Saturday, October 27, 2007

Sacramento Real Estate Market - October 2007 Water Cooler

Post off-topic links, observations, and stories about the Sacramento real estate market here. Please read the comment policy before posting.

93 comments:

BMac said...

I got into this game of schadenfruede late, so I'm curious it someone can point me in the right direction for some specific info.
I am curious what the $/sq.ft. costs of various categories of housing (different size ranges and/or locations) was at different points in the past.
I want to have some better frame of reference to decide what is reasonable. How much should a 1500 sq. ft. SFR in xyz neighborhood cost vs. 2200 sq.ft., etc.

Sittin' Out This One said...

Did anyone go to the USHomeAuction at Cal Expo this weekend? It would be very interesting to hear a report. I would guess buyers are starting to thin out. Impac Financial did their 95% financing a couple of months ago. Are they still offering those kinds of loans?

norcaljeff said...

I read up alot on that auction. They supposedly would do loans for owner occupied homes for as low as 5% down with "good credit" but these are bait and switch type operations. Who knows what you would actually get from them. If you didn't qualify for a loan and close within 21 days it was a $15K penalty for a 7-day extension. I was planning on going until I read the small print. They wanted a lot of personal financial info up front without even applying for a loan. There was also a $5K bank check you had to bring. They also said that the min. bid wasn't necessarily what the min. reserve requirement was. They also said the banks could have "employees" bidding up the bring but may have no interest at all in the house itself. They also said after the bid was complete the bank/owner could still decline your offer. DR Horton did the same thing in SD this weekend for a condo complex that wasn't selling well. If you want that link I can post if for you. They mostly seem like scams and marketing gimmicks.

Cmyst said...

bmac--

Here's what I do. I opened a free account with Zip Realty, and that allows you to browse the MLS and save the data to "My Homes".(You could just browse the MLS and save them, there, too -- but Zip gives you an interesting interface with Zillow.)
Then, choose a few homes you like. Then, if you click on the home's picture or address, it takes you to a page that has all sorts of info about the home, arranged in tabs over the top of the page. Go to "Estimated Value". That page will tell you the current price per sq.ft. and (more importantly) it tells you what the home sold for the last time it sold (or what it's sold for for the past 10 years, if you set it that way). You can then figure out the sq.ft. price for up to the last 10 years.

Curious said...

I'd be interested in what the final sales prices were at this home auction in W.Sac:
http://www.news10.net/display_story.aspx?storyid=33039

I spoke to a friend today who said he has a friend who paid $220k for one of these and that most went in the $200k range.

The prices quoted in the article are okay but not great, IMO.

I hope one of the local bloggers with access to final sales prices follows up on this one.

My friend quoted his friend as saying the builder "did not look happy" during the auction.

anon1137 said...

I have to say, I love this, this thing that is going on.

I love looking up the z-estimates of houses on my block that have sold in the last 2 years just to see how many more $10K's they have lost in the last few months. A year ago I was very frustrated being a renter, but now I am almost repulsed by the thought of owning one of these albatrosses. I don't even look at the MLS anymore. I check my investments, I put money in the bank, and I watch. There is lots and lots of time. Every day there's a new development. There are $Bs of losses on the books of banks and RE companies that have yet to be written down.

paranoid renter said...

I spoke to a realtor this weekend expressing interest in the Westpark development in Roseville. She said "there a lot going on over there and you should get representation". She declined to give further information. Anyone know what this means? Does it relate to pricing or something else?

paranoid renter said...

By the way, what's the general consensus on REO properties? Are they good value? Saw one this past weekend and it was a dump. Stained carpets, dirty cabinets, damaged walls (filled with plaster), etc. I just couldn't see myself buying something like that even if it was offered at a price lower than I expected to see.

Ideally I would like to buy a new place at some point, but almost all the desireable locations in Roseville are built up. To me that's yet another negative of the boom. We have all the desireable areas built up with crappy homes that are now going to be abused as people are forced to let go of them.

Sippn said...

REO properties are Bank "real estate owned" - homes they have repoed. Former owners are generally not happy to leave and some like to show their displeasure.

The pros haven't been buying repos since the general population got into it - its not for the faint of heart.

