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Old 04-16-2012, 01:51 PM
 
4,515 posts, read 10,098,487 times
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There's a simple solution:

Never buy things(houses included) due to self created desperation.
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Old 04-16-2012, 05:20 PM
 
Location: Denver, Colorado U.S.A.
14,165 posts, read 26,084,795 times
Reputation: 10428
Quote:
Originally Posted by k374 View Post
to illustrate this situation: I searched for upto $350k, 1500+sqft, 3 bed, townhome in Orange, CA
and it yielded exactly 12 available properties...out of those 12, 2 were short sales and 10 had pending offers in the $290-350k range so were not available to be shown. What that meant was exactly 0 properties for sale that was not a short sale or in pending.

I feel there is some kind of ridiculous buying mania right now...perhaps investors. This may be another bubble in the making who knows.

What is even more amazing, MLS listings for $500,000 houses with only 1 or 2 bad pictures of the house... seriously? they are trying to sell a half a million dollar asset with 2 pictures like they are some piece of $100 used electronics on craigslist?
I remember back in '99 when we bought our condo in Orange, it took us about 8 months and bidding on 12 or so condos to get one. But most of them weren't staged for selling at all. Beat up, tore up, messy... it was so frustrating.
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Old 04-16-2012, 05:20 PM
 
Location: Newport Coast, California
471 posts, read 569,991 times
Reputation: 1141
Where do people think house prices are going to go? Up? Not likely. People don't buy a house price, they buy a monthly payment.

Interest rates are at an all time low with nowhere to go but up. Even a 1% increase in interest rates, which would still be extraordinarily low by historical standards would cause the monthly payment to jump by over 10-20%.

With incomes flat to declining and not showing much likelihood of increasing substantially, it doesn't bode well for meaningful appreciation in the future. Not to mention all the baby boomers who will be liquidating assets to pay for retirements and long term medical care over the next 20 years.

As the previous poster put, I see this mad rush as another "self created desperation" with shades of "buy now or be priced out forever" Realtorspeak induced panic.

Honestly, ask yourself, other than "investors" buying up property, what reasons are there for meaningful appreciation?
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Old 04-16-2012, 06:35 PM
 
Location: Sputnik Planitia
7,601 posts, read 10,890,971 times
Reputation: 8710
GoldenZephyr, I am in agreement with what you are saying, it should be that prices go lower, much lower... sh!tholes in Garden Grove (aka Garbage grove aka the hood) are still listed at $300-350k for a 3bd. I have checked the historical prices of these homes and they were only $75,000-100,000 10-15yrs ago...now they want 300% of what it was in 1995. I didn't know prices in the HOOD appreciate that fast [sarcasm].

While your argument is sound it is not reflected in what is happening in the market, all the houses are being bid on over asking and prices don't seem to be coming down...

House looks like it was a meth lab or former ***** house:
http://www.trulia.com/homes/Californ...Grove-CA-92843

what about this house? looks like it was built from leftover scrap metal... for $300k+?? serious?
http://www.jeunitedrealty.com/listin...-grove-s598514
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Old 04-16-2012, 07:25 PM
 
3,787 posts, read 4,151,110 times
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Quote:
Originally Posted by k374 View Post
GoldenZephyr, I am in agreement with what you are saying, it should be that prices go lower, much lower... sh!tholes in Garden Grove (aka Garbage grove aka the hood) are still listed at $300-350k for a 3bd. I have checked the historical prices of these homes and they were only $75,000-100,000 10-15yrs ago...now they want 300% of what it was in 1995. I didn't know prices in the HOOD appreciate that fast [sarcasm].

While your argument is sound it is not reflected in what is happening in the market, all the houses are being bid on over asking and prices don't seem to be coming down...

House looks like it was a meth lab or former ***** house:
13345 Ramona Drive, Garden Grove CA - Trulia

what about this house? looks like it was built from leftover scrap metal... for $300k+?? serious?
13312 Dapplegrey Rd, Garden Grove, CA, 92843 | MLS# S598514
It is pretty astonishing isn't it?
The investors are definately out in force.
Some of the foreclosures are in really bad shape so they scoop them up for cash, spend 20-30K give or take and relist them a few months later 100K more than they paid for it. Some of them are dreaming as the comps wont support their asking price.
What gets me are the ones that get a distressed sale that doesn't need much or any work. For instance, hubby and I seriously considered making an offer on a place that was in great shape with upgrades etc. It was a short sale listed at 299K, but (this is only from what we could understand what our agent tried explaining to us) it turned out that the bank refused because the sellers made too much money to justify the short sale, so the sellers let the property go to foreclosure. An investment group came in and swooped it up for something like 245K, and few months later listed it at 324K and it sold for 315K. And they didn't have to put any money into the place except a little clean up! Grrrrr!!!

