Meltdowns Of The Month
Each month I am going to try and post the best meltdowns of the month in as many areas as possible on the Westside. Hopefully others that have knowledge in the chosen areas can chime in and give us any particulars. The purpose of this will be to educate as many as possible that are looking to buy in these areas and update any current trends.
Let's start with these:
26258 Farside Rd. Malibu 90265
4+3.5, 2600 sqft
YB 1976, 5995 sqft Lot
SOLD 12/6/07 for $1,250,000
SOLD 9/22/11 for $706,500 (-43.5%)
4732 La Villa Marina Unit J MDR 90292
3+2.5, 1763 sqft
YB 1966, Townhouse
SOLD 8/19/08 for $640,000
SOLD 10/13/11 for $487,500 (-23.8%)
1514 Maple St. Santa Monica 90405
2+2, 935 sqft
YB 1941, 6299 sqft Lot
SOLD 6/10/05 for $900,000
SOLD 9/23/11 for $675,000 (-25%)
510 San Juan Ave. Venice 90291
5+2, Duplex, 2000 sqft
YB 1965, 2570 sqft Lot
SOLD 1/7/09 for $1,100,000
SOLD 9/30/11 for $480,000 (-56.4%)
1047 N. Crescent Hts. W.H. 90046
3+2.5, 1508 sqft
YB 1924, 6550 sqft Lot, 2 houses on a Lot
SOLD 7/13/07 for $1,025,000
SOLD 10/12/11 for $679,000 (-33.8%)
2044 Coldwater Cyn. B.H. 90210
4+4, 2873 sqft
YB 1952, 9150 sqft Lot
SOLD 12/6/06 for $1,800,000
SOLD 9/21/11 for $1,207,000 (-32.9%)
3862 Huron Ave. Culver City 90232
2+1, 901 sqft
YB 1941, 7497 sqft Lot
SOLD 3/24/05 for $652,000
SOLD 10/12/11 for $425,000 (-34.8%)
4244 East Blvd. Mar Vista 90066
3+2, 1418 sqft
YB 1940, 5688 sqft Lot
SOLD 12/6/05 for $750,000
SOLD 9/30/11 for $500,000 (-33.0%)
854 Thayer Ave. Westwood 90024
5+4, 3570 sqft
YB 1929, 7490 sqft Lot
SOLD 10/19/11 for $1,475,000
I will try to post other areas as soon as possible.
Posts
126 comments:
From West Hollywood:
Busy 1005 N. Crescent Heights, WEHO 90046
3+2, 1222 sqft
YB '23, 6288 sqft lot
Sold 03/13/08, $1,000,000 (speculative development)
Sold 07/04/11, $ 599,000 (short sale, -40%)
Quieter 1020 N. Ogden, WEHO 90046
3+1, 1151 sqft
YB ' 20, 6500 sqft lot
Sold 06/25/07, $1,224,000 (another botched redevelopment)
Sold 05/31/11, $ 645,000 (short sale, -47%)
But witness:
Move-in-able by Pacific Design Center
701 Westbourne, WEHO 90069
2+1, 980 sqft
YB '22, 5624 sqft lot
Sold 08/24/07, $871,000
Sold 08/03/11, $510,000 (Short sale that went pending just after one day, -42%)
BOM 08/22/11, $729,000 (Pending as of 08/29/11)
Looks like the top 1 percent still knows how to make money and fast!! We'll have to see what it ultimately sells for.
Now how about some Beverly Hills, Culver City, Mar Vista, etc...
These are incredible price drops and they're happening in the high end, to boot.
I actually went to another short sale open house at 26312 Fairside a couple of weeks back.
Its a lovely area if you like a rural life - its quiet, you're near the beach and the views are amazing over Corral Canyon. Plus mile of hiking trails, if thats your thing (it is ours)
Its only drawback as far as we were concerned was the looong commute to Santa Monica along the ever more congested PCH. Plus as Corral is a 'blind' canyon, with no amenities for groceries etc.. you'd have to do a lot driving to get basic necessities.
Its interesting to see that prices there are becoming relatively sane. I wish the same could be said for other non-coastal property in Topanga/Calabasas/Malibu.
Just read on the front page of the LA Times that default notices jumped 26% in the third quarter. Goodness gracious sakes alive -- it's hard to see a silver lining in news like that.
Using Western Ave. in LA as the eastern boundary for the Westside, even historically designated areas (known as HPOZs for Historical Preservation Overlay Zone) are experiencing declines from the boomdiada days:
6747 Milner Road, Historic Whitley Heights near the Hollywood Bowl/90068
3+2, 2000 sqft
YB 1923, 6000 sqft lot
Sold 06/19/06, $1,127,000
Sold 10/14/11, $ 773,000 (-31%)
212 N. Irving Boulevard, Historic Windsor Square, often mistaken for historic Hancock Park which is farther west/90004
6+2, 2628 sqft two-story duplex
YB 1923, 7318 sqft lot
Sold 12/12/07, $1,300,000
Sold 09/28/11, $ 865,000 (-33%)
1027 Alvira, Historic South Carthay, west of Crescent Heights/south of Olympic/90035
3+2, 2184 sqft
YB 1934, 6853 sqft lot
Sold 11/07/03, $800,000
Sold 09/22/11, $800,000 (to a "third party" at the courthouse steps auction brought to you by Bank of America's Recontrust subsidiary).
Prices back to 2003, even for homes in historic areas.
How about these potential prices in 2015 for the first comment:
Busy 1005 N. Crescent Heights, WEHO 90046
3+2, 1222 sqft
YB '23, 6288 sqft lot
Sold 03/13/08, $1,000,000 (speculative development)
Sold 07/04/11, $ 599,000 (short sale, -40%)
SOLD 11/14/15 $385,000
Quieter 1020 N. Ogden, WEHO 90046
3+1, 1151 sqft
YB ' 20, 6500 sqft lot
Sold 06/25/07, $1,224,000 (another botched redevelopment)
Sold 05/31/11, $ 645,000 (short sale, -47%
SOLD 08/30/15 $400,000
I think you're off by about 200K, by 2015 no one will have jobs and those houses will sell for $200,000.
