More review of the 101 SFR sales between June 1st and August 17, 2010, in 92130.
These are from the tax rolls, and include new-home sales, FSBOs, and deals not on the MLS:
1. There were 28 of the 101 that sold for less than they paid, at an average drop of 12%.
2. Five of the 28 sold for a loss of at least 20% or greater. (73 sold for more than they paid)
3. There were nine new Pardee homes sold, between $764,000 and $805,000 (only one on MLS).
4. There were 92 sales on the MLS, plus the one dirty deal on Winstanley.
5. There were 8 short sales, 2 REO listings sold, and one flipper – Adam!
Here’s how the buyers financed their purchases:
| Down Payment | # of |
| Zero | 1 (this was a no-down doctor loan) |
| 3.5% FHA | 4 |
| 5% | 1 |
| 10% | 4 |
| 20% | 23 |
| 25% | 10 |
| 30-40% | 19 |
| 41-50% | 19 |
| 51-75% | 12 |
| 100% all-cash | 8 |
Over 90% invested at least 20% down, and 58% used a down payment of at least 30%.
For those homebuyers looking to purchase in an area that has a lower threat of foreclosures in the future, Carmel Valley is about as safe as it gets – at least on the surface. These buyers must have felt pretty comfortable with their personal financial situation to invest as much as they did, and it’s been the trend that we have seen lately in the CV!
excuse my ignorance… what is a “no-down doctor loan”?
Did Adam’s flip count twice – or was the trustee sale excluded from the data? (In other words – did you count the trustee sale purchase and the subsequent sale by Adam and his group?)
I agree that CV buyers seem to have more skin in the game. I’m curious – of the 10% that put less than 20% downpayments… were any in the $1M plus group mentioned in the previous post?
Sorry for so many questions… just trying to digest the data you presented.
Thanks Jim. That’s great information (as was your buyers vs. sellers $100K estimate)!
Where do you get this type of data re down payments? Is it available for other geographic areas?
Thanks,
Don Q
There are banks willing to fund 100% of the purchase price for doctors who qualify income-wise. I had one close at $1.1 million!
Adam’s only counted on the retail side.
There were five FHA and one VA total. Four FHA with the minimum down payment (3.5%) and an FHA and the VA with 10% down payment. I think the other four were under $1 million too, so all 10 of 101 were cheaper.
Don Q, I manually count the data off our MLS tax rolls. I can do other areas, but it is time consuming. What do you have in mind?
Thx for the info Jim. I didn’t know it was a manual task — I was looking for the 90803 in the Long Beach area, but I’ll try and find another way since it’s out of the scope of your blog. Keep up the good work.
Awesome data – thanks Jim!
Great Data Jim . CV continues to amaze .
However I am going to give a big warning here! , there is a storm brewing that will be unlike anything most of us have witnessed in our lifetimes and even the immune housing is CV will feel its effects. Also with this storm will come some of the greatest opportunity for those few who prepared and who play their cards right when the fear and panic sets in. Sometime in the next 1-9 months -its not going to be pretty. If you are loaded up on the stock market you may want to pull a lot of the table or hedge yourself.
Good luck to all.
Precious metals and puts.
vegasandre, what’s your intel? I agree, but just wondering what you are hearing and your source.
Thank you for clarifying, Jim. I always learn something on your site.
I second Jeeman. Just making grand gloom/doom statments isn’t helpful or accretive on JTR’s evidence driven blog.
Many here are in full agreement with your conclusion (shadash, et al..and myself to a lesser degree), but from what/where do you derive your conclusion???
I third jeeman’s request.
We’ve all heard the claims, even I mentioned the guarantee I heard from my Bofa source that promised the tsunami of REOs was to begin in April – how did that one turn out? Still waiting, with my wadders on.
I think andre has made the claim before too? I like you andre, and value your insider view. Can you cut loose with more intel please?
I’m not sure this applies directly to “housing,” but this organization and site have been forecasting consumer weakness by measuring demand for various durable goods on the internet. They have a housing and refinancing index. It’s worth a look just from interesting perspective.
http://www.consumerindexes.com/
I know I have taken a bearish slant over the last couple years but even during this time I was bullish on the stock market and accumulated a large long stock/fund portfolio which I mostly acquired in the spring of 2009.
1-Over the past month I heard from two higher ups at two of the largest known banks tell me(within days of each other) to strongly consider “lightening my load” on my long positions. This is very unlike them as we usually only discuss the housing reo situations.
2- I follow John Carter closely ( I am a very active stock,options and future trader) http://www.tradethemarkets.com and over past two weeks he has given a unbelievable bearish slant which is also hugely unlike him.
3- Much of my success in life I can attribute to Tony Robbins. I have followed him for 20 years and have went to multiple seminars and he helped me help myself to get out of retail and into real estate in 1992. I owe a lot to his teachings. He is a very positive individual . But when I see a “some what emergency” broadcast to his group on the economic uncertainty to come- I had to stand back a bit – as he never takes a pessimistic slant. here are the videos:
part 1:
http://www.youtube.com/watch?v=Z_rShZA_IjE
part 2:
http://www.youtube.com/watch?v=LZuJqrcwrEU&feature=related
4- when talking to my firends ,realtors,business owners around the country I have been hearing on the struggles that every one is facing and that the struggles are much more severe than 2008-2009.
