Yev

Here is the latest on foreclosures, if someone could wake these sellers up and have them drop prices, this whole thing would get to the bottom much quicker.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aYchgMdp… - Wed Jul 2 2008, 16:52

Dot Chance,

I am sorry to hear you have been ill, I hope you are doing better. It is good to hear you have been able to sell some homes. There will always be buyers and if you can snatch them, then you are doing better then others.

For me I am still in the waiting mode, the desperation level is still not high enough and sellers are living in a lala land. But with lending tightening more and more (Wachovia finally has stopped providing Pay Option loans) it will be tougher and tougher to find financing. I believe we should see even better drops in prices come the end of this year. Next year additional Pay options loans are due to reset, that should give us another significant leg down.

Here is another installment from Mr. Mortgage:
http://mrmortgage.ml-implode.com/2008/06/30/mr-mortgage-engi…

Take care - Mon Jun 30 2008, 22:37

Dot Chance,

Let's put some context around your statement "It is a fact that sales have increased for the past four consecutive months in the San Fernando Valley".

1. It is the selling season, you would expect sales to increase
2. Compared to last year and a year before the sales are DREADFUL !!!!
3. If you want to state sales have increased provide the numbers.

I've asked you numerous times on this thread to post number, but the only response you provide is that you are an optimist. That's great, I applaud you for being an optimist, but the here is a simple fact. The real estate market is dreadful in California !!!! - Sun Jun 29 2008, 15:01

Jordan, do you by any chance have a view into what type of financing these offers have?

FYI, stopped by the property it needs again 100-150K of work :) - Thu May 15 2008, 11:45

Want to see a 50% drop from the top in Studio City prime neighborhood ???

http://www.redfin.com/CA/STUDIO-CITY/11975-SUNSHINE-TER-9160…

This property was a short sale for a while and wasn't even listed. Now its a foreclosure. How many more of these will come out in the next 6 months? - Wed May 14 2008, 18:59

Tristan, and other buyers on here, how do you determine that prices are good? Everyone's definition is different. Some people will throw most of their paycheck and feel good about it, others have and unlimited bank account, and yet others want to still have a life in addition to a mortgage payment. So how exactly do you define "prices are good".

Personally I don't feel prices are good, prices have dropped considerably in some places, but in my opinion they are not good.

Good to me means 1/3 of my gross with at least 20% down. So that means 30 year fixed mortgage. I would consider other products as well but the baseline for me is a 30 year fixed with 20% down. - Fri May 2 2008, 12:43

S, Coldwater is a major commuting street ( I live in the area), but anything South of the Blvd. has been pretty expensive. So a drop like that is significant for that area of Coldwater - Wed Apr 30 2008, 09:05

Jordan, check out this house on Coldwater south of the blvd., don't know if its a typo or maybe a smart seller trying to get out with some profit, after all they did pay only 240K for the house in 1993. But a 300K drop will certainly look like a deal to someone :)

http://www.redfin.com/CA/STUDIO-CITY/3540-COLDWATER-CANYON-A… - Wed Apr 30 2008, 08:06

Ok, here is the nail in the coffin for a very large number of buyers in California and the real problem with pricing. This is where creative financing helped to prolong the dream, now chickens are coming home to roost.

First article on the site called "When $100,000 makes you Go Broke: The Invisible Hand Forces Americans Into Debt."

http://www.doctorhousingbubble.com/ - Sat Apr 26 2008, 08:56

Ok, here is a little help for the realtors here. Ever want to see what a house looks like from outside without lifting your foot?

Go to maps.google.com, enter the address and choose Street View, some of it is accurate some of it is not, but you'll get an idea of a neighborhood without having to go out there.