"Its interesting to see that prices there are becoming relatively sane. I wish the same could be said for other non-coastal property in Topanga/Calabasas/Malibu."
Give it time, give it time. We're only 5-6 years into this crash, it's got at least 15 more years to go. I think you should stop looking altogether for at least 10 years.
@ 8.16am LOL, yes....
I'm having to fine tune my gag-reflex at shelling out over half a frikking million dollars for a house, with the practical need to expand my studio for business purposes - which would need new electrics and some major construction in our rental. Which ain't gonna happen.
Still, up here in the 'Malibu Ozarks' asking prices are starting to fall, albeit verrryyy s l o w l y.
On the one hand there's still a huge amount of inventory, much of which still sits with hundreds of DOM and wishing prices from 2009. Seriously, I've been tracking a few places that have been listed for upwards of 2 years, and very little in the way of price reductions. You'd think that the sellers would have got the point, but noooo, their place is Speshul
On the other, there's a few places that started off low and continue to shed a few grand a month, chasing the market down. Oddly, those places don't appear to be selling either...
Anyway, if I had some shadenfreude-generating sales numbers I'd be more than happy to share them. but nothing much is selling here.
This is a helpful site -- it gets so tiring listening to the drone of the agents who claim it couldn't be a better time to buy.
854 Thayer L.A. 90024
MLS #11-516009
Sold 10/19/2011 $1,475,000
5 bed 4 bath
3570 sq ft. house
7490 sq ft. lot
swimmers pool and bath house. Prime location near Holmby Hills.
Agent trys to justify low price by altering the MLS description to state "The sales price of the property reflects a reduction of $36,875 because no commission paid to the selling agent"
-Does this mean buyers should not use a buyers agent because they'll end up paying less??? Sounds like it.
Why did agent point this out???
The property has been on and off the market for some time. Most recently in March 2011 asking $1,875,000. Could've started higher (most likely- but not reflected in publicly available sources.
"speedingpullet said...
@ 8.16am LOL, yes....
I'm having to fine tune my gag-reflex at shelling out over half a frikking million dollars for a house"
You do realize if it takes 15 years to bottom, you will have paid close to 500K in rent...plus the 100K+ you have already spent thusfar.
Here we go again with a ridiculous comparison of renting vs. buying. Will someone please do a complete analysis of why it's better to sit on the sidelines when prices are dropping and equity is evaporating? Renting is much smarter.
What I have observed on this blog over the past 3 years as a reader...
I think the renters are frustrated that they have not seen:
1.Home prices drop low enough for their comfort level
2.Waiting for the short sales and foreclosures that haven't come to be in their area
3.Throwing away $$$ every month to pay someone else mortgage
4. Uncertainty in the future job market=housing mkt
Home owners are either frustrated and underwater or happy with the new lower mortgage rates and trying to re-finance to take advantage of that.
Sellers are still a bit delusional about price (some can't take less since they bought in the past 5 years)
Buyers are nervous...'Will I be paying too much?" "Will the market continue to go down?"
This all makes for an uneasy market (to say the least).
One trend I am seeing is the availability of quality, reasonable priced rentals, especially single family home rentals on the Westside...dry up.
My friend is looking at SFR (good if you have dogs, home offices, little kids) rentals in Santa Monica and can't find anything decent under $5K (3bed/2bath with extra office space)
This usually means when rental prices go up and scarce, people start to think conversion from renter to buyer.
Any thoughts?
I am a happy renter, not frustrated. I would not want to be paying a mortgage, feeling the slow loss of my equity and paying upkeep, insurance, utilities, etc., on a house that is a depreciating asset.
Renting is nothing to be ashamed of. Some people were never intended to be homeowners. Embrace the freedom and be content with the knowledge that, at a moment's notice, you could pack up for that new job in North Dakota.
"Home owners are either frustrated and underwater or happy with the new lower mortgage rates and trying to re-finance to take advantage of that."
Or their homes are paid off and they don't care one way or the other, or they bought before 2004 and already have rock bottom rates locked in, their homes would go into escrow in one day for 50-75% more than they paid for them,and life ain't so bad, even if prices decline another 5%.
3.49pm said:
"You do realize if it takes 15 years to bottom, you will have paid close to 500K in rent...plus the 100K+ you have already spent thus far."
Logic fail. I have to live somewhere.
Because there's no option for 'I go into hibernation for several years and rent a POD container to store my body until the housing market stabilizes...
You know that's not a real life option, don't you?
Like many others before me, when accused of exactly the same crime against real estate, i'll give the tried-and-tested response: "show me the same sized house for sale, with the same amenities, in the same neighborhood, for the same amount of money per month, and I'll consider your argument anything other than a tired old straw man."
But you can't, can you? So, if its all the same to you, mate, I'll continue renting.
Damn speedingpullet, take it easy on the other permabears.
I'm a permabear. I'm sure all the other permabears reading this site agree with my statements, to varying degrees.
Maybe the word "permabear" doesn't mean what you think it does?
"Anon said...Here we go again with a ridiculous comparison of renting vs. buying. Will someone please do a complete analysis of why it's better to sit on the sidelines when prices are dropping and equity is evaporating? Renting is much smarter."
Because it very much matters how much prices are dropping and how long it takes to get there. This is what both you and Speedingpullett miss.
Say home prices continued to ooze away a little at a time for years and years and years. The Hysterical permabears would continue screaming "im not gonna catch a falling knife!!! - well im just gonna rent til they hit bottom!!! Take THAT homedebtors."
Now, for arguments sake say that the total drop was indeed 50% but it took 40 years to get there. Thus, speedingpullett could buy that 500K house today and he could have it paid for in 30 years at a total cost of (approximately) 966K.
However, if speedingpullett rents til bottom he will have (bare minimum) spent 1.04 million dollars in rent.
