Home Sentiment Has Changed For Most Buyers
The "American Dream" has turned into the "American Nightmare" for buyers who bought homes within the last 10 years. With the market top on the Westside in the summer of 2007, homes are still dropping day by day, month by month and year by year, at a rate of 1 year in price for each year of decline. Pricing rolling back to 2002 is beginning to appear and there doesn't seem to be anything currently to prevent further declines. At this rate, we will be looking at 1999 - 2000 pricing in 2014 - 2015. How much further down it could go, nobody really knows. The old saying that "real estate is a great investment and always goes up" has been shattered and prospective buyers are re-thinking about "owning" property for now. Even if you only put the FHA 3.5% down, you are out 15% in your first year if you consider closing (3%) selling (6%), taxes (1.25%), and maintenance (2%) costs. Throw in the average 5% yearly loss in home valuewe have seen over the last 5 years and that's a 20% hole by the end of 2012.
Needless to say, many have a different take on home buying and it has become an albatross if they are dependent on financing. This is affecting the overall market , as most of the transactions seem to be either short sales or bank foreclosures, which sell at a large discount to organic sales (regular non-distressed). Why would anyone take on that big of a risk, when you could rent a comparable home for much less than a mortgage right now? Sure there are always some buyers where money is no object, but they are few and far between and hardle enough to support the entire Westside housing inventory. (both shadow and listed).
With an uptick in apartment construction, builders know what's on the horizon. Condominiums are surely to be hit hard, as new apartments come on line in the future. Condominiums are essentialy apartments that allowed buyers to enter the real estate market, when it was appreciating. Those days are gone for now and probbaly won't see a bottoming of prices for at least 5 years. Even then, we normally bounce along the bottom for another 2-3 years, which could mean 2020 before we have a chance of any appreciation.
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Yes, this.
Just yesterday my wife was saying in the next few months, if we find something interesting, it might not be a bad time to buy.
I told her that while I'm not the kind of person to try to time the market, buying a house in the next 24-36 months is probably a really bad idea. I know for a fact that in Santa Monica (Ocean Park residents here), there is still room to drop.
what are prices like right now in your neighborhood
west of licoln
I agree that condos seem to be a risky investment...with HOAs and lack of private outdoor space....its kind of off the table for me.
Single family homes will always have a bigger appeal.
Looked at 1615 Ashland on Sunday. Nicely redone 3/2 and priced well at 1.4
8 offers on it already (according to the slimy RE agent) Lets see what it closes at...
This should be a good data point for a slow time of year sale.
Original house, good location, taken down to studs renovation, decent sq. footage at 2K....goes for 1.4m East of Lincoln
Inventory is very very low in the SFR 90405 right now....If you kick out the 'backups' and stale listings (3-4 months)...you only have about 15 homes on the market.
As a person looking for a deal...is this what you all are seeing too?
Sadly, at least in areas from around western ave to the ocean north of the 10, sentiment really hasn't changed. Not that most people think prices are going to bounce back soon, but people seem to think the worst is over. This, despite the fact that prices in these areas, with some exceptions of course, haven't really fallen too much. What was a million plus at the peak still sells for 8-900k plus. They were 250-400k in 2001. People are still building spec houses and flippers are still flipping. Watching paint dry would be more satisfying. The residue of this boom is pretty heavy.
Oh well... :-/
Don't worry folks, the pain is coming. Anyone who has looked at the ivy Zelman charts knows that the mortgages on the Westside fall into the camp of the second hump of resets/recasts, which are occurring now. Keep saving.
And those resets are doing what to rates? Oh yeah, they're resetting LOWER.
How are those re-setting homeowners going to get re-financed when their house is worth 25% less than it was 5 years ago, not to mention the home equity money they borrowed against the home and can't pay back?
Every forecast I've read says prices are heading lower as the shadow inventory of foreclosed homes finally hits the market.
Anyone else going to open houses today
can we shift to discussing specific houses
Anyone see the house at 16th and Ashland? 1.395?
I saw a 2+2.5+den at Village Park Way at 27th and Pearlin Santa Monica. Asking $779,000. Lots of traffic, but overpriced in my book. Owner paid $316,000 in 1998. Nice complex, green spaceatrium and good floorplan, but no windows in bathrooms :-(
"Anyone who has looked at the ivy Zelman charts knows that the mortgages on the Westside fall into the camp of the second hump of resets/recasts, which are occurring now."