Jordan, here is the link for the Kling house, click on the little yellow guy when the link opens, the green arrow is the wrong address.

http://maps.google.com/maps?f=q&hl=en&geocode=&q=+12824+KLIN… - Wed Apr 9 2008, 17:37

Here is another phenomenal chart:

http://bp0.blogger.com/_SfxDExxUukY/R-he5fB56aI/AAAAAAAAASk/… - Tue Apr 8 2008, 21:49

Roger, I think accountability is good, especially on subjects like this. People get wound up and throw out an opinion, or a reaction to someone's post. If you don't think someone's post is valid, great then provide facts that debunk said statement. But if you simply don't like it because it doesn't suit your needs, that doesn't work.

keep up good work :) - Tue Apr 8 2008, 15:42

A side note: I just love these Thumbs Up/Down, especially the ignorant Thumbs Down. I wish they Trulia would show who tags it. - Mon Apr 7 2008, 22:20

Jordan, here is a list of stuff that I think would need to happen on that property for certain, there is no way around it.

A MUST !!!
- floors - either new carpet or new hardwood
- kitchen - cabinet tear-out, replace + new appliances
- bathrooms - tear out, redo from top to bottom
- walls - clean-up, patch, paint, possibly replace some
- ceiling - cottage cheese, redo + recessed lighting
- back yard - new landscaping
- front yard - new landscaping
- possibly new roof

optional
- completely change the floor plan, then do all of the above
- resurface the driveway

Of course all of the above depends on quality, and for a developer its all at cost, which I don't have, but it sounds like at least a 100K job. - Mon Apr 7 2008, 17:16

Hey Jordan, yeah, I bet it will be a complete re-model, I should of taken pictures. There are quite a few re-model's in the neighborhood, between Fulton and Whitsett. Let me/us know if you get the closing price anytime soon.

Thanks - Mon Apr 7 2008, 16:34

Listen to George Soros, somewhere in the middle of the video, and form your own conclusions.

http://www.ft.com/cms/893ac9c8-757e-11dc-b7cb-0000779fd2ac.h… - Mon Apr 7 2008, 13:41

Renato, it is frustrating, but you got to weather it out. Prices will drop, they are dropping in fact, but they have lots of room to go.

The math doesn't seem to matter to people, not a lot of agents talk about that (the higher the sale price, the higher the commission, yeah its a low blow, but its a fact), however, with tight lending, lack of buyers, and huge inventory, prices will keep dropping. End of this buying season should be eye opening to people. - Mon Apr 7 2008, 12:44

Jordan, the Kling house is a complete and utter disgrace, its a fixer upper, so at 599, you could put a 100K into it and possibly fix it up really nice, then try to flip it at the comp price. In that area, SFR's go for 700-1 mil range. That's still a dillusional price to me, I wouldn't give 350 for that shack. - Sun Apr 6 2008, 21:32

Hey, guys, here is one for the Studio City agents on this thread. How about this comp busting foreclosure at close to 300 per sq. foot. in the desirable Studio City !!! Zillow zestimate is around 900K. This should make the neighbors happy.

12824 KLING STREET, Studio City, CA 91604. - Sun Apr 6 2008, 08:01

Cat, there is one problem with adjusting for inflation, incomes have not participated in adjusting for inflation, and savings have gone down, I am looking at best for close to 2001 prices. - Thu Mar 27 2008, 17:12

Now if only the sellers would get it through their heads that they should stop asking 2006-2007 prices. I watched a video today, some woman in Encino will not lower her price of 1.1 mil for a shack. She just said NO, I am not lowering. - Thu Mar 27 2008, 13:31

Jordan, thanks for the data !!!

Sylvia, you're right I am not purchasing soon, I am just following the trend until the point where I see my price.

Here is an article from LA Times that talks about some absolutely scary numbers.

http://latimesblogs.latimes.com/laland/2008/03/california-fr… - Wed Mar 26 2008, 13:43

Just in case anyone missed this, here is the latest article on Bloomberg:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a4BfF…

It ain't getting better in the near or middle term in CA (6 months to a year and a half), and if I was a Realtor I'd do everything to move sales and prepare for the worst.

Just my opinion. - Fri Mar 21 2008, 12:01

Dot Chance,

I am not sure if I am getting my point across, or you're simply choosing not to respond in a manner that supports your stance.