Thus the choice presented here is
(a) buy a 500K house now and pay 966K over the next 30 years
or
(b) Spend 1.04 million in renting for the next 40 years, AND THEN spend 250K on that now bottomed house.
Assuming they are going to buy someday, who would ever choose (b) above. Answer, no one.
Now granted I am exaggerating here to prove a point - specifically while buying is expensive, the expenses (save repairs and taxes) end after 30 years. By contrast, RENT IS ETERNAL. Paid from the moment you strike out on your own, to that last dying breath escaping your body.
While renting for a few years to see how this all shakes out makes sense, over the looooooooooong run, it doesnt.
Where we land on that spectrum (bottoming in 1 vs 40 years) is anyones guess. However, when I see hysterical types here continuing to say stuff like "im gonna rent for 15 more years" you really have to consider that you may be destroying yourselves in the long run.
It all depends on how much rent you pay in comparison to how much you have to pay to buy a house. This is a great calculator to determine what's better for you: to buy or to rent?
http://www.nytimes.com/interactive/business/buy-rent-calculator.html?ref=patrick.net
I know what permabear means, and this statement applies to many of them who claim to rent for 50% of PITI:
"Like many others before me, when accused of exactly the same crime against real estate, i'll give the tried-and-tested response: "show me the same sized house for sale, with the same amenities, in the same neighborhood, for the same amount of money per month, and I'll consider your argument anything other than a tired old straw man."
"I'm a permabear."
Thank you for being honest about your worldview.
You know, anon, if you want to have a conversation with me then maybe you should take the time to actually create a moniker here?
Otherwise you're just a sea of 'anons' to me.
Which, frankly is sort of creepy.
And, whichever anon said it - where did I say I rent for 50% PITI?
Hey, I'm a happy renter -- I have a fantastic place in Santa Monica, I don't worry about upkeep or taxes or insurance or further drops in prices. When the time comes I'm looking forward to buying a house, but not until prices drop during the next couple of years. Why would I buy something now, when we know where things are headed? We are not out of the woods on the economy, you don't have to be a genius to know that. With massive shadow inventory getting ready to hit the market during the next year or two, there's no hurry. The posters I read on this site who say it's important to buy, buy, buy -- either they drank the Kookaid, or they're real estate brokers whose lives depend on it, or both.
Well, I'm glad I have rented long term. My bank account is super robust and I have freedom to move about how and when I please. I figure I've saved about $400,000 over the past 10 years by deciding not to buy. Study that NY times buy v rent calculator and you can easily see that with rents being so relatively cheap, combined with negative downward prices, can easily lead to the conclusion that you may be better off by never buying.
"I figure I've saved about $400,000 over the past 10 years by deciding not to buy"
Ten years??? Why didnt you just buy in 2001 and then sell in 2007, and then rent for the next few years???
I just read in the LA Times that sales of pre-owned homes dropped last month, and escrow cancellations jumped by over 18% as the definition of a jumbo loan dropped by $100K, which means fewer people can qualify for loans. Doesn't sound good.
I bought a house in 2001 and sold it in 2005. The price doubled during that time. Now I thank my lucky starts that I don't own. I'm sitting this market out -- I don't see making a move for at least a couple of years. Prices are going to be under pressure for 2 to 3 years. I like to sleep at night. I can't sleep if my equity is slipping away.
anyone want to comment on the bill that is being floated that whould woo foreign buyers to the US housing market?
What kind of impact will that have in coastal So.Cal?
That bill should help the real estate market in cities like Los Angeles. Of course, if they lower the ceiling for the mortgage tax deduction to $5000,000, which is under serious consideration, that will crush -- crush -- markets like Los Angeles.
$500,000 (above)
3:24 is a troll. Never mind his idiocy.
"Anonymous said...
I bought a house in 2001 and sold it in 2005. The price doubled during that time"
Good for you. Now, as to the other anon who said he decided not to buy over the last 10 years. Why did you not buy in 2001, and then sell in 2005-2007?
I was just in Venice taking a stroll in Abbot Kinney and at the corner of California Avenue and Abbot Kinney there were at least 8 for sale signs piled up on the curb. Real estate brokers, if you're listening -- don't do that! It looks desperate, like you've got too many houses to sell and you're fighting each other for attention. If you want to fool everybody into thinking it's a good time to buy, relax and lay back. Everybody's turned off by that kind of appearance.
2:40, why are you so jealous? How underwater are you?
All that's important at this point in time is, house prices are under pressure. They're falling. If you bought a house in California in 1952, you're probably ahead. Great. Who cares? Why buy now?
anon 2:40 Why did you not buy in 2001, and then sell in 2005-2007?
Why did you not buy Apple stock when it was $10 and sell it when it was $400? It's so obvious.
Furious anons: Dont get after me. Look, the guy said: "I figure I've saved about $400,000 over the past 10 years by deciding not to buy"
I am wondering how he came to that conclusion. Seems to me, the best move would not have been renting from 2001-2011. The better move would have been buy in 2001, and then sell when the bubble was bursting, and then rent.
So again, versus that scenario, how has his 10 years of renting "saved him about 400K"?
Anon 12:10
I have to agree with you. It doesn't make sense to rent forever.
The fence sitters are just that...want to feel good about not being home buyers.
I think being a home buyer has more to it than just money. The sense of community, the ability to improve your property yourself, the legacy for your kids, the flexibility of renting out your own home if needed, the write offs (not such a big factor, but...)
Some people are bound to be renters..why try to talk them out of it?
I would like to buy a house someday BUT in the meantime, I am truly getting miffed at these stereotypes about renters...
1. Only homeowners have a "sense of community." NOT true. I have been living in my apt for ten years now and am best friends with several of my neighbors. I am very active in the neighborhood council. Renters can feel just as attached to their community as homeowners. There was a great study out of Harvard that demonstrated my experience is not rare. Renters are just as good community members as homeowners.
