flesh’ around their necks.
the ignorance was so disgusting that those of us that were stating this truly cannot care less how much these bonehead braindeads lose.
I am enjoying the best year in business in the most beautiful kneck of the world…that is all I need to know…to those that did not buy or refi…cheers!
The good news is that there is only another 25 to 30% down in prices from here so if you are willing to wait until the Spring of 2010, you’ll get some good deals out there. With the economy going into recession, the last thing people should be doing right now is to buy a home. Renting is the smart thing to do.
what goes up, must come down.
It is a good thing popcorn is not fattening.
I keep hearing this will be the lowest prices will be, better buy now!!! Now is a great time to buy…….
Not only have prices been stable for a couple of months everywhere I know of, but even these broad-brush stats aren’t really budging. They’ve been stuck in neutral for quite some time. I am missing the hullabaloo.
Ah, this is for “California”? Nuff said.
Cheers? Ya gotta score a property first. Who knows you will……and who won’t.
Make that “Who knows who will…..and who won’t”. For now, rent city (a bird told me it’s up…..again.)
“Nominal home price declines have stabilized in the 10 to 11 percent range for several months,”
It’s NOT just here! Wouldn’t it be funny if the national recovery has started? Wouldn’t it be great if people could prosper and jobs could come back? Of course, you have to care about something, anything outside of your own selfish little bubble for that.
Lasner is a real gem. Price goes up - it’s all about the “OC” - Price goes down - whoops - it’s all of California! Bottom line is - People who look at the roof over their head as an investment got stung. The average person should buy what they can afford, as it is a “home”, not something you borrow on or look to make a quick buck with. Leave the real estate dealings to people like Donald Trump - they know what they are doing and sometimes, even they loose!
I don’t think we are close to the bottom until the lenders sell off the homes on their books to investors who then set the new market values by selling those homes to buyers.
DigDoug, I understand your disgust with the people who bought in 2004 and on, but I also place the blame on the greed of lenders and RE agents who assured these gullibles that they could finance under these insane conditions, and then refinance later when the home appreciates. People blindly and without thought purchased, using two incomes to do so. Now with the recession and many losing their jobs, qualifying on two incomes was not wise. We do well on one income, but the insane appreciation of the last few years priced us out. We will wait when we can qualify on ONE income. Then when I get a job, I won’t have to worry about what’ll happen if I lose it, and we’ll have spending money for vacations, college, going out to eat, etc. It’s smart planning. Yes, I do pat myself on the back for having scoffed at all those 0 down, 0% interest scams.
Mom,
CDM very nice new construction 2/2/2 went into escrow for $799ish in the numbered streets. Best deal I have seen in CDM all year probably…
He who has the money is in control. It is why cash is king. So, back to the boom buyers, who controlled the money? RE agents or underwriters? They are your “stupidity” checkpoint. It is the very reason for their existence…”In evaluation of a real estate loan, in addition to assessing the borrower, the property itself is scrutinized. Underwriters use the debt service coverage ratio to figure out whether the property is capable of redeeming its own value or not.”–Wiki
So, did I miss something or did the banks have the money? They were in control…or lack thereof.
Get ready for the next wave.
My rent has gone down. Anyone else seeing this?
Foreclosures in US rose 55 percent in July as housing market continued to sink
The headlines just keep on coming.
Jon, the moderating is soooooo annoying. For heaven’s sake, please educate me on why my last post was moderated…
“To speed up the disposition of the 54,000 foreclosed properties it owns, Fannie Mae is opening offices in California and Florida and is considering selling those properties in bulk to investors. “I do not think this is a time to be holding onto (foreclosed properties) hoping for a better day,” CEO Daniel Mudd said last week.”
Just like I said, they’re getting ready to dump a bunch of property.
Everyone should be given a cheap home they can easily afford on one income, all the while having all the perks life has to offer. They should be able to hoard money for retirement, take the summer off to tour Europe and send their kids to Harvard as well. Of course, this does NOT apply to you if you are part of the food-chain that begins with the timber industry and ends at a title company table. Those poor bastards will eat dirt and make all the sacrifices for you. It is all about you.
Fannie is not a player here. Yawn.
LOL………… so ironic………..
……… Fannie is going to be a huge player in setting the bottom……
………… can you start a graph for us provider………. and show us what the looks like in 2012?………
Damn, those are some fugly properties Fannie is sitting on.
…….. provider…….. do you understand….. that most of the time….. your statistics, show the exact opposite of what you are trying to show?……..
When the banks start dumping their hidden inventory, there will be houses for everyone :)
No, mav, they don’t. People getting excited over Fannie dumping inventory will be sorely disappointed. The inventory isn’t hidden, it’s in Santa Ana….you can find it anytime.
Learn Spanish, Melody. Can you work a switchblade?
Apologies to my hard-working Spanish-speaking friends. One love.
I did not know that Stockton made national news…
Melody,
The banks are only giving their rep agents 20 homes at a time…when one sells, they replace it. They will not dump their inventory. They have been managing this for well over a year now.