You are making statements without backing up your information. You are saying "families who have been outpriced", what exactly does that mean, have you surveyed these people? Are you certain they have been outpriced, or are they simply thinking they are getting a deal because the property is a few hundred thousand below comps? As I said I see the same properties and I have put in a few offers but my offers are at a price that is below these "cheap" listings. I honestly don't expect to hear back as people and banks are not desperate enough yet.

It is obvious that you "should" get more buyers in the spring and the summer, but if you want to see if the buying season is doing well you MUST compare inventory numbers and sale numbers for the past few years. This will tell you basic ratios how well sales are doing as compared to inventory (demand vs. supply). Perhaps your team doesn't care for this type of analysis and you guys simply sell, sell, sell. Gotta pay the bills right.

FYI: I have been researching this market for the last few years, and keep on top of it. I do not miss any of your points, my responses address the fact that you are not backing up your information with any kind of numbers, which is irresponsible if you are discussing "buyers in droves", terms like that are too simplistic and relative.

One thing I will say about loose lending practices, is that it was all hunky dory when the market was flying up and every other LA Times story said, "Home Owners expect 25% annual appreciation on their homes every year", but now they cannot make their payments. HA - Wed Mar 19 2008, 23:22

It's the law of supply and demand: there were very few listings.
_____________________________

Given that I believe the demand was artificial generated by loose lending standards and "free" money, we should be back to the demand levels prior to 2001 with supply increased significantly by all the new construction between 2001 and now. I'd say the prices should fall below 2001 levels.

For the upper end, the investments in the stock market over the past month and a half should be quite painful, how does your 401K, investment portfolio looking? - Wed Mar 19 2008, 18:51

DotChance, I am not fainting, don't worry.

One thing we do agree on is that we are both optimists, I have been all my life. There is one thing that I have learned to be and that's a realist !!! There is a difference between the two.

I don't care that there are buyers and there are 14 offers on some properties. I expect there to be buyers, I am not saying no-one is buying. If no-one was buying there wouldn't be a market. I placed offers on a few properties.

My point was to get the supply and demand numbers from you, not to get a sarcastic remark on how you are so busy. If you want to state that buyers are out in droves then provide numbers supporting your "droves" statement. 2005-2006 was "droves" meaning every property had huge number of offers. The fact that some low priced properties have 14 offers means nothing in this market. Those properties are few and far in between, these people are trying to get a "deal" as I have tried. - Wed Mar 19 2008, 17:58

DotChance,

If you are so optimistic about your "booming" sales I am certain 5 minutes out of your day would not pose such an inconvenience for you.

My request is simply pointing out that although there are sales, supply and demand are not the same as compared to the last few years which is putting pressure on the prices and buying. In my view that fact is moving this discussion forward.

Jim, I have simply stated that current prices in the LA area are not supported by incomes in the area. Prices have been bid up over the past number of years (since 2001) due to lax lending guidelines and abundance of cheap credit. I am certain you speak to lenders and brokers and they tell you that ability to get loans is nowhere near where it used to be.

Has anyone noticed numerous issues with financial institutions who are involved with CDO's and numerous problems they are experiencing. Bear just got sold to JP Morgan for $2 a share, a huge number of lenders have gone bankrupt in the past year, all of a sudden the Fed is buying morgage back securities that they wouldn't even look at before. Banks are having issues lending to each other. Do you think these same banks will loan to regular people who have been buying houses in hopes of 20% increases year after year.

All of the above is a repetition of numerous posts from below, I don't mind waiting some more. - Wed Mar 19 2008, 16:45

DotChance,

If you were so optimistic about the "booming" sales, you would answer my request.

I'll wait for Jordan, 5 minutes out of his day, does not seem to pose a problem. - Wed Mar 19 2008, 16:36

Jordan, can you go back to 01/06-02/08, and also include:

Date | Inventory # | # Sold | Month Avg. Sale $

Although to me the Month Avg. Sale $ is pretty meaningless, but keep it for amusement.