2. Legacy for your kids. WHAT? Like your kids are going to want the house you buy? Most will be living in a different city. Are you talking inheritance? When I crunch the numbers, my total estate wil be much less if I buy a house versus taking the differential and investing it. If I do continue to rent, I'll have much more liquidity to help my child pay for college so they wont be saddled with student loan debt. Now that's a legacy I want to give to my children.
3. Flexibility. Are you truly saying that homeowners have more flexibility than renters? A homeowner can rent out his home if needed"? Um, right. Here on the Westside, you can't charge rent high enough to cover your owning costs. A renter can sub-let or even easier, just leave!
I'm particularly miffed at the superior attitude from homeowners. It's a very personal decision and there are any numbers of reasons why you would want to do either. To make pejorative assumptions about renters is just mean.
Why am I a fence sitter? Because while I am emotionally compelled to buy a house, it makes no financial sense to do so. I will be worse off, even in the long term.
Miss Slim:
I wrote the entry that miffed you.
Sorry to insult you. But its my opinion that owning a home is usually has a stabilizing effect on the community/street/block surrounding properties.
Studies have shown that home owners are happier and healthier. They feel a
greater level of control over their lives in that their mortgage payments are really long term (really long term yes...)investments. Home ownership is, if not the best way, one of the ways to build long-term wealth.
Home owners vote more, volunteer more and contribute more to their neighborhoods. The stability that comes with home ownership adds to a greater feeling of community among neighbors. In addition, children of home owners do better in school, stay in school longer, and are more likely to participate in organized activities.
I made sacrifices to become a home owner, and while I don't think its right for everybody, it was the right choice for our family.
http://www.newtowncdc.org/pdf/social_consequences_study.pdf
Great study for 2003. I wonder if that would hold true today for those who bought from E004 on. I doubt it.
I would argue the social and community building aspects are as important now than in 2003....
This was an independent study. No realtor groups involved.
I am looking at home ownership from a different angle. From a long term perspective. Too often the blog posts go straight to 'Its crazy to buy now, I will be throwing money away in the short term'
When I hear the rationale that you need to look at the long term, not the short term, when evaluating whether to buy a house, it seems like the person is saying, even if prices go down at first, even if you lose money in the beginning, prices will rise eventually. Is that a good reason to buy? I don't want to lose money at first. I don't want to buy now when everyone says prices are going to fall. I would rather wait for a better time.
Easy. Even in 01 my rent was a heck of a lot less than buying, and yes I was very good at saving and investing the difference. Plus, I wasn't trying to trade up or take out helocs like most of the folks in the professional class. These folks, and I know a lot of them, are generally down a couple hundred thousand. Get it? I wasn't caught by all this bs that your less than if you're a renter. Many are becoming strategic foreclosures -- they've lost their downs and a ton of investment income. I am so glad I've stayed conservative and didn't get caught up in this housing frenzy. Are you still caught?!
I bought in 2001, and anyone who says they made the right choice in 2001 by deciding to rent needs their head examined. That is true even if prices drop another 20%, which deep down you all know they won't.
Anon 9:17: How can you claim that study you cite is independent when it was funded by the Homeowners Alliance, an advocacy group for Fannie Mae and Freddie Mac? Please read more closely and critically when you cite sources and make claims of objectivity.
Here's a study from Harvard from 2001 that is a bit more independent. Read closely - while the surface evidence seems to support what you are arguing, the authors conclude: "None of the studies on this topic have totally ruled out the possibility that the association between homeownership and social and political participation is spurious"
http://www.jchs.harvard.edu/publications/homeownership/liho01-12.pdf
Note: fannie mac provided a small percentage of the funding for this paper but that only strengthens for the confidence of their conclusions which are the negatives of homeownership, primarily caused by low mobility, can outweigh the positives.
Just think of what your vaunted "neighborhood stability" has cost some of your neighbors. How many people could not take a better job because they were stuck in their underwater or unsellable house?
I would also argue that historically as rates of homeownership have gone up, civic engagement has gone down precipitously. Here's a great book, that while 15 years old, talks about trends over a long time frame.
http://en.wikipedia.org/wiki/Bowling_Alone#cite_note-1
You say you made sacrifices to become a homeowner. Good for you. But please don't try to justify that cost by demeaning renters and please don't support your discrimination with studies that are clearly biased.
I truly doubt most people bought a house because they felt it would make the community stronger and strengthen civic engagement. Most people buy houses because they have been told it is the financially smart thing to do or because they've been told it's the "adult", "right" thing to do for their families, for their children etc. we are now discovering that both of these "well established" nuts are quite probably cracked.
There's one reason to buy a house - you can do whatever you want to it, make it truly your own. That's a great reason and why I am looking. But the rest is just, in the words of the Harvard researchers, spurious.
6:39, I think you protest too much. I can sense the frustration. Houses are already at 03 prices in many places, and it won't be long until 01 prices come along, especially if you take inflation into account. How big is your heloc?
"Easy. Even in 01 my rent was a heck of a lot less than buying"
Hold up. For a long time, ive heard this narrative of westside will return to "rental parity" or something close to it as it was back before the bubble.
Yet, you telling me that even in 2001, at the bottom in terms of pricing, rental parity was not even close to being true on the westside?
And a follow up question for "even in 01 my rent was a heck of a lot less than buying"...
If people who bought at the bottom in 2001 made a bad choice, when, if ever, in the past 20 years of westside prices was it the "right choice" for people to buy? 1997? 1994? 1991? If you didnt buy in 2001, arent you basically saying that your plan is to "rent forever"?
Yep, I'm an excellent shopper and patient to get the best deal. And I'm patient not to buy on the westside for a couple or more years.
If govt support were pulled back to where it historical has been, and interest rates were not being manipulated, we'd be at 01 inflation adjusted prices. Anyone that says now is a good time to buy in the westside is smoking something.
If the market is screwed up don't buy. If you bought in 01 and didn't do anything stupid like heloc or trade up, you're good. But most did do something stupid.