OH ‘PROVIDER’ OF BS AND ENTERTAINMENT
ARE YOU AN ALBERT EINSTIEN FAN?
HE ONCE SAID: “IMAGINATION IS MORE IMPORTANT THAN KNOWLEDGE”
Sorry if my facts disturbed you, Bogey. I know you’d rather inhabit Candyland.
Per housing tracker, asking prices for the lower 25 % are dropping pretty fast, the median is dropping and the upper 75% of asking prices are flat.
Once the upper 75% realizes that their homes aren’t selling(per steve thomas), they will start to lower prices dramatically….that will be the beginning of the housing correction in Orange County……should occur in Q3 2009. When the correction starts to occur, it will be very dramatic.
They’re doing a fine job …. losing more by the day. 28% in the past year. Hang on to those properties Fannie, and watch the controlled drop in values:)
Melodious,
Where have you been for the last couple of days? I’ve posted several times about BULK SALES of inventory. The Sovereign Funds from Dubai and Singapore are the money guys behind these bulk purchases and if they grab up 54,000 properties, you aren’t gonna get anywhere near one of them until they are ready to sell it to you.
Housingtracker?
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha!
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha!
So, apparently then, all this speculation about “phantom inventory” is accurate?
The real numbers (pent-up inventory added to the existing inventory) are far greater than the demand, even counting the uptick in demand caused by the bottom-fishing investors buying at auction.
…………………..Holy mackerel, Provider has finally had her long-expected public breakdown.
Those 54,000 properties will either sell at what people will pay or they will help lower rents, dramatically.
This is good. Cheaper houses for sale and rent….. and at the same time bailing out the mortgage holders (somewhat:)
Those investors will be in no hurry. Why would they be? They can wait as long as it takes for a great return.
Cognitive distortions occur when an individual makes up facts to satisfy their emotional needs……………wonder who frequents this blog that has substantial cognitive distortions.
provider Says:
August 14th, 2008 at 4:00 pm. Those investors will be in no hurry. Why would they be? They can wait as long as it takes for a great return.
NEWS FLASH PROVIDER - This type of ’speak’ is the old way of thinking regarding home ownership
Of course investors will be in no hurry, They realize the days of “a great return” from home ownership in the OC have expired.
truthi provider realtor is hilarious. All distress property is in Santa Ana? Are you for real? SInce you don’t have anything else to do all day, why don’t you get a foreclosure radar account and educate yourself about how it really is out there.
Not an expert but if they buy 54,000 properties in bulk at a huge discount, don’t they have to record tranfer of title on each individual property? Won’t they have to come up with a $ number for each house? They can’t fudge the numbers on title. Or does Fannie keep them on the books until they are ready to be sold to individuals. These are the questions I want to know. becuase if they are recorded individually at a huge discount and then rented out this will drive comps way down.
Who knows the answer?
From their site it looks like Fannie has 1920 properties in CA - not a whole heck of a lot in OC (mainly condos in the nicer areas) - the couple in DP and LN were priced north of $300/sq ft so they are not giving them away.
You know if investors buy in bulk they are not going to take 5% below comps. They are probably going to ask for 25% or more below comps. What happens if thousands of homes get recorded at 15-25% below existing comps? Well we all the know the answer. That is if that is how they record bulk tranfers of property. I don’t know how else they could do a tranfer of title without naming a price for tax purposes??????
Let me spin a little scenario. OK, the Banks have tightened credit and raised rates, you would think that’s not the smartest thing to do since they hold all these REO’s they need to sell. But wait, here come the Foreign Investor who have cash and will buy in bulk at a discount. Hazzar, the banks are saved they don’t have to make any risky loans even to qualified buyers nor do they have to carry the cost of servicing those loans and now they have loads of cash. Ok now these Foreign Investors have blocks of property in SA, ORG, ANA,etc, fast forward a year or so and a Developement Co. with a funny sounding name that no one has heard of before comes along and they go before the planning commisions with a plan to redevelope the area with Glass Towers, Condos, Hotels, Amusment Parks, upscale, first class all the way and the Cities roll over for them and who do they have to buy the property from? Not you and me, from the Foreign investor and the banks that got the cash turn right around and loan it to the Developement Co with the funny sounding name and the Foreign Investors so they can do a Joint Venture. A bunch of houses disappear from the market, the area gets redeveloped, the Rich get richer and all you guys will be standing around with your hands in your pockets blinking like Owls in a snow Storm saying “Wha Hoppend”.
Provider is right they will sit on them and rent them until they make money becuase they just drove the price down on all the houses around them.
Stash, I’ve been wondering that myself. I’ve heard that some of the discounts may be as much as 50%. I do remember back in the 80’s there were some development companies that wanted to redevelope some rundown areas in San Bernadino and they came up with the idea of not buying the homes individually but getting the homeowners to form a corporation and they would buy the properties in bulk from the corporation in a single transaction then each owner got a share of the corporate price. There was one recorded deed showing a trans fer of property from one corporation to another and that was it. I would think since the Bank or Fannie or Freddie own the properties they could do a corporate transfer the same way and the individual sales would never be recorded.