Thanks - Tue Mar 18 2008, 18:33

Dot Chance and Jordan, I'll repeat my previous request:

Provide inventory numbers and number of sales for the past 2 months for this year and for the past 2 years, then we can make a determination regarding the health of the buying.

Just because there is the Realtor's Code of Ethics and responsibilities, it doesn't mean that it is followed. The SEC is also supposed to protect retail investor from fraud and manipulation, yet it happens every day. If you want to police all realtors with a third party, and enforce the rules, sure. But to point people to the Realtor's Code of Ethics is meaningless. Greed always wins. - Tue Mar 18 2008, 17:04

That's not going to loosen up the tightening lending guidelines. :) Unless free money rain comes back, we'll keep on moving down the slippery slope. - Tue Mar 11 2008, 11:40

JR, I'll ask you the same questions I asked Dot Chance. What is the current inventory in the area where you sell and how many sales happened in the last 2 months. In addition please provide the same numbers for last year and a year before.

Thanks - Sat Mar 8 2008, 08:59

Walstmnky,

1. The area(s) I am looking at are Studio City and Sherman Oaks(South of Blvd), Hollywood Hills, Brentwood, Pacific Palisades, possibly Santa Monica and South Bay, latter 4 will likely take longer of a wait. We are looking for 3-4 bed, between 2.5-3K sq. feet, some kind of a view, possibly with a pool.

2. I am looking for a price between 200-250 per sq. foot, I am not certain in the areas i am looking for I will be able to pick something up at less then that, unless we have a complete break down, which is quite possible.

I believe we will at least retest 2001 prices. When more REO's start appearing I will gladly begin low-balling. A fixer in Studio City just went for around 260 a sq. foot at 2800 sq. feet on a 0.36 acre lot off of Laurel Canyon. It hasn't sold yet but it is in escrow. There are a few more REO's that are appearing between 260-310 per sq. foot.

My guess, and this is my personal opinion, many sellers pulled their properties off the market hoping for better prices this spring and summer. When they realize it is not happening, people will start lowering their prices to move properties, by the end of this year we should see additional 10-20% drop. I will re-access where we are after October 2008 when the selling season slows down. I am thinking if I can lowball and get my price end of 2008, or start seriously looking toward the end of 2009. - Fri Mar 7 2008, 15:56

I honestly don't care if there are 1% or whatever number of foreclosures. I feel bad for the people, but then again they shouldn't have been buying houses they cannot afford, or hoping the market would keep going up. If they got suckered in by brokers, re agents, friends, and family it just comes to show you, do you own homework !!!

On the other hand, credit is getting tighter and tighter, prices are dropping, and REO's in Studio City(and other locations in LA) are increasing in numbers, which is all music to my ears.

I am looking to buy and I will get my price at some point. - Fri Mar 7 2008, 14:57

Dot Chance,

Could you provide us with the current inventory number and number of sales in the area where you are writing these offers, compared to last year and year before during the same time period?

Thanks - Mon Mar 3 2008, 20:27

Realestateinvestor, thanks for a great couple of paragraphs !!! I posted a separate thread asking agents on here to post an honest assessment of the market, your response is what i have been looking for. I got called an arm chair economist, troll, etc. by the same agents. Not one agent ever provides numbers to backup prices, or the market, or even understand why prices are where they are. Maybe some do understand but choose not to say anything.

Good job !!! - Sun Mar 2 2008, 18:16

Tom, please don't compare Warren Buffet investing into quality companies to real-estate. These quality companies grow their profits consistently, real-estate does not grow squat, except sucking in more cash for maintenance, taxes year after year. Based on your explanation real-estate will just grow and grow exponentially.

