It is very frustrating these days for buyers trying to make a sensible decision – the lower-end of every market has been hot, and multiple offers are the norm. Just because the market is hot now doesn’t mean it will last, so let’s keep a close eye on it to see where it goes!
I’ll keep bringing the stories that I see, and if you think there are some worth noting, send them my way – I’m happy to take requests.
Here’s a look at a couple of standard lower-to-mid range homes:
And now non-distressed sellers will enter the market and trade-up.
It’s what I plan to do next year.
Mozart you’re in a good spot if you’re able to do that, but I think you’d be in the minority. With what equity will all the trade-up’ers use?
Trade up from what to what?
I can’t see people swallowing 3000SF on 5000SD of dirt anymore. Unless it’s carmel valley 🙂
I was really expecting a much harsher treatment since my views are in the minority too.
People who are looking at even a small profit will trade-up because I think prices will still be comparatively low and financing more available next year. In other words, maybe not huge profits but a chance to essentially trade-up for close to the same payment with profit used as money down. Probably most who owned before 2003 are probably in this position.
Okay, back to the heckling…
Great, Escondido is at $210 per sq ft. I’ll take that because that means Encinitas is at least 1.5x – 2X Escondido. So that puts me back at 620K 🙂 Seriously, I don’t think so because low end Encinitas is not as hot as low end Vista, Escondido or Oceanside. We have a few REOs to work through.
This is actually a great time to trade up. If you bought a townhouse in UTC for $100K and it’s now $500K even *after* the bubble pop, that’s easy. Oh wait, you’re thinking just about people who have no equity in their house.
Even if you broke even, there are many reasons why you’d trade up now or next year. If you’ve been saving 10% to 20% of your paycheck every year, that wouldn’t be a problem. In 15 years you can either pay off your mortgage outright, or have the alternative of buying a much bigger house. This is one more reason why you never buy the biggest house you can afford.
Next years 15K rebate with more relaxed qualifications will absolutley set the housing market on fire. Maybe they will bump up the FHA limit as well. I don’t want to even venture to guess what the unintended consequences will be.
I’m having a hard time understanding all the cash buyers… Not just flippers?
Good points all around.
Although you could also say that the person who bought the $100k townhome must have done so a long time ago – probably last decade if it were that low. I think most of those purchasers grew out of their homes by now. How long do people usually live in starters? To have equity in a townhome or starter home, probably means you bought over 6-7 years back, and I think most people would have moved up by now.
I know a ton of them who didn’t move up simply because of the bubble. They’re still waiting, and some of them are all paid off.
It’s never a matter of “Can I buy a house”. The answer is yes for the vast majority of people. The question is simply “Should I buy a house.”
To put things into perspective, I would have happily bought in 2001 or 2002 had I had the money I have now. But, I just got out of college and had the tiniest fraction of now. A lot of “why didn’t they buy before” simply comes down to this. Peoples finances aren’t static year to year.
Multiple offers? Trading up? Entry level buying frenzy? DOW 10k? Pinch me to make sure, but seems like this b*tch has turned the corner.
‘I would have happily bought in 2001 or 2002 had I had the money I have now.’
Bingo.
For those of us who graduated at that time, prices were ‘expensive’. Now ~10 years later those prices look really good! 🙂
Most of my friends have recently purchased houses – I don’t know many people still on the fence. Most people I know who purchased a long time ago are involuntarily downgrading and have taken their home and leveraged it to the moon and back. I’d wager the move-up crowd is still the minority in this environment.
That said if the credit gets expanded to $15K and the eligibility is expanded I’d have to agree there is probably enough excess demand out there to continue fueling the fire.
I’d probably even spur me to get off the fence because at that point waiting for all the games to end vs. just paying the extra ‘premium’ now and moving on becomes less of a hard pill to swallow.
The only thing fueling the “low” end buying is FHA loans. If that source dries up and intrest rates go up (highly unlikely no matter what the fed spins) prices are going to drop.
btw Gold went up $25 today.
THE NEW (OLD) CALIFORNIA ‘MOVE-UP’ TAX MATH:
“10.I know a ton of them who didn’t move up simply because of the bubble. They’re still waiting, and some of them are all paid off.”
That’s me. Paid Off, Deed in Hand.
