So Cal Real Estate Market...great CNN Money article

[Ivan Dan]

Buy now??? UGGHHH (http://money.cnn.com/2004/04/19/pf/yourhome/homeguide_bubbleworries/index.htm)
If you know of anyone that is thinking about buying a property but unsure of the real estate market this is a great article for them to read.

[Dr. Eagle]

Originally posted by Ivan Dan
Buy now??? UGGHHH (http://money.cnn.com/2004/04/19/pf/yourhome/homeguide_bubbleworries/index.htm)
If you know of anyone that is thinking about buying a property but unsure of the real estate market this is a great article for them to read.
NFW I would buy an outhouse down here. The bubble will burst then you'll all be DOOOMED>......:p

[Ivan Dan]

AND the Lakers whoopppedddd some ass today!!!! :D

[Dr. Eagle]

Originally posted by Ivan Dan
AND the Lakers whoopppedddd some ass today!!!! :D
One game out of three...... impressive....:D :D :D :D

[AZmike]

Hey Ivan Dan,
Your boat looks good, I saw you floating around a couple times this past weekend.

[framer1]

Ivan Dan, Are you seeing a slow down in sales? It seem with the price of lumber and liability ins. something has to give. I don't think the homeowner can absorb all of the increase:confused: What do you think?

[bigq]

I said many times before, but heres a better way....you're DOOOOMED!!!!......DOOOOOOMED!!!:D
How many houses have fallen out of escrow in the last week?

[Ivan Dan]

AZmike~ Thanks! Shoulda said hi...we had a cooler full of cold ones. It was a great weekend.
Originally posted by framer1
Ivan Dan, Are you seeing a slow down in sales? It seem with the price of lumber and liability ins. something has to give. I don't think the homeowner can absorb all of the increase:confused: What do you think?
I know in the Corona, Riverside, Beaumont, Banning, Fontana areas they can not build homes fast enough. My brother put his name on a list for a tract of new homes about 3 months ago. He is putting down over 20%, has stellar credit and was NOT in the top 250 canidates to get a property. So far they have released 3 phases and he has received 3 letters from them stating that he is not in the top 250.
In the Orange County area they are running out of land to build on. This is a simple factor of supply and demand. If there is limited supply and demand is high (which is extremely high) the prices will continue to go up.
Homes are selling faster now than ever I think and they are getting 5-10 offers on them. I have written 5 offers in the last month and none have gotten accepted. They received offers WELL over list price because these people don't want to lose another home.
***My opinion*** I think the market will continue with record appreciation through the end of this year and as the rates go up toward the end of the year the sales will slow down a bit. I don't ever see the market going down in this area because of the huge demand of people that want to live here. Not to mention the job market in this area is better than it has been in a long while too and that is a major factor in the housing market staying strong. I think the worst you will see with this market is the interest rates will creep up to 7-9% and the appreciation rates will drop from the current 20-25% per year to about 8-10% per year.
BigQ~ You are definitely entitled to your opinion but I disagree with you. The bottom line is....NO ONE really knows what is going to happen with the market. The article above has some great information from a professional market analysis specialist and I have heard this same type of info from several other analysts as well.

[bigq]

Originally posted by Ivan Dan
AZmike~ Thanks! Shoulda said hi...we had a cooler full of cold ones. It was a great weekend.
I know in the Corona, Riverside, Beaumont, Banning, Fontana areas they can not build homes fast enough. My brother put his name on a list for a tract of new homes about 3 months ago. He is putting down over 20%, has stellar credit and was NOT in the top 250 canidates to get a property. So far they have released 3 phases and he has received 3 letters from them stating that he is not in the top 250.
In the Orange County area they are running out of land to build on. This is a simple factor of supply and demand. If there is limited supply and demand is high (which is extremely high) the prices will continue to go up.
Homes are selling faster now than ever I think and they are getting 5-10 offers on them. I have written 5 offers in the last month and none have gotten accepted. They received offers WELL over list price because these people don't want to lose another home.
***My opinion*** I think the market will continue with record appreciation through the end of this year and as the rates go up toward the end of the year the sales will slow down a bit. I don't ever see the market going down in this area because of the huge demand of people that want to live here. Not to mention the job market in this area is better than it has been in a long while too and that is a major factor in the housing market staying strong. I think the worst you will see with this market is the interest rates will creep up to 7-9% and the appreciation rates will drop from the current 20-25% per year to about 8-10% per year.
BigQ~ You are definitely entitled to your opinion but I disagree with you. The bottom line is....NO ONE really knows what is going to happen with the market. The article above has some great information from a professional market analysis specialist and I have heard this same type of info from several other analysts as well.
I agree with your assesment of interest rates, but i believe in some areas we will see a equity decrease of 15-20% not an increase as you have stated. just remember I am only guessing I configure computer networks for communication for a living, you do it everyday.:D

[welk2party]