As far as "THE SKY IS FALLING", let's talk buy low sell high, I would rather rent then buy. I will buy when "I FEEL" the price is right, NOT because it will come back sometime in the future and because you say it will come back. Instead of plunking a 20% down on a property today, I can rent for a fraction of the cost, and buy in a year or two, when I KNOW that prices will be lower. If you want to buy now, then do so and sit it out, I will gladly use this opportunity to generate income off of my down payment instead of once again "HOPING" it will come back.

Basic money management. - Sat Feb 2 2008, 21:47

Hey Tom, it is obvious you didn't read anything that I wrote, or maybe you did read it but its way over your head so the easy way out is to simply say I have an agenda, and I watch CNN Business too much. My agenda is to buy a house in the Los Angeles area for a price which is supported by local incomes.

IF you did read my writing you would also realize that I don't listen to the media, except perhaps to see the current trends.

In addition, if you are such a hard worker, it doesn't take much to spell my name correctly, it only has 3 letters in it.

In conclusion, you have not addressed any of my points, so before you call someone someone's mind small, make sure to address what they have to say and prove them wrong or show their facts are wrong, otherwise it makes you look stupid. Thanks for listening.

Jim, prices in LA are still hovering around 500K on average for a decent place, still not supported by incomes, still in the la-la-land. If there was a decent place for 300K here, I wouldn't say anything. My point is that affordability level in LA is still not there.

Jordan,
One could argue that some people should sell their homes in this market. It all depends when they bought them. If you are sitting in a house from late 90's or early 00's, I would be a seller at whatever price at this point. At this point they missed the top, but they could still get a hell of a lot of money if they price their property correctly and not ask for last years prices.

If your property was also bought as an investment in the same time period, I would also be out as fast as I could at whatever price, because I would of doubled, trippled, or quadruppled my money. That just does not happen much at all, and if you want more that you are plain greedy ( I mean the owner, not you directly :))

If you bought your property a couple of years back I would cut it loose and not lose any more money on it, or try to rent it out, just depends on your personal finances. Personally I would let it go, as I don't like to keep investments that have potential to lose even more.

From the buyers perspective if I could get a property for 2001 prices in LA, I would do that whether by lowballing or REO, but if you are suggesting buying at the prices we have today, forget it, still not supported by incomes and there is nothing that I see that will push prices higher from here. If you have buyers who are willing to buy today, be happy that you do and walk them through the process until you pocket your commission.

Jordan, also regarding having a positive cashflow on your house in less than 7 years, either you are hoping or you know something that no-one else does. Here is an example:

I buy a house at 700K today. The expectation is that houses will drop in value another 25%. Well that's down 175K from 700K, makes my house worth 525K. Then I need my house to go up 33% to be back at 700K, ok that's break even on paper, but I still have to sell it and pay you commission, oops, I need to make more than 33%, but than I want positive cashflow. You need to make quite a bit more than that 33% from todays prices which in Los Angeles are still ridiculous and again not supported by incomes.

Please show me how I will have a positive cashflow before 7 years. Give me examples, market drivers, etc.

Giants over Pats. - Sat Feb 2 2008, 19:16

Let's address the interest rate issue, Tom's assertion that "if you hold for at least 7 years, you will make money", and the Media.

1. The Media
IGNORE it and do your own homework !!! The media is always late to the party and the media never does their homework, they simply report whatever sensational news they can find. Don't be a sheep !!!


1. Interest Rates
Let's analyze who the potential customers are for lower interest rates in todays market.
- Home owners with equity in their homes, if they didn't lock in a low rate already from a few years back, they could be potential customers for re-finance. This is fine since these are not the people who jacked up the prices in this market and who are upside down.
- People on the fence who think this is close to the bottom, they can low ball current prices or attempt to get their hands on an REO.
- People with plenty of cash to spare who don't care about rates, prices, etc.

