'There's More Bad News on the Way'
A follow-up to the Meadowview foreclosure story. From a News10 online chat session:
[Kim, News10] 11:03 am: George, is there an estimated time that these foreclosures will stop?
[George Warren, News10] 11:04 am: DataQuick believes foreclosures have peaked, but there's more bad news on the way before the picture improves dramatically, I believe.
[murphysdad] 11:04 am: is there a foreclosure "bubble"?
[George Warren, News10] 11:05 am: Re: Bubble. Looks like there is a foreclosure bubble. It's coming in waves that are somewhat predictable based on when the ARM (adjustable) loans were originated. Looks like ARM's peaked in May 2005.
[Coop] 11:05 am: Are these f/c's through one particular lender?
[George Warren, News10] 11:06 am: Lenders are all over the place. We searched property records looking for a smoking gun but saw lots of different lenders, not all of them sub-prime.
[Sharon Ito, News10] 11:06 am: George, were these houses over-priced to begin with?
[George Warren, News10] 11:07 am: That's a subjective question. I drove by that community on I-5 and saw the signs advertising new homes for $XXX,XXX and wondered who would pay that? But obviously there were willing buyers and cooperative appraisers.
[George Warren, News10] 11:12 am: Sacramento County has 3 percent of California's population, but 7 percent of the mortgage defaults in Q1 2007
[George Warren, News10] 11:14 am: Home prices down? Yes yes yes. Sales have declined year-over-year for the past 19 months. I think we haven't seen the bottom yet.
[George Warren, News10] 11:16 am: Personal observation: When my wife and I with stable, good-paying jobs go to get a loan, we get the third degree. I always wonder who are these people getting 100% financing on $526,000 homes?
[Robin] 11:21 am: As a first-time homebuyer with a responsible FIXED loan, I'm still paying an unfair price because the predatory, slimy lenders are now foreclosing on the people who've taken out these irresponsible loans and have flooded the market by quick-selling homes at bargain basement prices. The sale-price of my condo in zip code 95835 has literally dropped $100,000 in the past year because the predatory lenders put 9 condos just like mine on the market at ridiculously low prices during foreclosure.
27 comments:
It really is time to shoot the messenger..
The reporter and his opinion is not the news.
The anchors on most of these stations make $200K plus and live in million dollar homes, they wonder "who lives in these $500K homes?"
That last comment by Robin is the moneyshot.
"The sale-price of my condo in zip code 95835 has literally dropped $100,000 in the past year because the predatory lenders put 9 condos just like mine on the market at ridiculously low prices during foreclosure."
Perhaps they were 'slightly' overpriced to begin?
Do so few people understand the concept of 'supply and demand'?
There was no real increased demand. There was a false demand due to speculation approaching 30-50% in places, not because of more people moving into an area.
Therefore, the higher prices were UNSUPPORTED, as the demand was not real to begin with.
Just because years ago the same thing happened with Beanie Babies (and others), does not mean that the high prices paid back then are supported by the ACTUAL demand of today.
I mean, how can the Bay Area, with a real decrease in population, have such an increase in prices. It makes no sense that with LESS real demand you have HIGHER prices.
Did I make it clear enough?
Sippin, I agree with you for once :) but I was waiting on your bullish RE statements....RE Bulls, where are you, on holiday already? LOL
I love this posting, people asking this reporter if the homes were overpriced. Well, let's see, that one home on Richfield sold for $526K less than two years ago and at the county courthouse, the lender/bank couldn't even sell it for half price. Gee, that's quite a difficult math equation. Yes prices were high, and they still are. There's still ARMs resetting all this year and next, plus incomes STILL cannot sustain the monthly payments of these houses. The economy is slowing, rates are creeping up and the state still spends money like drunken sailors. I don't see an end to the downward pressure for a while. Local HBs bought up a ton of land back in the 80s and early 90s at pennies on the dollar so they can really take prices lower. Just accept the fact that there's no longer a 6 month wait to buy an overpriced home, those days were so long ago.
...and they should build them all in Dixon and Woodland and give the lovely homeowners of Davis apoplexy>; )
Damn I wish I knew of this unconditional love affair with Davis, I would have bought everything in sight :) It makes Roseville seem like a freaking bargain.
Jeff,
Only reason I care about Davis is because I want to continue to bike to work. I believer gas prices are going to get really bad. Other then that, the people here can pound sand.
On CNN Money under the listing
real estate, industry experts
predict BIG DROP in
housing prices....they are predicting 8 percent from now
through 08. With more waves of
foreclosures and housing affordability problems it's going
to get a lot worse before it stabilizes.
Lexi - 8% is highly possible in general while the stuff you want (the good stuff, right?) may not drop in price. Its the junk and the "Meadowview Mansions" going down 50% that offset the good stuff.
Gwyn - I predict you will have a hard time being satisfied. Find a desparate seller, ask for that 8% now.