Actually, Ivy zelman has backed off her old Credit Suisse chart-o-doom (says they pretty much all the resets/recasts defaulted early) and she is now calling bottom. I will see if I can find the link.
Who is Ivy Zelman? Never heard of her....
Latesummer - there is a good discussion going on now at SM distress monitor - you should point readers there - good perspective
low inventory and low rates are really heating things up. I have never seen such high numbers of people going through open houses...60-70 people with 2-3 hours.
I have a friend who wanted to put an full price offer in on a redone house in the 90405. Only to have the agent pooh-pooh it as it was expected to go for 50-75K over asking.
Its the ol' supply vs. demand economics at work in the marketplace.
A large 8,000 sqft lot, with three dilapidated rental "cottages," located on 18th just north of Pico across from the college drew a high bid of $760,000 at an auction on Sunday. Bidding started at $600,000,
Court confirmation still required and the final price may go higher if a new bidder appears. But, as a data point, land value comes to $95 per square ft for this SM 90404 income property.
Yes, most of the lower end houses in Santa Monica neighborhoods seem to be in escrow. Does that automatically mean those are good purchases? Not necessarily. There is alot of pent-up demand with little listed inventory, but this could be another head fake on the market. The economy has improved because of businesses restocking depleted inventories. Consumers are still hurting, good jobs continue to be lost, and the world is still filled with debt. Nothing fundamentally has changed since 2008. Unfortunately, a few weak hands in Santa Monica doesn't really mean much. I can't believe people are getting into bidding wars again. That's a great way to overpay on a property.
New York Times, 1/31/12:
"Of the 20 cities traced by the [Case Schiller] index, home prices fell in 19 in November; only Phoenix had higher prices from the month before. On an annual basis, only Detroit and Washington experienced price rises.
'Despite continued low interest rates and better real G.D.P. growth in the fourth quarter, home prices continue to fall,' David Blitzer, chairman of the index committee at Standard & Poor’s, said in a statement.
'The trend is down and there are few, if any, signs in the numbers that a turning point is close at hand.'
Since a peak in mid-2006, home prices tracked by the index have plunged by almost 33 percent.
Although economists believe the rate of declines in home prices may slow, they generally forecast further decreases this year. 'The enormous supply overhang of existing homes (particularly factoring in all those in foreclosure or soon to be) promises to keep pressure on prices for some time,' Joshua Shapiro, chief United States economist at MFR Inc., wrote in an analysis of the Case-Shiller data.
Ok, I have read this blog diligently for 4 years.
In that time, I have seen a softening of the Santa Monica market. 15% down from the peak (2006-7) on average for high quality properties. Yes, I know some properties have been discounted lower, but generally they have been 'incurable defect' homes.
I, like so many other buyers, am not interested in home on a busy street, below an airport runway, a complete teardown or next to the city dump.
Here is am 4 years later. No crash, no return to even 2004 prices, no giant wave of foreclosures/short sales, no real distress sales...and now I am hearing about low inventory, crowded open houses and multiple offers on houses in the first week.
Should I give up?
"Nothing fundamentally has changed since 2008."
Aside from prices being down 25% and rates being through the floor, you mean?
"Should I give up"
I am not sure what you mean by "give up"
If your job is in Santa Monica and you have children, you have three choices
1. Buy in Palos Verdes
2. Rent in Santa Monica
3. Switch jobs and move to Boulder or Portland
So the answer is, yes, give up on buying in Santa Monica. But don't see it as a negative. See it as a chance to find real estate happiness in another way.
1. If you rent in Santa Monica, you will pay less each month than you would by owning and you will have the flexibility to move whenever your life circumstances change. Mobility is important and renting gives you that
2. If you buy in Palos Verdes you get the benefit of house prices that are, apples to apples, all in half of what they are in Santa Monica. You also get a benefit that NO neighborhood in Santa Monica has - a spectacular high school
3. If you move to Portland or Boulder you get a chance to live in a community with the same values and same interesting people as Santa Monica for less than one quarter the price, on an apples to apples basis. (you may have to accept a lower paying job however)
I think that it is best to think through all the choices without any hyperbole or rancor. All three are legitimate responses to the fact that prices in Santa Monica aren't down as much as we all would like yet
Late summer - your brother blogger sm distress has a great series on short sale fraud
May i ask you to consider writing about this topic? There seem to be some deals happening far below market and I want to know how a non realtor can find the chance to get something that far under market
I guess you "can find the chance to get something that far under market" by working with realtors who are willing to share such deals before grabbing them for themselves.