1997 (new) $ 192,500 tax bill now 2400 per year
2009 comparable $539,000 tax bill 2400/yr still
to move UP? New Cost, AT LEAST 850,000
NEW TAX BILL 850 x 1.1% = 9350 (Santa Clara County) + 138 new rotten stupid spoiled kid and dumb broke bankrupt house-debtor parent welfare measure tax to be voted on Nov 3 Measure B which the kid nazis will pass (NO KIDS HERE)and couldn’t acre less about yours
minmum tax increase for ‘move up’ = SEVEN THOUSAND DOLLARS MORE PER YEAR FOREVER.
Well, WTF Kalipornians F-THAT. I’ll stay. If they gave the homes away for Free I wouldn’t take one to live in. California is dying. Thank you again Dianne, Barbara and Bela Lugosi Nancy.
idiots. insanity.
I have equity in my starter house bought in 2002 but won’t be a move up buyer any time soon. Mid range is still too high and my next house won’t be another existing home – I’ll buy land and build before I’ll spend another 6 years remodeling to get the house I want to live in. Right now it’s still a 100% premium to get into the next zip code over.
I’m having a hard time understanding “all these cash buyers” as well (who aren’t mostly flippers or tied to an investment group?) We sold our house at peak and walked away with nice profit, have rented cheap since then, save 15%-20% out of each paycheck, great credit, and we will not be cash buyers. 20% down 30 yr. buyers yes, but not cash. The example in the video of the guy who’s been saving for the last 30 years is an anomaly in my experience. C’mon, Americans do not save. Also, the vast majority of people I’ve been familiar with who’ve owned their home long enough to see equity took the cash out and they are in debt debt debt. If people are cashing out their 401ks (what’s left of them) to buy, what will they retire on? There’s something weird here.
Could be a bull trap. I am wondering if the buy-holders are hoping to get in before they get priced out. The flippers are seeing that the price is significantly discounted from recent history so they are smelling an opportunity.
What will determine the eventual result will be the number of homes in ‘inventory’ (NOD, NOT, etc) and available buyers. I could see the price going up a bit if this was going to be a ‘V’ recovery.. but if it turns flat.. the prices may dip again.
Frustration at trying to get a house does not necessarily lead to smart decisions.
Hope your rating didn’t take too bad of a hit on that San Marcos asset, unless of course you priced your BPO up there. Crazy market.
Oh man, If Mrs. Dawg sees that “nothin’ too fancy” kitchen I am sooo dead.
In the first house ~@$370K would that be roughly equivalent to renting after the 20% down? Seems like it to me but I’d like to hear the rates. The neighbors are probably all breathing a sigh of relief about the price. As are their mortgage holders and the local tax base.
Just a guess, I’d say at least half of this hot market is the people looking to get the $8k credit. Time will tell. I’m might just buy some $100K dump if they bumb it to $15k.
By the way, how’s that downtown condo market coming along?
Jim,
What was that additional blog name you were considering… “DoubleBubbleInfo.Com”? Sounds more than appropriate. You gotta be feeling some serious deja vu these days, but hey, the commissions can’t hurt. 😉
“To put things into perspective, I would have happily bought in 2001 or 2002 had I had the money I have now. But, I just got out of college and had the tiniest fraction of now.”
Exactly my situation; graduated too late to get into the .com madness and too late to buy a house before prices started rocketing. I knew $1M starter homes wouldn’t last the same way I knew $85k high school html ‘programmers’ wouldn’t last.
Don’t worry RBGenius – you’ll get your shot. Just enjoy the fact that you’re not paying property taxes, money to fix roof’s, yards, broken water heaters, and leaky sinks.
Enjoy life renting.
It ain’t the tax credit. It’s the Fed-subsidized 5% mortgage rates.
… and the zero-down FHA scam.
Let them bid it up and pay whatever they want. I predict those houses in the video will worth the most at $230K by end of 2010.
Today is the third day on the market for the $760,000 short sale on Chambord, and Richard found 20 business cards there today. Had to be many more agents who didn’t leave a card.