……….. if you buy at 50 cents on the dollar………
……….. and you sell quickly at 55 cents on the dollar……
………. that is a huge return……….
………. especially when you have the capability to circumvent realtors………
Yeah but if they rent them how do they pay property tax? They need a # to get property tax on each property? They can’t just pay a bulk property tax can they?
Doesn’t each property have a seperate title? They are individual parcels and I thought they had to be recorded as such? Like I said not an expert so if anyone has definitive answers I would like to know. Becuase if that is the case I want to know where they are buying property becuase that is where the biggest price drops will be after they close.
Alfalfa, doesn’t a bulk tranfer of a whole community require all the home owners to agree. I don’t think they have forclosures that encompass whole communities like that.
I have to go but I will check into it and see what I can find out. I will return here later tonight to see if anyone else can figure it out.
Later……………
“becuase if they are recorded individually at a huge discount and then rented out this will drive comps way down”
Ha! The population of California is 33 million people. The inventory you are speaking of is 54,000. That is .0016 units for every resident of California.
OMG! My math above was based on 54,000 in California. Only a portion of those are in Cali. Move the decimal to the right!
“From their site it looks like Fannie has 1920 properties in CA - not a whole heck of a lot in OC (mainly condos in the nicer areas) - the couple in DP and LN were priced north of $300/sq ft so they are not giving them away.”
That’s because that’s where the market is.
“What happens if thousands of homes get recorded at 15-25% below existing comps?”
Nothing happens.
Alfalfa, your scenario is hilarious…..and quite possible.
Mav thinks the funds are going to put up all that dough for 5%, before expenses. Sad.
There are 2 Fannie Mae REOs in, say, Huntington. I doubt that could drive rents down if they became rentals.
Bill, your second story contradicts your first post. Try and QC your work, will ya?
BILL
YOUR LAST LINK WAS A GREAT ONE EVERYONE SHOULD READ IT
THE SHADOW INVENTORY THAT OUT THERE IS HUGE
PROVIDER
WHY DONT YOU GO DO SOMETHING PRODUCTIVE LIKE GET SOME REAL INFORMATION
YOU MUST BE ONE OF THE UNEMPLOYED ALL U AND MULLIGANHEAD AND
SEEKING ALFALFA FOR BRAINS DO IS POST AND MOST OF THE TIME WORTHLESS INFO
The bulls are getting a lil restless. It’s getting harder for them to spin data.
So if some foreigner buys a bunch of crappy homes that could not sell, why would I want to buy it?
Stash, sorry I was gone for awhile. Yeah there’s some details that would need to be hammered out but I’m sure there’s a team of MBA’s in Finace and Law working it out right now.
Melodius, why don’t you go buy some more Thorazine for Hwood.
Provider you must be deaf dumb and blind.
I said pre-foreclosure notices spiked in that last week and this week.
So, being the doofus you are, you provide a link to July’s numbers.
SEEKING SOMETHING FOR BRAINS ALFALFA
I WISH U WOULD HAVE STAYED AWAY…. IM SURE STASH HAS A LOT BETTER THINGS TO DO THAN WAIT FOR A GOOF BALL LIKE YOU TO POST SOMETHING RIDICULOUS
hwood and bill
I’ve been saying this for some time and I totally agree. They’re still in denial but there’s nothing left to do but watch this nightmare unfold. Deny all you want, paint that pretty picture and dream on.
MELODY
THERE ARE IN DENIAL I THINK THEY STILL HAVE ON THERE BLU BLOCKERS SUNGLASSES ON…..
THEY ALSO NEED TO WAKE UP GET A JOB INSTAED OF POSTING ALL DAY……LOLLLL
IT MAKES SENSE WHY THEY HAVE SO MUCH TIME TO POST STARBUCKS CLOSINGS SO THEY LOST THERE JOBS
While the boom was going on, hopefully Realtors/bankers/brokers/appraisers/contractors/builders stashed their cash so they’re not financially strapped. I REALLY don’t wish financial ruin on anyone who was an innocent victim in this credit crisis. That’s why I’ve advised family/friends NOT TO BUY!!! And “they” said prices wouldn’t come down!!!!
All I want is for people to speak the truth and stop bsing me into something that isn’t real.
Melody,
I’m not sure if you are a new welcome guest here or if you have been subject to this carnival act that provider, alfa and the other endless made up names these con artists are forced to use in here.
We have narrowed the culprit(s) down to either Pat Veiling, Gary Watts, Steve Thomas, or other very panicky, flipping realtors, that have flopped right on their butts.
They are definitely not fans of this blog, mainly because this blog is full of useful, honest and reliable data from Jon and most of the other bloggers.