You guys sure whine a lot about auctions - they're usually for people with cash - otherwise you have to buy the old fashioned way - retail. The best way to buy anything is to have your financing or cash ready to go; otherwise, you're just blowing hot air.

smf said...

"You guys sure whine a lot about auctions"

Because they are usually not really auctions, more like marketing ploys.

Sippn said...

Yes and if you go to a real auction with real dealers (buyers) they will know the market, what they are buying and the value to pay.

An "auction" for the general public IS a marketing ploy like you say, it plays to greed.

The "too good to be true" light should be going off, but greed often overturns it.

semloh said...

quick question: how do you access public records to find information about how many times and for how much an owner refinanced a given house ?

Sippn said...

County recorder's office - or if you're a good client (paying) a title company will look it up for you or your agent.

norcaljeff said...

PR, it means the realtor wants a get the co-op fee the builders give agents when they bring in clients. The builder does factor in that fee when you give an offer so if you really need a realtor for some reason, just remember that. Otherwise you can just go in there and lowball them yourself, and pocket the $2-5K+ yourself and use it for a big screen TV.

norcaljeff said...

That's the first intelligent thing Sippin has said in a long time!!

Check this out, pending home sales index plumments and in some areas of the country, up to 30% of buyers with signed contracts backed out of the transaction. "The housing bubble has burst," said Peter Schiff, president of Euro Pacific Capital in Darien, Conn. "Prices are going to collapse and sales are going to fall through the floor."http://tinyurl.com/39t2tp

Gwynster said...

The Property Maintenance ordiance passed last night 4-0. Now absent owners have to take care of the property of get fined. And in cases where the property is being rented but not maintained, owners are going to be requiring renters to mow the lawn etc or hire someone to do it.

Myabe there is a reason for all those lawncare side businesses after all.

buying time said...

It all seems to be coming together!

All time low in contract activity, higher carrying costs for sellers (property maintanence), and no is taking their house off the market (seassonal reduction in inventory doesn't seem to be holding this time round). Seems my patience may eventually be rewarded!

paranoid renter said...

Is there any way to find out what people paid for a home in a new development? I assume people are getting all kinds of "deals" from free upgrades to $$ off the list price. Is there any way to know what homes are really going for?

Cmyst said...

I'm thinking some of these REOs are going to be the former homes of move-up buyers. In that case, they may not have great upkeep but they probably won't be trashed.
The two homes that I'm most interested in both appear to have move-up owners. One doesn't have any information on the last sale, and one was last sold in 1993. Both are empty already.

AgentBubble said...

paranoid renter said...
Is there any way to find out what people paid for a home in a new development?


If you have specific addresses, I'll look them up for you.

paranoid renter said...

agentbubble,

I am interested in these:
http://tinyurl.com/2x9kzg
They are listed at 405K so
I want to see what people are
paying. Also want to see
what they are paying for:
http://tinyurl.com/24w5qs

I don't have a specific address
though. Perhaps I could drive there and get an address.

smf said...

I'll be much more interested in getting opinions as to which areas will be less affected by the downturn.

Here is my issue:

We are looking for a house anywhere from 3000-3500 sq.ft. in size, since we have 3 young kids.

New developments are/will be hammered. We could eventually get a house in a new development, but there are no assurances that the area will remain 'nice'.

Gold River is at the end of the day, nothing more than track homes, and we have never seen such areas remain nice for long.

The older areas of EDH are nice, and since so many large homes were built, the deals may come soon. But it is still far away from the city.

Opinions?

Gwynster said...

Lander,

On the poll, can we get a none of the above? >; )

AgentBubble said...

smf,

When we buy, we're looking at about 3,000 sf. There's an area by Wildhawk Golf Course, across from Silver Springs, that we came across while driving over the weekend. For fun, we went and looked at three homes that were 3,027 sf and priced right in the low 600's. The homes are all on decent sized lots, well kept, and not your cookied cutter tract homes. I'm thinking they'll be in the mid 500's at the end of next year, which is about what they were during 2003. Another area is Waterford in EDH. Much larger range of pricing though, but the homes are solid and very custom. We're also watching some 2 acre home sites in Galt that have steadily been coming down to our range as well.