5-Of course than there are the usual suspects of goverment intervention spending etc much of which can be covered here:
The National Debt – The U.S. government has accumulated a national debt that is rapidly approaching the 14 trillion dollar mark. According to Democrat Erskine Bowles, one of the heads of Barack Obama’s national debt commission, if we continue on the path we are on the U.S. government will be spending $2 trillion just for interest on the national debt by 2020.
State And Local Debt – Many of America’s state and local governments may be in even worse financial shape than the federal government is. In fact, some state and local governments are in such a financial mess that they have starting cutting off even the most essential services.
Consumer Debt – The total amount of consumer debt that Americans have accumulated now stands at approximately 11.7 trillion dollars.
The Trade Deficit – The U.S. trade deficit has exploded to nightmarish proportions over the past two decades. Every single month tens of billions more dollars flows out of the country than flows into it. The rest of the world is literally bleeding us dry in slow motion.
No Jobs – Today it takes the average unemployed American over 8 months to find a job. The number of Americans receiving long-term unemployment benefits has risen over 60 percent in just the past year.
The Credit Crunch – The U.S. is experiencing a credit crunch unlike anything it has seen since the Great Depression. Lending has really, really dried up, but without loans our economic system cannot function properly.
The Housing Crisis – Even with mortgage rates at historic lows, a shockingly low number of Americans are buying houses. There has been a total collapse in home sales since the home buyer tax credit expired. At the same time, mortgage defaults, foreclosures and home repossessions by banks continue to set new all-time records.
Rising Bankruptcies – Nationwide, bankruptcy filings rose 20 percent in the 12-month period ending June 30th.
Rising Poverty – One out of every eight Americans and one out of every four American children are now on food stamps. Approximately 50 million Americans couldn’t even afford to buy enough food to stay healthy at some point last year.
The Coming Pension Crisis – America is facing a pension crisis that is so nightmarish that it is almost impossible to adequately describe it. State and local government pension plans are woefully underfunded, dozens of large corporate pension plans either have collapsed or are on the verge of collapsing, Social Security is a complete and total financial disaster and about half of all Americans essentially have nothing saved up for retirement.
The Derivatives Bubble – Our financial system has become a gigantic gambling parlor and we have allowed a horrific derivatives bubble to develop that could destroy the entire world economy if it ever bursts. Nobody knows exactly how big the derivatives bubble is, but low estimates place it at around 600 trillion dollars and high estimates put it at around 1.5 quadrillion dollars. Once that bubble pops there simply will not be enough money in the entire world to fix it.
The Federal Reserve – The Federal Reserve has devalued the U.S. dollar by over 95 percent since 1913 and it has been used to create the biggest mountain of government debt in the history of the world. There are many economists who would argue that the Federal Reserve is at the very core of our economic problems.
(most of this is common knowledge)
So , today I have unloaded every long I own including some stocks owned for over 10 years. I am devising a plan to position myself for the coming fall(a combination of shorting the SP, etfs,SPiders,individual stocks,long gold and yen)which I hopefully will have positioned in the coming month.
Much of my belief is to buy when it looks bleakest. Some say that it looks bleak now- however there is no sense of panic anywhere- yet
I will be looking to rebuy Dow sub 6k in steps.
sorry for the length of this – it is too freaky that all this is occured to me with in past few weeks.
Is there a chance I leave 10-20% profit on the table? yes , but the risk is not worth the minimal reward.
vegasandre,
Thanks for sharing your thoughts. However, most of your points have been like that for at least couple of years already, such as national debt, bad situation for states, and consumer debt, etc. The point really relevant to TIMING (the question of why now?) is “two higher-up telling you to lighten up”. In a nutshell, it is not very convincing that “timing” part for the coming doom and gloom.
Thanks!
Thanks andre for sending in your thoughts, I appreciate them.
Tony Robbins said it in his video too, just consider them for what they are, concerns about the future, especially for stocks.
The tipping point may be the treasury bond “bubble”, it’s a very crowded trade right now and if for any number of reasons we see a run for the exits it could prove lethal to all risk assets including real estate. Think hyper inflation rapidly for essentials (gas,food etc.) and massive exiting of the USD to cause carnage to stocks, real estate all large core assets.
Like I said, precious metals and puts.
vegasandre,
Thanks for the thoughts. It is inline with everything I have been reading and thinking. I’ve sold 60% of my stocks in the last two weeks and am going to sell a few more…gonna hunker down for the fall and jump back in after the carnage. Of course, things could go up 20%, but it’s a risks are higher than those rewards, I believe. Those Tony Robbins videos were awesome!
Housing down 27%? Sheesh….
clearfund, are you giving interviews to major newspapers? Just saw your name where you said, “I’m in no rush”…
http://www.cnbc.com/id/38832652
Good eye Jeeman, didn’t know it was in the Journal today – One of my more eloquent/ground-breaking quotes “I’m in no rush..” Genius!!