Real Estate Opinions - East Bay (Oakland, Hayward: short sale, real estate market, foreclosures) - San Francisco - Oakland - California (CA) - City-Data Forum

baybook · 08-03-2011, 08:52 AM

Just curious as to what folks are thinking since I'm living out of the area now.

I bought a condo in 2002 for 250. In 2006 they were selling for almost 400. I believe they were built in 88 and sold for 95ish at the time. They are now selling for about 105. What can I do other than continue to pay the mortgage. Pretty much nothing. It appears that investors are now buying the units(foreclosures) and turning them into rentals. There goes my plan to move back to the bay and live in my condo.

SO what are people thinking in terms of real estate? What do you see happening in the next 10 years? Do you think home values are unrealisticaly low right now? What are others doing who might be in similar situations?

clongirl · 08-03-2011, 10:16 AM

It depends on where your condo is located and how the economy recovers in your city.

In some areas prices are still fairly outrageous. Other areas like the outer East Bay etc, I'd say they have about a year still to bottom out. There's just so much inventory.

As for you situation, you can either continue to pay the mortgage, foreclose and deal with 7 yrs of poor credit, or spend countless hours to try to work with your bank/mortgage company to lower your payments etc (which generally doesn't work). Sadly, I think those are your only options.

My brother was in a similar situation and ended up foreclosing--this was after foolishly spending thousands on hiring a lawyer to get his terms negotiated (which didn't work at all- not recommended). Ultimately he got my mother to purchase the house in her name, as her second home and he lives happily ever after, being forever indebted to her.

mstnghu2 · 08-03-2011, 10:53 AM

There's really no way to answer this question. People can speculate all they want about what's going to happen with the Bay Area housing market, but the reality is that nobody actually knows.

A few years ago when the housing bubble was about to pop, nobody had any clue that the real estate market was going to crash the way it did. Likewise, today nobody really knows for sure how the market is going to progress. People can make educated guesses, but anything can happen in the next ten years.

fizbin · 08-03-2011, 10:59 AM

No one knows for sure where real estate prices are going around here. Lots of unknowns, both known and unknown, surround that analysis.

We recently literally bet that house prices would either continue to fall or stagnate for the foreseeable future by selling our house now in anticipation of retiring and moving out of the immediate area in three years or so. We're saving about $3,000/month (net of increased income taxes) renting vs. what we were paying to keep the rather expensive house up and running. One added benefit is that I no longer worry about the negative stories about Oakland and their negative effect on real estate prices . . .

baybook · 08-03-2011, 11:20 AM

I guess I was hoping folks in the bay had a more optimistic look. It just seems so unfair/unfortunate/crazy that a place that would sell for almost 400k five years ago would be selling for 100 now. Just how low can it go?? And of course it is a viscious cycle. I can understand someone looking at the situation and deciding the hit to their credit is worth walking away. That means forclosures which is how I guess we end up with these huge drops.

I purchased the place with my mom as a co-borrower so walking away is not an option for me.

Quote:

Originally Posted by clongirl

It depends on where your condo is located and how the economy recovers in your city.

In some areas prices are still fairly outrageous. Other areas like the outer East Bay etc, I'd say they have about a year still to bottom out. There's just so much inventory.

As for you situation, you can either continue to pay the mortgage, foreclose and deal with 7 yrs of poor credit, or spend countless hours to try to work with your bank/mortgage company to lower your payments etc (which generally doesn't work). Sadly, I think those are your only options.

My brother was in a similar situation and ended up foreclosing--this was after foolishly spending thousands on hiring a lawyer to get his terms negotiated (which didn't work at all- not recommended). Ultimately he got my mother to purchase the house in her name, as her second home and he lives happily ever after, being forever indebted to her.

llowllevellowll · 08-03-2011, 11:22 AM

My job isn't to forecast the future of the nation's economy and employment-health, etc, which the 'health' of real estate is so heavily dependent on. When brokers get into the habit of answering these questions, they're probably overstepping their bounds. If they had any real, tangible evidence for our economies 10 years down the road, they probably wouldn't be selling real estate.