"I can sense the frustration. Houses are already at 03 prices in many places"
Sorry, but your super powers are failing- no frustration at all on my part. And, FYI, I bought in one of those places that is nowhere near 2003 prices, thankyouverymuch.
And as the other poster commented, when has a SFR in SM EVER been cash flow positive from day 1? Answer- never. As your fellow permabear speedingpullet said, that is a "straw man".
"If govt support were pulled back to where it historical has been, and interest rates were not being manipulated, we'd be at 01 inflation adjusted prices."
And if everyone moves out of state and if a big earthquake hits and if unemployment hits 30%, then you'd be able to buy something.
"If people who bought at the bottom in 2001 made a bad choice, when, if ever, in the past 20 years of westside prices was it the "right choice" for people to buy? 1997? 1994? 1991? If you didnt buy in 2001, arent you basically saying that your plan is to "rent forever"?"
They're called permabears for a reason.
It sounds like some of these anons are trying to justify owning a house in a falling market. "It'll work out in the long term." "It's not that bad." Who wants to be in those shoes? Not me.
It seems logical to me that if you bought a house and you are happy and not worried about being under water loosing your downpayment, or just generally being in the financial distress, you would not be here on this blog, trying to convince a bunch of anon that you did good or that they should buy. You'd be enjoying life, your kids, or whatever else life has to offer. No? I know we live in LA and many here fake it until they make it, they fake with zip codes and leased cars, and mortgaged houses.
On the flip side....the people who return to this blog everyday are looking for reasons to justify their reasons not to buy.
Why else would you be here?
Misery loves company.
OK - if it can get people here to focus, I will admit to whatever tangential issues you desire.
1. Im underwater
2. Im insecure
3. Im destitute
Whatever the tangential issue is regarding me and my personal situation, lets go ahead and put that into the "asked and answered" column. OK?
Now, as to the question which you seem incapable of admitting, earlier I asked, if buying in 2001 at the bottom, was not a good idea, when would have been a good time? Is your plan just to rent forever?
Destitute?
# 1 and 2...sure. But destitute....hardly.
On this bog: These are people WANTING to buy or wanting to justify their underwater purchase.
Oh BTW, the FEDs are coming to the rescue again! If you truly are underwater, they will help you refi...nice!
The US gov't WANTS you to be a homeowner....and if you f&%* up buying that overpriced house...don't worry...there is an App for that.
"On the flip side....the people who return to this blog everyday are looking for reasons to justify their reasons not to buy.
Why else would you be here?
Misery loves company."
Touché my friend. This blog would be boring without the opposing views. Actually, I read this blog and a few others to get a sentiment about people's perception about real-estate. Not to justify "not to buy" but rather to feel the market. I would venture to say that even the perma bears here will buy, but only when it at a financial advantage. The discussion is not "to buy or not to buy" but rather would you be better off.
To add to that, as the market saying goes, past performance is not guarantee of future results. We know the past lows and highs, if you bought pre 2000 and sold pre 2006, you are golden. No argument there. I think rather the argument is if we are at a bottom, which I do not think we are.
Do you permabears really think that I/we non-permabears think you are 1) capable of actually buying something, and 2) would listen to anonymous posters and then decide to go buy? If you think that, you are truly stupid. I used to just lurk here and laugh, but when every non-permabear comment was labeled as a troll or realtor, I decided to call a permabear a permabear (especially latesummer 2005 who has never bought anything and never will).
"On this bog: These are people WANTING to buy or wanting to justify their underwater purchase."
There are people WISHING prices would crater another 40% so they might have a chance to buy something, and there might be a realtor or two, and then there are people who bought pre-2005 and enjoy the amusement.
"you would not be here on this blog, trying to convince a bunch of anon that you did good or that they should buy"
Is that really what you think I/we are doing!? Seriously?
OK - destitute or not, lets also put that into the "asked and answered column" as well.
Now, as to the question which our 2001 renter continues to seem incapable of addressing. Earlier I asked, if buying in 2001 at the bottom, was not a good idea, when would have been a good time? Is your plan just to rent forever?
Wow... I see the anger phase has finally arrived on the west side. This might take a while...
1. Denial and Isolation
2. Anger <------------we are here.
3. Bargaining
4. Depression
5. Acceptance
here is some feedback i heard over the weekend from prospective buyers.
there is no inventory in 90405
there are no decent SFR rentals under 5k in 90405 (3/2)
major fixer on ashland got 9 offers in first week
seeing a pick up in buyer activity in all types of condition homes (move in/tear down, etc.)
Is it because they are idiots? Or is it because they are done waiting? Or has the market bottomed? Is it the low interest rates?
Is that really what you think I/we are doing!? Seriously?
Yes.
"people who bought pre-2005 and enjoy the amusement."
Isn't that cutting it kinda close considering the bubble popped around '06-'07. There are a few example on the main post that's already below '05 prices, and there are many more examples on Santa Monica Distress.
Reuters: "Consumer confidence unexpectedly dropped to its lowest level in two-and-a-half years in October, while house prices were unchanged at low levels in August, suggesting the consumer is still struggling.... the S&P/Case Shiller composite index of house prices in 20 metropolitan areas was flat compared with the month before on a seasonally adjusted basis, frustrating expectations for a gain of 0.1 percent." Facts are facts.
"Wow... I see the anger phase has finally arrived on the west side. This might take a while...
1. Denial and Isolation
2. Anger <------------we are here.
3. Bargaining
4. Depression
5. Acceptance"
Agree. Denial lasted a long time. Even at the 2009 bottom, even at the all time peak of inventory, here is a choice permabear quote:
"With Option ARMs and Alt-A mortgages resetting in 2010-2012, the housing market will turn down for the worst. This is an epic housing bubble that is imploding.
September 19, 2009 9:12 PM"
2 years later, after we told them that there was not going to be a 2010-2012 "TSUNAMI" the permabears have finally given up and moved on to anger. Denial can only last so long.