Many of us know only what ultimately appears in the public records or what we hear from friends. But then again, I'm sure there are quiet deals out there all the time, like the ones obtained by those who actually knock on doors and get the old timers to take leave of their property for a relative song.
I haven't looked at this blog for a few years but I stumbled onto it again today and am pretty surprised to see what appears to be a very negative view on the housing market here.
Rather than debate intangibles and macro forecasts, I would challenge any of the very bearish readers to actually go out and try to buy a high quality, well located property (in SM, West LA, Culver City, Palisades, etc). You will quickly realize what I have been trying to put forth on my blog for some time now. There is very little quality inventory out there and there are a host of high earning, high net worth people looking to buy in these areas. From what I see, people don't seem to be buying or looking to buy based on appreciation anymore. The market is getting healthier as buyers this time around are buying because rents are increasing while property values have fallen and rates are very low. The rent vs buy decision used to be heavily favoring renting but now it isn't.
Also for those complaining about not being able to buy in SM, how about looking at neighboring areas? Culver City, West LA, etc are only getting better as more high earning, educated people are pushed away from the extremely high price of SM real estate.
And exactly what has buying a home switched to besides the rent vs buy equation, in your humble opinion?
Warchest,
please accept my genuine thanks for taking the time to post here.
I go to your blog to hear a bullish view and I go to this blog to hear a more fair and balanced view.
Warchest you write
" for those complaining about not being able to buy in SM, how about looking at neighboring areas? Culver City, West LA, etc are only getting bette"
Warchest, what you don't seem to realize is that the schools in those other neighbohoods you mention aren't as good as some of the schools in Santa Monica.
That is why.
Yes, of course sentiment has changed.
Back when you started blogging, just about every one of your readers knew that we were in a bubble and knew that house prices would fall.
No one knew how far they would fall. Huge numbers of the people reading your blog looked at their incomes and legitimately thought that after the bubble deflated they would be able to afford to buy in their chosen neighborhood
Well due to a combination of factors, most of your readers who thought that they might be able to afford the best neighborhoods have thrown in the towel
Many of your readers have seen their incomes fall faster than prices in the best neighborhoods
The dream is gone
And the combinaion of factors are?
Please tell us your take on what our dream is and why it is gone.
I think that our esteemed moderator, Latesummer, has covered it.
Incomes have fallen, and more importantly expectations of future income growth have diminished.
Many people feel less able to buy.
And many people with the high income needed to, for example, pay the mortgage North of Montana are now fearful that they might lose their jobs.
So our moderator is correct. Many people that planned to buy are now not planning to buy
WarChestSM - You obviously have a counter argument about the real estate market in Santa Monica. I have never doubted that there isn't a mini hot market right now for lower priced homes in Sunset Park and NOM. Both are very sought after neighborhoods and have corrected 25%. Some buyers believe that our economy is recovering and are calling the bottom. I am not. What we have is limited inventory because the banks are holding on to many higher priced homes which would have been foreclosed on in a market not being artificially juiced by the government. Also, I believe most of the folks who bought from 2003 on, are now underwater taking into consideration the total cost to sell in this market. If the market is so hot, why aren't banks releasing more properties?
I think your analysis is a bit skewed because you are looking at such a micromarket, when in fact the macro picture (Job loss, Europe, and U.S. Debt) will sink all boats. When have we ever had a real estate cycle that hasn't over corrected? Never. And we just experienced the biggest real estate bubble in history. Being an election year, the numbers seem a bit to rosy for me. The government can easily present numbers in a favorable light. Just take a look at the NAR for example. What you have, is giant head fake, as the basis of our economy is struggling to change from a FIRE economy to something else. If you can tell me what that something else is, I'm all ears. GOOD jobs are still being cut and replaced by low paying jobs. I guess that's the basis for our recovery according to the economists claiming the bottom of the housing market is in. That isn't much of a suprise when they are nothing more than cheerleaders for the banks, stockbrokers and insurance companies. I prefer to listen to others, such as Robert Shiller, Gary Shilling, and Barry Ritholz. They are not owned by anyone and can look at facts more objectively.
