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Old 09-10-2014, 11:52 AM
 
Location: Sputnik Planitia
7,822 posts, read 11,711,108 times
Reputation: 9044

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Quote:
Originally Posted by Electrician4you View Post
On that note I'm really not seeing the furious bidding wars that were so prevalent in the first part of 2013.
We'll see.. my friend just listed his home for $30k more than what he paid for it in 2005 at the peak of the last bubble. The ZEstimate is $20k above his list price.

I read in the press all the time that homes have gone up BUT they are still way under what they were in the bubble. I am wondering which market these people are looking at and what data they are following because it is totally wrong. List prices now are AT or ABOVE the peak of the last bubble, at least that is the case here in Orange County.

What I fail to understand is that IF the prior bubble peak represented the biggest bubble in the history of the United States and the result of indiscriminate subprime lending etc. how is that same price level now considered normal? To me this defies logic but most people do not seem to thinking anything is amiss. Am I missing something here?
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Old 09-10-2014, 04:09 PM
 
117 posts, read 236,583 times
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Quote:
Originally Posted by k374 View Post
how is that same price level now considered normal? To me this defies logic but most people do not seem to thinking anything is amiss. Am I missing something here?
It's inflation caused by the two rounds of bailout and stimulation we had after 2007 and several rounds of quantitative easing by the fed issuing bonds. The money influx goes to prop up the stock market and real estate market. Still, I don't think we are at the level back in 2007, the house we bought last month for 800k was valued at 1.2 million in 2007. The condo we sold in July for 480k was valued at 625k back in 2007.

All these plus the fact that the south orange county is one of the most desirable areas to raise a family and Irvine a focus of investment by the Chinese cash buyers help increase the real estate gains we've had the past two years.

A house buyer is not getting as good a bargain nowadays but I don't think the real estate market is going to crash either. Renting is still more costly compared to the cost of mortgage when buying with 20% down. The price is just about right.
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Old 09-10-2014, 06:21 PM
 
3,439 posts, read 3,256,085 times
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we are currently house hunting and notice that houses bought in 2012/2013 and listed in 2014 with a mark up of 100k and above have no takers?
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Old 09-10-2014, 08:34 PM
 
Location: Riverside Ca
22,146 posts, read 33,204,372 times
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Quote:
Originally Posted by k374 View Post
We'll see.. my friend just listed his home for $30k more than what he paid for it in 2005 at the peak of the last bubble. The ZEstimate is $20k above his list price.

I read in the press all the time that homes have gone up BUT they are still way under what they were in the bubble. I am wondering which market these people are looking at and what data they are following because it is totally wrong. List prices now are AT or ABOVE the peak of the last bubble, at least that is the case here in Orange County.

What I fail to understand is that IF the prior bubble peak represented the biggest bubble in the history of the United States and the result of indiscriminate subprime lending etc. how is that same price level now considered normal? To me this defies logic but most people do not seem to thinking anything is amiss. Am I missing something here?

Do you understand how the housing market went into the bubble and how it popped and and how the current market is manipulated by certain factors? Look up
Banks changing foreclosure procedures
Quantative Easing
How suppressing a loan rate allows a borrower to borrow more money.
Hedge funds, domestic and foreign investors


There are a lot of houses with in the stratosphere asking prices. Look up sold prices vs asking price.

Last edited by Electrician4you; 09-10-2014 at 08:57 PM..
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Old 09-11-2014, 01:15 AM
 
Location: Sputnik Planitia
7,822 posts, read 11,711,108 times
Reputation: 9044
Per the government inflation is under 2% a year, how can that cause a 30-40% escalation in prices within 2 years? Besides income growth which is what drives organic affordability is negative for the entire decade. That cannot sustain current price levels long term.

Quote:
Originally Posted by jamsifoes View Post
Still, I don't think we are at the level back in 2007, the house we bought last month for 800k was valued at 1.2 million in 2007..
A friend of mine who bought her home in Orange for $450k (move in ready standard sale) in 2012, that home was recently appraised at $725k... a whopping 61% increase. During the peak it had reached $760k. So, while there may be variations in neighborhoods, we're definitely within the last peak in many areas.
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Old 09-11-2014, 07:30 AM
 
Location: Riverside Ca
22,146 posts, read 33,204,372 times
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Quote:
Originally Posted by k374 View Post
Per the government inflation is under 2% a year, how can that cause a 30-40% escalation in prices within 2 years? Besides income growth which is what drives organic affordability is negative for the entire decade. That cannot sustain current price levels long term.



