More thoughts on the real estate market:
Jim the Realtor
Jim is a long-time local realtor who comments daily here on his blog, bubbleinfo.com which began in September, 2005. Stick around!
More thoughts on the real estate market:
I believe that one stories deserve a significant premium, but it looks like if you compare the first two houses you end up getting the second story absolutely free. That’s an insanely high one story premium.
Oh yeah, and that last one has to be the most butt-ugly house on the planet. Somebody shoot the architect, geez.
That last house reminded me of an old Alfred Hitchcock flick…
Saw that you were comparing 1 stories to 2 stories and was curious to know if there was a good way to see the comparison of condos vs. townhomes vs. homes over the last 10 years. I understand that they really don’t compare directly to each other, but what I’m getting at is that, one would expect to see the % price difference over a 10 year period of time between let’s say a 3BR condo and a nearby 3BR townhouse to remain somewhat steady.
I’m really curious about 92130 right now. It’s probably because I’m not from California, but the detached homes are so close together here that they feel like townhomes to me. I can’t seem to justify the additional cost to get an extra 60 inches between my house and my neighbor’s.
Anyone see this over on MSN? “Foreclosures Hit Record in 2009” – “1 in 45 US Households Received a Foreclosure Filing Last Year”.
From the 1/14/2010 article:
“The number of U.S. residential properties receiving at least one foreclosure filing jumped 21% in 2009 to a record 2.82 million, according to a report from RealtyTrac this morning.
A staggering statistic showed that 2.21% of all U.S. housing units, or 1 in 45, received at least one foreclosure filing last year. That percentage was up from 1.84% in 2008, 1.03% in 2007 and 0.58% in 2006.”
Here’s the link: http://articles.moneycentral.msn.com/Investing/Dispatch/default.aspx?feat=1550472
Thoughts, JtR?
Is it just me or do most of the houses shown in Jim’s vids for today qualify as “garage mahal’s?”
How do you have anything close to real curb appeal when 70% of the front of your house is garage? Uck.
And the last house? “The only thing this is good for is to paint it red and to store cattle in it!”
JtR for the win for the funniest early-morning comment! My sentiments exactly. I can’t stop laughing. Another classic JtR view from the street…
And re: the choice between one-story and two-story. (Yes, Jim, this is a long post, feel free to edit or delete–your call!)
As a wanna-be homeowner, I’m only looking for one-story. Why? There’s nothing, I mean nothing like watching your mom (after a 1994 stroke) struggle to put one foot in front of the other and walk across the room to gain perspective on what will be my last house.
When she had her stroke, she was in escrow for a condo in a huge development in Hawaii (including clubhouse and pool) that was handicap-accessible with wide corridors and elevators. Perfect for her, right? Not!
The developer, the contractor, all the subs and even the Fire Marshall were all in conspiracy (with kickbacks) on one of the worst, corrupt builds I’ve ever seen. After she moved in, all the residents discovered things like: no shower pans in the showers, termite-ridden posts, cracked concrete walkways, etc. The fix-it list was staggering.
A well-respected Big Island construction company won the bid ($30 Million) to re-do all the corruption (even before the lawsuit ended) All residents had to move out. Talk about the American dream of home ownership turning into a complete nightmare!
Through it all, my mom–bless her heart–was a trooper.The six weeks I spent with my mom then were mesmerizing. She hung on for five more years, and still was the best “Tutu” (google) ever.
I found her a 3,000 sf rental overlooking a golf course with the best ocean view on the Big Island during construction.
The defendants’ lawyers argued the $5,000/month rent too extravagant (remember this was 1995), but my only requirement was that it was just two miles of the hospital since my mom was on oxygen.
I only told my mom that I had found her a rental. But I will never forget the look on my mom’s face as she and her caregiver walked in the front door. “Oh, Susie, I’ve always wanted to live in a place like this!”
You see, she had been an avid golfer (with my dad), and the house fit her needs perfectly. And yes, we eventually got her in the swimming pool and jacuzzi.