If the market is so hot and you have a big war chest, what are you buying presently? Frankly, I believe people are foolish if they get into a bidding war on a house today on the Westside. We have yet to see the end of declines as nothing in regards to the housing industry has changed. Our banks are still insolvent, There is no private mortgage industry, and zombie houses are losing more and more value each day. I'm sorry, but a handfull of houses doesn't tell the whole story. Who is going to consume all of the shadow inventory when it finally comes to market? And I'm talking the entire Westside, not just a few streets in Santa Monica.
Don't take it to heart Latesummer. I still go to Warchest's blog - but truth be told he spends a lot of time justifying how the sale of a $1.4 million house is 'reasonably priced'.
Its one reason I get so cross with the comments here focussing exclusively on NoM property : guys, there's already a blog dedicated to that area, and run by someone much more bullish about that micro-market than the host here.
And, if it makes you feel any better, Warchest rarely gets the number of comments you do here. It might be because most of the people who have an opinion on the area actually post here, and also I'm fairly sure there's an ever-shrinking demographic that thinks a modest bungalow on a modest lot is a 'steal' at over a million dollars, no matter what the cross-street is.
Calculated Risk is calling a housing bottom in March 2012 (nominal prices).
WarChest...the sentiment on this blog will never really change in part because of who it attracts. We used to (A) hard core bears and (b) a bunch of moderates who (once the price declines slowed to a crawl) left the blog and got on with life.
Now that the moderates are mostly gone, all we see now is the hard core bears who (no matter how severe the price declines get) will always think that greater declines are just around the corner. I know for a fact that at least one person here did not buy in 1993 (the bottom of the last RE bust) because they thought prices were still "way too high"!
If you stick around, you will get used to it though...
Discussions here and elsewhere rely on facts and feelings, but in-depth analysis like that provided by the oft-quoted and respected "Calculated Risk" site is rare.
CR says "The Housing Bottom is Here" and slated for March 2012. To help discussions here, readers may want to see the two recent housing bottom articles at:
http://www.calculatedriskblog.com/
How about this macro picture?
Economy seems to be getting a little bit better, albeit slowly. Jobs picture and manufacturing have picked up. Stock market is up. China hard landing looks far less likely. Europe is a wild card but it is priced in and financial institutions have been clearing their balance sheets from too much European exposure. BTW, banks have been cleaning up their balance sheets since 2008. At this point, they are holding onto their exposure to residential b/c they have deleveraged, sold a lot of other assets, and believe that real estate prices are recovering and it is a good bet to hold on. No forced sales.
I think a hard leg down like late 2008, especially given the surprise and speed of that downturn, seems a lot less likely. That crash, the scariest perhaps since the Great Depression, caused a real estate crash that resulted in real estate down 40% across the country and 20% on the Westside.
At this point, a lot of the worst markets (Miami, Phoenix, etc) are beginning to bounce off the bottoms.
Hi Latesummer,
If you go back to my comment you will see that I am not talking about a few blocks in SM. I challenged readers to go out and buy a quality property in a quality location in any of the westside markets.
You say that the macro picture will sink all boats. But if that is the case, why is the stock market at multi-year highs, why are initial jobless claims falling through the floor (and nonfarm payroll data showing healthy 200k+ gains)? Why are housing stocks and any stocks related to construction ramping so hard right now...I know, I know, it doesn't matter because you will say all the good jobs are gone or leaving. But that isn't true. There are a ton of high paying jobs in Los Angeles. I can't believe what a realtor I sound like but the fact is that it comes down to supply and demand sprinkled with a little consumer confidence. If you still have your high paying job (and many who want to live on the westside do), then you aren't getting laid off at this point. Your investments are up nicely from the bottom and all the economic data continues to show improvement. Look at retails sales (and the stocks of retailers), look at auto sales, etc. Consumers are feeling pretty decent. Housing is lagging but I feel like its turning here.
