Wednesday, March 19, 2008

"He Believed Then That He Had a Steal"

From the Stockton Record:

Home-sales auctions have popped in the Central Valley since last summer, but the latest twist is an online auction for new homes with a bidding process similar to that used by eBay.
...
Some residents there aren't happy about the impending auction. Richard Provencio lives at the north end of Crescent Park Circle, a lane that has 14 of the 18 houses to be auctioned off - the remaining four are model homes a block south. "I feel very robbed," he said. "These are the same houses I paid $620,000 for, and now they could be selling for $300,000 to $400,000."...Recently, he counted 15 houses for sale down the long street from his house, and many sit empty because of foreclosure. "Our ghost town," he said. "It's just sad, man."

Many of the homes in the development were bought initially by investors and then filled with renters, he said...The auction likely will draw only more investors, who then will put renters into the houses, he said.
...
Another development resident, Matt Mettler, wasn't happy, either...He bought his house for $472,000 in January 2006 — a house originally listed at $585,000 with $80,000 in upgrades thrown in. He believed then that he had a steal — the model of the month. He found out later that a neighbor down the street bought his same-style house eight months later for nearly $100,000 less.
From the Modesto Bee:
Northern San Joaquin Valley home sale prices plunged again in February, dropping to levels not seen since early 2004. But for the first time in many months, Modesto real estate brokers are practically giddy with enthusiasm over jumps in pending sales and prospective buyers.
...
Median home sale prices fell to $250,250 last month in Stanislaus County. That was $104,750 below February 2007....San Joaquin County saw an even bigger price drop. The median-priced home there went for $275,000 in February, which was $130,750 less than the year before....Home prices dropped most in south and west Modesto (down 54.7 percent in one year), Patterson (down 37.3 percent), Turlock (down more than 38 percent), Waterford (down 40.9 percent), Denair (down 47 percent), Atwater (down 35.1 percent) and Los Banos (down 35.6 percent).
....
After two years of falling home prices,...Mike Zagaris, president of PMZ Real Estate...said the increase in sales volume signals that price stabilization is near. "I believe we've reached the bottom of the market," said Zagaris, who thinks prices will "bounce along the bottom" for a while as the excess inventory of homes for sale clears out.
From the Central Valley Business Times:
Five of the state’s “top ten” counties for foreclosure sales in February are in the Central Valley. San Joaquin County leads the state in a per capita basis with one auction sale for every 709 residents. That’s 6 percent less than January, but 431 percent higher than in February 2007. Merced County is second at one sale for every 781 residents. Yuba County is third in the state with an auction sale for every 831 residents. Stanislaus County is ranked fourth by ForeclosureRadar, with 842 residents per sale. Sacramento County is sixth in the state with one home hitting the auction block for every 995 residents.

12 comments:

AgentBubble said...

Another development resident, Matt Mettler, wasn't happy, either...He bought his house for $472,000 in January 2006 — a house originally listed at $585,000 with $80,000 in upgrades thrown in. He believed then that he had a steal — the model of the month. He found out later that a neighbor down the street bought his same-style house eight months later for nearly $100,000 less.

Let's see Matt...You paid over $200/SF for a tract home in Lathrop, and you are surprised that it's worth less now? And you shouldn't be focusing on your neighbor who bought his house for $100K less, you should be worrying about the short sale not too far away that's listed for $279K...And it's been on the market for over 5 months!

smf said...

"You paid over $200/SF for a tract home in Lathrop, and you are surprised that it's worth less now?"

Do you mean that everybody doesn't want to live in Lathrop? The area is 'special' after all...

RMB said...

These people will grab at any straw and try to say that the bottom is near. Kind of like Sippn. The problem is, they haven't stopped making new problems yet. All the loans that created this problem are still available. "Investors" are still buying these properties. You name it, it is still happening. Today's deal catchers are tomorrow’s foreclosures. This summer should provide a good indicator of the pain that is coming as foreclosure hit heights nobody ever though they could.

alba said...

If someone really wants to sell, at today's value, the market needs someone to take them up on that offer. Tomorrow, at a lower price, more catchers are needed....and so on.

Jacob said...

yea, whenever I see the news for an auction they always seem to interview someone talking about how it is a great investment.

Here I thought a house was something you lived in...

When all the RE shills have left for other employement, them maybe I will buy something.

Fed keeps cutting the discount rate, but banks keep raising the mortgage rates and home prices keep sliding downhill.

STOP ROSEVILLE CRIME said...

What a bunch of whiners. You shouldn't buy RE in the middle of no where that smells like cows on a flood plain. Just because they can't re-fi and buy an SUV and boat with the equity they are gonna cry. We have bigger problems like government bailouts of large banks owned by billionaires.

A Fool and his money are soon parted.

Patient Renter said...

"These people will grab at any straw and try to say that the bottom is near."

Yea - I've noticed a lot of the blog chatter recently seems to be from people justifying their desire to purchase soon.

That's cool if people want to set some comps, but someone feeling that it's beneficial to purchase now should be more an exception than the rule, and there seem to be a lot of people who are justifying purchasing now.

Rob Dawg said...

The falling knife hasn't even finished accelerating. It is important to flush out the greater fools in the downturn so that at the bottom there will be fewer potential buyers.

Jacob said...

The only way I would buy now is if I found the perfect house (and my criteria is getting more and more picky), and I could easily afford the full PITI payment.

My deposit keeps growing and prices keep falling so eventually I may get what I want. But I don't think that will be in 08.

Buying Time said...

"and there seem to be a lot of people who are justifying purchasing now."

I would be thrilled to set a comp if someone would just sell me a house at a price I am willing to pay.

At some point in the not to distant future, it will be more economical to purchase than to rent. At that point does it really matter if bottom is here or not?

Patient Renter said...

"At some point in the not to distant future, it will be more economical to purchase than to rent. At that point does it really matter if bottom is here or not?"

I'm not sure it's possible to have a situation where it's more economical to purchase than to rent while appreciation is flat or negative, at least according to all of the rent/buy calculations I've run.

Patient Renter said...

I should mention, I'd be interested in seeing a realistic rent/own scenario that comes positive for owning while appreciation is flat or negative. Try eLoan's calculator (and be sure to adjust the appreciation rate after doing an initial calculation):

http://eloan.com/s/show/calc_rentvsown

These calculations require you to put in some number of years that you plan to live in the home. So if you enter 5 years, the calculator would tell you whether you were better off renting or owning after 5 years. It does take into account selling costs, but you can subtract that out just to get an idea of where you'd stand after 5 years.

Post some numbers if you find something good.