Foreclosure in Santa Maria>Question Details

Penny G, Home Seller in California

ok, I realize there is no real answer out there, but if you took your best guess, are we near bottom on

Asked by Penny G, California Tue Dec 11, 2007

housing prices? Why or why not? Thanks!

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Mike, You are not familiar with the Larry the termite guy leading economic indicator ??? He has been one of the most reliable leading economic indicators for housing on this thread for almost six weeks ! Back to school for YOU !! I don't know him at all, but since Penny and Linda do, I put my faith in Larry!.

On Jan 31st Penny ( the original poster )wrote "So the Penny's sister indicator is thumbs up for the market! Second, my friend Larry from LD Termite has been twiddling his thumbs waiting for the phone to ring for termite inspections in Santa Maria, California. Yesterday he did 5 termite inspections!!! Amazing turn around in the Penny's friend Larry the termite guy indicator!!! Yup, things are looking up!"

I give more credence to Larry's termite twiddling thumbs than to Bernanke Ben' s benign beard. And I believe him to be more reliable in the short term. Anecdotes lead statistics by extended and significant time frames in this industry. Ignore anecdotal evidence at your peril. But do continue to have fun with it..
3 votes Thank Flag Link Sun Mar 16, 2008
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
Contact
Thank you everyone for your input, I appreciate the time you took to answer my question. Now I will answer two of yours. Why did I ask? I am selling my house in a very slow down market. I am fortunate that I am in a position financially to wait out the market. I had to move for family reasons, and unfortunately couldn't take my cute little cottage with me! So now I am renting, when I am really a homeowner at heart. My equity is tied up where I used to live. When my house sells, I'll be in a position to buy again in my new location. And to answer the second question posed, the house is listed for $365,000, which is a bit less than I "have in it". Thanks for asking! Now the good news that I have to report, using 2 of my indicators. My sister has been sitting on over $200,000. cash for several years, waiting for the market to hit bottom. Last month she bought a house! So the Penny's sister indicator is thumbs up for the market! Second, my friend Larry from LD Termite has been twiddling his thumbs waiting for the phone to ring for termite inspections in Santa Maria, California. Yesterday he did 5 termite inspections!!! Amazing turn around in the Penny's friend Larry the termite guy indicator!!! Yup, things are looking up!
4 votes Thank Flag Link Thu Jan 31, 2008
I think Trulia needs to start categories of FAQ as this one has been featured many, many times!! If the Trulia Girl is moderating how about it?? I'm not going to give my upteeth explanation of this. Penny, I would cursor through the questions pages at the bottom. You'll find them out there. I'll let someone else explain. Good site to visit: OFHEO.org which is the Office of Federal Housing Enterprise Oversight. They have a terrific "trends" site for real estate pricing. But why do you care? Explain THAT and we can advise ou better. Thanks!
4 votes Thank Flag Link Tue Dec 11, 2007
Ok, I accept, but only if I get to wear a tiara! Here's an update on my house for sale. It didn't. And the renter moved out. I'm digging in for the long haul.... But what the heck, I bought my first house in 1976 and have bought and sold in every market out there, it's not timing the market, it's time in the market.....
3 votes Thank Flag Link Tue Mar 18, 2008
Interesting thread, most interesting responses from everyone.

Even with today's uptick in the existing home sales, I seriously doubt that we've seen the bottom. I doubt it because in order to determine whether or not we are close to the bottom, one has to ask how we got off the top. Housing prices began declining after the first lenders started going under and the sub-prime mess started unraveling. More and more lenders started closing shop, creating the credit crunch (which as I remember was announced about 9 months ago). Big lenders like Countrywide were unscathed for a while, but not long after they started announcing serious trouble. Even today, take a stroll through the Countrywide website and look at their REO listing. It's page after page, after page of REOs. The big banks are also holding a big bag of subprime loans - even though many of their loans have been already sold at a discount to other companies. So there's no question that the Fed understands the profoundity of this issue, they've recognized the potential of banks having serious financial problems - hence the lowering of the overnight interest rates and the 200B injection of liquidity into the banking system.