RE:
NEW TAX BILL 850 x 1.1% = 9350 (Santa Clara County) + 138 new rotten stupid spoiled kid and dumb broke bankrupt house-debtor parent welfare measure tax to be voted on Nov 3 Measure B which the kid nazis will pass (NO KIDS HERE)and couldn’t acre less about yours
What are you talking about? Is this like mello roos? Is it only Santa Clara County? and you should care about other people’s kids… If life is too rough on them, they’ll be inclined to dish it out too. Better that they grow up to have jobs and mortgages.
Totally OT! (and I respect the fact JtR has a delete button for this blog), but has anyone seen the You Tubie entitled: 100 Greatest You Tube in Four Minutes? It has over 2.3 million hits since 9/13. Here’s the link:
http://www.youtube.com/watch?v=BudhFVnN2o0
Watch it? Then you too will be seriously outraged just like me. Why isn’t one of JtR’s classic real estate videos featured on that list? Check out the video’s awesome music too. Forget the ice cream trucks featured in your videos, Jim. What you NEED to do is “bang the drum”–just like the music says. Then the rest of America will know what we addicts on your blog have already discovered: JtR Rocks!
*Chuckle* Who’s with me? Let’s start boycotting You Tubie for NOT including Jim on that “100 Greatest You Tubes” list. Um, wait a minute! If our boycott is successful, maybe JtR won’t be able to post any more videos there. And I tell ya, all of America would be poorer for it.
So on further reflection, forget my outrage! Forget the boycott! I just have one further question: Is it obvious that I was up for 42 hours straight, but finally crashed last night and grabbed 7 hours of snooze time?
I have felt crazy all day. How crazy? Jim has mentioned my dilemma here previously before. I’m a wanna-be home buyer who doesn’t live in the San Diego area. And I didn’t even check JtR’s blog today until right this minute (9:04 pm PDT). Now that IS certifiably crazy. Miss a day of JtR’s bubbleinfo, miss a lot!
Go ahead and delete–if you must–Jim. Sometimes I just can’t resist the fun of poking you in the ol’ ribs. But yeah, JtR, YOU should have been mentioned in the Top 100…
5% rates are very helpful, and highly lucrative to tenants who pay $3,000 and higher rent – they think they are throwing a lot of money away, and if they can scronge up $20,000 they can buy a $600,000 house and have about the same payment and a happy wife.
Susie, that is MUST-SEE TV!
I’ll have one of whatever Susie had please.
LMAO
This past weekend I toured Temecula looking at bank REOs for sale from an investment perspective. Most were in the $200,000 price range, 5 to 15 years old, at 1500-2000 s/f.
Two things were very noticeable.
First, I don’t think I saw an organic seller. Every home with a For Sale sign had a dead lawn.
Second, just about everyone we talked with said that most reasonable listings had 30, yes 30, offers!
While I’ve been negative on the state of the economy and the RE Market, it appears that well priced homes have strong buyer demand.
By the way, Jim mentioned Phoenix. Our investment partners report the same thing. At the trustee sale auction, homes that were selling for $.60 cents on the dollar just this past spring/summer are now going for $.80 cents+.
These are all cash buyers of course.
Hard to believe, but Jim’s right about the demand based upon the anecdotal evidence I’ve seen.
And I thought this was the slow time of year…
Just throwing my prediction out there…
I think we will see very active buying until at least Q3/Q4 2010.
There are so many things going on right now that have lit a fire under the RE market: holding back the REO inventory, $8,000 tax credit, 3.5% FHA loans, and most importantly, **the Fed sitting hard on interest rates.**
Right now, the bulk of our (USD) money is earning .5% or less. I know many other people who are in the same boat. After years and years of sub-standard returns (with 2007 being the only year in almost a decade with somewhat reasonable rates), the Fed/govt/PTB is trying everything they can to squeeze every bit of cash off the sidelines. It’s very painful to be sitting on cash right now, believe it or not, and even I have considered parking money in RE just to hedge against a hyperinflationary/currency event. Certainly, this is on the minds of many of these “cash” investors, IMHO.
30 offers! I suspect the same players making offers on about 30 places, hoping somebody bids more.
CA renter — good point…it’s VERY hard to sit on the sidelines, making 1% interest on your cash for a long period of time. You do feel, at a certain point, you need to put it in some to sort of vehicle that is going to grow at a higher rate. And RE is a good hedge for certain economic events, as you mention. I’ll truly never retire if I don’t do something with my money…but what to do with it?
