CoreLogic said that while the data point to continuing price appreciation, the overall national rate of home price increases is projected to decelerate in 2013 from 2012 levels. The CoreLogic Case-Shiller Indexes project a 2.5 percent home price increase in 2013, as the market dynamic shifts again in bubble/crash metro areas. While homes in these markets are still significantly undervalued, the strong investor demand for foreclosed properties, record levels of housing affordability and other demand factors that have driven recent double-digit price gains are unlikely to persist throughout the year.
Price appreciation is also expected to contribute to an increased supply of available homes as owners who have been locked into their current homes due to negative equity or were just unwilling to sell at existing prices begin to list their homes for sale. This will tend to curtail the portion of price increases that have been fed by unmet demand.
Dr. Stiff tamped down concerns of another housing bubble.“Even if double-digit price appreciation were to continue in the former bubble metro areas, there is no reason to believe that new home price bubbles are forming. That’s because single-family homes in these markets are still very affordable, even after last year’s large price gains. Consider Phoenix, where home prices rose 27 percent since the market hit bottom in 2011, making it the strongest residential real estate market in the U.S. Yet, home prices there are still 45 percent below their 2006 peak,” Stiff continued.
This is one of the few places where you can find newer, larger one-story homes on good-sized lots. No wonder it blew of the market in the first few days, and over list price!
REDDING, Calif. — A man accused of cheating North Coast residents out of hundreds of millions of dollars in what prosecutors characterized as one of the largest real estate Ponzi schemes in California history has been convicted by a Shasta County jury.
James Stanley Koenig, of Redding, shook his head and rubbed his forehead as the verdicts against him were read on Monday, the Record Searchlight of Redding reported (http://bit.ly/16zpZTZ).
Prosecutors said Koenig and two accomplices bilked 2,000 investors out of $250 million. Many of the victims were retirees who lost much of their life savings.
Koenig, 60, accused of being the architect of the Ponzi scheme, was convicted on 35 of 36 felony counts, including securities fraud and two counts of first-degree burglary. He faces about 50 years in prison and is scheduled to be sentenced on June 11.
Gary Armitage, 62, was sentenced to 10 years in prison earlier this year after pleading no contest to conspiracy to commit a crime, fraud and sale by false statement. Jeffrey Guidi pleaded guilty to lesser charges and avoided prison time.
Prosecutors said the three men sold real estate investments, promising low-risk returns. But many of the projects faltered or were never finished. Still, the men continued to raise money from investors, using it to pay off earlier investors, according to prosecutors.
Koenig did not disclose that the company had defaulted on loans for some of the properties in its portfolio and also did not disclose his 1986 federal fraud conviction, prosecutors said.
The men were arrested after a 17-month investigation.
The Vandals formed in 1980 in Huntington Beach. The band quickly built a reputation in the LA and Orange County punk rock community which also included bands such as Bad Religion, Descendents, Black Flag, T.S.O.L., the Germs, X, Suicidal Tendencies, The Dickies, and Fullerton’s Social Distortion.
This clip includes footage of a typical mosh pit of the era (1:35). Hat tip Shira!
A tour of the most-recent listing of a CV canyon-front home, in DH. I saw the house on Raven Hill that sold for $1.9 million, and I liked this backyard better:
The pro-tax politicians in the Legislature continue to threaten Prop. 13, homeowners and small businesses.
Today at least 7 bills that would directly undercut various provisions of Prop. 13 will be heard in committee. If approved, these bills could cost every property owner thousands of dollars.
There are seven bills pertaining to Proposition 13 that are up in the Senate Governance and Finance Committee. Six of these bills directly undercut various provisions of Proposition 13.
The bills are: SCA 3, 4, 7, 8, 9 and 11.
THE FOLLOWING BILLS PLACE A BULLSEYE ON PROPOSITION 13 AND TAXPAYERS:
Senate Constitutional Amendment 3 (SCA 3), Mark Leno (D—San Francisco): Lowers the threshold for school district per-parcel property taxes from two-thirds to 55%. This is a direct assault on Proposition 13 because it makes it easier to increase property taxes above Proposition 13?s one percent cap.
Senate Constitutional Amendment 4 (SCA 4), Carol Liu (D—La Canada) and Senate Constitutional Amendment 8 (SCA 8), Ellen Corbett (D—San Leandro): Lowers the threshold for the imposition, extension or increase of local transportation special taxes from the Proposition 13-mandated two-thirds vote to 55%. Most transportation special tax increases consist of very regressive sales tax hikes. These add to the burden of California taxpayers who already pay the highest state sales tax in the nation.
Senate Constitutional Amendment 7 (SCA 7), Lois Wolk (D—Davis): Lowers the threshold from two-thirds to 55% in order to approve a bond to fund public library facilities. Lowering the threshold for school facilities to 55% has already resulted in billions of dollars of additional property tax payments that otherwise would not have been approved by voters.
Senate Constitutional Amendment 9 (SCA 9), Ellen Corbett (D—San Leandro): Lowers the threshold from two-thirds to 55% to increase special taxes to fund community and economic development projects.
Senate Constitutional Amendment 11 (SCA 11), Loni Hancock (D—Berkeley): Lowers the threshold to 55% to allow for voters representing ANY local government entity to approve a special tax for ANY purpose. This is far and away the broadest application, and thus the most egregious, of these constitutional amendments.
Assembly Constitutional Amendment 8 (ACA 8), Bob Blumenfield (D—Woodland Hills): Lowers the threshold to 55% for city and county voters to approve a local bond measure in order to fund emergency service facilities projects.
One supportive bill, Senate Constitutional Resolution 25 (sponsored by State Senator Mark Wyland, R—Escondido) is also up in the committee today and honors Proposition 13 on its upcoming 35th anniversary.