It’s impossible to spin the truth here, as these phonies find out on a daily basis.
Banks will NOT hold inventory and wait for prices to return. Some owners can do that. Individual bag holders/owners may hold till 2050 and sell their condo for 2mil. BUT the banks will not.
TIME is a factor in investing. Even if they held on to property and it goes flat or gains 1% a year, the stock holders will not allow this. The banks will dump and put their money elsewhere.
1,300 foreclosures a day. (nice post bill.)
The dam WILL break. The market will have its way.
Bill,
I’m going to take that as a compliment. Thanks for the additional info.
Bill:
I admitted long that I was posting as ALL of the bull aliases on this blog.
Now you have spilled the beans that Gary Watts, Steven Thomas and I share the job. They cover the blog when I am traveling during the work week, and I handle it on the weekends while they do their open houses.
It’s a shame our cover is now blown. Your next job will be to determine which of the three of us is writing under which alias. Somehow, Bill, I know you will figure it out.
And you are wrong about our hating this blog. What else will the three of us do with all of the spare time we have?
*Sarcasm Off*
Pat, you sound like a puppy dog with his tail between his legs. You’ve used “sarcasm off” on more than one occasion. Why do you do that?
Melody:
You wrote: “Pat, you sound like a puppy dog with his tail between his legs. You’ve used “sarcasm off” on more than one occasion. Why do you do that?”
Because I have been taken too seriously here on more than one occasion. My fear is that someone will actually believe what I write or say. I am pretty sure you wouldn’t believe me, however. So…it does not apply to you.
Question, do realtors get paid hourly along with commision? If they’re let go from a major realtor company, can they collect unemployment?
I HAD TO SELL MY HOME IN CDM AND I AM NOW IN HAWAIIAN GARDENS. WHAT A BEAUTIFUL NAME.
So many Renters here! I will start raising my rents on all my renatl properties ASAP! Thanks for paying my mortgages!
He who controls the money controls the business. It is pretty simple really.
I agree with nord…
Buy a home with a 30-year fixed loan… You fix your monthly costs. Then sit back and watch how low your payments become compared to the ever rising rents !
pat veling owns a company called REAL DATA but didnt see the worlds greatest real estate bubble as it inflated like the hindengerg right before his beady little eyes- he actually charges someone money
for his clueless opinions on real estate- oh and hes real busy
“traveling”- to where and for what reason we dont know- probably
getting more “real data” for his clients- hes now been reduced to
give an occasional remark that has no real substance- thanks
oh real man of genius this buds for you
Can we just simply put together a simple graphic to track housing performance in Orange County and California?
The worst has yet to come..More losses from fat cat banks, investors, and spread out like a contagious disease.
So provider if thousands of houses that are now part of the new comps get recorded 15-25% below other comps the appraisers just ignore them? Last time I did loans they used most recent sales as comps? Has the whole appriasal system changed in the year and half since I stoped doing loans? I am not talking Fannie in CA I was talking in general. If 3 of your nieghbors sell thier house 25% lower than the comps in your neighborhood that doesn’t effect your house value? Please expalin……….
Nord
Go ahead and raise your rents, see how long it takes to fill your empty rentals. Lots of competition out there. You go for it!! Mine was lowered but they have lots of leeway, maybe you’re having to pay money on top of the rental price, quite a few are in that predicament. This is what life is about, you live and learn.
stashingmycash,
Maybe we need to create an unbiased agency where possible buyers can get real data so they don’t get screwed. We used to hire realtors for that but they’ve changed their tune.
This is not rocket science. If a client asked me “is now the right time for me to buy?” That is not for me to decide…that is for them to decide. And I would tell them such. Obviously, the flippers are by the wayside for the time being, so today’s buyers know it is a buy and hold…like RE should be. Do not ask your agent if this is the right time for you to buy. You and only you get to make that decision.
Melody maybe nord’s option arms just recasted and he has to raise his rents! Funny how he bags on the people who do pay his mortgage.
I’m not an angry renter. It is rather peceful this time of night in Capo Beach. I can hear the waves crashing on Beach Road. I think I will sit on the balcony and watch the boats go by. Then go to bed before my wife thinks I have a girlfriend.
Good night all…………………
Oh poor, poor thoughtless provider of the ROC, you seem to think that all the foreclosures are happening in SA, ANA, and GG, while I agree with you they are higher there, there are plenty in nice areas going back to the bank or bought at the foreclosure auction. Come on, this is public info that even the dumbest bear or bull could find.
There has been some good ones in Newport this week, as well as Dana Point, and good ole Ladera is still on fire, one went back today for $472k when it last sold for $880k, ouch! There were quite a few in Irvine, including one that was scooped up for $262k in brand spanking new Woodbury. Another one that sold for $900k in early 2006 in 92602 was picked up for $560k. The rest in Irvine went back to the bank. Columbus Square got hit with another bank owned home today, and there are many more scheduled for the villages of Columbus.