Boy – are you feelin’ it!? In the air, on the computer screen…are permabears retreating from this site? Or from the RE marketplace? It feels different around here. I have many friends in the midst of real estate transactions right now. 2 years ago, I had none. With the exception of some pockets that Jim has covered (SEH, for example), I think solutions are starting to bubble up in N. County — no pun intended!
Is this really so shocking? In the video Jim said that the same houses were selling for $550K a couple years ago, now they’re around $350K. 40% off, plus 5% rates? Hello! That’s almost a no brainer. Now if the areas that are only down 20% so far start taking off, that would be shocking.
I’m in the same position as many people here: graduated college ’98 (Genius was it you who was ’98 UCLA?) and by the time I could simply start planning toward buying a home, prices were shooting straight up. This was ’01. Dr. Housing Bubble Blog had a great piece on bubble headlines starting in 2000 – people were talking about inflated home prices already. Being a sucker who believes 20% down and 30-yr fixed is how to buy a home, I watched the amount of money I needed for a down payment grow from $25k to $50k to $100k and up. That was just for a condo in Brentwood!
Though I couldn’t buy a home , I managed to set aside $2k to invest in the hot hot hot stock market. I put it all in a tech fund in March of 2000. That soon became about $300 and I learned a valuable lesson about investing: don’t follow the herd.
Over the next few years I watched housing prices skyrocket, which reminded me of the tech bubble. I know there’s many respected and educated people who compare today’s home prices to peak prices. I read things like “60 cents on the dollar!,” or “33% off peak!” With all due respect to these commenters, I think this is an absolutely irresponsible way to make a sound financial decision. TJ said it beautifully in a comment a couple posts ago; you have to look at base trends. Think back to the tech bubble and look at what happened to those who jumped into the Nasdaq at 40% off peak. They’re still down big.
My friends who have bought homes did so out of impatience and are getting crushed. I’ve got a buddy who bought a 1,200 sqft townhome in the San Marcos School District for $500k 3 years ago. He just had his second child. You think he’d like that ocean view in SEH for $575k? Doesn’t matter because he’s underwater.
I’m in my 30’s now, still waiting on the sideline, and I can’t wait to buy. Unfortunately, I’ve skipped the “starter-home” phase and my wife and I don’t qualify for the credit. There’s got to be plenty others like me out there, so I don’t doubt the demand. It’s tough to stay objective when balancing considerations about rates, inflation, bubble trends, unemployment, incomes/debt ratios, etc. against wanting to live in my own home. With the government intervention I really think we’re headed for a Japan-like housing situation, and I accept that I won’t buy at the bottom. But I’d like to wait through the steepest part of this drop. Are we at least that far? Is there another cliff ahead? Tough to tell! This blog helps me keep my sanity! Thanks Jim!
Here is a motivator!
Unedited property description of a new listing today in Vista on Sunrise!
Property has unpermitted add-on and rooms above the garage. Prospective buyers should check with the city to determine what action required of the new property owner and investigate thoroughly any concerns they might have. Also due to being built in 1966 should carefully read sellers addendum including the mold and mildew disclosures as well as lead based paint disclosures. Huge lot goes down toward ravine at back end of property. Aggresively priced to move you their is much potential in this property
Well said Blur – pretty much sums up our situation as well.
Blur, I didn’t buy my starter home until I was 40. You can wait as long as you need to wait. Everybody needs shelter, but nobody “needs” to own a house.
Personally, I think the lower end areas have bottomed. Purchase price and rents have reached an equilibrium. Frankly, I think mid-range has a ways to go yet. As you’ve guessed, you probably won’t be able to time the market and buy at the bottom, the bottom and top are only apparent months after the fact and the opportunity is gone. One thing I have learned is that bottom chasing causes you to lose opportunity. Decide how much you can spend (realistically – don’t stretch) and hold to that figure. If a property that meets your criteria becomes available at a price you can afford – you win. Don’t set yourself into a tailspin and lose the property because you’re afraid it will be worth $50k less in 6 months. If you stop looking for an investment and start looking for a home, it becomes much clearer.
It feels different around here.
Some of us are tempering our statements a bit out of deference to Jim. Opinions haven’t changed, nor has the broad economy. Time will tell.