A friend of mine who bought her home in Orange for $450k (move in ready standard sale) in 2012, that home was recently appraised at $725k... a whopping 61% increase. During the peak it had reached $760k. So, while there may be variations in neighborhoods, we're definitely within the last peak in many areas.
Oh I agree we are most certainly near at or past peak bubble prices in some areas. But the problem is that those high priced houses aren't moving. There are no buyers for them. Sellers are overshooting and think this is still the 2013 market. And a lot of those people back then were bidding up prices yo get in before the lifetime FHA PMI came in effect.

Thats a crazy jump in "value" but it's "normal" in such manipulated market. That's the problem. Prices have been so pumped up that your typical buyer can't do it. Investors for the most part are out cause there is no meat on the bone. Cash buyers are pulling back and hedge funds aren't buying. FED is tapering and houses are sitting there with high asking prices and no takers. There is no way in hell I would sign up for a 3-4000 conventional(4-5k of I was doing a FHA) house payment.
Any house I was looking at that fits my needs wants desires is in the 650-750k range. And that's not remodeled. For a 3/2 ranch built in the 50/60s and maybe got remodeled once in the 80s. Yeah no thanks.

There isn't any organic increase in values. As soon as QE started it was like a junkie doing a speedball. Remember may 13? The interest rate jumped almost 100 percentage points. And the market **** itself.
Right now there is no first time buyer market and there sure as hell isn't a move up market. I don't know anyone whose buying a house to move up. I was looking and walked away from this market. This is even less sustainable than the last bubble. But I forgot. I keep hearing this time its different.
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Old 09-11-2014, 07:37 AM
 
Location: Southern California
4,453 posts, read 6,761,893 times
Reputation: 2233
Quote:
Originally Posted by k374 View Post
Per the government inflation is under 2% a year, how can that cause a 30-40% escalation in prices within 2 years? Besides income growth which is what drives organic affordability is negative for the entire decade. That cannot sustain current price levels long term.
Previously people had to pay capital gains on short sales. People were given a free pass. People didn't care how much they lost since it didn't matter if they short sold for 100k or 200k since down payments of cash were not required, people had no skin in the game. Many homes weren't sold for top dollar in the open market. Appraisal values dropped. If you wanted to sell, your appraised value for a buyer's loan would be close to the short sale price.

There was a psychological fear of buying in a declining market. People don't want to buy, take a 5% loan, on a property that is declining 5% per year. A 500,000 home would cost you $50,000 in interest and loss of value.

Banks use to have to get rid of their inventory to stay in business and would dump their holdings ASAP. That is no longer the case.

If you are waiting 3-7 years and you haven't put your money in a place to hedge against inflation. If prices are too high now, you won't be able to buy in the next 5 years in a desirable market. 3.5% interest rates are common. If people speculate that home values increase over 4% It becomes a no braining to buy for a speculator.
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Old 09-12-2014, 03:02 PM
 
Location: So Ca
26,577 posts, read 26,445,339 times
Reputation: 24520
Quote:
Originally Posted by payutenyodagimas View Post
we are currently house hunting and notice that houses bought in 2012/2013 and listed in 2014 with a mark up of 100k and above have no takers?
Housing price cuts point to a shift in Southland market - LA Times
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Old 09-13-2014, 01:07 AM
 
Location: Orange County, CA
65 posts, read 104,663 times
Reputation: 88
Quote:
Originally Posted by payutenyodagimas View Post
we are currently house hunting and notice that houses bought in 2012/2013 and listed in 2014 with a mark up of 100k and above have no takers?
that's because buyers are not idiots. The purchase history is out there on the internet for all to see. Maybe in the past flippers could have done this and gotten away with it, but not anymore. Why would anybody in their right mind pay an extra 100K (or more like 200-300K markup in the neighborhoods where I'm looking) to these shameless buy and hold flippers who in some cases have done absolutely nothing to improve a property?
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Old 09-13-2014, 04:36 PM
 
Location: Riverside Ca
22,146 posts, read 33,204,372 times
Reputation: 35433
Quote:
Originally Posted by glowinthedark View Post
that's because buyers are not idiots. The purchase history is out there on the internet for all to see. Maybe in the past flippers could have done this and gotten away with it, but not anymore. Why would anybody in their right mind pay an extra 100K (or more like 200-300K markup in the neighborhoods where I'm looking) to these shameless buy and hold flippers who in some cases have done absolutely nothing to improve a property?


Not only that, but you now have sellers who have never remodeled it upgraded in 20-30 years yet expect to command the same price as what a brand new construction commands.
Sellers and agents need to realize that a lot of buyers are getting smart and no longer buying like lemmings. The old sakes technique of buy now or forever be kept out is no longer working.
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