"With Option ARMs and Alt-A mortgages resetting in 2010-2012, the housing market will turn down for the worst. This is an epic housing bubble that is imploding.
September 19, 2009 9:12 PM"
Sounds like someone we know.
option ARMs?
You would be a fool to lock in a fixed mortgage at this point....my adjustable is down to 3%!!! I pay 3 frickin' % people...thats all!
Pray your adjustable resets...it will be even lower next year!
option ARMs?
You do realize it will take you quite a while to pay off your house. Unless you plan on paying it off in the next 3-5 years, you are in trouble. Of course you are counting on the housing prices appreciating to get you out.
Great comments...
Now, as to the question which our 2001 renter continues to seem incapable of addressing. Earlier I asked, if buying in 2001 at the bottom, was not a good idea, when would have been a good time? Is your plan just to rent forever?
2001 was the bottom?
2001 was the bottom?
In nominal terms, no but in real, it may have been. In any event it was extremely near the 20 year low.
So lets rephrase it then to see if our 2001 friend will answer:
Now, as to the question which our 2001 renter continues to seem incapable of addressing. Earlier I asked, if buying in 2001 near the 20 year low, was not a good idea, when would have been a good time? Is your plan just to rent forever?
7:47 what's wrong with renting forever? Why don't you just admit that buying now would be stupid?
Whoever is advocating buying now cannot be serious. Why throw money away?
Throwing money away?
When you buy a car, do you check to see that it is appreciating every week you own it? Really?
Housing and buying into housing should be a long term mindset....
Isn't renting throwing money away too? Or I guess its better because you are throwing LESS of it away every month, is that it?
"7:47 what's wrong with renting forever?"
Suppose you are 35 years old, with possibly 50 more years of life to go. Would you rather:
(a) Pay 600K (1.1 million over 30 years) or
(b) 1.7 million (conservatively) in rent over the next 50 years?
10/26/11: The Commerce Department report showed the median sales price for a new home fell 3.1 percent last month to $204,400 last month, the lowest since October 2010. Compared to September last year, the median price was down 10.4 percent.
8:49, you really need to get a clue and quit putting your foot in your mouth. You're so simple minded it's hilarious. Get some common sense and look at the NY times buy v rent calculator. It's quite apparent that oftentimes you're better off renting forever than buying in a declining market. This would especially be the case where a person can rent for 50-60% of the cost to buy.
"This would especially be the case where a person can rent for 50-60% of the cost to buy."
Give us one example of a place you can rent for 50% of the cost to buy.
Here is my scenario:
I pay about $5500 a month on a 1.5m mortgage for a large home in a desirable part of Santa Monica. Interest only loan terms....which could be considered the same thing as renting....
Rent for this house I would guess, would be in the range of $6000-7000 month.
Yes, my equity is not building as fast with interest only. (My situation changed).
And I have to pay ins.and taxes and upkeep.
But with my deductions and the possibility of selling and breaking even, it still pencils out better than renting.
"Isn't renting throwing money away too? Or I guess its better because you are throwing LESS of it away every month, is that it?"
To this I like to respond with an interesting article on CNN Money.
"First things first, I want to dispel the belief that you are throwing money away on rent.
This is a self-serving notion real estate agents often spout that not only isn't true, but isn't a basis for making a rational decision when it comes to buying versus renting."
You can read the rest of the article here yourself. The internet and the sharing of information is a wonderful thing. It allows everyone to see through the lies and the sale pitches by those who live on commissions. The take away from this article is,"If you can't come up with several concrete ways your lives would be better as homeowners, then it may not be worth it to go through the trouble of moving and taking on the extra financial responsibility."
http://money.cnn.com/2011/10/26/pf/expert/buy_or_rent/index.htm?iid=HP_LN
Isn't renting throwing money away too?
Here is an interesting article from CNN Money. People are waking up and recognizing sales pitches vs. good advice.
"First things first, I want to dispel the belief that you are throwing money away on rent. This is a self-serving notion real estate agents often spout that not only isn't true, but isn't a basis for making a rational decision when it comes to buying versus renting."
Good article, you can read it here, but all you really need to take away from this is this, "If you can't come up with several concrete ways your lives would be better as homeowners, then it may not be worth it to go through the trouble of moving and taking on the extra financial responsibility."
http://money.cnn.com/2011/10/26/pf/expert/buy_or_rent/index.htm?iid=HP_LN
Give us one example of a place you can rent for 50% of the cost to buy.
Given you plenty. Give us one example where that's not true.
Isn't renting throwing money away too?
Interesting article I read this morning on CNN Money, talks about your sales pitch above. In the age of information, we can easily dispel lies and sales pitches. Were you born yesterday and have no idea how to use the internet? Here is a nice quote from the intro:
"First things first, I want to dispel the belief that you are throwing money away on rent.
This is a self-serving notion real estate agents often spout that not only isn't true, but isn't a basis for making a rational decision when it comes to buying versus renting...If you can't come up with several concrete ways your lives would be better as homeowners, then it may not be worth it to go through the trouble of moving and taking on the extra financial responsibility."
here is the full article:
http://money.cnn.com/2011/10/26/pf/expert/buy_or_rent/index.htm?iid=HP_LN
Isn't renting throwing money away too?
Read the perfect article this morning on CNN Money to answer your question:
"First things first, I want to dispel the belief that you are throwing money away on rent.
This is a self-serving notion real estate agents often spout that not only isn't true, but isn't a basis for making a rational decision when it comes to buying versus renting.
If you can't come up with several concrete ways your lives would be better as homeowners, then it may not be worth it to go through the trouble of moving and taking on the extra financial responsibility."
You can read the full article here:
http://money.cnn.com/2011/10/26/pf/expert/buy_or_rent/index.htm?iid=HP_LN
"But with my deductions and the possibility of selling and breaking even, it still pencils out better than renting."
Everyone's situation is different, some people are willing to trade their credit rating for small temporary monetary gains. If your home decrease in value or your are at the end of your interest only term, then you are done for.