I can take a shot, just don’t pile on! 🙂
Blur,
i couldn’t have said it better myself.
I couldn’t have told my experience better. Losing house after house depsite getting more and more aggressive with our offers has gotten us to the point where we are either just going to give up and sit on the sidelines or make a crazy offer on a home that we don’t really want. I’m guessing we’ll just keep saving and wait until we can buy what we want. I hate the tax credit.
I’m with Jakob in item #12 . . . something has definitely turned some corner somewhere.
I’m the guy Jim referred to in the video who has been living frugally for 30 years and saving money. My extended family lives in San Diego, and I’ve spent most of my working life just trying to get back there (don’t ask, but it involves a bad career move with golden handcuffs).
We’re a family with two kids in elementary school and we’ve been trying to buy a house since selling ours last spring (we’re renting for the interim). We have negotiated and/or submitted offers on probably a dozen or more houses without success. But, to add insult to injury, during the past 3-4 months we have watched with horror as the market has heated up. From our perspective it now seems hotter than a firecracker, and it’s scaring the daylights out of us. What little quality inventory comes on in the desirable areas gets snapped up at, or close to, full price before we’ve even had a chance to digest the data and get an offer together.
So, I certainly don’t believe Jim is exaggerating anything. He’s simply reporting what he observes, and if anything (based on our experience) has been downplaying what’s really going on out there.
Thank you, Jim, for being the consummate professional; but I feel it’s time to tell it like it is. We’re adults; we can handle it (I think) . . .
Right now, the bulk of our (USD) money is earning .5% or less. I know many other people who are in the same boat.
Count me as another in that particular boat. Poor return on our cash has definitely increased our motivation to find our house and be done with it. Two years ago when we were getting a decent return, it certainly helped crush the buy/rent math. Now, not so much.
sdcellar, . . . me too! You couldn’t have said it better.
I know 2 people (myself and a close relative) seriously considering getting into real estate since we are sickened by our cash sitting around earning 1% or less. I’m still worried though who the h*ll will be left to buy once interest rates go up and the $8000 tax credit ends (don’t know when those 2 will be, but eventually they will both occur).
What’s the saying – nothing price won’t fix?
Sounds like these prices have been set realistically.
When the higher end (carmel valley) starts seeing reasonable pricing, they too will have bidding wars. The ones that hit the market with good prices, get snatched up. The ones that hit the market with 2006 prices, linger…
And until there are more organic sales, vs shorts and REOs – the market will continue to frustrate buyers.
Blur – you have a good memory; you are correct on both year and school. Very nice summation of your thoughts. I’m right there with you, except I’m in no hurry to buy; I really like my rental house, as modest as it is. I’ve been following RE for so long that I think it’s now a habit more than anything else.
One of my friends is looking at houses in San Marcos that are very similar (as in almost identical) to the ones in this video. He’s only submitted one offer thus far, but hasn’t run into any places that have more than 5 or 6 offers on the table. Maybe he needs a new realtor.
Anybody think tax credit buyers are turning to condos in the last couple of weeks, just to lock in the credit. I’ve seen condo inventories in middle class areas (say Mira Mesa) drop quite a bit in the past 2 weeks, while housing inventory in the same area has been going up. Could these condo buyers be frustrated SFH bidders that want/need the credit to get into something? Is is possible these current condo buyers are reducing the future pool of buyers for the kind of homes displayed in this video. I’m sure there’s still quite a few buyers, but an unintended consequence of the tax credit could be shifting future Single Family Home buyers into current Condo buyers.
We need more realtors making video walkthroughs like Jim. Says almost everything about a house without the hour spent yourself. Years from now everybody’s going to do this.
livingincali: That’s a good point, I should lock in this tax credit before I lose it since I’m paying for it anyway. What can I get for $8k? I’ll probably be able to flip it for $15k in a few months, so I’m not too picky.
I too have been worried and frustrated about sitting on cash that is earning less than 1%.
But then I think about how the best strategy in a boat race when the wind starts blowing hard is to drop anchor and wait. You may not be moving forward, but at least you are not being blown back.
