Effect of rising interest rates on California housing prices (Anaheim: hotel, houses)

[lostsoul359]

Originally Posted by expatCA

The banks have a hand in this as well. Foreclosures are not brought on the market in the volume they exist at. The banks hold houses off the market to drive prices up. An employee was foreclosed 5 years ago, still lives in the house and pays nothing. The bank does not object as he keeps the house and yard in good shape. They will make more now than if they pushed him out when foreclosed.

I have always thought that this was the real deal that has suppressed the housing market inventory across the State of most of California, depending on the location. I imagine that the banks decide which locations to dump the homes BOMK first, and which ones to short sale and which ones to auction etc... at least IMHO.
I have only bought 3 homes in my lifetime, and I sold one to move up then, used proceeds after the down for the move up home and got foreclosed on that last spec home. What was odd is that unfortunately My Mom got Dementia and had to foreclose on her home, due to her Dementia, she needed more care at a facility. My Spec home and her town home both with different lenders and both in different states were like night and day regarding the foreclosure process. I got foreclosed on, but no foreclosure marked my credit report. They kept reporting it for 7 years that is was current but the loan balance never dropped and it was a 30 year fixed. So am pretty sure that robo signing Countrywide Scandal got me off of that Credit Score Hook. Remember the loan modifications?
My Mom had cashed out 80K during her last Stated Income refinance (she did those a lot)
She ended up owing the bank (Citibank ) 10 grand or the IRS maybe because the Citibank 1099ed her

I miss her so much

[lostsoul359]

Originally Posted by Frihed89

A house is an asset. As interest rates rise, asset values fall.

A house is a roof over my head and a shelter from the world.

There's no place like home

[expatCA]

Originally Posted by lostsoul359

A house is a roof over my head and a shelter from the world.

There's no place like home

Yes, unless you are a landlord or a very talented speculator a house is not simply an asset, but a ... home.

[lostsoul359]

Originally Posted by expatCA

Yes, unless you are a landlord or a very talented speculator a house is not simply an asset, but a ... home.

I understand because I am a Landlord to a Commercial Property, and I have speculated on RE, and I did get burned, because my Ex Husband was not on board. We went to see the deal, I said no, he said yes. So we ended up purchasing a spec home in Arizona in 2004. He got tired of being an OOS landlord and he let the house slide into the foreclosure pit from sheer laziness! I am just glad that my credit score stayed intact.
I think that the housing market inventory from the last California Housing Market correction is still having ramifications today; the banks are in control of the inventory still.

[expatCA]

Originally Posted by lostsoul359

I understand because I am a Landlord to a Commercial Property, and I have speculated on RE, and I did get burned, because my Ex Husband was not on board. We went to see the deal, I said no, he said yes. So we ended up purchasing a spec home in Arizona in 2004. He got tired of being an OOS landlord and he let the house slide into the foreclosure pit from sheer laziness! I am just glad that my credit score stayed intact.
I think that the housing market inventory from the last California Housing Market correction is still having ramifications today; the banks are in control of the inventory still.

Sorry to hear this.

Yes the banks and every high dollar group, including politicians, contractors, lenders, mortgage companies, insurance companies and groups like the Irvine Company are in control. People pay and they make the money. They limit the choice.

[Peasy973]

There was a story on the radio, that sales are starting to level due to rising interest rates. I think the upcomoing summer will let everyone know how the economy is really doing. If sales are doing good then there's still some steam to keep the economy going. If not, then we will see.

[expatCA]

Originally Posted by Peasy973

There was a story on the radio, that sales are starting to level due to rising interest rates. I think the upcomoing summer will let everyone know how the economy is really doing. If sales are doing good then there's still some steam to keep the economy going. If not, then we will see.

It simply depends on supply and demand. As long as enough people have the money, either cash or a good monthly income, the slight rise in interest rates will not impact prices much. I bought a home at over 8% one time in CA, but could afford the payment. When interest rates dropped I refinanced, but took no money out. I expect a slight leveling but not much unless the economy drops significantly and it does not look likely right now.

If the interest rate rises 1% on say a $600,000.00 mortgage the difference in the payment is just a couple of hundred dollars a month. If you can afford that type of mortgage you can afford a couple of hundred dollars a month more.