The underlying economic conditions that started this downward slide are still in effect. The Fed has continued to cut interest rates even with inflation as a concern. At some point the interest rates will have to climb again, which will again provide another punch to the housing market. Additionally, we haven't even seen the worse of the maturing arm loans - yes, the worst is yet to come - which will flood the market with even more foreclosures, short sales and institutions trying to offload inventories, competing with homeowners trying to retain some of the equity they've built up over the past few years. Not such good news for owners with negative equity though, they may have to ride it out for a few years.

So, when looking for the bottom always look for the underlying causes of the mess to be better, right now they are not. The economic outlook has continued to deteriorate, many think we're in the middle of a recession. Hoping that the housing market will stabilize in the middle of a recession is unreasonable. When median home prices reach 2000 levels (adjusted for inflation), I would expect to see a short dip even lower, and then start seeing some recovery. The dip would be caused by economic pressures, it happens after almost every bubble (housing and stock market). Keep an eye on the economy and the home prices - the bottom isn't close yet, but the good news is that it will come, the market will recover and prices will go up again over the next 2-4 years.
2 votes Thank Flag Link Mon Mar 24, 2008
I nominate Penny and Larry to be the new Secretary of the Treasury and New Chairman of the Federal Reserve after Secretary Paulson and Chairman Ben Bernanke quit in frustration.
2 votes Thank Flag Link Tue Mar 18, 2008
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
Contact
Santa Maria = Punxatawny, Larry = Groundhog. Termite inspections on foreclosure = market declining. Termite inspections on non-foreclosures, non-short sales = market stabilizing. Termite inspections on non-foreclosures, non-short sales + more than one bidder = market rising. Call it June '08 the test month. School's out, it's ok to move, if anyone anywhere is going to buy a house it's then. Let's ask Larry to keep a stroke tally of termite inspections. A = Foreclosures/short sales, B = Seller & Buyer agreed to a price and closed a deal, and C = B+ 2 or more bidders. If A >B and > C, market is not rising. If B > A and > C, market stabilizing, if C > A and > B, market rising. We'll get back to you July 4th, 2008. Hopefully this will answer the original question - "Are we near the bottom on housing prices?"
Web Reference: http://ldtermite.com/
2 votes Thank Flag Link Mon Mar 17, 2008
Like Cramer, I am calling the bottom... I am calling it a LONG bottom. A relatively flat long bottom that will last all year. Prices will not appear to climb but they will not drop much more either. Numbers of sales will increase. Areas such as mine may not see prices jumps until 2010.
2 votes Thank Flag Link Thu Jan 31, 2008
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
Contact
Cramer on CNBC is calling the bottom now. Fed rate decrease and Fannie Mae limit increaseswill be the turning point. IMO, Nicer areas are at bottom now, while lower priced properties will bottom next year.
2 votes Thank Flag Link Thu Jan 31, 2008
From all the information I am reading about the mortgage market, foreclosures and increased inventory my personal feeling is I think prices will continue to decline but gradually. The UCLA Economic Forecast this year stated that "the bottom of the market" will not finish "bottoming out" until 2009-2010. They are usually conservative in the predictions from what I hear. I recently attended to a short pay/foreclosure class and the expert who gave the class predicted that the number of foreclosures we have currently will triple by this time next year. Additionally, he predicted that number will triple again in 3-5 years. I believe he makes his predictions by looking at all of the interest only loans that are due to reset in the next few years within California and nationwide. Several people will not be able to afford "the real payment" and they will get foreclosed on. In the end, the amount of foreclosures coming into the market place definitely affects home values. But of course no one has a crystal ball.
2 votes Thank Flag Link Tue Dec 11, 2007
Ok thanks everyone for all you insight, wisdom and encouragement. (I'm the originator of this thread...) I decided to pull my house off the market. I'd rather wait it out than take a short sale, I'm lucky I have a choice. Since I wasn't able to sell the house at a price that would work for me I have decided to try something dramatic to change the neighborhood, thus increasing all property values in the neighborhood, and mine in the process! (Hey, we had to DREAM about getting to the moon before we actually DID get to the moon, right???) Therefore I switched gears and am trying a new marketing avenue with a friend of mine who is trying to sell his country store right down the street from my 100 yearo old cottage. I have a good gut feeling that there is a buyer for every property that needs to be sold. If that assumption is a solid given, then time and price are the variables. If my price cannot change (I am willing to sell it at the current mortgage price with 0 cash out), the only adjustable variable is time. So wait I will.... And I'll have some fun in the meantime promoting a contest to generate ideas for a new use for the store that has been for sale for about 2 years. Personally I think Sisquoc needs a Basque Restaurant. And my assumption is that if we did get a buyer for the Sisquoc Store that put in a Basque Restaurant, Sisquoc would become 23% more interesting, thus increasing property values by half that percentage, thus increasing property values by a bit over 10%. Since I am keeping my price at the preset value, if the house increases in value it will become more desirable, thus attracting the buyer that is out there for this specific property. My motto: Yesterday is a History, Tomorrow is a Mystery, Today is a Gift, That's Why it's Called The Present!!! Anyone wanting to enter the Sisquoc Store Contest to win some local wines on July 4, 2008, just click on my name to go to the blog!!!
1 vote Thank Flag Link Fri Apr 4, 2008
no bottom in sight
maybe 2010

