Buyer's Remorse Version 2008
From the Sacramento Bee:
Shania Jensen sat in the kitchen of her 2,700 square-foot home in Roseville's Crocker Ranch neighborhood and uttered three words that no homebuyer ever wants to say aloud. "I regret buying," Jensen said simply.
She and her husband, Steve Liggett, had been renting for two years, waiting for the right home. The wait ended in May 2008. "We thought we were getting a great deal on this," she said of the $419,000 purchase price. But today other new homes in the neighborhood are selling for under $400,000.
...
"With the taxes right now, if we end up deciding to leave, we'll leave California," Jensen said.
22 comments:
I can understand people buying at the peak, thinking it was their last chance and prices would keep going up, that was the propoganda anyway.
But buying in 2008, tough ****. Prices were coming down, jobs were being lost, businesses were going under, stock market was crashing... There was no reason to think you were getting a good deal.
Buy because you like the home, can afford it, and don't plan on selling anytime soon. Don't buy because it is a good deal cause it very likely that it is only a good deal for everyone involved except the buyer.
Knife catching is a very dangerous game. The best move at the moment is NOT to play. Much more pain to come.
Oh yea, the market has hit bottom. This buyer buying it definetly made a good many realt-holes claim that the market was hitting bottom.
All I can say is, it hit a bottom, rose a little, before plunging.
In the calculus parlance its a local minima. Slope of the curve =0 so it essentially rose a tiny fraction and plunged again if it was even a minima. Of course life does not have to follow calculus.
Cool.
Cow_tipping.
Boomers wanting to sell - or not, http://www.msnbc.msn.com/id/29535417/ -
Well my dire prediction was that ~2015 it will occour en masse and wipe the market out once and for all.
Maybe that wont happen in 2015, looks like they are getting creamed, and many will give up on retiring or they will panic and sell sooner making a milder 2015 come early.
Cool.
Cow_tipping.
Reading between the lines, fear is such a demotivator! Personal futures are uncertain. Net worth has fallen faster than in anytime since the depression, and most of it is tied up in housing. News reports don't give any relief as the next report overshadows the last. With deteriorating fundamentals, the RE market is working overtime to find price points as they relate to current conditions. And current doesn't last very long! In a normal market it's about 3 months. Now I'd be surprised if its 3 weeks.
There must be a silver lining!
I've got to believe we're getting close to total capitulation in our real estate market. Imho, people are willing to throw in the towel, not because they're down a bit on paper, rather nothing else around them gives any confidence that things will change anytime soon. That's the Jim Jone's recipe for Koolaid, because it's centers on nothing but emotion.
Its sad because the only vehicle that will pull us out this spiral is a tapped out public that has nothing left to give, is scared ****less, and is frozen in a fetal position until further notice.
As a contrarian it's tempting, but as a pragmatist there's nothing to lose by waiting...
"Net worth has fallen faster than in anytime since the depression, and most of it is tied up in housing."
Not mine kemosabi, some of us didn't join in the reindeer games >; )
DJ....I'm not worried either...as a property owner who risked nothing by selling in the summer of 2004. In 2004 we paid cash for our ranch with the proceeds on a home we bought in 2002 with no money down. I don't really care where property values go, because it wasn't my money to begin with. If it goes down 60% or better, so be it. While I don't like renting, it becomes easier, having watched the carnage occur over the last couple of years.
However, even though one didn't play the game, it's probably not a good bet to think that personal net worth doesn't take some form of a hit in this environment. Imo, it will. The trick is to protect yourself and plan for the unexpected.
Price discovery is happening in many segments of the economy, real estate being the most visible. When value meets expectation, we're off to better times!
What was being said at the time this POOR lady bought her overpriced stucco crapbox.
www.youtube.com/watch?v=9upclhyneqo
I wish a could have listened to the NAR pimps screaming on the phone to Kramer's producers for equal time that day. The stooge in Dallas couldn't do anything but parrot the "real estate is local" line over and over again.
Good point Jacob. Even Bear Sterns had failed by the time these people bought that home. Guess who they'll stick the bill to?
"I don't really care where property values go, because it wasn't my money to begin with. "
I can't look at it that way. We've still got the proceeds from selling our house in 2006 -- and it is MY MONEY now. Just because I didn't earn with my own labor doesn't mean I'm going to spend or invest it with any less care.
In fact, a house is looking like a poor place to have money tied up. Keeping a big financial cushion seems much more appealing right now.
"In fact, a house is looking like a poor place to have money tied up. Keeping a big financial cushion seems much more appealing right now."
That's been a fair statement regardless of the times. And you're right, it is my money, gladly taken tax free from a wildly "exuberant" market that was doomed to fall.
But the motivation for buying the second place was completely opposite from buying the first. The first was an investment with an exit strategy, the second was merely for the safety and security of our entire family. We have no intentions of ever selling or caring to profit. That one paid for the other, was nothing more than buying a little peace of mind and a safe, self contained place, for the kids to go.
I suppose if my retirement was completely secured, I could manage to think of a house as just another big-ticket purchase, like a new car. I'm not there yet.
RE: the article. I wonder how much of the slant that comes from the MSM pieces is derived from the kind of people who are willing to give testimony. Plenty of people are willing to cast themselves as victims: a few, like this woman, are willing to say they made bad timing decisions; but almost no one will admit they were speculating - even though we KNOW that many families were doing that, even with their primary residence.
http://www.davisenterprise.com/archive_free.php?a=28533
Unemployment hit 11.6% in Yolo.