You want an unbiased macro, housing based forecast? Check Calculated Risk today. The bottom is in for new home sales, starts, etc (all of which will be making positive contributions to GDP going forward). He is guessing March 2012 as an approximate bottom to national prices.
http://www.calculatedriskblog.com/2012/02/housing-bottom-is-here.html
How about the rent vs buy equation? I saw stuff on here where people were talking about it being twice as expensive to own. That is nonsense. People are buying because the costs are about even. In a lot of cases I've looked at it may even be a bit cheaper to own...and then you get the embedded call option on the asset for free.
I'm not saying I think prices are going up or that this is some raging bull market. But to sit here and be so negative is a mistake in my opinion. If you find a great place that you can afford, you should buy it (and good luck outbidding the other 3 people putting offers in within the first week). The heavens aren't going to open up and present you with high quality "cheap" westside properties.
10,000 baby boomers are retiring every day.
College graduates are entering the work force with an average $25,000 in debt.
23% of all homeowners in the U.S. are underwater with their mortgage.
The country is $15 trillion in debt.
California is in the process of plugging a $23 billion hole.
It is hard to qualify for a mortgage.
After the election next fall, when the country comes to terms with the deficit and debt, there is talk about lowering the amount of mortgage interest that is tax-deductible, or changing it to a tax credit instead of deduction, or eliminating the deduction on 2nd homes, or lowering ceiling on mortgages for the interest deduction. One or more of these things is likely, since all of them are an enormous gift to high-income people (the more money you make, the more expensive your house, the bigger mortgage you have, the higher your mortgage interest deduction, the bigger the benefit).
It's good news that more jobs were created last month.
A lot of real estate professionals on this site say house prices are firm and attractive.
Every report I've read in the last two weeks projects lower home prices in 2012.
I was just reading a blog on Santa Monica where bungalows were selling at over $1,000 per square foot. The blogger referred to them as "starter" homes. Insanity is aka Santa Monica.
The loans may be resetting to lower rates, but the fact remains they will start having to amortize the principal, which ought to push a lot over the edge. I stand by the logic that people way overbought.
6,000,000 homes in some stage of foreclosure -- that's the shadow inventory that will be hitting the market in the next year or two that people are talking about.
"The loans may be resetting to lower rates, but the fact remains they will start having to amortize the principal, which ought to push a lot over the edge. I stand by the logic that people way overbought."
Are you saying there was a bubble!? No way!
The question is, where is all the inventory on the westside. It's just not there, and there is very little being hidden on bank balance sheets. Sorry.
February 6, 2012 3:55 PM says: "How about the rent vs buy equation? I saw stuff on here where people were talking about it being twice as expensive to own. That is nonsense. People are buying because the costs are about even."
This is simply FALSE for higher end SFH properties. Please run an example on the NYT buy vs. rent calculator and give us some examples. With a 30-year loan (not a crazy adjustable with points), rent is about 55-70% of "ownership" cost (including property taxes for example) for Westside SFH markets that have properties at $2mm and up. If cost or renting were even or even 85%, I would have bought already. Take a look at Little Holmby or Beverly Hills flats, or even Baja Beverly Hills (south of Wilshire) some time.
It is good to see a well balanced and lively debate here.
It seems to me that the bank owned properties are being absorbed as they come to market North of Montana.
The banks probably made the right decision not selling them all in 2009. By waiting, the banks are now able to sell at a better price than what they could have gotten in 2009
I know someone who put a low ball bid in on the bank owned house on 22nd and so far the bank is holding out for full price
"Please run an example on the NYT buy vs. rent calculator and give us some examples. With a 30-year loan (not a crazy adjustable with points), rent is about 55-70% of "ownership" cost (including property taxes for example) for Westside SFH markets that have properties at $2mm and up."
Don't be a hypocrite, cite at least one example yourself.
For 9:23pm,
There is a lot of pent up demand for housing based on delayed household formation, echo boomers, and new immigrants.
About one-third of homeowners own free and clear with no mortgage.
For a lot of the higher income buyers who pay taxes under AMT the mortgage interest deduction doesn't even matter much at all.
I'm not saying home prices are zooming up. I'm just agreeing with WarChest SM that permabears who think the market is going to fall 25% is completely missing the picture.
Sir WarchestSM what happened to you? And, who are you? I didn't see much of a bio on your website.
Since rent vs buy is so important to many of us I urge others on this blog to run the calculation on some houses.