"Given you plenty. Give us one example where that's not true."
Then humor me and repeat one, just one.
"Read the perfect article this morning on CNN Money to answer your question"
Wow, the geniuses at CNN Money said it, so it must be true. Did you also take their advice in 2007?
"8:49, you really need to get a clue and quit putting your foot in your mouth. You're so simple minded it's hilarious. Get some common sense and look at the NY times buy v rent calculator."
I have. The problem with it (and all calculators) is they stop at 30 years. If they went to 50 years, and showed buying costs stopping after the mortgage is paid off in year 30 (vs renting continuing for another 20), they would show buying is far better than renting.
Again though, this is really common sense. Let me ask you again, to see if you can show some intellectual honesty here and answer directly:
Suppose you are 35 years old, with possibly 50 more years of life to go. Would you rather:
(a) Pay 600K (1.1 million over 30 years) or
(b) 1.7 million (conservatively) in rent over the next 50 years?
Can you answer this directly, or will you continue to spin, flail about, go off on tangents... We shall see.
Can you answer this directly, or will you continue to spin, flail about, go off on tangents... We shall see.
I will use your strategy... Why don't you stop spinning and going of on tangents and show me one example where it's better to buy than rent. Answer me this? Is it better to
(a) Pay 600K for a house worth 300k (1.1 million over 30 years) or
(b) (b) 600k (aggressively) in rent over the next 50 years?
Answer me this. Come one, just one example. blah blah blah
Wow, the geniuses at CNN Money said it, so it must be true. Did you also take their advice in 2007?
My point exactly. What you say must be unbiased trush. BTW, Walter Updegrave, senior editor at Money, has won a number of journalism awards and has appeared on national radio and television programs, written 4 books, and etc. What have you accomplished other than not being able to sell houses?
Those that can, do. Those that can't, teach. And I'm not a realtor.
I will use your strategy... Why don't you stop spinning and going of on tangents and show me one example where it's better to buy than rent. Answer me this? Is it better to
(a) Pay 600K for a house worth 300k (1.1 million over 30 years) or
(b) 600k (aggressively) in rent over the next 50 years?
In your case, obviously, B. If its only 600K the rest of your life, then yes, rent forever. In this case, (and I mean this very sincerely) only a fool would buy in this scenario.
There, see how easy that was!
OK now you try...
Suppose you are 35 years old, with possibly 50 more years of life to go. Would you rather:
(a) Pay 600K (1.1 million over 30 years) or
(b) Pay 1.7 million (conservatively) in rent over the next 50 years?
Can you answer this directly? Thus far, it seems that the answer is to flail and thrash about, and throw kinda unrealistic counterexamples back at me. But I guess we shall see...
OK now you try...
I am not the guy that was renting, but the one you've been posting with. But yes the example that you gave would indicate it's better to buy.
You are right we shall see...
Like it or not, I rent a $1m house for $2,750 a month. I'm sorry this bothers you. You see, oftentimes a good long term tenant can get a great deal, especially when renting from a retired person who owns the house outright. So yes, I have saved about $400k over the last 10 years. And, btw, the would have probably sold for $1.5 in 2006. Why you ask aren't they selling? To get the kids a fmv under the estate tax rules when they pass on.
Regardless of my personal luck, I've run the NY times calculator several times and buying now is just stupid. No one stays in a house 50 years so your hypothetical is just stupid.
NAR says average period of home ownership is 6 years. Hmm....
>I pay about $5500 a month on a 1.5m mortgage for a large home in a desirable part of Santa Monica. Interest only loan terms....which could be considered the same thing as renting....
>Yes, my equity is not building as fast with interest only. (My situation changed).
OMG. There's no equity being built. How many of these 'homeowners' are around here? I can't tell if this is denial or idiocy..it really doesn't matter though. As long as it's not me.
"Like it or not, I rent a $1m house for $2,750 a month. I'm sorry this bothers you."
It does not bother me because I don't believe it. but even assuming what you say is true, if you had bought the same house 10 years ago, you likely would've paid $600K for a house that today is worth $1 million, and you would've paid down the mortgage over the last 10 years to the tune of about $100K, so there is $500K+ in equity. So even in your BS story, you're really not ahead you're actually behind.
Who's the crass asshole that keeps harping about things 10 years ago? The are multiple reasons why someone might not have bought 10 years ago. Maybe they were still in school, or in a different area, or just starting working and paying off other debts. It's irrelevant and distracting.
It's probably the same poster that emphasizes the looonnngg term. Maybe some people have no intention of living in the same place for 30 years and so won't use that as a purchase determination. It may fit your lifestyle but especially for a career there's an advantage to being flexible and mobile.
Like it or not, I rent a $1m house for $2,750 a month.
Lucky you! We have a couple of renters in our building that pays $1000 for 2 bedroom ocean view. The building is rent controlled and they have been living there for 35 years. Although the building will not update their units, meaning when something breaks, they replace it with the crappiest things they can find hoping to drive out the tenants, but I don't think they will ever leave.
"Who's the crass asshole that keeps harping about things 10 years ago?"
That would be me. Im not advocating that everyone should have bought years ago. If you are in the type of situaiton where you ar likely to move to different cities multiple times, I dont advocate you buy. In fact in those cases (depending on the cities) you may very well be better off never buying and incurring the multiple transaction costs.
That said, we have one guy here who said in essence "well I didnt buy 10 years ago, and I have come out way ahead" Sorry dude, but no, you didnt.
He is still here, meaning he is (presumably) still interested in living on the westside for what another 6 7 years? If so, the decision he made 10 years ago, affected the choices he had for the next 17 years.
In 17 years time he could have had a mortgage that is quite managable, and he would be debt free in only an additional 13 years time. Clearly, an enviable position for those who are still interested in buying. Yet, if he continues to think "im better off" I want to know, what are his long and I mean (looooooong) term plans?