If the economy drops then we will see, but even then foreign buyers unaffected by that will still be buying and those with good paying jobs will not be impacted. Generally it is those right on the edge that get hurt. In 2009 I sold my home in SoCal because I was moving to TN. I had it sold within 1 week and at a higher price than I thought I should list it for, but the realtor said raise it and I did and it sold. After all costs I still got more than I expected to get, over 50% more than I paid for it ion 2000. Prices had dropped dramatically by then and I still made a LOT of money on it and paid cash for my new home in TN.

The "recession" dropped profits for my companies, but not enough to hurt anyone working for them. By moving out of CA the very first year I saved nearly $20,000.00 in costs like; property insurance, property taxes, State income tax , car registration (I registered 4 vehicles,1 a truck, for less in total than I paid for the cheapest one in CA). I could have stayed with no problem but my wife, also a SoCal native, wanted out of CA.

If things really go bad, those who want to buy now, still will not be able to.

[Electrician4you]

Originally Posted by Peasy973

There was a story on the radio, that sales are starting to level due to rising interest rates. I think the upcomoing summer will let everyone know how the economy is really doing. If sales are doing good then there's still some steam to keep the economy going. If not, then we will see.

Sales are floundering simply because there is no supply. There are 10,000 LESS houses for sale as compared to last year. That’s why sales are lower. Because there are simply a lot less houses on the market. But the demand is still there. So basically only those that can afford it are buying. Which technically is how you let supply catch up with demand. Unfortunately in housing it’s very different than any other market. In a normal supply demand situation things are built in a factory or grown and eventually supply can catch up. The acquisition and build costs are not like anything else. In order to build you need LAND. Without land you’re not building. The lack of sales nothing to do with the rates which btw are still insanely low. They’re still well below 5%. I read a recent story where buying agents are losing customers because those customers are going to the listing agent in order to be accepted.

[expatCA]

Originally Posted by Electrician4you

Sales are floundering simply because there is no supply. There are 10,000 LESS houses for sale as compared to last year. That’s why sales are lower. Because there are simply a lot less houses on the market. But the demand is still there. So basically only those that can afford it are buying. Which technically is how you let supply catch up with demand. Unfortunately in housing it’s very different than any other market. In a normal supply demand situation things are built in a factory or grown and eventually supply can catch up. The acquisition and build costs are not like anything else. In order to build you need LAND. Without land you’re not building. The lack of sales nothing to do with the rates which btw are still insanely low. They’re still well below 5%. I read a recent story where buying agents are losing customers because those customers are going to the listing agent in order to be accepted.

Even the idea of building up does not help as they still cost more for the buyer than they can generally afford. OC is about built out and that means the only people who can buy have ... money. Normal in any popular place. Make enough money or move to where you can afford it.

[Electrician4you]

Originally Posted by expatCA

Even the idea of building up does not help as they still cost more for the buyer than they can generally afford. OC is about built out and that means the only people who can buy have ... money. Normal in any popular place. Make enough money or move to where you can afford it.

Sure. Within limits. But you’re simply not going to get only people making 100-150k a year to live in OC. Eventually everything hits a affordability ceiling rent8ng or purchasing . That’s why buying and rents in Anaheim are lower than Irvine for a like property.

The thing is that we are starting to build up. Single story houses are more rare than two story and they aren’t built as much. A whole tract went up near my old house. Not one single story house in the whole 88 house project. . Lots more multi use construction coming up too. I know a contractor who bought EVERY house in a cul-de-sac. He reparcelked/zoned the properties where he built two houses on each lot. So instead of 8 houses there are now 16 houses.
Every available postage stamp of land in OC has someth8ng going up on it. In Hunt8ngtom on Beach and 405 you know the dirt or planter section (cloverleaf) that’s usually on the off/onramp area along the freeway? That’s now office buildings and a storage place.
Brookhurst and Westminster was a gas station. Vacant for years. To getting something.
The corner of Brookhurst and Bolsa is planning a huge hotel, shopping and apartment building.
Corner of 405 and Brookhurst in Fountain Valley was a old office building. It’s now a bunch of houses.

It’s far cheaper to tear something down and help a wall and call it a remodel.