So Melody, don’t listen to the thoughtless provider of the ROC, she is so clueless it is becoming embarrassing. She is just jealous she has all her cash tied up in her home and can’t take advantage of these deals. Sucks to be her. For others that didn’t drink the Kool-Aid are taking advantage of this wonderful opportunity. You can too Melody, and you sound smart enough that you will.
Just wait until the August foreclosure numbers come out… the thoughtless provider of the ROC will give birth to a purple Twinkie when she sees the NODs break all records and the foreclosure number is higher than any of the NOD numbers from last year. Mark my words, write it down, copy and paste this one, bookmark this thread, do what you have to do to remember this quote of mine… between now and the end of the year OC will see 2000 or more foreclosures for the month. August will have over 1500, so be prepared for the 2000 mark month. It will happen, it is in the bag just like another name change from the thoughtless provider of the ROC.
The decrease in real estate prices is in the top of the third inning.
“So provider if thousands of houses that are now part of the new comps get recorded 15-25% below other comps the appraisers just ignore them?”
Yes, they are not arms length. Dumb question.
Graphrix, you’re funny. Why did you go AWOL in the Option ARM discussion? You have a nasty habit of running away when you are pinned into a corner. I am aware of foreclsoures, you’re not some spy (well, yes you are) that has cornered the market on data. The market is so far keeping up with them, especially outside of Santa Ana. Don’t you worry about me, I just made a deal that is going to make me a ton of money on……….foreclosures! Isn’t it ironic?
And Graphrix, can you believe how close to asking the sales are in Irvine? And how stable the psf is? It’s really amazing. And inventory is at three months supply. Looks like its completey stable now.
Your Friday news:
Stocks climb
Oil drops
Commodoties drop
Industrial production up
Consumer confidence up
Bond insurers advance
Mulliganville Says:
August 15th, 2008 at 12:12 am
“Do not ask your agent if this is the right time for you to buy”
Even realtors are telling folks not to trust them.
The problem is people aren’t asking for their advice, they’re cramming it down our throats.
Paid ads in the paper, paid commercials and interviews, all constantly telling people it’s a great time to buy even when people would clearly take a substantial loss.
The bottom line, don’t trust anyone in the real estate business.
No Bill…trust and verify…trust and verify. Once someone proves to be unworthy of trust, avoid them. My guess is most of the ads you see are placed by a RE agent who has a listing to…………………………….SELL! Yes that is right ladies and gentleman. Mr. Realtor is going to spend his own money advertising your home. He should be doing so!
It is like if you hire the register to run an ad for you if you are selling your H2. We all know now is not the right time to buy your H2. But you may still want to SELL it. And, someone will buy it. How about those Escalades at 0% for 60 months! X5’s for 0.9% financing. You get to decide if the time is right for YOU to purchase an SUV at attractive financing offers.
You are so funny William…
Psssst: oil dropping like a rock today…this is good, yes?
Great catch, Mulli. Bill wants agents to not advertise properly for their clients. Actually, he just wants them to stop breathing, period. There’s so much more to his story than we’ve heard.
Only 25%?
Stash, been checking into how to record a bulk sale. The simple answer is recordation is not necessary in the state of CA for a contract to be legal. the other thing is that if the bulk buyer pays cash all valuations (appraisals) and other requirements for a traditional purchase that involves the holding of the note by a bank is out the window. All they do is give them the note. As a matter of fact most the really big transfers have been of the non performing notes which are securitized by the property. I also found out that most of the bulk sales so far by these investment pools have been small, 5 to 20 properties at the most and a lot of small tracts in various stages of developement. But there have been a couple that involved $5 billion dollars and they ain’t say who, where how or when on those deals. So it looks like the small bulk deals would be recorded normally and have some effect on market values but the big ones are really clouded in secrecy.
Alfalfa, I understand what you say about the contract but there are still many variables. Without tranfer of title to the new company doesn’t the lender still have responsibility for property tax? The persons on title actually still owns the property. Like when I sell my car, until I go to the DMV and change title over I am still responsible for anything that happens with that car. What about insurance on the property? Maybe there are legal proceedings that I do not know of that protect all parties when doing tranactions in bulk, but the investors holding for long term will have to rent and eventually have to tranfer title.
If an invester gets homes at 25-50% under comps even if they turn and burn they are going to have to sell below comps to get a fast sale or suffer loses from holding costs. This would mean that regarless- if a sale is below comps they become the new comps. Thus driving price down.
Stash, those would be concerns and like I said the smaller bulk purchases of 5 to 20 properties would most likely be handled in a more traditional manner even if the deal was all cash with each property having a new deed issued and recorded with the purchasers name. And those will have an effect on market value. But in a huge $5 billion transaction, that’s whole new territory. I suppose since all you need to record is a legal description they could use Accessors Parcel Numbers instead of an address and list the properties that way and do a bulk recording, but if all they are doing is buying the non performing note at a 50% discount then they could reduce the payment(which would inclued taxes) to the homeowner and keep them in the property until they’re ready to do a redevelopement. this would be less likely to have an effect on values. I don’t know but it’s my best guess.