If you continue to view your life in 6 7 8 year chunks, you very well could continue to delay something that in 20 years time you will look back and say "gee, I really wish I would have...." And if you continue to have 6 7 8 year windows at year 20, you might as well go ahead and commit yourself to renting until the day you die.
Im gonna stop now because some will see my message as tatamount to "buy whenever you can, as soon as you can". When we were in full meltdown mode, circa 2007-2008-2009, I was right there with you boys advocating, "stay clear of this train wreck until we get out of meltdown mode". Well, we are out of meltdown mode for over 2 years now, and I continue to see things like "im gonna rent for another 10 years".
I guess long and short of it, I am really starting to question the utility and judgment of some of the posters on this blog...
Well, we are out of meltdown mode for over 2 years now, and I continue to see things like "im gonna rent for another 10 years".
Well, I don't think that people here refuse to buy forever. In fact, I think most people would love to buy if it makes financial sense. We are only a few years into the downturn, therefore, it's very possible, especially with the way the fed is intervening, that we have 10 more years of slow gradual decline. Therefore, no one is in any sort of a hurry to buy. Your point about buying makes sense. However, if you look at when you said was a good time to buy to now and compare the income and P/E ratio and such, you can see why it made sense to buy back then and not so much today.
Anon 9:29
I hear ya. I agree with you.
What really is the end game for these people????
I bought my home in 2003 and yes, I haven't been super happy with the market appreciation. But I don't regret buying at all. I didn't get into it to use my home as a piggy bank or investment tool.
Repeat: I am HAPPY I bought in 2003...yes thats right...happy I have the home I do now.
But some people are cautious and to those who are too fearful to take the plunge...I say they never will. The stars will NEVER align perfectly enough for them....
anon 10:40 AM
I think at issue here are two separate arguments. Some see homes as consumption ,the same as cars. Others see homes as investment vehicle. The two views will have very different perspectives on "value." I think it's great you bought and are happy, there is "value" for you to make such a move.
I don't know about the other bears, but my endgame is and always will be financial independence. Owning a house does not mean financial independence. However when I am at my endgame, I may certainly buy a home. Sometimes people confuse a house with wealth and independence. In the past decade, real-estate certainly was a path to financial independence, but that train has long left the station and stalled in the middle of a desert.
"If you continue to view your life in 6 7 8 year chunks, you very well could continue to delay something that in 20 years time you will look back and say "gee, I really wish I would have...."
Truth be told, that actually resonates with me more than I would like to admit.
In 1996, westside prices seemed incredibly high. I first ran across one of the buy vs rent calculators on the "intertubes" and it said something like "it would take 6 years for buying to make as much sense as renting" so I rented.
In 2002 I thought again about buying but westside again seemed outrageous. Calculator again said something like "it would take 11 years for buying to make as much sense as renting", so I again rented.
Fastforward to 2010 and I again looked. Prices still seem outrageous, and once again the calculator said "wait - its gonna take 7 years for buying to make more sense then renting". And then it hit me...
I have now spent 15 years looking at various calculators that tell me dont buy, and likely never will when it comes to the Westside. Yet if I dont want to be paying rent when I am 75, and if the calculators never say buy, am I destined to rent forever.
Well no more. 15 years of renting later, I got off the pot and bought. Yes it was terrifying. But in 1996, the prospect of buying was terrifying, too and in hindsight I can now say, yes I do wish I bought in 1996 (w only 15 years of payments left to go). In the end, I am cautious...and probably too cautious for my own good.
I am not saying this to pressure any people here to buy. I am however here to say I too share your sympathies and concerns. Still, if its the year 2013 and you are still looking, I ask you to think of that story of the overly cautious buyer who spent 15 years on the sidelines, and ask yourself, if not now, when?
Good luck to you all.
you must be a realtor.
Attention: People who are pro housing are not all realtors.
Stop with the troll/realturds comments. This blog is for those who want to buy a house someday, maybe, sorta...if it works out.
Its just a lazy way to reiterate your dumb points about fence sitting....
I'm going to wait to buy because everything I read says there will be more downward price pressure and not price appreciation. The honest brokers will tell you that as well (I actually know 2 of them). When I read "It's not that bad" or "It works out in the long run" or "You'll only lose money in the short term" I wonder who wrote that and what sort of brain they have. It sounds desperate.
"Well, I don't think that people here refuse to buy forever."
I do know for a fact that there is at least one person here who has been waiting since 1988. Just sayin...
Buying a house does not get you a ribbon that says "I'm a smart home owner." It says, "I'm tied to a mortgage and my house is going down in value."
Out of curiosity, what would you think of someone who made a sweeping generalization like:
"renting a house does not get you a ribbon that says "im a prudent investor". It says, "im afraid to commit to anything, and I will pay rent til I die."
Did they do anything to advance the conversation? Or are the just a troll?
Why do you assume that someone who chooses not to buy is afraid to commit? I know at least 4 people who have money sitting in the bank but they do their research and they conclude that it's not a good time to buy. They've owned 2 or 3 homes in the past, but they consider how they spend their money and they know when it's time to move forward. They're smart.
I bailed out myself back in 06 and pocketed a good chunk of change. No way I would consider buying again now. One day sure, but not now.
And I got off on one of the last lifeboats -- in early 08 just before Bear Stearns sank. Got out with downpayment and most equity intact. Relaxed now renting.
"Why do you assume that someone who chooses not to buy is afraid to commit?"
I dont.
If you go back and reread, you will see that 2 post above you, some guy, lashing out at no one in particular posts:
Buying a house does not get you a ribbon that says "I'm a smart home owner." It says, "I'm tied to a mortgage and my house is going down in value."
In response to him, I asked: Out of curiosity, what would you think of someone who made a sweeping generalization like:
"renting a house does not get you a ribbon that says "im a prudent investor". It says, "im afraid to commit to anything, and I will pay rent til I die."
Did either of these sweeping generalizations do anything to advance the conversation? Or is it more appropriate to determine both types of comments are nothing more than the work of a pathetic troll?
too much hate and bitterness on this blog. Please let's get back to the facts
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