Stay tuned: Two additional bills, Assembly Constitutional Amendments 3 and 8 also diminish Proposition 13’s protections. These will head to hearing soon.
Why does a frenzy only last for a year? Because of the sellers’ disease.
Reader Sue left this comment:
In Carmel Valley, I’ve seen some very premium Lexington’s go for a high price ($1.9m) but they were on extremely large view lots. Afterwards, it seemed like anyone with a Lexington or Derby Hill priced their home at simply ridiculous prices ($2 million or more!) and now I seem these homes sitting unsold on the MLS. Excluding the few extraordinary homes, other CV homes seemed to have increased in price maybe $100-$150k in the past 2 years, but I don’t see prices going up the $300k that sellers have priced into them (versus prices from 2 years ago). And the more homes that sit on the market, the lower their prices will be.
We’ve noticed more CV canyon-front homes coming on the market in 2013. It used to be that you could expect to find one around $1,500,000, but this year a couple of sellers created new highs and now many are jumping in, hoping to capitalize on the good fortune.
One of the signs of a stalling frenzy is how sellers price their homes based on the active listings, not the solds.
Sure, there has always been some of that built into every seller’s price, but today’s euphoria is causing some huge pops in list prices.
CV Canyon-Front Scorecard:
13 active listings between $1.659 and $2.195 million.
3 went pending in April, none pending in May.
2 closed over $1.7M this year.
Everyone is hanging their hat on this sale – it closed for $1,900,000 last month:
Because one buyer paid a premium for a house that had everything going right for it doesn’t mean that there are dozens waiting to PAY THE SAME. There are buyers waiting, but they want to pay less, and hope that a glut is forming that will cause sellers to lower their price.
It is a timing issue too.
Sellers all think that this is the prime-time selling season, and their lucky buyer will be walking through the door any minute. They are ignoring how much competition there is, and how many aren’t selling.
A smart seller would drop their price now and be the first one out, but it’s more likely that they will all wait until mid-summer. In the meantime, expect the frenzy to die down a bit.
The last time the market took off, it was for different reasons (easy money, shorter-term thinking, and more move-ups), but the market psychology should be similar this time around – because buyer exhaustion is inevitable.
Here is how it looked then – during the first part of 2003 you could feel the market bubbling up, and by summer it was evident in the closings.
From June, 2003 to May, 2004, average pricing rose from $331/sf to $469/sf, which is a 42% increase:
Here’s the SD Case-Shiller graph, which reports three months late and documents the whole county, which lagged behind the coast:
The big difference this time is that while it feels like a frenzy with prices increasing, the overall stats are far more moderate than last time. Comparing last July’s $366/sf to last month’s average of $420/sf, the increase is 15%:
This frenzy is focused on the quality properties, which apparently doesn’t float all the boats higher this time (or at least not as high), and the fraud is keeping a damper on the statistical increases too.
If a frenzy can stay red hot for about a year, then we should be wrapping up this version shortly – probably in the next couple of months. Future pricing trends should fall more in line with the averages (sub-10% annually), with an occasional outburst.
You often see in the MLS remarks the now-standard comments like “this won’t last” or “reviewing all offers on Monday”; whose intention is to make you think it’s a hot buy. But now that virtually every listing says those same things, you have to look deeper.
The true hot buys require immediate action, but only about 1 out of 10 listings fall into that category – if that many.
About half of the remainder are obvious, like this one which listed today:
It’s the same floor plan and a few doors down from the REO Craptacular we just saw list for $939,000, so their $1.375 list price makes for an easy choice.
The other half are tougher to figure.
For a house to command a frenzy premium, it needs to have most or all of the following things going for it:
Quality location.
Excellent condition – visually attractive.
Big kitchen, great room, and/or good master suite.
Newer features – high ceilings, big windows for light, etc.
Decent-sized private yard.
Great school district.
Excellent presentation by agent.
Once you see a house that fits into most of these, how do you know if you need to jump on it? Other signs to consider:
A. Is the listing agent actively pushing the product, or on the 3-P program? (Put the sign in the yard, Put the lockbox on, and Pray)
B. Does the listing agent’s recent listing history indicate they are sharp on pricing? Does their average DOM make you reach for your checkbook?
Of the 338 listings I’ve sold on the MLS, my average is 40 days on market. Twenty-six of those were in the last 12 months, and their average is 23 days on market. If the agent of your target listing has better numbers than that, you should not wait around.
C. Does the presentation impress you? Will it cause other buyers to come running with suitcases of money? If not, your patience is more likely to be rewarded. The listings with quality photos/video that are complimented with open houses offer maximum convenience to buyers, and are the ones that sell early.
D. When at the house, are there business cards of other agents scattered around? Have you heard of any of those agents?
If the house just listed and there are 10+ cards, then it might be hotly competitive but make sure it wasn’t a ‘refreshed’ old listing, or on broker preview that day. If there aren’t any cards, maybe there isn’t any competition, and you can let it ride until the initial urgency is gone.
Last week I showed a house while it was on broker preview. I got there a few minutes before it began, and what I saw told me plenty. The listing agent showed up for the first two minutes, and once the goof assistant arrived, the LA left. The house was priced at retail-plus, and had a 1960s floor plan and mostly-original kitchen. I knew that most buyers would pass on that quickly, and the lime-green house across the street clinched it – no need to rush into anything here.
We know that the vast majority of houses that sell for top dollar are those that sell early in their listing period – usually in the first 5-10 days.
As a homebuyer, time is your best friend. We know that if a house isn’t sold after the first two weeks, the showings dry up until the sellers start lowering the price.
So if you can be patient for 2-4 weeks before offering, you should catch the sellers, and listing agent, in a more-negotiable mood.