Melody,
I have no problem with you doing it on your own. There are over 200 typical steps involved in selling a home. Buying a home is completely different. You can always rep yourself.
You got me thinking, if it was just about opening homes and access, why do you think the masses and the wealthy continue to utilize the services of RE professionals time and again? Why don’t the discount brokerages have a presence from Santa Barbara to San Diego along the coast? My guess is there is no faith and trust in their marketing model to get the job done.
Melody,
You could do everything except hire the appraiser. If you are qualifying for a loan the bank will select an independent Appraisal Management Company at random and they will send a contracted appraiser in your area to do an appraisal. Otherwise have at it.
Seeking -
Even if the bank sent an appraiser, I would still get my own. Why would I trust the bank? It’s not rocket science to buy or sale a home - been there, done that.
By the way, I have yet to hear a rebuttal from the bear den with respect to WHO WAS CONTROLLING THE MONEY during the boom. Was it the banks or the agents? He who controls the money controls the business. My guess is you all are avoiding this since it is a simple fact…in every business. I do know you all want to blame the local real estate community for the run-up in values here. But you are sorely mistaken. I have seen pawn shop owners run a better business than some lenders did over the past several years.
Can you imagine the following scenario—
You take your fake Rolex to the local pawn shop and you ask for $3000.
The owner says to you, “is this a real Rolex?”
You reply—yes it is.
He says, “OK, would you like that in $100’s?”
Later on the owner realizes you duped him into taking a fake asset…he did not trust and verify….he just loaned the money “on your stated information.”
Now, ask yourselves, who is to blame for the above ridiculous scenario? Even a pawn shop owner is going to verify the repayment plan, in this case the value of an asset, prior to loaning the money.
However, for some reason, lenders decided to take the applicants word over their own ability to research and verify the risks.
Once you all understand this little nugget, we can move on from here.
What caused the above to be moderated????????????? Come on Jon…a little explanation would be helpful.
Bill -
Good catch, thanks. A lot of their data is worthless… hehehehe
Yeah Mulli - I want to know what buzz words are blocked. Sure would be helpful.
Mel,
You can get your own, but yours will not be suitable for their underwriting department.
Melodious,
It’s now a legal question. Ever since Andrew Quomo the AG of NY, won the law suit against Fannie Mae (or maybe it was Mamu) for supposedly influencing appraisal values, the appraiser can no longer be hired by any involved party. That’s why the AMC’s are popping up all over. they are autonomous from everyone. You could hire an appraiser and it might not be a bad idea just to get a second opinion, but the bank couldn’t use it.
provider Says:
August 15th, 2008 at 6:50 am
Graphrix, you’re funny. Why did you go AWOL in the Option ARM discussion? You have a nasty habit of running away when you are pinned into a corner. I am aware of foreclsoures, you’re not some spy (well, yes you are) that has cornered the market on data. The market is so far keeping up with them, especially outside of Santa Ana. Don’t you worry about me, I just made a deal that is going to make me a ton of money on……….foreclosures! Isn’t it ironic?
You owe me a new BS meter, you broke mine from the extremely high level of BS. You and I both know you aren’t doing anything with foreclosures. You couldn’t possibly have the time since you spend it all here. Plus if you had done something with a foreclosure, you’re right I would know about it. And if you really had a clue as to what is going on in foreclosures you would be posting the deals here, but oh no… that would show how bad things are.
BTW, I was never pinned in a corner and I didn’t disappear after the option ARMs thread. I stopped posting there because you couldn’t get it through your thick skull that my point was the defaults were happening now, and more important now, than the stupid recast date you keep bantering on and on about. The recast doesn’t matter when people are defaulting en masse on every option portfolio, Wachovia, Wamu, Countryfried, Downey, First Fed, Bear Stearns, all of them have double digit delinquency rates. Get it, do you get it? Now, not 5 years, not 10 years, but right now and it is getting worse.
Keep calling your bottoms, and keep hoping the Irvine numbers will remain stable, because it will be fun to keep making fun of you for the next four years. BTW, why don’t you tell everyone about the money you lost on your AZ failed flip? Oh that’s right, you only want to see and tell people about the positive deals, just keep your head in the sand, it has served you well the last few years. The check engine light is still on.
graphrix -
Well done maestro.
“Plus if you had done something with a foreclosure, you’re right I would know about it”
Like I know you are an adulterer?
You look dumb in that ride.
There it is for all the world to see: Graphrix is a creep invading everyone’s private life. What a punkass you are.
And you don’t know jack about my deal. I just left a builder office an hour ago, just one of my many clients.
Foreclosures are only PART of my deal.
Graphrix, please tell us all how you would know what deals I do? Because you track public records in Irvine? You think Irvine is the world? I’m disappointed in you.
graphix, you struck a nerve.