AgentBubble said...

pr--What size house are you looking for? Once I have the SF range, I'll do a radius search from the models and get you some numbers.

paranoid renter said...

agentbubble,

3 bed/2 bath, 1800 sq ft - basically your typical starter home. If I can't get that for < $350, then I will probably look at condos.

AgentBubble said...

pr--The resales are going for about $190-203 a sf right now. In a year, probably around $175 a sf is my guess. If you have some actual street names, I can do a tax record search and see what the new ones in that sf range went for.

paranoid renter said...

That should have been $350K not $350! Sorry.

Lander said...

Lander,
On the poll, can we get a none of the above? >; )


LOL! Landette said the same thing. Perhaps the "LEAST honest news source" would have been a better question.

Everyone--please feel free to make suggestions for future poll questions in this thread.

buying time said...

SMF -

Sounds like we are in the same boat as you are....but looking for a bit smaller (2000-2500sqft) as we only have 2 little ones.

If you happen upon anything ...please let me know...we have mainly been looking in Folsom and older developments in EDH. But would consider the new Blackstone development in EDH if their prices came down (and once they have sold enough homes for us to feel comfortable that the development will be stable).

SacramentoCrash said...

I wouldn't touch a condo with a ten foot pole.

They are the first to go down in value and the last to increase in value.

You can have a bunch of nuts running the HOA like their own personal fiefdom.

Condos, yeeech!111

norcaljeff said...

I haven't been looking at homes in over a year now, haven't signed up for any information, etc and yet I had 4 sale reps call me over the weekend asking if I was still in the market for a home. Man, that's a lot of digging, they had to get to the bottom of the stack to find my name and number. And you'd think the weekend was a busy time for them writing up sales contracts instead of leaving me messages :)

Cmyst said...

Sacramentocrash, I second your advice on condos.
I had a love/hate relationship with my HOA and my neighbors when I owned the condo. It is like paying for an apartment -- if you're going to live in an apartment, RENT it, don't buy it. The grounds at my old condo were not extensive, and there were two small swimming pools that were really SFH sized. But we had to pay thousands of dollars a year for services, and yet we ended up doing most of the work on the grounds and upkeep such as cleaning pathway lighting and replacing broken fixtures and bulbs, ourselves. We had a "gardening group" that planted and transplanted cover and ornamental plants, etc.
In an apartment, if you want to be a hermit and avoid all your neighbors, you can for the most part. In a condo, you can't. It's like living in a small town. And if you try to become involved in actually running the place -- God help you. You will be able to make slow changes, while drawing a lot of attention to yourself and inspiring petty pizzing contests amongst supporters and opponents of change. (I literally watched one woman get emotionally and physically worn down to a ghost of her former charmingly eccentric self.)
On a day-to-day basis, people move out and leave their stuff on walkways and piled NEAR the dumpster, or they miss the dumpster with their trash, or they throw their trash in the parking area. And the responsible owners have to deal with that. Or the lady who collects cats until the cats are spilling out into the grounds and demanding food and attention from everyone who walks by.
I will never buy a condo again. If I want that kind of grief, I can always go live with family!

paranoid renter said...

cmyst and sacramentocrash,

Many single family homes also have HOA dues. Would that mean those are out for you as well?

paranoid renter said...

Maybe exotic mortgages are not yet over. :-)

Jacob said...

HOA and Mello Roos are definitely a turn off for me, but since I want a newer home most of those have one or both.

That doesn't mean that I would turn down a home I really liked at a price I really liked just because it has a HOA, but I will be looking at homes without those first.

Cmyst said...

I'm not really interested in new homes, although by the time this is all over, that might have changed.

I dislike HOAs whether sfh or condo, but that's a personality quirk. The rational part of me realizes there have to be rules, but deep down I don't want to be told what to do with property that I've bought.

RMB said...

Agentbubble,

Which lots are you looking at in Galt. I am looking for something of the same type in the same area, but what I am findin it they are still about 50% over priced. asking 300K for 2 acres of dirt. and 375 for 5 acres of dirt. Not willing to pay that for them and an thinking next year will see more declines. Willing to go 150-200 for 2 acres and 250K for 5.acres

Sippn said...