From my own experience, the rent vs buy calculator usually pushes you to rent the really high end properties, but rental parity is closer on the low end properties
For example, a five bedroom 30 year old house South of Montana in the Franklin School district rents for a high % of the cost to purchase
A five bedroom that is only three years old that is North of Montana rents for a much lower $ of the cost to purchase
That same house
I am not a bear or bull, but observation tells me that the open houses for decent homes in Santa Monica is getting a lot of traffic....houses that wouldn't even pass the sniff test a year ago are seeing renewed interest...
Something must be in the air...?
The question is, where is all the inventory on the westside. It's just not there, and there is very little being hidden on bank balance sheets. Sorry.
It's calles shadow inventory for a reason. You have no idea how much the banks are holding!
"It's calles shadow inventory for a reason. You have no idea how much the banks are holding!"
Rubbish. The foreclosure process is made very public, if there were dozens of SFRs in Santa Monica that had gone through the foreclosure process and not been resold, people would know. And before you quote some ridiculous number from foreclosure.com, keep in mind they're baiting you to sign up for their service.
Latesummer, your brother blogger just posted the following:
Santa Monica (and north SM in particular) isn't a sleepy little beach town where anyone and everyone is entitled to own a house in this type of location. Santa Monica is one of the most expensive real estate markets in the nation. Throw out your notions of "insane" and realize that there is a tremendous amount of wealth and income in this area.
Latesummer, I respectfully think that he is missing the point. The point is not the wealth already in North Santa Monica but instead the wealth held by people that don't live in North Santa Monica that want to move there.
That's why incomes in a specific market don't have to match the house prices in that neighborhood.
There are plenty of neighborhoods in middle america where incomes are $75k and houses cost $150k In those neighborhoods everyone accepts that houses cost two times income.
In a mirror image, other neighborhoods have sustainably high ratios of income to house prices
Anyone else do the rent vs buy calculator on houses North of Montana vs South of Montana? How big a difference ?
Get ready for forthcoming Santa Monica Sunset Park 90405 auctions:
1021 Grant
1027 Ashland
1737 Wellesley
2418 Hill
3224 Pearl
On a recent drive-by, all the properties looked forlorn, but the Wellesley was nicely situated on a hill with views.
Rubbish. The foreclosure process is made very public.
I think the robo signing fiasco is a good indication of how transparent the whole foreclosure process is. Banks are not foreclosing for obvious reasons, thus the 300+ days to foreclose on average. Shadow inventory are those that are not transparent and hidden from public view, thus the name, and for good reason. The banking sector would implode if mark-to-market was reinstated and the shadow inventory was dumped on the market. The power that be is trying it's hardest to prevent this from happening. That's like saying that a patient on life support is health. They maybe alive but far from healthy.
Either way people see what they want to see, so believe what you will.
"The banking sector would implode if mark-to-market was reinstated"
Yes, IF. It won't be for a long time. You all are fighting the Fed, good luck.
People can argue all they want about what they think is happening or going to happen. The Fed has done a great job over the last 5 years with smoke and mirrors. Unfortunately, they don't have a solution to solve the housing crisis. What's worse is, nothing has been done to resolve the moral hazard issue with the large financial institutions. That is the real crux of the issue. Were just kicking the can down the road, hoping it doesn't all blow up tomorrow. When it does, it will dwarf what happened in 2008, because we are so much deeper in debt. Keep a close eye on Portugal, Italy, Greece and Spain (PIGS). If any of those go under, it will set off a domino effect that would send the global empire into a tailspin.
And, for those that don't believe there is much shadow inventory on the Westside, just look back at all the sales activity from 2003 to 2007. Anyone who financed their purchase then, is sucking wind right about now. After 3 months of non-payment, they are considered shadow inventory in my book. Since banks are at a crawl when it comes to foreclosures (no mark to market),more and more home(debtors)owners will ultimately strategically default.
I guess that was a driveby visit from WarChestSM and Santa Monica Distress Monitor. Perhaps he feels better talking to himself or the the 4 people on his blog. Regardless, I think his advice to go out and try buying a property on The Westside right now is ill-advised. Even if it is the bottom in "March of 2012", it normally drags along for 2-3 years on average. Why on earth would you be buying today, with Europe on the brink of default and the U.S. Presidential Election 9 months away?
