If so, please nominate him (or her) here for the HousingPanic Greatest Fool award - someone has to be the last one in after all...
April 24, 2006
Does anyone know anyone, ANYONE, seriously looking to buy a house today?
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keith.....there were 7 million buyers of homes in March in the U.S.......20 million so far this year......are you seriously calling all 20 million of them fools?
just because renting is good for you (though i seriously, SERIOUSLY, doubt your fortunes are getting better by renting), does not mean renting is good for all.....
I know someone who wants to buy a 780k condo in Neport Beach, 75k down, interest only. She told me that if the condo goes down to 500k after the IO period, she will just refinance into another interest only loan. Pretty crazy.
I would call whatever % of the 20 million people who have bought this year with a no money down, no doc, arm, io loan, neg am, what they are fools who will be punished to the full extent of capitalism.
Keith ... I love you're blog for two reasons:
1. You're right about most things.
2. Your pictures make me laugh, and laughing is something we all need to do more of.
Back to your question ...
If someone is super-rich, I mean super-rich like Michael Dell or something, would I hesitate buying my $5 million ocean front vacation home in Hawaii?
Nope.
Other than that, the economic odds say "hold off" until home prices come down, which I expect them to do.
Keep up this great blog.
Went to several open houses today in Boston suburbs. The first one was a condo at 48 Quimby Street in Watertown (MLS#70369381). A flipper/renovator purchased a two family in March 2004 for 510k, spent a year plus rehabbing it, and then put it on the mkt as 2 condos in Aug 2005. He wanted 479k for EACH condo, A TOTAL SALE PRICE OF 958k for both combined!! This means he was looking for a 448k profit (less rehabbing costs of course) for rehabbing two condos! There was obviously minimal interest because the property sat and sat, and then was reduced from 479k to 459k. Then in Feb 2006 it was taken off the mkt. Big surprise - it reappeared in April 2006, a re-list at 459k. Both condos are for sale now. I asked the realtor how long it had been on the mkt. He said "Only 1 week". Yeah right! Try 8 months for a real answer. The condo was nice and I am glad that these flippers are rehabbing the neighborhood, but they should not expect make 400k or whatever for just rehabbing a place, expecially when it is right down the street from some slum apt buildings. The open house was empty except for us. I kind of felt sorry for the realtor to be honest. All work and no pay these days for them. We'll see what happens next....
We also some starter houses in suburbs north of boston. One was for 420k and was conveniently located right next to a railroad track. It was kind of small and old, basically a starter house. We also looked at another similar small old house for 439k, conveniently located right next to a cemetery. I would describe them both as small undesirable starter houses that are worth (actual worth) about 250k in my opinion. If we bought one of those crap cemetery/train track starter houses, we would more than double our current monthly housing cost compared to our rent. Hmmmm, I can rent a really nice apt or pay double the amount for a crappy house with a view of a cemetery?
Frustration anyone??
Keith,
I've been critical of you in the past regarding your view on immigration. Your views on the current housing market are spot on. Keep up the good work. The pictures are also great.
Elizabeth
P.S.
I think the dollar just fell further(4-23-06 1955 hours). Hmmmm... what will that mean for the housing market?
To the person who reported about someone buying a condo in Newport Beach...maybe I'm wrong, but if the value of that condo actually did drop from 780K down to 500K, and no equity other than the 75K down (705K loan balance), that person should try explaining to everyone how a bank would be willing to refinance a 705K loan when the property is only worth 500K. That would be about 140% of the property's value and the most I've heard any financial institution would lend is 125% of value. Also, that person should explain what they will do if something in their life changes where they have to move somewhere else and they can't get rid of the property because it's "underwater".
I love the photo of Keith which came with this question. Exactly how I imagined him after reading his incoherent posts.
bayh_allen_2008:
Those numbers you quote, those are seasonally adjusted figures. That's a fancy way of saying those numbers have already been anualized.
So, this year at current rates, economists expect about 7 million existing homes to trade, and about 1 million additional new houses to trade.
I'm not dissing your point (you can still make it), just clarifying the facts.
--Get Long Vega
bayh_allen_2008:
Those numbers you quote, those are seasonally adjusted figures. That's a fancy way of saying those numbers have already been anualized.
So, this year at current rates, economists expect about 7 million existing homes to trade, and about 1 million additional new houses to trade.
I'm not dissing your point (you can still make it), just clarifying the facts.
--Get Long Vega
Good point Keith, I support your self-nomination!!!
Vega - i think what bayh was trying to do was answer keith's question - "does anyone know anyone, ANYONE, seriously looking to buy a house today?"
20 million seems like a lot of 'anyone'
Lots of sold signs here in Pasadena
No lack of greater fools.
Who said there would be?
I just met ANOTHER unintentional 2nd home owner. Of course, the first thing he mentioned to me after we shook hands was, "I understand you are still renting, you need to look at my house. It's perfect for you."