I understand the frustration of those who are substantially in cash and not getting much return these days. Only time will tell if plowing that money into RE right now is a better move, financially speaking. If you throw $100K down on a $500K house that drops 10% in value in a year, you are now down 50% as opposed to being up 1%. But in the long run it may turn out to be a great investment.
I am going to eventually be a move-up buyer but it is just a completely wacky market now. Way too many odd variables (that are probably not of the long-term variety) for me to make a move with any confidence that I would not suffer the evaporation of my hard-earned money. I am tracking the $750K-$1.25 mil range and there is no way I am sinking my dough into that market anytime soon. For me, the downside risk of losses far outweighs any upside I can see at this time.
I’m from the school that says RE is always an investment. Too much of my money over my lifetime is going to be at stake to not think of it as such.
Are the low interest rates and the tax credit, kind of like cash for clunkers, in that they pull buyers forward, creating a mini-bubble? I think there’s still way too many people in financial trouble for this to last. You can only inflate an economy with hot air for so long.
I know 2 people (myself and a close relative) seriously considering getting into real estate since we are sickened by our cash sitting around earning 1% or less. I’m still worried though who the h*ll will be left to buy once interest rates go up and the $8000 tax credit ends (don’t know when those 2 will be, but eventually they will both occur).
————————
And this is exactly what is making my very skeptical…
So many of us are feeling squeezed out of cash, and the PTB are doing absolutely everything in their power to get the cash out of our hands, that my naturally cynical self is questioning the motives behind all the news and policy actions of late. Being skeptical and naturally contrarian, when everyone is trying to convince me to get out of my cash position, there’s a part of me that wants to hunker down with the cash and wait everything out.
Indeed, if the currency collapses, what will happen to interest rates? I can see it going both ways — very low because too many dollars are flooding the market, and very high because we are trying to get people to fund our debt. High rates will absolutely decimate U.S.-based demand for housing. OTOH, a currency collapse opens the door for people in other countries with stronger currencies to come over here and buy up our land.
This is the Grand Dilema of our times, IMHO. Those who get it right will win big, those who get it wrong may be ruined for life.
Another unintended consequence of gubbermint actions – buyers are motivated to use high leverage to lower their risk to the uncertainty.
But those using the big down payments are flying in the face of that argument, and makes you wonder if Haves could prevail?
‘Right now, the bulk of our (USD) money is earning .5% or less. I know many other people who are in the same boat.’
For anyone earning less then 1% on your cash, I suggest you look around a bit. All of our accounts are over 1.7% FDIC, etc.
At this point every little bit helps.
Remind me how this turned out last time prices rose 20% in a month with multiple offers. It is incredibly scary that people are paying $60K more versus a few months ago to gains a $8K credit.
The bottom in prices for many areas was 6 to 8 months ago but that is not to say good deals are gone! Jim is just showing people what is happening on the ground,and I must say HONESTLY at that.How many RE clerks will do that? He is the only one I have ever seen.He is not a clerk but a professional.many people complain they will never be able to buy their dream house but the fact is California RE is expensive and always will be so my advice is to buy a starter home at a good price,make extra payments for 10 years and build equity and the next cycle you can trade up!I fear many marginal buyers have already missed the best chance to get their foot in door and only want to complain about being a victim because they feel they deserve a 2800 sq MCMANSION when in reality they can only afford a 1200 sq foot starter.I grew up in 1200 sq ft starter in the SFV and my pops worked 2 jobs to raise 4 kids and send them to private school.people today are spoiled and think they deserve to live like people on TV.RANT OVER !!!
Until we fix the job problem, the market will simply be specuvestors and people who are tired of renting.
“What was that additional blog name you were considering… “DoubleBubbleInfo.Com”?…You gotta be feeling some serious deja vu these days
tj & the bear | October 6th, 2009 at 6:24 pm ”
EXACTLY! Gov’t is just re-inflating the bubble so the big players can slowly ease their way out of this and leave both the taxpayer and new buyers (mostly one and the same) holding the bag. Joe Public hasn’t learned a thing. I’ll rent and wait for this crap to collapse (when the gov’t is too broke to ‘fix’ it again). I came to Cali in 2005 and have fared far better by renting than anyone who bought around that same time, or even into 2007. And just when buying was looking like a better deal, the gov’t decides to ‘save’ everyone and keep reasonable prices out of reach. So a renter I will remain for now. Funny, the RE market will probably go to hell around 2012 when the world is supposed to end anyway. Sorry for the gloomy outlook, but this stuff is insane. Come on folks, it shouldn’t be this hard to [affordably] own a decent size house in a safe neighborhood, even in SoCal, when you have a modest-to-high average income and don’t live an extravagant lifestyle.