22916 AVENIDA VALVERDE #7, Laguna Hills, CA 92653 | MLS# S686275

I was also told by another agent when we took a look at an open house, that investors want to sell the flip at soon as possible because they'd rather make 20K profit a week rather than 50K profit a month.

As the old saying goes... "it takes money to make money!"
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Old 04-16-2012, 07:44 PM
 
Location: Newport Coast, California
471 posts, read 569,991 times
Reputation: 1141
Yes prices are sliding upward on low end properties as investors paying cash, usually get a good deal, and they are desperate for yield on their money. Instead of getting the .5%, they can get 4-6% on their money though rents or such. However, this is predominately at the low end of the market. Higher priced properties are still sliding lower (because there is little flip/resell upside).

Mind you, this is all short term not to mention most REO's have been held back but will be working their way through the market over the next two years.

Again, there is no real logic for price appreciation at this point and anything you see is mostly slight of hand. Don't catch a falling knife, even if the market is slow. If you are searching rental yield, there are far FAR better places to do it than Southern California. Many parts of the country you can buy a home and get 9% rental yield or more. In SoCal, you'd be lucky to earn 5%.

This is the history of bubbles, the pop, have a bit of a bounce and then slide downward again, albeit much slower. This time will be no different because there are no fundamentals to support real price appreciation other than speculation.
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Old 04-16-2012, 08:27 PM
 
11,715 posts, read 39,014,525 times
Reputation: 7578
Quote:
Originally Posted by k374 View Post
GoldenZephyr, I am in agreement with what you are saying, it should be that prices go lower, much lower... sh!tholes in Garden Grove (aka Garbage grove aka the hood) are still listed at $300-350k for a 3bd. I have checked the historical prices of these homes and they were only $75,000-100,000 10-15yrs ago...now they want 300% of what it was in 1995. I didn't know prices in the HOOD appreciate that fast [sarcasm].

While your argument is sound it is not reflected in what is happening in the market, all the houses are being bid on over asking and prices don't seem to be coming down...

House looks like it was a meth lab or former ***** house:
13345 Ramona Drive, Garden Grove CA - Trulia

what about this house? looks like it was built from leftover scrap metal... for $300k+?? serious?
13312 Dapplegrey Rd, Garden Grove, CA, 92843 | MLS# S598514
And even if you can stomach the actual house, there's the prospect of having to send your kids to the local schools.
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Old 04-17-2012, 01:28 PM
 
Location: Sputnik Planitia
7,601 posts, read 10,890,971 times
Reputation: 8710
Quote:
Originally Posted by EscapeCalifornia View Post
And even if you can stomach the actual house, there's the prospect of having to send your kids to the local schools.
exactly! it is astonishing...

Garden Grove is definitely what I would consider a neighborhood for low income families. $300,000 at a 3.5X multiplier on income and 20% down would require $86,000/yr family income and $60,000 + closing costs down which is not only stupid but downright ASININE to expect in a place like Garden Grove. Even if you ask for a conservative 10% down...how many low income families with kids have $30,000-40,000 to blow away? Many of these people are living paycheck to paycheck!!! It just makes no sense whatsoever.

These homes should be $100,000 tops!
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Old 04-17-2012, 02:55 PM
 
Location: Newport Coast, California
471 posts, read 569,991 times
Reputation: 1141
Quote:
Originally Posted by k374 View Post
exactly! it is astonishing...

Garden Grove is definitely what I would consider a neighborhood for low income families. $300,000 at a 3.5X multiplier on income and 20% down would require $86,000/yr family income and $60,000 + closing costs down which is not only stupid but downright ASININE to expect in a place like Garden Grove. Even if you ask for a conservative 10% down...how many low income families with kids have $30,000-40,000 to blow away? Many of these people are living paycheck to paycheck!!! It just makes no sense whatsoever.

These homes should be $100,000 tops!
And they will be again or relatively close to it, accounting for the sunshine tax and inflation.

People have bought into the notion that real estate always goes up based on the predication of increasing incomes and population. A simple observation of our demographic future does not support either, or at least in ways that we understood them to be in the past.

20 years from now a whole new generation of people will have grown up with many of the tired axioms of the past shattered and will view the world differently. Until then, you'll have house sales people spouting the same rhetoric and slogans like "buy now or be priced out forever" "there's never been a better time to buy or sell a home (and make a commission of course), "Real estate always goes up", "this is the most desirable place on earth", etc, etc, etc.

Don't buy into the propaganda, keep yourself free and as liquid as possible. The world 20 years from now will look very different from today.
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Old 04-18-2012, 03:44 PM
 
82 posts, read 157,709 times
Reputation: 47
I don't believe that a home in GG will go back down to 100k. You'll be waiting a very long time for something that will most likely never materialize. There will be another bubble but probably not as big as this one. Sadly, history always repeats itself.
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