Yep, life can hand you lemons, but don’t forget you REALLY can make lemonade out of it.
End of story? The residents won the lawsuit, and eventually moved back in. Fortunately for us, my mom decided to move back to the Mainland to be closer to her three grandchildren, and magically a buyer showed up.(My mom even made a profit).
Yep, it was an adventure to be sure, but I learned a lot about myself and in retrospect would not change it.
A word of advice here. If you really are looking for your last home, think of the worst-case scenario and make sure the home will adequately see you everything you can imagine. Life? It really can change in an instant…
I believe that one stories deserve a significant premium, but it looks like if you compare the first two houses you end up getting the second story absolutely free. That’s an insanely high one story premium.
The one story is on a canyon and down a cul-de-sac which both add to the value.
That last house in Encinitas Ranch is U-G-L-Y… Yikes. And I agree with Art Eclectic about the garage as facade issue with the other houses. Why would you sandwich a door between 2 garage doors on the left and one on the right… It is stating that the house is more about storing cars than housing people.
If we were in the housing market we would only consider single story… We’re care givers for my in-laws (built them a detached, single story, granny flat to live in.) Once we had that our long term plan is to move in there when we can’t handle the stairs anymore. I saw my dad get to the point the stairs were too much for him. Plus the sf associated with stairs is not really “living space” – so you don’t gain as much sf as you’d think.
WASHINGTON (AP) — The Obama administration’s mortgage relief plan provided help to only 7 percent of borrowers who signed up last year, another black mark for the struggling program. About 900,000 borrowers have enrolled in the $75 billion program since it launched in March, the Treasury Department says.
But as of last month, only about 66,500 homeowners had received permanent loan modifications, which reduce borrowers’ interest rates to as low as 2 percent for five years.
Another 46,000 have been approved and are awaiting a borrower’s signature. The Treasury Department has been stepping up pressure on the 102 mortgage companies that are participating in the program to do a better job.
A staggering statistic showed that 2.21% of all U.S. housing units, or 1 in 45, received at least one foreclosure filing last year.
2.21% is staggering? Not in my book. I think they are people trying to sell you something.
“70% of your front yard are garage. Uck”
Don’t forget all the beautiful concrete. Also, that driveway will look great with a bunch of oil stains.
I thought there were city codes that required a certain amount of landscape in the front yard.
yeah if you turn it around then you’re looking at 97.79% of properties that are doing fine.
Jim, thought you would find this CNBC article interesting. Have any of you been confronted with this? The link is below the excerpt.
Big Banks Accused of Short Sale Fraud
“…But here’s what’s not legal and what’s apparently happening quite often recently. Since many second lien holders are getting very little, they are now allegedly requesting money on the side from either real estate agents or the buyers in the short sale. When I say “on the side,” I mean in cash, off the HUD settlement statements, so the first lien holder doesn’t see it.
“They are pretty clear and pretty upfront about the fact that if the first lender knows they are getting paid, the first lender will kill the short sale,” says Brandt. “So these second lenders are asking for the payments off the closing documents, off the HUD statement, usually in a cashiers check prior to closing. Once they receive that payment, they will allow the short sale to go through, which according to RESPA laws and the lawyers that we have spoken to on the topic is not legal.”…Brandt told me he’s heard from at least 200 agents that they’ve had these requests made by representatives of Citi Mortgage (NYSE: c), JP Morgan Chase (NYSE: jpm), Bank of America (NYSE: bac) and other large banks…JP Morgan Chase simply answered, “No Comment,” when I relayed the charge to their media representative…”
Lots more here:
http://finance.yahoo.com/news/Big-Banks-Accused-of-Short-cnbc-281601046.html?x=0&sec=topStories&pos=5&asset=&ccode=
I just read that same article on yahoo! It figures, the second lien usually gets pennies on the dollar but a kickback will motivate them. Problem is if the seller had cash, they’re basically giving it to the 2nd but withholding it from the 1st.
For an individual case it wouldn’t matter, but once a bank lets this happen people are going to go this route on purpose and it’s just going to grow more prevalent.