Like Ivan Dan said, who really knows. The market will bear what the consumer wants. The price of homes is affected not just by demand but by interest rates as well.
I see an alarming trend of homebuyers buying homes that they are barely able to afford at the rock bottom interest rates. (I am a Mortgage Broker)As rates rise with high home prices, something will have to give. Generally speaking, these two factors spike back and forth until a balance is achieved. You can charge as much as you want for housing in demand. However, if you can't get qualified buyers it is a moot point. People are in debt up to their eyeballs and buying homes that are too expensive. It is not their fault. The market has been willing and able to do this.
A day of reckoning is coming. When OSB is approaching $30 a sheet, rates are rising, employment is slow in growing, and many other hidden inflationary events lead up to a nervous outcome. Consider this:
Purchase price of $500,000 (more common than not)
20% down $100,000 (lots of cash, usually from the sale of another home. First time buyer? Rarely. More like 5-10% and still a lot of momey to come up with)
Mortgage $400,000
Payment $2,528.27 (Based on 6.5% 30 yr fixed)
Taxes $625 mo. (Based on 1.5%)
Insurance $50 (Based on average)
Total $3,203.27
Add in utilities, 2 car payments with gas and insurance you are rocketing into a gross income requirement of $15k a month. That is a lot of money for most folk. Keep in mind my example does not include other debt, kids, or maintenance and repairs, or retirement. Scary stuff!

[Dr. Eagle]

Just remember, this was the same story in the late 80s and in 91/92 the bottom fell out. Lots of people couldn't sell their homes for what they had in them. Many took their keys into the Mortgage company and threw them on the desk and said, your house now!!!!!!!

[welk2party]

Statistics show California with record low foreclosures for the last couple of years. I don't think you will have the same situation as the 80's with people walking away. People have been upgrading more than anything and will be less likely to want out. Most will stick it out and wait for the market to come back.

[MagicMtnDan]

I'm not interested in "arguing" over the housing market and where it's headed or if/when the bubble's going to burst. I just want to remind all of you with an opinion on this subject of one fact that always seems to be overlooked or unmentioned...
POPULATION
The population in this state, country and world is billowing and the greater the population, the greater the demand for all kinds of housing, rentals, apartments, condos, and houses, etc.
There's a finite (limited) amount of real estate (land) and the population is growing. Add that fact to the mix and you just might reconsider your doom and gloom projections. Sure there are cycles to markets but the population growth will probably make any down cycle short-lived.
Real estate continues to be one of the very best investments you can make. If you don't believe me put your money into the stock market now or into the bank :eek:

[Mandelon]

Real estate is cyclical. Sometimes the up cycle is longer and the down cycle is minor, sometimes its the other way around.
California has not experienced the downcycle this time around as the rest of the country has.
Foreclosures are up all over the country, just not here. I am a broker and I used to manage foreclosures for banks. I booted the deadbeat borrowers out, rehabbed them and made them pretty to resell.
We did shitty little 1 br condos in the ghetto and multilmillion dollar estates. Liberace's house in Hollywood, the Heaven's Gate house in Rancho Santa Fe, I served Bob Mackie the designer with notice, repo'd ocean front homes in Santa Barbara and 4 unit POS units in Apple Valley.
Even at 50% LTV the banks still lost millions. Don't say it won't ever happen. It always happens. Just a matter of when.
I don't think it will be bad, but if Kerry wins, the war goes badly, the economic rebound poops out and jobs dry up....well, then just hold on. Too many cash out refi's and some job losses could start the ball rolling.
I don't think it will happen, things are actually improving for most folks. I believe we will have a leveling out of appreciation and no declines in southern Ca.
I want to know when wages are going to rise to keep up with all the bills and costs that are rising.....
(See next thread)
:D

[572Daytona]

Originally posted by welk2party
Purchase price of $500,000 (more common than not)
20% down $100,000 (lots of cash, usually from the sale of another home. First time buyer? Rarely. More like 5-10% and still a lot of momey to come up with)
Mortgage $400,000
Payment $2,528.27 (Based on 6.5% 30 yr fixed)
Taxes $625 mo. (Based on 1.5%)
Insurance $50 (Based on average)
Total $3,203.27
I want to know who you can insure a half a million dollar house with for $600/year? You can't do that in Georgia and I would think CA would be more with wildfires/earthquakes/etc.

[Ivan Dan]

Originally posted by 572Daytona
I want to know who you can insure a half a million dollar house with for $600/year? You can't do that in Georgia and I would think CA would be more with wildfires/earthquakes/etc.
That might be a little low but not much....I pay about $650/yr for my house and it was $435,000.

[Mortgage Paul]

Lately, I've seen a huge swing in the number of fallouts Realtors are having from telling people they were approved(and were not, to people losing their jobs, or layoffs before closing etc).
So far just this week I've had 16 deals from different Realtors that come to me to save their deals.
Mostly this is becasue alot of Realtors are new/unexperienced, and even some in the biz for 20 years, just don' t understand how financing works. They should have just had me deal with it from the get go, as alot of Realtors rely on their in house broker who chances are hasnt been around long and even so, very few have access to many loan products. Seems most are approved with 1 or 2 lenders max and usually its a company that doesnt have alot of products to begin with. Especially for people with credit probs.
As far as first time buyers, go, 103 to 110% financing is the norm anymore. Most dont have 10 cents to close, and basically can only start making payments..
Shoot even 2nd time buyers seem to need at least 100% financing because most have milked their houses dry of equity.
I was talking with a area manager for a lender the other day, and he mentioned First Payment defaults are through the Roof, and Foreclosures/notices of default are rising quickly.