1000sqf. $550k. Ummm. No thanks.
We just moved to San Francisco and we are actually were considering to buy. I was considering 6K per month - hard but possible.
But then friend of mine (which I consider very smart) told me to wait and just rent.
So I'm looking for house to rent.
20 mil..what r u smoking ( r u a helocked investor?)
total sales/yr last few bubbly yrs, were in 7 mil range..6 mil existing, 1 mil new...These will drop to 4 mil or thereabout soon
get your facts right and then pontificate..
Idiot.
last anon....bayh wrote:
20 million so far this year
6.5 + 7 + 6.5 = 20
thought i would do the numbers for you in case you can't do math either.
7 million in one month........20 mil for jan/feb/mar
Looking for an 8-unit building with cap rate above 9% in Los Angeles. I'm only looking casually at this point and inventory has begun to increase after a dead year last year. My target date is late 2007 or 2008.
Regarding suburban SFRs in California, there will be a flood of inventory by the end of this year and significantly lower median prices next year.
keith.....there were 7 million buyers of homes in March in the U.S.......20 million so far this year......are you seriously calling all 20 million of them fools?
HAHAHAHAHAHAHAHA!!!!!LMAO!!! SOMEONE DOESN'T KNOW HOW TO READ THE STATISTICS!!!!!!!!!!!!!!!!!!!!!!!!!! 20 MILLION!!! HA HA HA HA HA HA HA HA HA HA HA HA HA. THAT'S 7 MILLION ANNUALIZED, DUMBASS. LOOK UP "ANNUALIZED" IN THE DICTIONARY.
Concurring - it's not 20 million for the year. Each month, they re-annualize the statistic ... 6.5 million ... 7.0 million ... 6.5 million. You don't ADD these up. And, YES, they're all fools.
I thought 20m sounded extremely high -- that would be about 1 out of every 15 Americans buying in a 3 month period. NFW.
They're not all fools, but the ones who bought from flippers in bubble markets at grossly inflated prices are, and they'll soon find out why if they haven't already. Can anyone spell B-U-Y-E-R-'-S-R-E-M-O-R-S-E?
bayh - that number is annualized.....the correct number is 7 million projected for the year......
that is still a lot though
I always look at property for sale. Right now its fun to go to open houses and hear the sales pitch. I cant even get my bussom buddy realtor friend to go in with me on a 2 acre piece in LA. She says its a good deal. If its such a good deal why dont she pony up half the down and buy it with me.
If you need a house now and hold off, rates might be in the teens in two years when housing prices collapse. WTF good would it do unless you have enough cash to buy the homes outright?
I live in an area where a new 3000sf w/pool house goes for $200K. Do you think that price will drop to $120K in three years?
There's always the chance for inflation, and housing prices will actually be higher. The Fed doesn't know what the heck it's doing now. My fear is that they sto praising rates an inflation gets out of control.
We are closing on a house Friday. But of course - the house is UNDER 100K.
I make damn good money, and I still think that paying more than 200K for a house is rampant insanity - no matter what the market looks like.
But then of course, I'm one of those crazy people who look at a house as a place to LIVE and to make your own, not as an investment to be dumped in 3 years for twice as much as I paid for it.
*shrugs*
twib - if you can rent your house out for more than your cost of owning, you'll be fine
texas is one of the only areas not to get the bubble. so it'll be one of the only areas not to crash back to the median - it's already there
cheers
Re Pasadena:
Lots of sold signs but did they get asking price...or less...how much less???
I noticed alot of open house signs theres yesterday too.
My buddy in seattle is thinking of buying another condo to rent all the while hoping it will go up in price so he can sell it in a couple years.
I told him now is not the time to speculate but what can you do.
Panicearly I totally agree with you. I am willing to take my chances on higher interest rates.
My mother is looking to buy more property. She currently lives in SF and says "it's never gone down in 20 years, therefore, it will not go down now". I have tried to disuade her.
We (3) people live in a 900 square foot apt in Austin Tx. When our house in Albuquerque went up 40k in one year, I told my husband, "now was the time to sell and move". The schools there are terrible, it's cold there (although the realtors won't tell you this), and they recieve 60 mph winds regularly, that create dust storms.
Many California investors are in Albuquerque right now. In fact I think one may have bought our house.
They have no idea of the harsh climate there. Also, there are almost no well paying jobs there. People are struggling.
We are now waiting patiently for the crash, with money in the bank. We now live somewhere with excellent schools, which we just couldn't find.
On another subject entirely. I was in Puerto Penasco over Christmas, and the poverty there was really eye opening. I don't blame the mexicans coming here. They are starving. We should show compassion to them.
Forgot to mention the altitude in Albuquerque. It's as high as Denver. Many retirees that move there thinking it will be utopia have health problems. I'm a cardiac nurse, and saw quite a few end up on my unit. We all need to be sure of what we are buying.
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