(now if I can read the funny word below)
BTW, I want credit on the MM coin!
Sippn, where I live...even the good
housing area's are being foreclosed
on. These people are not poor by
any means... this is a highly desirable area... but, they got
carried away buying things like
multiple luxury cars, expensive
furniture, vacations etc and when
their serial financing was put to
an end they are now having a hard
time and are losing their homes.
Although I have been watching Sacramento due to the fact I'm sick
and tired of Southern California,
and used to live in Carmichael I
currently live in La Quinta which
is an upscale community. In my
opinion nowhere is immune. It's
all about living within your means
and as a boomer it seems we really
have a hard time with that. Myself
included. Life is short and you want to enjoy it, seems to be the
boomer philosophy...eat drink and be merry till the bills come in.
Although some places like Meadowview which is one of the least desirable area's in Sacramento will be hit... every
single area will come down in price. I believe their 8 percent
was for the desirable area's and
it will be much more for the least
and don't forget they were taking
across the board and you have to
take into account Sacramento is
one of the least affordable area's
price to income in the US. That
will make it even more likely to
come down much more. Just my two
cents.
The lack of drop in Davis home prices is sooo frustrating, ESPECIALLY given the carnage nearby in so much of the rest of the Central Valley...
...but Gwyn, come on. You know Davis is, in fact, All That.
Yes, when we owned a home here it was a b*tch dealing with busybody city govt/code issues/etc. But for the most part, Davis is just flat-out more pleasant than ______*insert any Sac area city here.*
Hmm...is there some connection here?
Money+Brains+Socialism=High Quality of Life!
Just Ask any Scandinavian. And they don't even get any winter daylight!
Nothing but truth in my opinion.
OK I can't make up stuff this good
Cops Raid Gold River Pot House
http://www.news10.net/display_story.aspx?storyid=28255
"On CNN Money under the listing
real estate, industry experts
predict BIG DROP in
housing prices....they are predicting 8 percent from now
through 08."
Prices from March to April already dropped 11.1% so an 8% drop was looooong ago.
Yes, prices have definitly already
dropped but CNN experts were predicting an additional 8 percent
from now through 08. And who
knows...more probably after that.
This is clearly a made up story. When I first saw it I called my Realtor to see what was up.
She had to call me back because she was getting her Lexus serviced.
When she called me back, she reassured me saying that real estate never goes down and I should buy now so I won't get priced out of the market.
See?
Dixon is about as overpriced as Davis. I leased a house there last year. The houses are still %150 overpriced IMHO. I ride to work now (Davis - UCD), it's awesome.
As a Realtor myself, I think her advice is sound. In fact, you should buy two houses because there's never been a better time to buy!
Too funny Happy Sam and Agent Bubble! Question for Agent
Bubble or anyone who knows?
I have access to the MLS where I live... (with a code for the realtors info) and saw a realtor
bought a repo like 3 weeks ago
that never hit the mls for 237 and
is now selling it as is for 309.
It's a cute little house in a tourist area that will most likely
sell for very near that. People
are still making money. If I could of bought that for 237 I would have! I was planning on
350 or less but that was a steal.
Does anyone know how you can buy
houses before they hit the mls.
I know some realtors help people do
that... is it a hassle or something or do you need a huge amount down?
Luis,
We're in town too so we can bike to work. I hate Davis with a passion now that I've lived here 2 yrs. We only stay because of gas prices.
Lexi, I bet we'll see that additional 8% drop before the July 4th holiday weekend.
norcaljeff..
you're probably right. Sellers and
agents have to start caving....better to take a low ball
offer today than a lower one tomorrow. Labor Day weekend should
be a blowout sale on real estate..
lexi,
Yes, people are still making money. I had a listing for over $450K that went to foreclosure. The guy bought it at auction for somewhere close to $330K and now has it listed for $400K. He's also $40K cheaper than the same model house on the same street. In my opinion, 99.9% of MLS listings are not priced for someone looking to flip. The deals right now (and for the coming months) can be found at auctions.
Agent Bubble,
I think that would be a way for
agents to make money... find out
what the client wants in what
area and represent them in an auction. Most people don't know
how to do that or how to find out
what's coming up and would gladly
pay a realtor to find them something affordable. Unless you
have to buy at foreclosure with
100 percent cashiers check or
money order?
At the auctions I've been too, you have to have proof of funds. There's a way to get a lender-approved loan, but it's very tricky and the loan will need to be refinanced relatively soon (which is okay if you're flipping). The problem with representing people at the auctions is there's no commission that will be paid by the seller (auctioneer). Buyers don't normally pay agents a commission, so that's the stumbling block.
Thanks for the info Agent Bubble!
Seriously, it would be worth signing an agreement with the agent
for 3 percent to act as a private
liaison in the deal. Save 80 to
a 100k and pay the realtor 3 percent. Paying an additional cost
to refinance and you'd still be
way ahead. Thanks, gives me something to think about.
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