If you have a modest to high income YOU CAN buy a home today,now explain decent size and safe!
Oh, I guess I’d say… 5’3″~5’7″, 90-120lbs, 36C cups, with no boyfriend in sight?
LOL
Hate to be the bearer of reality here, BSinOside, but the chances of a girl who is 5’3″ and 90 lbs, or 5’7″ and 120 lbs, having a 36C is pretty close to nil. That is, unless you don’t mind the bolt-ons. 😉
End of thread. BSinOside wins.
This is almost the exact same situation/environment where I bought in May. ’80s tract home street in Oceanside, stucco and tile, with close comps from $250K to $295K. I jumped in at $280K for a 1600 sq ft short sale with a large back yard with mature trees and landscaping. Except mine is single level w/ no pool which I consider pluses. I may not have caught the bottom but I figure close enough.
And yes it is a HOT market. I lost out on many before that and it got to the point where I was monitoring the web several times a day and when I saw something I liked I’d call my realtor and look at it within a few hours. Mine had just fallen out of escrow that day when I made an offer.
“Another unintended consequence of gubbermint actions – buyers are motivated to use high leverage to lower their risk to the uncertainty.
But those using the big down payments are flying in the face of that argument, and makes you wonder if Haves could prevail?”
Nice post JTR, it is hard to make the case all the cash buyers out there are dumb because they did get their cash in the first place. Of course, they could have sold at the peak but the point was they had the savvy to do so.
Someone should really punish you for trying to pump this market like you’re doing.
Maybe you’ll do a showing in the future and meet the buyer of your dreams… Careful Jimmy.
Jim,
Please don’t take my post above (or this one) personally, like I said I am not the most eloquent blog poster. I’m just trying to tell you what I see, and how that conflicts with what once attracted me to your site.
To me, your early description in the next days video are a perfect example of how the focus around here has shifted from home buying to short term finance finance. What you described is the very essence of a bubble. No rationale for pricing, buyer frenzy, and the unspoken urgency for people to get in now. I’m sure at one point the tulip brokers were having a hard time finding merchandise for their buyers, too.
In my opinion, in the past you offered more commentary on the intangibles, on neighborhoods, peculiarities of a particular house, and longer time horizon factors that as a newcomer to SD, I found refreshing and useful. The oceanside condo auction/head shop tour is a perfect example.
What seemed to me to distinguish you from other realtors was that you kept the excitatory rhetoric relatively low, you didn’t openly fan the flames and play on emotions like the realtors who took me around NoCo in late 2007. They were crassly after a commission, and didn’t seem to care a whit how that affected my family or future prospects. [You may be too, but at least you try to hide it :-)]
How about some information for “the rest of us,” the ones who still don’t have 20% down and are unwilling to rush into this crazy market? What SHOULD we be looking for? I’m not talking about buying price alone, but also the more intangible and durable components of home buying. Neighborhood, noise, future development, commute times, boring details like that that make a place a dream or a nightmare.
You’ve been through a SD RE bubble before. Where did people get burned, what mistakes were made, what things have proven over time to have been good moves?
Thanks.
“Susie, that is MUST-SEE TV!” (JtR)
Exactly! But I was sooo wondering if you would delete my “crazy” post, Jim. On further reflection, this should be mentioned in ALL your videos: “JtR’s videos: MUST-SEE TV!” Really, my check’s in the mail, right?
“I’ll have one of whatever Susie had please.” ~ Genius October 6th, 2009 at 9:48 pm ~ (In reference to my comment #31.)
ROTFL, Genius! OT ~ Is there anyone who hasn’t seen Meg Ryan in the famous restaurant scene with Billy Crystal in “When Harry Met Sally”?
http://www.youtube.com/watch?v=F-bsf2x-aeE
First, I’ve finally gotten some more sleep and am on my 2nd glass of OJ (my coffee) this morning. Thankfully, I’m much more sane today. I have learned an important lesson: I’m no longer college-age and easily able to go without sleep. Back then, I could stay up for 42 hours. Today? Nooo… But being a single parent (by widowhood), I find there just aren’t enough hours in a 24-hour period to get everything accomplished. Add a real estate search into the equation and forget about it.