Now how do lower rates apply to everyone else, well, they don't. People who bought between 2005-2007 are either upside down or close to it. They CANNOT re-finance. This is 70-80% of buyers in those years. Inventory is still high (supply), sales volume is still down (demand). People's salaries still do not support 500K homes. To keep prices where they are you need demand and it is GONE !!! Lending standards are getting tighter and tighter. I don't know what possible positive conclusions all of you are drawing from this, but I see nothing but down price pressure. Election year shenanigans will not create demand, they might create a perception of demand, but that's about it.
FYI: I just watched a 2000 sq.foot townhome built in 2005 get dropped 100K in price after being on the market 130 days, thats 150K from the original listing price, which is a short sale at this point.

2. "If you hold for 7 years"
Tom you must be seriously bullish to even think that in 7 years you'll make money after we had the most ridiculous price appreciation in housing. Look at the Nasdaq bubble of 2000, is that market back where it was? Yeah, yeah, you'll saying houses are not stocks, fine, but the speculation in the last few years is nothing different, the problem is houses are not as liquid and people don't lower prices as fast, because they "hope" they will get their million for a 300K shack.

Incomes in LA County DO NOT support these prices, this is the most fundamental reason for housing to drop. Please don't provide typical reasons about people moving to LA, desirable area, etc. Facts are facts 80K average income in LA does not support 500K home, period. If you are expecting to make money on a house that you purchase today for 500K in 7 years, that's a lot of home, and a lot of lost opportunity over such a long period of time.

As I said before this is your job, and you make your living on commission from sales, I do not expect a financially sound advice.

P.S. The bottom will be around the time when your neighbors tell you "Don't buy, you are stupid to buy, you will lose money" or when prices get close to 1999-2001 prices. - Fri Feb 1 2008, 22:26

John, sounds like you and I will be waiting for a while longer until we get our prices or not :)

Here is a fact that I realized a while back, it is pointless to speak with real-estate agents about market conditions. No disrespect to any of you, but selling homes is your job and pays your bills, so I do not expect any of you to begin saying that yes the market is heading down. If real-estate agents started saying that, eventually most buyers would be on the side lines. Hence I don't expect any of you to understand the market deeply enough and especially express your views in any sort of negative way. NAR proves this on a monthly basis. I equate MOST real-estate agents to stock-brokers, commission is your livelihood, and there is nothing wrong with it.

Just for the purpose of this discussion I've gone through the dot.com boom/bust, I understand/trade the equities/options markets, as well as manage highly technical projects. In addition financially I can purchase a home easily if I wanted to, however I choose not to, because my equity can be used better somewhere else up until this market comes to its senses.

To address a comment that buyers are astute who are buying today is reaching, they are "falling knife catchers", if you heard this term. They think this market is coming back and a 10-20% drop is more than enough of a drop. That is not the case. Prices usually revert back to the mean, and there is lots of room to go down. - Mon Jan 28 2008, 17:02

To answer this question one has to look at the reasons why this market is where it is.

Market ran up because:
1. Easy credit since 2001
2. Low interest rates
3. Zero qualification checking by lenders
4. Speculation
5. Realtors, mortgage brokers sold the idea of the "American Dream" to people who shouldn't be in houses
6. Large number of people took out unaffordable mortgages not just the buyers in the Inland Empire and RIverside
7. Fraud

Why are buyers dragging their feet? ( I am one of the buyers by the way)
1. Lenders tightening up their quidelines
2. The only way to buy in CA is with a Jumbo loan unless you have a downpayment, currently banks are restricting that activity
3. Incomes in CA do NOT support a median of 500K, or 400K, or mid 300K, I am sorry but 70K income does not support any of these prices.
4. Ref-is with money out to support lavish lifestyles in Los Angeles do not indicate wealth
5. 80% of loans in CA during the last 2 years were ARMS and Option ARMS, largest number of resets on those are coming in 2008, get ready for an even worse market this year
6. Investors lost their appetite for Mortgage Backed Securities, Wall Street says NO THANK YOU, hence lenders will not be offering ridiculous 700K mortgages to people making 20K.
7. Smart money (people who are not buying at this moment) will be waiting until prices get inline with fundementals, meaning incomes supporting prices, so for you real estate brokers, tell those sellers to keep dropping their prices and not to expect what their neighbor got in 2005-2006
8. Inventory is climbing
9. Sales are down