Cmyst - regarding more expensive repos not being trashed - maybe, but I am watching a million dollar short sale (just for fun) and the appliances and light fixtures are missing - $25-50k in this case, plus the rear yard and fencing never completed, but still a good deal.

I talked to the agent, was submitting 5 offers to the bank all about $25k below asking.

SacramentoCrash said...

HOAs in SFR developments.

In some areas like Ghettomas you might be better off with a HOA.

Otherwise you'll have the pleasure of looking at yayhoo neighbors with huge boats in their driveways, basketball hoops on the sidewalk, ugly sheds in the side yard, purple color paint jobs, paved over lawns with taco vans (roach coaches), taxi cabs and ice cream trucks parked in front of the houses.

The clock is ticking......

Alot of the idiots that used their houses as ATMs to buy fancy Hummers, other SUVs, huge plasma TVs, outdoor entertainment centers, swimming pools, etc. are going to get hit really hard in the next 9 months.

The chickens are coming home to roost ... Brrwwwaaaak!

norcaljeff said...

It's not only the idiots taking money out of their homes at interest only pennies on the dollar rates, but now the house they bought it worth even less than they paid for, DOUBLE WHAMMY! So that a $500K mortgage with a $100K equity loan is now sitting behind a home now worth $350K, tops. The banks and brokers were all accomplices in a money for nothing scam and we're all paying for their mistakes. Ain't freedom grand? And we want to bring this to Iraq too. Very nice.

paranoid renter said...

I went to Westpark Sunday. Price have dropped. A lot. It's 10-15% off the prices quoted on the website for Pulte. The area may shape to be real cool...with a town center and all. I really wish they were closer to 80. 15-20 min just to get to a highway (in these times...it can only get worse with time as congestion increases) is a bit of stretch for my liking.

SacramentoCrash said...

From article re: Paseo West.

" Like her neighbors, she fears investors will swoop in and turn their "luxury" community into a rental slum. Green lawns could turn brown. Cars with flat tires might fill the cul de sacs. The value of her house could be so low, she worries, she will owe more on her mortgage than her house will be worth."

Sound like some of the newer subdivisions in this region.


Be careful when you buy in those new subdivisions. You don't know if your neighbors will be great... or whether they will be occupants of a group home housing parolees, drug abusers, convicted teens, etc.

robert said...

Someone gave me the speech today that "downtown Sacramento and Midtown (the grid) is different". That there will be minimal declines in home values. lol.

SheWrestles said...

I think I may have jumped the gun a little.

I'm buying in Lincoln and set to close soon. I'm paying $425,000 for a 3250 sf home that is 2 years old, but has never been lived in.

It originally sold for almost $600,000 in 2005, BUT I have to put in window treatments and do the backyard.

There's another huge round of foreclosures coming next year, but there are only a couple of never-been-lived in homes remaining. I figured that was worth an extra $25,000 or so, but even allowing for that, am I still overpaying by too much right now? I'm planning to live in the home at least 5-7 years.

I'm interested in reading some of your opinions.

Thanks.

Jacob said...

130 per sq/ft is pretty good imo.

Im looking for around 120 myself. I will be waiting another year at least since there are a lot of resets due next year and foreclosures keep mounting.

I think it is a good price and if you really like the house then go for it. I am a little hesitant about Lincoln and am not sure if all the neiborhoods will get build properly. Plus you pay taxes for schools that sit closed or parks that are never built.

So my biggest concern would be what is the neiborhood going to look like when all the foreclosures hit.

G Spot1 said...

I'd be concerned about buying anything right now if you are only planning to live in it 5-7 years. South Placer has been way overbilt the last few years and even if prices bottom out soon (big if), they are likely to remain flat for years. I think it is very likely you will lose money if you have to sell in 5 years. If you were looking at a longer time horizon and really loved the house, it might make sense, although you have to realize that there is always a risk you may have to sell sooner anyway (lost job, relocation, etc.).

What are you out of pocket if you cancel?

I would think about renting a similar house in the same area for a lot cheaper. That will allow you to see how the area develops and whether the foreclosures and rentals really do drive it downhill.

SheWrestles said...

Right now, I've got a $5000 deposit in escrow and have spent $400 on the inspection. In another couple of days $400 more for the inspection.

