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Bill Gross' Blog

By Bill Gross | Broker in Los Angeles, CA
  • Stupid Short Sales

    Posted Under: Market Conditions  |  May 13, 2010 10:07 PM  |  2,096 views  |  2 comments
    OK, I am fed up. Started a new blog. Feel free to post your experiences, horror stories, or success! Go ahead, name names, provide phone numbers, email addresses. let's hold lenders and other agents accountable!

  • Where is the market headed? Watch the signs, and count the 7-11s

    Posted Under: Market Conditions in Los Angeles  |  August 10, 2009 11:50 AM  |  2,393 views  |  No comments

    The million dollar question. I get asked every day by buyers and sellers. I get told every day by buyers and sellers, buyers that the market is going to go down further when the "hidden" foreclosures come to the market, and sellers that the market will be up next year as long as they can rent their place this year to cover their payment. I do not have a crystal ball. Or, another way to say it, I do not have a crystal ball. I do think we have to pay attention to signs and try to figure out what is happening. A big sign in LA that is going to get bigger is 7-11. At one time there were 1,500 7-11 stores in LA, now has 800. I was surprised when I was in Santa Clarita today that there are NONE in the area at all! An article in the LA Times last week detailed the company's plans to nearly double by adding 600 stores in 7 years, and doing so now will let them improve their real estate costs as well as expand. They also feel they are hitting the market for lower priced options where their coffee bars and hot dogs are cheaper alternatives to Starbucks and fast food. Seems like the bottom has been hit in the entry level housing market. In every location I work the bottom level homes are selling for 10-20% higher in price than just 4 months ago, and the competition is staggering. Southern California still attracts immigrants from all over the world and increasing numbers of people will need places to live, eat, and buy Slurpees. How, I am looking for the article about Nordstrom's plans to open new stores. Anyone seen it? The full text of the LA Times article can be found at: http://www.latimes.com/business/la-fi-seven-eleven24-2009jul24,0,7883938.story

  • Where are values headed in the high end?

    Posted Under: Market Conditions in Los Angeles  |  January 13, 2009 10:09 PM  |  1,022 views  |  3 comments
    As an active agent, I talk to buyers and sellers every day. Buyers think it is 1929, and sellers think it is 2003. I talk to 10-20 home sellers daily who tell me they are going to wait a year or so until prices are back to where they were 2 years ago. When I ask them if they base that on any statistical analysis, they always admit that they are projecting their hopes on the market.

    Will values go back up in a year or so? Sellers whose homes are 10% too high today are expecting 5% annual appreciation starting today. Does that seem likely to you?

    Particularly in the higher ends, I doubt the market is done correcting, as the market shift is just making it up to the higher levels.

    My namesake, Bill Gross of PIMCO, the world's top bond trader, wrote in the summer of 1980: "Plankton, of course, are almost microscopic organisms that serve as food for higher life forms. Without plankton almost every fish and mammal in the sea could not survive, since most species depend upon other fish for their existence and plankton are the initial building blocks of the entire process."

    What does that have to do with housing prices? He continued: "In the case of real estate, the plankton would be the first-time buyer (perhaps a young married couple) with a desire to own their own home but with very little capital to carry it off. When the time comes that they can’t pull it off – either through an inability to come up with a down payment, or to service the monthly mortgage – then the ‘plankton’ would disappear and the rapid escalation in housing prices would ease as well. For, unless the current homeowner has someone to sell his house to, he’ll be unable to afford the house with the view or that extra bedroom, and the process would continue into the echelons of Beverly Hills and Shaker Heights. In the end, the entire market would wither on the investment vine and home prices would stop increasing at the same rapid rate. So to gauge the health of the housing market, look first at the plankton."

    Entry level markets are red hot. I recently helped a buyer make an offer on a lender-owned condo in Sana Ana, where properties are selling for 100% of asking price. Higher priced markets, like West LA, are starting to see lower priced properties selling and higher sitting for longer. While the news is reporting on the increase activity reflecting the lower price points, the upper end of the market is poised for a challenging year in 2009. Sellers speculating on higher prices in 2010 would not be interested in buying their home as an investment yet are doing just that by waiting a  year when they can cash out now.

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