anyways

keep the house

and

good luck
1 vote Thank Flag Link Tue Mar 25, 2008
I think all the activity we are now experiencing is just indicative of the "spring-market" as this IS when we SHOULD be seeing increased activity. Officially a "recession" is two quarters of negative growth which we've yet to see. But I'm more in agreement with BP. The recent "uptick" in sales is simply caused by the dumping of REO's into the marketplace. I'm wondering if the families who LOST their homeownership due to bad lending policies will be supplanted by those "qualified" buyers taking advantage of these incredible prices.
We are two counties above San Francisco and when they mention "Bay Area" we get lumped into this and the major media outlets all broadcast into our area. Last night they had a SF Realtor saying how the upper end is selling like "Hotcakes" (I should invest in a IHOP!). Here in Sonoma County we have and 24 months supply of those "Hotcakes"--ever eaten a cold pancake? Bleeeech! What I'm getting at is all real estate is local. We as Realtors should not "buy-in" to any NAR announcements (irrational cheerleaders) or even statewide predictions (California's Leslie Appleton-Young is much more tempered than Mr. Yung!).
Keep it local, follow the stats, and check the trends. If you're on a listing appoint with someone who has equity and you’re in a sea of REO's and Short-Sales THEY need to know this! They are going to get BEAT UP! Do they really have to sell? Your counsel is now why you get paid the big bucks. Bread upon the waters today will equate to additional business years from now.
The last time we went through a downturn like this we were flat for almost 5 years AFTER the fall and bottom. I have not heard a big SPLAT!! Yet so I don't know if we've gotten to the bottom to start our way back to the top!
1 vote Thank Flag Link Tue Mar 25, 2008
Does that mean a dollar is only worth a penny now. I am confused exactly how long are we going to be in
this recession???

My market indicator is up, Investors are coming out of the wood work and starting to sniff around, not buying just yet but, the interest is there. First time buyers are getting qualified and we're pounding the pavement finding them homes. I feel that the market may be at its' bitter end for falling prices and starting to level out.