I guess time will tell how good his current advice is.
Good advice, LateSummer2009. Why on earth would anyone be buying today, with so much uncertainty swirling around?
Watch what the government does with the mortgage interest tax deduction after the election. It will have to change, and it will only hurt high-priced markets.
"I think the robo signing fiasco is a good indication of how transparent the whole foreclosure process is. Banks are not foreclosing for obvious reasons, thus the 300+ days to foreclose on average."
You don't understand the foreclosure process. And "shadow inventory" means houses that should be on the MLS but are not. It does not mean properties that haven't shown up in any way via notice of default, auction schedules, etc. Once again I would challenge any of you to point out all of the houses that are at some stage of the foreclosure process in SM. The list is short, and if you dumped it all onto the market at once, we'd have 3 months supply instead of 1.5.
Gotta love socialists:
The biggest U.S. banks will provide about $25 billion in relief to distressed homeowners, as state and federal officials hold lenders responsible for taking illegal shortcuts during foreclosures and for other deceptive practices.
The settlement announced on Thursday seals more than a year of negotiations after evidence emerged late in 2010 that banks robosigned thousands of foreclosure documents without properly reviewing paperwork.
The Obama administration hopes the settlement will open a new avenue for housing relief because it will force the banks to write down mortgages at a time when roughly one in four borrowers owe more on their mortgage than their home is worth.
"Now that the moderates are mostly gone, all we see now is the hard core bears who (no matter how severe the price declines get) will always think that greater declines are just around the corner."
True, but that doesnt mean this site is useless. If nothing else it is a good sentiment tracker for contrarian types.
Case in point, early 2009 when the "green shoots" first apeared in the stock market, I would come here, and drop a choice bullish flame bait along the lines of (i.e. "earnings are headed up" or "wow, the govt can pump this bull market for years")
Then, I would sit back and watch all the hysterical bears here attack my comment with great rage and furious anger, all about how I was going to "lose my shirt" or other such nonsense. So long as there were so many who were so fearful about the stock market, I felt reasonably certain it had a good ways to go to the upside.
Granted their failure to miss the bull market in stocks, doesnt say anything necessarily about housing...partly because its so much slower to react. Still, if you could somehow tap into and read that bear sentiment that still exists here today, (and bet against it), you could probably do well in the housing market too.
Yes, IF. It won't be for a long time. You all are fighting the Fed, good luck.
True...however, home prices will also take that long to recover.
For those interested in shadow inventory, here is an interesting chart:
http://goldsilver.com/news/the-biggest-obstacle-record-shadow-housing-inventory-and-how-obama-may-have-just-popped-the-consumer-spending-bubble/
We are at at an all-time record and it keeps getting worse. It is called shadow for a reason. It is hidden.
"For those interested in shadow inventory, here is an interesting chart:"
The 90+ days delinquent, foreclosed, and REOs are all discoverable, they are not hidden.
This blog is not about Riverside, or Phoenix, or Las Vegas. Show us some data for the westside.
So Calculated Risk has called the bottom of the housing market. You might want to take look at some real analysis here:
http://www.businessinsider.com/calculated-risk-is-wrong-there-is-no-housing-bottom-in-sight-2012-2?source=patrick.net
Calculated Risk's analysis of the resale market is vague and unsupported. Sorry.
Calculated Risk's analysis of the resale market is vague and unsupported. Sorry.
CR correctly called the bubble, correctly called the bottom (in sales transactions, noting the price bottom was years away) and correctly called the bull market. 3-3 thus far. Could he be wrong now? Sure. However, he is the one person I have seen who has the capacity for bearishness AND bullishness, and has the best track record thusfar.
Oh, and the guy who said CR is wrong (Keith Jurow), he predicted the NYC market was going to drop 50% from 2010 until 2012. Given what a miserable and spectacular failure that prediction was, I will take the word of CR over this bufoon.
The future will always be uncertain. I think it is a pretty compelling time to buy a quality property but others disagree. We'll just have to sell how it goes.
This will be my last post here. As for my blog and the lack of comments, I think things died down when I stopped allowing anonymous comments (most comments here are anonymous). I also slowed my posting down a while back. I've been posting more lately. Reading this blog is helping fire me up. I started my blog to document the downfall of SM real estate. I was dead right. The fall happened and now I'm thinking we are going to see more signs of a turn. So feel free to come debate me on the oh so bullish distress monitor. I'll check back here in a year and see how things stand.