You need help, seriously you need to get help. You are not well. You not only make up fantasies about the RE market but you make up fantasies about my personal life.
And you couldn’t have been in a builder’s office, you have been posting here all morning long.
Get help, seriously get some help.
If you know how to read an appraisal it is real easy to see the ones that don’t jive. If you can pull comparables then you just need to find the ones closet to you that are most like your property to verify thier work. There are compensating factors that make the comparable + or - and they are always noted on the appraisal. You can always ask for a copy of the appraisal and the company name and persons name doing the apparisal will be on it. You can call them and have them explain why they valued the property the way they did. If your lender won’t give you a copy of the appraisal then I would be leary.
That’s why they say never to over improve your property becuase compensating factors can only make your house worth more than the comps to certain degree.
Show me the post times, big mouth.
Melody, a comparable has to be not only arms-length (which a bulk sale is NOT), but the property has to be exposed to the open market. These deals are NOT comparables.
Arm’s length does not go very far :(
Now Mulli you know you can argue most anything. Look at provider arguing that bulk sales are not arms length. I posted the definition and it said nothing excluding bulk slaes as being arms length. So lets play devils advocate…..
“Later on the owner realizes you duped him into taking a fake asset…he did not trust and verify….he just loaned the money “on your stated information.”
Who sold them the fake asset in the first place and told them they could get a loan at pawn shop no problem?
Banks did verify the asset with appriasals they just did a poor job on verifying the ability to pay. A pawn shop doesn’t care if you have the ability to pay becuase they are in the business of selling things people don’t come back for, banks aren’t.
Don’t get me wrong I don’t blame RE agents for the run up in prices completly. Banks, consumers, investors and everyone in the game during the boom holds there share of the blame. Just thought I would play devils advocate since you threw the cricket thing out there. :)
Stash, prepare your next acknowledgement that you are wrong. Bulk sales are by definition non-arms-length. Each property establishes a relationship for the next AND they are not exposed (at that price) to the open market. There has to be equal footing for all buyers for a good comparable sale.
They DO have a relationship.
How do they have a relationship besides buyer and seller? How do they not have equal footing? Your telling me the corprations are taking advantage of the bank or vice versa and they have to control?
Wow my typing is terrible.
They have a relationship because each sale is not negotiated seperately, and is contingent on a basket of other properties being sold. The buyer does NOT have equal footing with other buyers (the general public) because you will not be offered that same deal. Let’s say you, or someone like you, could bid the property higher on the open market, but you are shut out from doing so here. An appraiser can’t know what you MIGHT have bid, and therefore, the sale is tainted.
Equal footing in the definition means between the buyer and seller not betwen different buyers. It says in the definition both parties are acting in thier best interest. Anyway if a private person had enough money they could be on equal grounds and get the same deal as the corporation. It’s about he cash not about the corporation.
Just becuase each sale is not negotiated individually doesn’t mean they have a relationship besides buyer and seller.
An none arms length tranaction would be me selling my wife’s sister a car for $1 to be nice.
Wrong. Equal footing refers to all possible buyers. Another big-bucks buyer could enter the fray, but that is still not exposure (at that price) to the open market. What part of “open market” is confusing? There are also unfair concessions in the mix. You selling to your wife’s sister is also not arms-length, but far from the only possibilty.
“The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.”
“Just becuase each sale is not negotiated individually doesn’t mean they have a relationship besides buyer and seller.’
They have a relationship outside of a single sale. The price would be different if not for that relationship. They would not get that deal without a side arrangement, i.e., non-arms-length relationship.
So you don’t think that other investors are not making bids for the same properties and there is no exposure to the open market for these bulk sales. The open market reffers to the poeple interested and capable of paying. We cannot compare individual buyers that are looking for owner occupied homes to large invetsors, but instead compare other investors with thier real competition. Other investors. In this situation the properties are on the open market to investors and they all have equal footing based on thier ability to negotiate and thier available capital. If the bank turned down higher bids for the same bulk properties from an investor and sold to someone they have special interest in than it would not be an arms lenth tranaction but if they take the highest bids (which I am sure they are) then it is an arms lenth tranaction.
Other investors do not make an “open market”. If YOU cannot bid, it is not an open market.
On a side note: you are hellaciously feisty! Wrong, but feisty. I like that!
open market – noun - an unrestricted competitive market in which any buyer and seller is free to participate.
provider Says:
August 15th, 2008 at 1:08 pm
open market – noun - an unrestricted competitive market in which any buyer and seller is free to participate.
Do you think the bank doesn’t go to more than one investor when they sell bulk properties? Do they just call one investor and say I have 500 forlcosed properties to sell in one bulk package, how much will you give me. You know they let it be known to all investors capable of paying that they have these packages and thus this bulk of properties is now on the investors open market for negotiations. They will bid and out bid each other, call in favors, do whatever they can to secure these properties from the bank. This sounds like an open market to me. The product is just a bulk sale not an individually negotaited property.