Even moreso than the depressed market, the main reason I might cancel at this time is because of this ongoing battle with the realtor I mistakenly signed a buyer-broker contract with back in the spring (long story and one which will have you running in the opposite direction if anyone from Avalar ever comes your way again). The way I feel right now, it might be worth it to me to give up the $6000 just to keep them from getting any commission at all on me.

The house in Twelve Bridges is 'really, really good', but it's got a couple of issues that could cost me when it's time to sell - smallish master bedroom, undersized closet in the master (with fluorescent lighting, which I can change), and it's very close to the street.

As mentioned, buying in Lincoln is especially scary (as compared to, say, Rocklin) given the fact that a lot of the municipal improvements they planned were put on hold once the foreclosure epidemic hit the area.

I made the decision to pull the trigger now because homes have started moving here again (although there's still plenty of inventory) and because the builders have really picked up the pace after a long lull. I figure that their long-range planners have a pretty good hunch that the new hotel and other factors will improve the area's economy in the next couple of years.

Jacob said...

If it isn't the perfect home for you, I would say wait at least another year. Prices will go down for a while and there will be a lot of choices.

You will make up the $6k with the savings you will get from renting as well.

So my advice would be that unless it is the home that has everything you want, or there is another reason that you really want to buy now (starting a family etc.) then I would say wait.

Especially in Lincoln.

AgentBubble said...

shewrestles,

Send me your e-mail address to agentbubble@gmail.com

I have some info that you might be interested in.

G Spot1 said...

$6000 is nothing to walk away from on a $425k transaction. I'd say it's a nonfactor in your decision. You are likely to make that back in reduced prices and money saved from renting. Heck, wait a year and you save nearly that in property taxes alone.

Is Lincoln really picking up? I am watching Roseville and Granite Bay. Sales were surprisingly brisk in August - Granite Bay was up 20% over last year. But I sense that sales crashed in September and are doing worse in October. Very curious to see the hard numbers when they are reported. Granite Bay had one home sold in the first week of October. One. That's in a zip code with over 200 homes in inventory and over 40 homes sold in August. Haven't been following Lincoln but I'd be surprised if it wasn't similar.

My opinion is that we haven't hit bottom in South Placer and you will have no trouble finding a great home for $425 in Lincoln in a year or two. Maybe even a better one.

norcaljeff said...

The market isn't picking up, that's BS. And builder and RE agents are playing to peoples' fears. 12 Bridges is overrated, I bet you're in the DR Horton development. Prices are still coming down, there are no buyers and income levels still cannot sustain those lofty prices. You could probably rent that same house for $1500, maybe less, and then you don't have to pay the property taxes, Mello Roos or HOAs. And you can always buy later, don't let them scare you into buying.

SheWrestles said...

The one we're looking at is a Pulte, and we've liked most of those that we've seen. I'm not a Horton fan at all. I got a couple of contractor estimates on concrete and landscaping and to get the entire job done will cost more than 2 times what the realtor said.

I like Twelve Bridges, but agree that it's overpriced, especially compared to Lincoln Crossing. Regardless of home size, you essentially pay about $40,000 more to live in Twelve Bridges vs Lincoln Crossing. I'm basically paying for peace and quiet.

My total payout is going to be around $3200/month...renting something for half or even two-thirds as much *does* make a lot of sense right now.

I'm a little *too* eager to own, which is likely to cost me more than I can admit right now.

anon1137 said...

Update on 1224 47th St., E. Sac:

I made fun of this listing in July when it first came on the market (MLS # 70079029, $685K for 1220 ft2, lot size = 7013 ft2, $560/ft2). I think it was on the market for less than a month before it went into escrow.

Sacbee is showing that it sold for $655K ($537/ft2) on 9/18/2007. It had just sold for $600K on 5/25/2007, so someone flipped it in 4 months for a $55K profit.

waiting_for_the_fall said...

100k price drop in 1 month! I bet the neighbors really appreciate that. mwhahaha!!

http://www.ziprealty.com/buy_a_home/logged_in/search/home_detail.jsp?listing_num=70077271&page=1&property_type=SFR&mls=mls_sacramento&cKey=3q4b569l&source=MFMLS

a_builder said...