WarchestSM - I am sad to see you go. But, I have to call BS, especially after your last Santa Monica Distress Monitor posting "Watch this fly off the shelf". Your writing reeks of real estate agent and especially now, that in your honest opinion you believe the market has turned.
Here are just a few other reasons why you are probably a realtor just trolling for business.
1) No biography on your blog. Why not tell us who you are and where all this Santa Monica real estate information is coming from?
2) Instead of your biography, you have an email address where people can contact you confidentially. Why would they need to do that if you already have a blog where they can ask you questions?
3) MLS photos are a dead giveaway that you are an agent. Who else might have MLS photos, besides a real estate agent.
4) There are no ads on your website. Most bloggers have some type of ads that compensate them minimally for the work they do. And believe me, when I say minimal it is minimal.
5)You have recently changed your opening message about how the market has changed for buyers now, attempting to insight bidding on properties, especially NOM. Your probably getting ready to change the name of your blog from "Distress" to something else, trying to work the buyer side of the equation, instead of the seller side.
6) WarChestSM is an interesting choice for your name. I suspect you are trolling the internet looking for some heavy hitters that have cash in Santa Monica, West LA and Culver City, as you challenge people to "try and go out and buy quality properties"
7)You claim you were "dead right" in documenting the declines in Santa Monica when your blog started. That was an easy call in 2007 - 2008 when the feeding frenzy was obviously over. Did your own personal business tank then? Why don't you document some "dead right" calls now about appreciation in Santa Monica, West LA and Culver City. By the way you forgot to mention Brentwood, Malibu, Venice, Marina del Rey, Mar Vista, Beverly Hills and The Palisades. I guess quality properties are easier to find in those locations. My guess is you work the Santa Monica, West LA and Culver City areas and are starving like most real estate agents these days.
8) As for your "anonymous posters comment", you are partially correct. I did get more comments once you eliminated anonymous posters. My guess is you are only interested in people you can snare. The 4 people you talk to are only bullish and probably real estate agents as well. I encourage anyone and everyone to write, as long as their writing is civil.
I could go on and on, but don't have much time. I'm a public high school science teacher and have very little extra time. Why don't you tell your readers who you really are? I suspect you won't. "CAVEAT EMPTOR" which means "buyer beware". In this case, it could be for a wolf in sheeps clothing.
Yes, time will tell. Let's see what happens in a year, to the value of the house you claim "will be flying off the shelf".
Latesummer, thanks for providing a forum here for all points of view.
Let's have the data posted so that we can decide for ourselves
Latesummer since you are a high school science teacher you probably have a good sense for the educational experience that kids get at each of the best high schools.
I myself am giving a lot of thought to the quality of experience that my daughters will get at different high schools
Choices are high schools in Calabasas, the Palisades, Manhattan Beach and Palos Verdes
real estate is about buying in a convenient location but also about buying where the schools are best
High School observations from a parent in the SMMUSD school district:
Samohi is generally seen as better academically than Palisades High...Manhattan Beach and PV are very good, predominantly white and asian, little diversity which actually leads to a more focused school environment as there are no ESL, or black vs. brown gang issues (see Samohi) to deal with. Highly motivated parents helps too.
Malibu and Calabasas...no clue. Too far away from me.
Santa Monica parent, thank you for your honest and blunt view.
I have heard that the Manhattan Beach students are much much more focused on athletics and the beach lifestyle than they are on academics and that relatively speaking, students take their studies more seriously in Palos Verdes
Any sense for the difference between the motivation level of students in MB vs PV
LateSummer, thanks for the heads-up on some of the people posting on this sight. I don't have any trouble with anonymous posters -- I understand it's a public forum, who wants to be identified with the crazies? -- but I don't like it when there are real estate professionals trying to gin up the market or get business but won't identify themselves as professionals. I wish they'd knock it off.
WarHorse, or should I say WarChestSM has just decided to post anonymous comments again. What a coincidence....I guess he's lonely talking to the 2 other people on his blog. I wonder how long it will take him to eliminate anonymous posters again.
i have decided to eliminate his link from my blog, as I can no longer will support him.
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