I am not sure how many more reasons I need to list to provide evidence of why buyers are dragging their feet. If you have not caught on yet, the media will make sure you catch on very soon as they keep pumping out article after article regarding the state of Real Estate in this country, and I don't mean NAR, they are full of it. I have a condo next to me that's down almost 200K and foreclosed since last January, in a 2005 building, and there are many more that I have been monitoring that just keep dropping prices. Another building next to our block has been on the market for over a year without a single sale, and price drops of 400K and still not a single sale. Meanwhile there are 3 more building being put up on the same block. This market is going down and down hard, I expect 2001 prices if not lower. - Mon Jan 21 2008, 18:27

Ken, I am not sure if you've read the threads on this site, but this topic has been discussed to death. Yes, this is Los Angeles, and in Los Angeles in 2002, prices were half of where they are today. Some of the reasons for today's prices is the following as discussed previously:

1. Loose lending (give money to anyone with a pulse, no matter if they can pay for it)
2. Low interest rates
3. Speculation (Flip that House anyone)

At the same time incomes have not increased, home equity withdrawals are not equivalent to income. Median income in LA is less then a 100K, since when can you afford a 500K house with 100K income. Creatively you can, but financially you cannot !!!

As far as demand supply, here is a well known fact, sales have fell off the cliff in the last 6 months to a year, and inventory as high as it has been in years. In addition to that foreclosures on bank's books are not showing up in the inventory and those are insane. So demand in Los Angeles is non-existant.

Government gimmicks to prop-up the market by providing 729K loans with 3% down will not bring the demand back. Go try to qualify for those.

Last but not least, real-estate market has NEVER been the way it is now historically, HOPING that it will come back is p_ssing against the wind. Income MUST support housing prices, and until they do you are a knife catcher.

And finally this is not doom and gllom, this is reason !!! - Tue May 20 2008, 11:59

Ken, you are using terms I haven't heard anyone use except the NAR. Strong market, affordable, low inventory. If you have been following the market, those terms would be the last ones to use !!! How about this, lending is almost gone, people need cash to buy, HIGH inventory, LOW affordability without ninja loans.

You think Hollywood market will be pretty safe? I'll say this, go back to 2001-2002, those are the prices you should expect to see. Right now is the "hottest" time in the real-estate season, wait till the end of the year and when those bank foreclosures will really start hitting the market. - Tue May 20 2008, 11:14

I am sorry APPRECIATION???? did you say APPRECIATION????

Good luck to you - Wed Apr 30 2008, 20:37

Helen, here is my advice, the real-estate market is not going to get better for a number of years, it is actually getting worse, there are foreclosures left and right and you have to compete with those. There are plenty of resources on the internet to support what I am saying.

If you want to live closer to your family then do everything you need to do to sell your house, or rent it out if that's an option. It sounds like you simply want to move on. At this point if you are not getting offers then your price is too high. That's just how it is. It is very hard for people to obtain financing these days the way they could in the past. if you keep your price too high your house will stay on the market and comps will keep dropping which is not good for you.

Bottom line, to move it you need to price it right and swallow your pride.

Good luck. - Wed Apr 30 2008, 20:33

Paul,

Your type of advice is what got her in this situation most likely. We are in the worst downturn in the real-estate market and you are talking about her home gaining its value back and more???? Are you insane !!!
This market will be down so far by the end of this year I'll be surprised if some realtors on this board will survive.

Her property lost 25% and will likely lose more. I don't know her financial situation, but here is a link so she can assess her position herself. How much more should she lose??? How many years will she have to wait to gain back the lost value !!! You think its normal for real-estate to gain 20-25% a year? NO NO NO.

http://www.doctorhousingbubble.com/when-100000-makes-you-go-…

Marites, either run the numbers for yourself or sit down with a CPA or financial planner and figure it out.