Whaddya guys think about the Greenbrier houses in 12 bridges? they havent dropped their prices but they've really upped the ante on "incentives" 90% off all upgrades! Extremely high quality homes compared to all other 12 bridges homes (real COPPER WATER PIPES!!!) I havent seen that in a LONG time- nobody builds like these guys do, and I'm in the industry.
2 acre lots, gated, views, 190/sq ft. Real stucco (not 1/4" stucco with 1" FOAM) etc, semi-customs

SeanPizzle said...

well, I think we are back into 2003 pricing in Rocklin 95677. We purchased in 4/03 for $430 (2500SF, 4BR, 3BA, .6 ac). Our neighbors moved here from Alabama and bought in 8/04 for $485. They then built a $60K pool and spent about $20K updating house. Their ARM adjust this summer to $4800/mo. The are moving back to AL and taking a short sale on the house. Short sale is coming in at $455K. Which is probably about $100K less than they owe. This of course will totally screw us comp-wise if/when we decide to sell, but I think we are here for the long haul. We only owe about $225K on the house anyway.

Patient Renter said...

SheWrestles:

FYI: If you look at a historical chart of housing prices (Shiller graph, google it), you can see that boom/bust cycles span around 10 years on average. Being that this was the biggest real estate boom in our nation's history, and we're only about 2 years into the bust, we still have a LONNNGGGGG ways to go before the trouble is over... many more years.

So what I'm trying to say is, don't buy now with any expectations that things will be better next year, or even the year after that. Think many years.

Good luck.

paranoid renter said...

a_builder:

Two words: "stay away". I wouldn't touch Twelve Bridges with a barge pole. They are the area where investors went when Roseville/Rocklin got too expensive. There is absolutely nothing in Lincoln that makes it a desireable place to be.

norcaljeff said...

Shew, think of the $40K as an expensive flood insurance policy. I've lived in this area for 25 years and that part of Lincoln called Lincoln Crossing has been under water several times.

Anon, after realtor fees, etc. plus capital gains taxes that $55K looks less like a profit.

a builder, let me know when the price on the actual home price matches that incentive price and i'll be more interested.

anon1137 said...

Ben Stein at NYT thinks there's going to be a taxpayer bailout, not of the homeowners facing foreclosure, but of the banks and investors who bought the bonds backing the bad loans:

The Gloomsayers Should Look Up
http://www.nytimes.com/2007/10/21/business/21every.html


The Treasury plan is either just plain foolish . . . or it’s the thin edge of the wedge: what may follow is to have a government fund to buy the slightly less fragrant parts of the portfolio. . . .

If the loans are sold to supershrewd buyers of debt like Leon Black or David Tepper or our resident megagenius, Warren E.Buffett, those buyers will demand a big haircut on the deal. Losses will have to be taken. The only buyers who might step in to pay full price are — drumroll, please — you and I, the taxpaying suckers. . . .

I could easily be wrong, but I suspect that at the end of the day, you and I will be bailing out the hundredmillion-a-year finance titans who messed this up in the first place. This is what happened with the savings-and-loan disaster. . . .

G Spot1 said...

Has anyone used any of the discount brokerages on the buyer's side (e.g., Ziprealty)? I'd be interested to hear your experiences. When I am (eventually) ready to buy I think I want to determine price and handle negotiations myself, but wouldn't mind an agent to help pull comps and walk through the contracts and closing. Thanks!

hubie2222 said...

Has anyone seen economist Gary Watts' forecast for 2008?

http://www.impactre.com/Forecast.html

Thoughts?

Gwynster said...

I've seen that write up before. Agents were emailing to anyone with a pulse who researched a MLS# earlier in the year.

The man is a complete idiot - next?

stevo said...

How do you find what new condos are selling for in a development? Specifically the Bridgefield Condominiums in Antelope. Address is 8434 Walerga Road, 95843.

norcaljeff said...

This comment has been removed because it linked to malicious content. Learn more.

stevo said...

Jeff,

Thanks for the tip.

norcaljeff said...