Facts about the Meg Ryan movie scene:
(1) The lady at the end of that 2:52 minute scene is actually Rob Reiner’s mom. Rob was the director of the movie and said directing this scene was very uncomfortable for him (Captain Obvious why).
(2) In an Oprah interview about 10 years after the movie’s release, Billy Crystal talked about this scene and how much fun he had. Meg Ryan was present (by remote). He told her what he had never admitted to her or anyone else before: “I intentionally flubbed my lines over and over just to watch you have to re-do this scene over and over.”(Meg cracked up.)
Now on to real estate–so JtR doesn’t hit the delete button. Here’s my confession: IF I can find my last home, if I can find 30-year financing (I have no debt, stellar FICO and long credit history, and my 20% down payment in hand), and sign the closing papers and then be standing at my new home with keys in hand, I could utter Meg’s famous words from the “When Harry Met Sally” restaurant scene: “Yes! YES! YEEESSS!”.
There I said it! Not just because this scene is my #1 favorite of any movie I’ve ever seen, but because those three words would portray my exact feelings at that very moment.
The fact is I couldn’t care less if my next home turns out to be a great investment or not when it’s resold, or if the do-nothing Congress extends the $8,000 tax credit.
Yep, there’s sure to be the usual homeowner headaches for me. And being a homeowner as a widow without the “best finish carpenter on the planet” along for the adventure will present personal challenges, but I’m ready. But there will also be the ecstatic feeling of knowing I’m finally “home” and am exactly where I’m suppose to be to move forward in my life. Simply priceless, I’d say!
ETA: (You can delete my next question after you read it, Jim.) *Susie Pondering* Jim, would my re-enactment of Meg from this scene at the front door of my new home really be considered a “verbal real estate orgasm”? *Chuckle* Not that there’s anything wrong with that…
Jim,
You are spot on with the buyer frenzy. I’ve noticed myself that getting a reasonable priced (<$350,000) home in North Park, Normal Heights, and even City Heights has been really tough. Most properties on the market have loads of offers.
From my experience in this market the buyers seem to be evenly split between Cash/Investor Offers, Conventional Financing, and FHA financing. The current market environment with low rates, high usage of FHA programs, and the uncertain macro-economic future of the USA, as well as the lowered purchase prices on the market are driving the buyers to buy.
Plus in the future FHA may have to make some major changes to the way they do business, and that’s going to mean a more expensive FHA Loan.
See: http://www.bloomberg.com/apps/news?pid=20601087&sid=aOmu318hOZr4
There is no way that lending rates can remain at this level forever, but the economic recovery has to happen before the Fed can raise the rates. If rates go up too soon many more people will be forced into foreclosure. (Lots of Macro-economic reasons for keeping rates low right now actually)
There are still so many people upside down on their properties meaning that the short sales and foreclosures are still happening, and going to trickle into the market a little at a time. I think there is going to be a slow/depressed market for years to come as people realize that the credit hit may be worth getting out of their overpriced homes.
I think that it is always a good time to buy, if you are looking for your own home. Don’t panic when you see pricing rising, there is no way I can see this taking off like another bubble. I think this is just a pricing correction because prices went too far down. Don’t be in a hurry, as it seems like timing is just as important as purchase price.
San Diego will always have a higher demand for housing simply because it’s a great place to live, perfect weather, diverse job opportunities, etc.
Just my 2 cents.
Who’s buying these houses? I’ll answer… Investors (foreign and domestic) who are trying to dump the dollar while it still has value. Property values are still depreciating; the decline of the dollar is just outpacing it, giving the perception that property values and are increasing.
This is the result of excess liquidity due to loose monetary policy coupled with low interest and government policy to prop up home prices. It does not represent an economic recovery but more like an intentional bubble like the equities markets. However expect it to continue as the Fed, Treasury, and Congress double down on reckless policies designed to delay the reckoning. Meanwhile people on here honestly trying to buy homes sit caught in the crossfire unable to buy at what should be more like the home’s true value.