People if you're waiting for the market to bottom out look in your rear view mirror, you've just missed it! Meaning if you would like to have prime pickens of the properties available now, start looking now.
1 vote Thank Flag Link Mon Mar 24, 2008
Now that Penny is the new Secretary of the Treasury.... the Dollar becomes the new Penny !
1 vote Thank Flag Link Tue Mar 18, 2008
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
Contact
Best of luck with everything and congrats on your new elected position! BTW, the tiara looks beautiful and really frames your face nicely.
1 vote Thank Flag Link Tue Mar 18, 2008
Oh, THAT Larry the Termite Guy!! Of course! This is "twiddling his thumbs" on one side of the graph--bad market. "Phone ringing off the hook" part of he graphy--Great market. Got it. Then of course we have the "I wish these were brains" lagging or in this case, sagging indicators. Perky is good! That's the breast, uh, BEST, I can do! Dagnamit!
1 vote Thank Flag Link Mon Mar 17, 2008
You'd have to be absolutly crazy to think that values in Santa Maria have hit thier low. Although they have gone back to 2001 values in many parts of town, we have many more foreclosures that are ahead. More foreclosures = more decline. I know Larry at LD Termite and I give him quite a bit of business, he is a great guy. However, seeing as this post was first asked 3 months ago and we are still very much in decline I predict based on many economic factors, that we will see Santa Maria bottom out next year or on 2010. Just because home pendings are up with all the crazy cheap foreclosures right now, there is no end in sight for this year. However, now is a terrific time to invest in a rental property since 20% down will get you positive cash flowing. It's been a long time for that to come around again.
1 vote Thank Flag Link Sun Mar 16, 2008
Penny, Always glad to hear good news! I think we're going to hit a point in pricing, interest rates and new coforming loan limits where the fence sitters are all going to start jumping off and buying. The New Home Builders are offering some amazing deals now. However, i still see that cloud of foreclosures lingering for months to come. We need to get the legislators off their duffs and enact some strong medicine ($1500 per family aint' it). I don't see families being thrown out into the street. They have rent money, got in with zero down, many haven't made a payment in months before the foreclosure so they are saving a ton of money. The wrote off their high payments and had tax savings. Loosing a home is NOT what we all had in mind by increasing homeownership over the past 7 year run-up. But "mad-money financing" gave everyone the chance but those adjustment hiccups gave them all home digestion.
My congrats to Sis! Homeownership is a wonderous thing!
1 vote Thank Flag Link Thu Jan 31, 2008
I would refer you to the National Association of Realtors and California Association of Realtors websites. The CAR economist is quite candid about her opinions. Please go to http://www.CAR.org
1 vote Thank Flag Link Wed Dec 12, 2007
I am constantly checking the OFHEO.org (Office of Federal Housing Enterprise Oversight) site and I am still depressed because I can't get a house within my budget. How much are you selling your house for?
Web Reference: http://OFHEO.org
1 vote Thank Flag Link Wed Dec 12, 2007
Uninterested in interest rates...bottom schmottom. The bottom is where the media says it is. If they said the bottom was today, you'd have a half a million people go out and buy a home tomorrow. My God, every time someone is about to predict the fallout of the real estate market based on interest only loans makes me wanna gag...no gag their mouths. There are a lot of people like me who can well afford a fixed rate 30 year term, who choose not to because I have better things to do with my money. How many people are about to retire, sell their home and move, and knew it 5 years ago and didn't want a higher fixed rate! Not all homeowners will lose their homes, just refi into another interest only loan, albeit at a higher rate than a few years ago.
0 votes Thank Flag Link Sun Jul 6, 2008
Peggy,

What a great question! It doesn't appear that we are through the storm. But prices are good and I have more buyers than the inventory will accomodate and there are routinely multiple bids on bank owned properties, so I think buying is a good move if you plan on holding a minimum of 3-5 years.

If I were a seller and didn't have to sell -- I wouldn't . The real estate market is a fast lane right now -- if you're not prepared or unwilling to go fast -- you have to get over to the right. Check out my latest article for home sellers in the Santa Maria and Orcutt market: http://santamariarealestateblog.com/2008/07/06/selling-your-…

Tni
0 votes Thank Flag Link Sun Jul 6, 2008
Linda, How did Larry the Termite guy get into this thread and who cares if you gave him a lot of business? Is their a leadging larry the termite guy indicator I'm not familiar with?
0 votes Thank Flag Link Sun Mar 16, 2008
Hi Penny,

My response is directed to Michael's answer below.

I hear you Michael and I'll share your comments with our team. We've noticed this as well and are currently analyzing how we can make our search options more apparent and better for users.

Best Wishes,

Emily Gibson
Customer Service Representative
0 votes Thank Flag Link Wed Dec 12, 2007
Looks like you have a few years to wait to be able to afford a home in Cali. Why don't you by an income property here in Texas during the interim to help build equity and cashflow for when your ready. And the first guy was right, everybody asks this question.
0 votes Thank Flag Link Tue Dec 11, 2007
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