On a side note. It is much nicer when you do not insult me for asking questions and we can just debate. I like that!
Mulli: “If a client asked me “is now the right time for me to buy?” ”
I do agree with your post - however, what do you expect the people around town to think when the national ads from NAR and the local ones from CAR explicitly state repeatedly that “Now is the time to buy.” - “there hasn’t ever been a better time to buy” and so forth.
Like I said, I agree with what you are stating - but I don’t agree that most agents are of the same opinion or have the same MO as you.
Seeing that many here seemingly have plenty of time on their hands, just pick a list of 10 agent numbers randomly, call them each - ask two or three direct questions, record their answers and post them here.
Nothing like having real data.
It is still not an open market, no matter how competitive. And an appraisal is only on one property. Your concern is about the valuation of a single property. You can’t act on information from a bulk sale, you may not even know the “price”. If you weren’t given a chance to bid on it, it is not a valid comp. Any appraisal on that single property would not show this sale.
Yes, no name-calling is better.
Gotta go.
The way they record is still up for debate and how bulk sales effect the market is as well becuase if they do not record each individual property they will have to if they rent long term or if they turn and burn they are going to sell below comps to move the property quick. Both scenarios effect values.
We can’t get past even get past the arms length thing let alone tackle the monster debate of what forclosure sales in bulk will do to home valuation.
See ya……….
I like that NBI…There are good buys today, but is it a good time to buy? Too objective of a question. And to state it as such is too objective of an anwer. Each purchase is subjective…otherwise one appraisal per community would be just fine.
Stash…the pawn shop owner got duped by fake information, like the banks did. Their teaser loan packages coupled with stated income on sub-prime credit scores got people to go to the extreme. What is worse is the banks leveraged THEIR financial well being on the asset could always come back to them. Therefore, like the pawnshop owner holding a fake Rolex and being out $3000, the lender is upside down now by some 30% or more in many instances.
The real game in town is qualifying for a loan…Forget any price appreciation for 8 years…As someone who looks at more credit than most here, I’ll give you a hint of whats happening…..credit contraction/consumer credit debt= Lower prices for OC thru 2010……No matter what the government does…..
Stash, from the resident bears, it is crickets. They have always tried to blame the Realtors for this quagmire. So simple is it not? He who holds the money controls the business. Always.
k.o.
Thoughtful is gonna wait for everyone else to go into the “panic” stage, then he’ll stop calling bottom.
seeking -
I read that some time ago. I wonder how much America owns? Truth be known, we’ve borrowed so much, we probably don’t own much. We sell our freeways, byways, waterways, weapons, technology, (Budweiser for gawd sake) there’s not much we haven’t sold.
I’d say that too if I were you.
this blog is pathetic
Headline in the OC Register: Buy a new condo, with a rooftop pool…
Become upside down, and underwater.
>>August 15th, 2008 at 1:17 am: Is this what a realtor does? The only thing I would need a realtor for is to open the door. I can get my own attorney, appraiser, title company, and inspector. What are your thoughts?
Agree. The internet has basically made them obsolete.
It is never been a better time to buy. Hey, how about a no money down. 80/20 loan and in no time you can use your equity to buy a new Humvee. Just think about how big you will look with all he new things you can buy with your equity in only a six months. The Money is freeeeeeeee.
Nothing like good all greed to get us were we are. I wonder how all those people who purchased 60, 70 thousand dollar cars on what is really a 30 year loan feel today. You are the problem not the banks. The banks are just criminals.
The future……….12 months…….the cost of renting a house will be very close to the monthly mortage of purchasing one. That is our bottom, regardless of speculation, inflated media, bull from the NAR, etc. Investors foreign and domestic will not want to absorb these homes until they, with great certainty believe, that it is a “good” investment. I can rent a house right now in California for 2300/mo, but to buy the same one, i would pay nearly $2900/mo. Its just old fashioned economics. When these two costs meet, everybody should jump in the pool again. There was a time, that the only reason people rented was because they had no down payment which was required, they had bad credit which was verified, or they didnt have a steady job. Today, even if you have all of the above, you cant make the payment safely and comfortably. Wait! Even Rome fell.
Here’s a Ps. Im not gonna pay a realtor 3 or 6 percent anymore. Even if its not coming out of my (the buyer’s) pocket. They are done as far as i am concerned. Driving their beamers, and audis, with relatively no qualifications or education. Meanwhile, we’re driving 8 year-old vehicles, while they basque in our blood.They are overpaid paperwork floaters, and nothing more. They can drown in the recession they helped create. They have been screwing us just as much as the the lenders. And the government let it happen, while the tx revenue from it bulged their wallets. The NAR is an irresponsible breed as is the government, exercising an extreme bias and abusing the peoples given power that has had us all wooed. Do really think it is a good idea to ask a painter if its time to paint your house? We must exercise our own judgement given all the facts, not opinions or speculations from NAR or our government. We are Americans. That means you piss us off, and we piss back.