"Job fairs are luring more people, yes, but they're bringing in people higher up the food chain who've just been axed, said Carol Lewis and Yolanda Garcia, job developers for Sacramento County.
Before the economy tanked, job fairs drew dropouts or high school graduates, Garcia said. 'Now it's people with degrees - with bachelor's degrees and master's degrees,' she added. 'We're seeing a different population of job seeker.'"
"Perry's looking for a solid salary. Many of the jobs at Thursday's fair are commission sales, he continued. You make money when you sell something, and 'no one's buying anything right now. I don't want to depend on people who don't have any money to keep me living,' he said."
I can't see how we stay at the current median price as these employment losses hit. This is why I'm renting another year and hugging my cash reserves.
DJ....
As for the median, it may become a false indicator as time goes on as the number of sales $ of higher end homes rise as prices come down. While inventory volume rests in the lower end, those higher sales $ might show a stabilizing in overall median prices. It might not tell the whole story.
As of January figures, California is one of 4 states with unemployment at 10% or better. The others are South Carolina, Michigan, and Rhode Island.
The other 3 states together aren't nearly the problem that California poses as a stand alone. Way too many people in our state.
You know things are tough when state leaders start floating ideas of breaking Cali into two states... north and south...
And when Realty Trac comes out and says as many as 70% of all foreclosures have yet to hit the street, once it does bottom, there be plenty of time to pick through rubble.
DD, I was just thinking about the impact on the median price when the higher priced homes start to sell, lower than today's level albeit higher than the lower tier. Until things flush out, this could be a little deceiving - but a good indicator of market changes.
On the higher end I am seeing more and more pushing the under $400k envelope in Folsom and EDH.
I saw on the news the other day that there was a job fair, I think in Sac, for mainly part time and summer positions. It was targetted at teams, but many older people showed up to apply.
You have a lot of people going from $50k+ to $0 and just hopeing for a $20k job to hold them over. They won't be buying anytime soon.
The banks still have tons of homes to sell, many are not even listed. There will be plenty of time to buy at the bottom, and when the last few exits start to close there will be a panic as the remaining homes get dumped on the market.
When looking at homes I don't know how to even evaluate the value. I could look at prices in 1999-2001, but there were a lot more jobs then than there are now...
Maybe 1990 prices.
DD said -
As for the median, it may become a false indicator as time goes on as the number of sales $ of higher end homes rise as prices come down. While inventory volume rests in the lower end, those higher sales $ might show a stabilizing in overall median prices. It might not tell the whole story.
That is if the high end houses sell for high end $$$.
Low end may be losing 30% high end may have lost 70% from peak.
And unemployment related foreclosures have not even started getting the first NOD's yet. If 70% of foreclosures haven't even hit the market yet, I'd say another 25-50% of foreclosures have not even started yet. SC is getting fried, I am in charlotte NC and the thing is Charlotte's banking sector had a huge work force from across the border in Rock Hill SC. Charlotte itself is a smaller city in NC than Raleigh, where tech sector has not gotten killed yet.
Cool.
Cow_tipping.
I have no sympathy for the person in this story. Who cares if you purchased at $418,000 and new homes are selling for under $400,000. If you didn't know that prices were on the decline, then tough $h*t. I'm guessing this person didn't put a considerable down and thought they could flip their home for a bigger one in 1-2 years. Well guess what, those days are LONG gone. And if you didn't have the common sense to study up and research on your own, instead of listening to your realtor, then it's your own fault. Due diligence is not only a responsibility of the realtor, but of the buyer as well.
I have neighbors around me who purchased their homes for prices that are around my value ±$20,000. Being the largest SF home in the lot, I ended up with the best $/SF. There are newer homes in the immediate area selling anywhere from $335k - $450k. The higher end was obviously fully upgraded and dialed out, but at the end of the day, it ends up being about $/SF. Those houses are still smaller and my home is still considered "new."
So to the individual talking about leaving Roseville, and California as a whole, good riddance. You're the type of people that screwed up the market to begin with.
^Follow-up to my previous post:
She purchased it under her own name, not with her husband. Purchase price was actually $425,000, not the $419,00 she claimed. Her loan was $403,750, so her down was $21,250. Not talking down the down payment, because any down payment is good, but they probably could have easily gotten a smaller home and not gone as extravagant. This way, their mortgage payment would be lower and their taxes would have been lower as well.
DON'T OVEREXTEND YOURSELVES PEOPLE.
Again, no sympathy for these type of people. Purchased a year ago and she's thinking about blowing out already.
"Purchase price was actually $425,000, not the $419,00 she claimed."
I think you're splitting hairs here. I always net out the cash back at closing when I talk about purchase and sales prices. 425k - 6k cash back is 419k. She may not be lying.
After how the Bee handled Jessup's story, I'm left wondering what the real story behind this story is.
Tax is based on total price when purchased not the monthly payment. So it doesn't matter if the monthly payment is 2k or 1k the property tax will be 1.1% of the price of purchase each year plus Melorose if you live in an area where they collect that. I know Elk Grove does.
Even if she can get back 3% of closing cost it is a bad deal because she's paying tax 1.1% of $429K and NOT $419K.
If she downed 20%, she wouldn't have to pay for morgage insurance for the next 30 years. That would cut down her monthly payment by at least $300 for the first 10 years.
Did she even do her homework. I am 20 years old and I know this. SAD.
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