Good article on the economy, US Dollar and how it could affect RE. Jim Rogers is quoted in 2 articles:

Jim Rogers, the commodity king and former partner of George Soros, said the Federal Reserve was playing with fire by cutting rates so aggressively at a time when the dollar was already under pressure.

The risk is that flight from US bonds could push up the long-term yields that form the base price of credit for most mortgages, driving the property market into even deeper crisis.

"If Ben Bernanke starts running those printing presses even faster than he's already doing, we are going to have a serious recession. The dollar's going to collapse, the bond market's going to collapse. There's going to be a lot of problems," he said.

http://tinyurl.com/3acev3

Jim Rogers quits dollar after declaring US recession
http://tinyurl.com/2r4qfv

norcaljeff said...

Reports Suggest Broader Losses From Mortgages
"Every time economists and Wall Street executives think they have acknowledged the full extent of the losses from the meltdown in real estate mortgages, more bad news turns up."
http://tinyurl.com/26y8z6

Buffett says mortgage ills might linger at least 2 more years
http://tinyurl.com/22xoyc

SheWrestles said...

I'm not really all that upset that my closing fell through the other day.

I'm just hoping that interest rates will stay down as the prices continue to tumble.

Gwynster said...

You can have your taxes adjusted down, you cna shop for better ins rates, and you can refi at a later date to lower your int rate. The one thing you can't lower is the price you pay.

Jacob said...

"The one thing you can't lower is the price you pay."

I thought we were all doing that by waiting... :p

SheWrestles said...

The plot thickens:

Having still not heard from my realtor, I decided to call the seller's agent today to figure out what the deal is.

As it turns out, they intend to pay even *less* of the total...so now instead of there being a $4000 shortfall, the actual shortage is closer to $6000.

Why did I have to contact the seller's agent to get this information?

Obviously, I'm ticked off that my realtor is not keeping me properly informed.

Furthermore, the seller's agent informed me that her client intends to re-list the property. The agent is attempting to delay that until I have at least had an opportunity to see the final settlement sheet, but I told her that they should do what they feel they need to do.

Those HGTV home search reality shows have *nothing* on this drama! (that should be my new sig)

smf said...

"I'm just hoping that interest rates will stay down as the prices continue to tumble."

The price you pay for higher interests rate still does not compare to the loss if you buy your home right now.

In four years, my principal payment has gone down $17K only, and we can all agree that houses will go down by higher amounts

SheWrestles said...

The seller's agent tried to impress upon me the fact that I'm getting a 'great deal' (assumes I would pay the extra money, which I won't)...even went so far as to say, if I don't take it, that I'd be 'kicking myself' a year from now wishing that I'd bought it.

That drew a chuckle from me.

It's as if the realtors are oblivious to the fact that potential buyers can be more informed now than ever before...and that information equates to real power in the negotiations.

Patient Renter said...

"even went so far as to say, if I don't take it, that I'd be 'kicking myself' a year from now wishing that I'd bought it."

Man, you sure are patient. This statement alone would have me telling them what they could do with their house...

waiting_for_the_fall said...

I think it's pretty clear the seller will be kicking themselves so much, they'll have a permanently dented ass after turning down your offer.

SheWrestles said...

The latest blew my mind.

This afternoon, I received a call from my loan officer and as it turns out, my 'agent' phoned on Friday and attempted to find out whether the lender would re-work the terms of the loan.

Agent wanted to find out whether the closing costs could be rolled into the total loan amount, which would keep me from having to pay anything more to close (but which would increase my loan, of course).

There's no way in hell I ever would've agreed to this, so I have no idea why the realtor even asked. What on EARTH was this person thinking??

The loan officer informed my realtor that they (the realtor's office) had screwed up, and suggested that they absorb the loss.

My realtor then asked the loan officer whether she'd be willing to give up her commission to get this deal done and the loan officer just laughed, saying that she doesn't *get* a commission on this transaction...only the realtors do.

I should set up a pool...pick the outcome of this ordeal and win a prize. lol

So, according to both the seller's agent and the loan officer, the ball is in my realtor's court. No one has spoken to the title company since early Friday, though, so we all need to see the final HUD-1 before the hard decisions are made.

SheWrestles said...

Man, you sure are patient. This statement alone would have me telling them what they could do with their house...

