San Diego home prices to slide for 2 more years (Corona: foreclosure, to rent)

[ArizonaBear]

Not California admittedly; but, my G/F bought a house here in the Phx area for $95K--------down from $210K just one year ago. Even if her place depreciates further-------where can one rent a comparable place for $673 a month, rhetorically speaking?

Translation: for you folks in Calif who thought they bought too high since the market implosion.........factor in rents for a crappier place.

[RD5050]

I've checked single family home prices in the Clairemont area during the past year, and they aren't much different then what they were selling for one year ago.

They still run around 350K - 500K.

Only houses in the most run down sections are going for less (high 200's).

Yes, foreclosures will continue for a while.

But foreclosures aren't necessarily the best cared for properties you will find.

If you are lucky, you will find one that is in good shape, and in a decent neighborhood.

Banks sell them "as is", with no warranty, so once you own it, you are responsible for all repairs.

And with people who are selling their homes "short" to avoid foreclosure ... there is a long wait from the bank who holds the mortgage to see if they will accept an offer from a potential buyer. The wait could take months.

[zango]

IMO. Prices are still too high. But this is Ca. and ordinary rules dont always apply here. You will always find peole willing to spend half their monthly income on a mortgage. Just because its California. Logical, No. But California has never been logical.

[BandPlaysOn]

I've been in the real estate market, at the low end and well south (like Lemon Grove, National City, and some areas in between) since last summer. It's no longer a buyer's market. Inventory has dropped, and though prices have only risen slightly, desirable properties are now selling FAST if priced appropriately!
I keenly notice that quietness is at a very high premium. Houses on busy streets, under the flight path, near schools or factories, or in congested areas go for a deep discount (and slowly at that.) By contrast, a house that's on a large lot in a cul-de-sac, and you can't punch out your neighbor's side window from yours (slight exaggeration); not only is the price much higher, but you have to move fast or it's sold!

[kettlepot]

Originally Posted by BandPlaysOn

I keenly notice that quietness is at a very high premium. Houses on busy streets, under the flight path, near schools or factories, or in congested areas go for a deep discount (and slowly at that.) By contrast, a house that's on a large lot in a cul-de-sac, and you can't punch out your neighbor's side window from yours (slight exaggeration); not only is the price much higher, but you have to move fast or it's sold!

That's an interesting observation. What your comments above indicate is that it is the features of the lot rather than the house itself which matter to buyers. That gets to the point that coastal California housing costs are all about the land not so much about the building on that land. And what do we know about land? They aren't making any more of it.

I can't comment on the validity of every observation you made previously, but I still believe that there is anecdotal evidence to support the desirability of intact (no crappy infill) single family urban neighborhoods. By that I mean Mission Hills, Kensington, Rolando, Talmadge, western University Heights, northern Normal Heights, and the better parts of North and South Park. These homes are on small lots, so yes, you can punch out your neighbor's side window, but these better urban neighborhoods are much quieter than other urban areas.

[MissNM]

Originally Posted by shannon94

John Alt: Trust me......you can't tell these people anything...some won't even admit when they were wrong in the past.

If you get a $220k house with $20k down and a $200k mortgage @ 4.5%, payments are: $1,013.37

If you get a $172.4k house with $20k down and $152.4k mortgage @ 7.0%, payments are: $1,013.92

House prices would need to go down ANOTHER 21.6% from it's current price to make the payments comparable. That is assuming you plan to take 30 years to pay.

It all depends if you plan to live in a house for awhile or not. If you plan on staying in a place for a while - buy. If you aren't - rent.

[HotRodJayhawk]

Originally Posted by BandPlaysOn

I've been in the real estate market, at the low end and well south (like Lemon Grove, National City, and some areas in between) since last summer. It's no longer a buyer's market. Inventory has dropped, and though prices have only risen slightly, desirable properties are now selling FAST if priced appropriately!

Yes, inventories have dropped - but only temporarily! I recently had my realtor check the number of homes in default in a certain zip code and the number of defaults were more than 10 times higher than the number of homes on the market. With all the unemployment, defaults are likely to become even much much more common - especially when people's unemployment checks stop coming within the next year or so.

It seems to me that the banks may be holding homes off the market at the moment in order to try to reinflate the bubble. I urge people to have realtors run the comps and be sure not to offer more than what a home is actually worth. It's time to stop succumbing to the scams and deceptions these bankers are running!

[f_m]

Originally Posted by HotRodJayhawk

It seems to me that the banks may be holding homes off the market at the moment in order to try to reinflate the bubble. I urge people to have realtors run the comps and be sure not to offer more than what a home is actually worth. It's time to stop succumbing to the scams and deceptions these bankers are running!

It was my understanding that lending money to the banks was to help them hold on to these bad assets and sell them over time in order to not drop the floor out of the market, or to sell them to govenment related entities, hence the term Troubled Assets Relief Program. The number of foreclosures/pending forclosures may be more than previously, but the percent that go on the market is still not very high.

[MotleyCrew]

Originally Posted by RD5050

The article is from Oct 2, 2008, which was during the peak of the economic panic. High negativity in the news back then was the norm.

Most of the recent housing reports I've heard on financial news indicate home values have been stabilizing in California.

Not so. Read Dr. Housing Bubble. There are millions and millions of ALT-A loans just getting ready to hit the market and these are in the prime areas. With salaries hovering around $50,000 a year and unemployment increasing it is doubtful that prices have hit the bottom yet. Hang on, going over the falls. Anyway, read drhousingbubble.com He has been dead on in his predictions for the last 2 years.

[HotRodJayhawk]

Originally Posted by f_m

It was my understanding that lending money to the banks was to help them hold on to these bad assets and sell them over time in order to not drop the floor out of the market, or to sell them to govenment related entities, hence the term Troubled Assets Relief Program. The number of foreclosures/pending forclosures may be more than previously, but the percent that go on the market is still not very high.

That's an interesting perspective. I was thinking that TARP was intended to buy up mortgage-backed securities, either from lenders or from the investors who had bought them previously - so that there would remain a market for those and thus money for lending, but maybe this has the side effect of allowing properties to stay off the market. Does anyone really know? The whole concept has been poorly explained. I can't see any real advantage for the banks to pay money on taxes, insurance, and upkeep for homes to sit around vacant. They will still lose money if they do that. In any case, the current situation is not working. I've been looking for months and months and every time I find a property that I'm interested in, it already has gotten numerous offers. At this rate, the pain will drag out for many many years!

This unruly situation is further compounded by the use of "short sales" in which there appears to be no standard rules for handling these. More often than not, someone will make an offer early on (after having made offers on numerous other properties). By the time a short sale finally gets approved, the person who made the original offer is no longer interested either because they have already found another property or else because the financing has fallen through. The "approved" property then may have to return to market to go through the process once again. Personally, I would prefer that they require buyers to make a "good faith" deposit on short sale offers - to discourage all these multiple offers. If you are buying a home, you should be spending enough time looking at properties before submitting an offer so that making an offer is not just some unconsidered nonserious thing. I've heard of stories of people making offers on dozens of properties. I've also heard stories of people making offers "sight unseen" - all simply because there is nothing to lose by doing so. This is ridiculous! IMHO, any broker or agent who accepts offers "sight unseen" should have their RE licenses revoked. I consider that unethical!

OK, enough of my rants for now!