Good luck. - Wed Apr 30 2008, 20:22

Bruce,

Thanks for your response. Although your points are valid, and I agree with the multiple family members in the same household paradigm, one questions begs to be asked: How is this different than i was 5 years ago? Its not !!!

Again:
- Easy credit drove up prices, when you have 10 offers standing on a property one higher than the other, comps go up, prices go up and we arrive at where we are today
- Now that credit is tight there aren't many offers to come by, houses are on the market longer, VOLUME is down, meaning ther is nothing to push prices higher, or even keep them flat.

Let's cut the high end areas out of this, as people living there can afford to pay 2,3,4,5,whatever million without blinking an eye, that's a tiny percentage of population. Whether price drops a million or 2, the price of the house is still a couple of million and most people cannot afford it anyway. So it doesn't matter.

By the way there are plenty of homes in Bel Air, Beverly Hills, Pacific Palisades that I follow with significant price drops, LA Times has listings of "celebrity" homes with price drops and how unhappy "poor" celebrites are about having to drop the price.

As far as other markets having increases, yeah I know this, but then again, those markets don't require jumbo loans to pay for a 1500 sq. foot crack house. - Thu Feb 14 2008, 07:58

Peter,

Thanks for the long lecture about investment/market analysis, risk, and market timing. However you have not provided me with any information that describes the current conditions.

You have provided me with the similar advice I was getting and hearing during the dot com boom about 6 months before a total collapse. Thanks but no thanks. This is one of the reasons why I do my own homework and base my decisions on my research.

Just for your information I trade options and am fully aware about risk and making smart investments. I would be happy to make as many mistakes as Warren Buffet has. Did you know he talked about the real estate bubble in this country and he is not super positive on it. Just google Buffet and real-estate.

Also thank you for pointing out the benefits of real-estate ownership, however buying at the top or close to the top will not benefit me in anyway when prices drop 10-20%. No tax savings, or equity build-up will help me if I put down 10% and prices on the house drop 10%. I am not willing to wait 10 years to bring the housing prices back up to what I paid for it. i can make better return somewhere else and wait until the prices revert to the mean. By the way if you have been a stock broker you should know that prices ALWAYS revert back to the mean. As a stock broker you should be familiar with technical analysis and you should realize where the prices are currently. So either you are simply pushing your agenda or you don't really understand what has happened in the last few years.

By the way new numbers are out, sales volume in LA is down 50%, median is down to 458K.
http://latimesblogs.latimes.com/laland/2008/02/collapse-la-h…

Tell me again how good it is to buy right now?

Terra, thank you for the commercial real estate market note, but I am not looking at that. - Wed Feb 13 2008, 23:14

Hi Dot Chance, I am looking for an honest answer regarding the market in LA based on quantifiable evidence. I know the inventory and sales have crashed at least 50% compared to last year as well as previous number of years, however I keep hearing from the realtors everything is hunky dory.and that they even expect this market to get better next year. You're saying the condo market is overbuilt yet I am seeing 700K asking prices for 1500 sq. foot condos which is absurd. I guess only time will bring these prices down. I'd like to know who is paying that much for condos in Studio City and what type of financing are these people using. When money was free, greed ruled, now that money is tight what are people thinking.

I am an optimist as you are, but after doing as much research as I have, I cannot be an optimist on real-estate, prices here are simply not supported by fundamentals (peoples incomes). Why renting from a bank is different then renting from a landlord confuses me, maybe its mental, and people think they own something, when in fact they are living in a dreamworld.

Look at what Rebecca below is saying, "Rates took a dip last week which spurred buying...", ok what exactly does that mean? There are a hell of a lot of listings in South Bay, did all of them get bought, did 50%, 40% of inventory get bought? How does buying last week compares to buying a year or two ago. Being in this business you must know how your volume today compares to your volumes last year, year before, and it cannot be very optimistic.

In any case if there is a reasonable foreclosure or reasonably priced house I would certainly put in an offer, but until then I am on the sidelines. - Fri Jan 25 2008, 17:04