I haven’t seen it myself, but the all-out assault to rip as much profit from this debacle is happening everywhere.
Flippers aren’t happy enough to make $100,000 net profit in 2 months, they want $200,000 or $300,000. The listing agents are tilting the tables their way every chance they get, to eliminate other buyers, and escrow companies are out of control.
This week I represented a buyer on a REO sale, and due to the new law the buyer has the right to choose the title and escrow companies. We chose our companies, and the bank’s escrow company comes in the week before closing and demands a $250 cancellation fee.
She didn’t do any work on the case, none.
I paid it, and complained to the two presidents of the board of realtors in San Diego. The said they’ll form a committee.
Howdy Jim-
It will be interesting to see how the 1-story vs 2-story premium plays-out. Here are some stats that I dug-up: I ran 4 mos back all closed SFR’s between 2000 and 3000sf in 92009: 1-story had a $278 average and 2-story had a $278 average–only a 10% difference. I also ran one full year back in LCV and found 1-story to be an average of $322, 2-story, $265–a 20% premium.
It has been 10% in my mind, but it would make sense that it would be growing with boomers getting older. More demand, and limited supply!
Yes, the first lienholder gets screwed in this scheme. Its also unfair to buyers who may not be aware of these backroom deals (or are unwilling to participate). This will effectively suppress the home price since part of the purchase price is “off the record”, so to speak. I can’t imagine the powers at be will react positively to this news given their efforts to keep home prices from falling further.
In my mind I think a 20% premium. However, we had set out to buy a single story (as that is what we sold) and found that it seemed even higher–go figure.
@15, I love it Jim. And we all know how effective committees are.
I’d prefer a single story. We have a two story house and two young kids and I’m constantly putting things on the stairs. Shoes, books, toys, laundry, etc to put in their rooms. It always looks messy. Not to mention, everyone has taken a few tumbles down the stairs, even me and my husband.
That said…”There’s nothing price won’t fix.” If I find a good deal on a 2 story in the areas I’m watching, then I’ll buy it. And my husband will just have to listen to me complain about the stairs.
Woops. Anonymous #20 is “Jinx”. My computer is on the fritz so I’m on another.
I have to agree on the excessive amount of front space allocated to garages. It’s almost obsessive! You can barely see the front door of the house!
Or is that now officially the back door? 🙂
Jim, can you put a lien on the bank’s escrow company? Charging your client for services not rendered or even requested sounds a lot like fraud to me.
I am not so sure that a second lien wanting more money than they get through escrow to release a lien is a RESPA violation. It is not likely a fee, just not as large a discount accepted to release a lien. It would not be smart for them to direct a demand soley to the buyer though without first informing the seller.
I don’t think they have a duty to the first or the borrower only to accept what is disclosed on the HUD-1. If they are owed a lot more than they are accepting, and part of what they receive is not through escrow, I have some trouble calling it a kickback, especially if they include it in their calculation of the 1099 they send the seller.
Susie–Yours was an interesting story and the best of it was that it ended so well.
It still bugs me the buyer and Jim were unjustly charged for services not rendered. In fact, I wouldn’t even call the purchasing team clients since they wanted to use a different escrow company altogether. So instead of seeing it as the bank charging existing clients bogus fees, it’s as if the bank pulled someone off the street and said “you owe me money! Pay up!”
RE: article mentioned in #13.
I actually came across a situation where the 2nd was demanding a cash payout as they’ve described. I was interested in purchasing a house which was listed as a short sale. The 2nd had a balance of $18k and demanded $15k in order to release their interest. This was a cash transaction to be completed outside of, and not documented, in the purchase documents. The listing agent said this was their sticking point on offers, and I told my agent that I thought it was extortion and unethical. I walked away from that one.
The owners of the house hadn’t made a payment since July 08 and they moved out in April 09. The house has been listed on and off the MLS since Jan 09 and right now, it’s not currently listed. I don’t see it on ForeclosureRadar and still sits empty