LOL

The seller's agent is actually pretty cool. The phrasing was that she didn't want me to look back a year from now and be kicking myself over losing out on this 'great deal'. But she, just like the other salespersons out there, does not want to accept that there are potential buyers who are watching the market closely.

Like I said, this home has been sitting there, unoccupied, for 2 years now. And there are others in the neighborhood that fall into that category, too. For anyone who's foolish enough to buy right now (me! me!), it's a virtual pick 'em, but the realtors just don't get it.

anon1137 said...

. . . and you can refi at a later date to lower your int rate.

Gwynster, you missed your calling. You should get a job as a mortgage "strategist".

norcaljeff said...

Shew, another year from now that house will still be vacant. And with smart money getting out of the US Dollar, rates will further collapse as the Fed races to the bottom. Rates will continue to be low until Russia or China, or most of the oil countries, unload all of their currency. In your next home negotiaton, not only should you not roll in closing costs into the load, you shouldn't have to pay those at all. Tell them to go to h_ll.

Gwynster said...

LOL 1137

My point was that with everything that goes into buying a house, only one with zero potential modification after sale is the price.

In my world, Murphy was an optimist. I'd never bank on a refi. Requiring a refi to keep a house affordable is a surefire death spiral to loosing the house. Having the option to get your fixed loan interest rate lowered at a later day is nice though, just don't count on it.

I will say that it took my husband about 5 minutes to explain YSP, points, and how to hide fees. Within minutes I came up with about a dozen ways to game the system but I couldn't do it for a living, no way.

SheWrestles said...

Believe it or not, we've reached a deal.

The difference turned out to be close to $6000. I caved and agreed to provide $400 more. The lender is paying a little. And the realtor is paying the rest.

I can't believe it - we're actually going to close...and then keep our fingers crossed over the next couple of years.

Like I said, though, if things collapse another 20-30%, then I'll just buy another one. :)

Thanks for all the information, everyone. After we move in, I'm sure that my obsession with the market will continue.

bubblemachine said...

After we move in, I'm sure that my obsession with the market will continue.

You will be obsessed for sure after the market drops another 50%.

Don't think that's possible in Sacramento? The passengers on the Titanic didn't think it would sink either. LOL

SheWrestles said...

You will be obsessed for sure after the market drops another 50%.

Don't think that's possible in Sacramento? The passengers on the Titanic didn't think it would sink either. LOL


If it happens, I'll most likely dive in even deeper.

A $200,000 loss in relative value is rather significant...I can hope that it doesn't happen, but if it does, I think the only way out would be to grab up a couple of other properties at the 'corrected' prices.

Gwynster said...

LOL Making it up in volume? You're braver then moi'.

King for a Day said...

i'm no shrink, but sounds like K├╝bler-Ross stage 3... we've got a ways to go!

norcaljeff said...

Lander, I'll pay the fees on the www.SheWrestles.house.bubble.com URL if you track the data as it races to the bottom :)

SheWrestles said...

Remember - even if this home does drop another $200K in value...I'll still be $200K better off than the guy across the street! ;)

Um, is it too late to cancel??? j/k

SheWrestles said...

Oh, one last thing for the night - I'm actually liking the 'sale' price on the homes at Crocker Ranch that were advertised in the paper yesterday.

Brand new and fully upgraded for the same price I just paid for mine. Whoops.

norcaljeff said...

I guess it's true what they say, misery loves company.

This is exactly why I know we're not even close to the bottom of the market. Shew can't be the only one in this area doing the same thing. We've still got people over paying not to mention the fact that they are paying prices 5-6 times the median income levels (or higher).

anon1137 said...

Did everyone see the article in the Bee about the Natomas pizza parlor owner who hired a friend to burn his business down? It says the motive for both men was mortgage problems. The owner wanted the insurance money to pay off a $250K third mortgage on his house. The arsonist was behind on his mortgage payments and the owner promised to bring him current if he torched his business.

This housing bubble is having broad sociological effects. Someone could write a book: bankruptcies, relocations, divorces, delayed births, and now, fewer pizza parlors.

Half-baked plan to burn pizza place backfires
http://www.sacbee.com/101/story/469562.html

waiting_for_the_fall said...

Ben Jones is writing a book.