The one thing you can bet on in any economy - good or bad - is location. If you're in a good location with good schools - that will never go out of style. In any region, the most desirable locations to be in aren't seeing the affects that other, less desirable locations are. In the Bay Area, it's lessened a bit because the Bay Area, in general, is one of the more sought-after locations in the country. As bad as foreclosures have been in parts of Contra Costa, Alameda, and Solano Counties, we haven't experienced nearly the amount of distress as has been felt in states in the Midwest, Florida, or even parts of California's Central Valley.

The really good news, though, is that many areas in the Bay have experienced growth since the beginning of 2011. Pended sales for Contra Costa and Alameda County (where I do the bulk of my work), have been up each month since December of 2010. Median home prices are up, average list prices are up, average sold prices are up, the % of list-to-sale prices up, and the average days that a home sits on the market are down. All since December. Those are all extraordinarily positive things for now.

If you want charts and graphs on the real estate market, I recommend Trend Graphix among others. If you are interested in a certain area, just DM me and I'll send you over some charts. The good, the bad, and the ugly. =P

mayorhaggar · 08-03-2011, 12:26 PM

If it's just sitting there and you can get good rent from it, I don't see why you don't rent it out. Housing prices anywhere other than places like the inner Bay Area, Silicon Valley, and NYC are pretty low, but rental prices are going up everywhere because so many people have been squeezed out of the buying/selling market and are being forced into the rental market.

80skeys · 08-03-2011, 12:54 PM

Quote:

Originally Posted by baybook

SO what are people thinking in terms of real estate? What do you see happening in the next 10 years? Do you think home values are unrealisticaly low right now? What are others doing who might be in similar situations?

Not predictable. If there's anything that's very unpredictable in this world (and there's lots), it's the real estate market. No way to tell what will happen. Prices could stay where they are at for 20 years. They could go lower and stay there for 20 years. They could go higher. Who knows. One thing is certain: it's pointless to try and predict.

Your choices are to
(a) keep the unit, keep paying your mortgage, and rent it out
(b) sell it and take a $100k loss
(c) declare bankruptcy and walk away and not owe anything
(d) abandon it and be foreclosed upon and maybe owe the balance
(e) try to sell it for $205k which will be impossible unless you swindle someone

I think (a) is your best choice. Eventually you will either pay it off, at that point you own it free and clear which is a good thing, or prices will appreciate and you can sell it without losing any money.

OakAve2OakLand · 08-03-2011, 05:35 PM

Short sale is another possibility, i.e. sell it for less than you owe, but you must get the bank to agree to it. Your credit will still take a hit, but not as bad as BK, and at least you'll be out from under it. One downside to this though is that you will still incur a tax hit on the difference between owed balance and sale price, as it must be recognized as "income". Not fair maybe, but it is what it is.

To the OP, I'm curious what area your condo is in. A 400% price decline in 5 years is hard to fathom for the Bay Area...I could believe that for places like Phoenix, Vegas, Miami, but....

baybook · 08-03-2011, 07:43 PM

Quote:

Originally Posted by OakAve2OakLand

Short sale is another possibility, i.e. sell it for less than you owe, but you must get the bank to agree to it. Your credit will still take a hit, but not as bad as BK, and at least you'll be out from under it. One downside to this though is that you will still incur a tax hit on the difference between owed balance and sale price, as it must be recognized as "income". Not fair maybe, but it is what it is.

To the OP, I'm curious what area your condo is in. A 400% price decline in 5 years is hard to fathom for the Bay Area...I could believe that for places like Phoenix, Vegas, Miami, but....

Sure, Hayward, close to Union City. I bought in Dec 2002 for 250. They were selling at one point close to 400. Do a search on 94545 and you should see some around 105ish.

I know some condos in Oakland that have suffered the same fate. Durant Square(although this was very close to an undesireable area) and the ones by the Quarry