This new blog (thanks Marin blog for the link) tracks homes in Sacramento - what the flipper paid and what the desperate last sucker in is trying to get today
The smart flipper will take what he/she can get and get out in time to lick their wounds. The stupid flipper will hold out for the irrelevant price they paid, and go bankrupt in the end.
Too bad there's not a "sell" button or stop-loss orders on houses, eh?
July 24, 2006
Watch the Sacramento flipper meltdown home by home
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23 comments:
Woowwwwww!
Kind of feel bad for them - but if there are that many anxious to get out instead of living there and waiting until the next cycle - they must be speculators. I haven't seen house prices in the $300's in almost 4 years. One can only pray there are as many idiots in the NY Metro area.
EveryBody in California Knows that Sacramento is the ArmPit of California - Mostly Mexicans and trailer park trash - There is not a house in Sacramento that is worth more than 300k unless it is the Governors mansion. What a bunch of dip Sticks - another example of Greed ran Wild...
Where are we going with this people? There is no day-to-day bubble news. What ever is going on, it is not happening quickly. Perhaps we should all go on hiatus and reconvene in one year to talk about what has happened.
"Perhaps we should all go on hiatus and reconvene in one year to talk about what has happened."
What makes you think there will be any more to talk about a year from now?
http://tinyurl.com/oxpaq
Outside of extreme cases like Phoenix, the powers that be could keep this crazy party going for a long time. The Dems will likely get control of Congress in November so watch as tax rates go up, income is redistributed to the "less fortunate", and interest rates fall to allow more families to enjoy the American dream of home ownership.
"Where are we going with this people? There is no day-to-day bubble news. What ever is going on, it is not happening quickly. Perhaps we should all go on hiatus and reconvene in one year to talk about what has happened."
I'll tell you why nothing's happening. It's because the speculators have been slowly but steadily getting in trouble, foreclosing, whatever, and everybody else has been refinancing their ARMs to keep their payments down.
Nothing's going to happen with this for a long time, at least not until the next recession and by then inflation will probably have crept up to cover it.
A meltdown is a matter of timing. Prices may fall considerably in Phoenix, just don't know anymore, just know that even with the declines I wouldn't pay what they are asking and a lot of folk can still ask more than they paid if they bought prior to 2005. So if the builders knock down the price to 2004 levels maybe people will continue to move to Phoenix or other markets that revert to the prices prior to their speculative run-ups.
People who bought before the bubble will see paper wealth flee but can still make money. One of my friends, who against my advice, kept the house he bought in 1983 and even though it is in a declining neighborhood and he couldn't sell it for what he paid for it until 1998, rents it out for a profit and it will be paid off in five years and then all the rent is profit. In retrospect I guess I was wrong to tell him to sell when he could walk away with $100,000. During the 2005 bubble he could have probably sold the place for $190,000 or more but even if prices drop 50% he'd still get $95,000 but he wants the retirement income from a rental.
It is easy to shout BUBBLE and dump property but like all things, held long term, it usually evens out and in the investor's favour. Sure if you buy high and sell low you always loose but if you hold, except in extreme cases like a stock in a bankrupt company, holding seems to pay off.
I use to believe you could protect your assets by selling high but it seems after 30 years of investing I should have been the tortoise instead of a hare. You cash out thinking things will drop and you'll have the cash to swoop in and buy and all you see is prices keep going up for everything, food, gas, taxes, rent, clothes, homes, so in the end I guess all those people I thought the "greater fool" to pay those high prices and keep them for 30 years weren't so dumb after all. So what if you sell and make $300,000 if where you want to live a year later things sell for $350,000? For 30 years I've always said, "No, that neighborhood is too expensive, won't pay those high prices, and lo and behold even with the money we've made in other markets the one's we really wanted to live in are even more out of reach than before.
When we lived in Phoenix I wanted to live in North Central, Arcadia, Biltmore, or Willow and couldn't bring myself to buy in the 90s because I thought the price too high and bought in other neighborhoods nearby for 1/3 to 1/2 less. Well, even if the neighborhoods I wanted fall 50% they will still be 100% higher than in the 90s. So I should have just sucked it up and bought right?
Point is nobody can time markets and nobody really knows the future. Growing cities are a positive, declining cities a negative. Pick where you want to live and suck it up for the long haul, as long as you don't bite off more than you can chew with risk.
bakersfield is the armpit, Sacto is the a-hole capital of the overpriced golden state.
"There are 2.7 trillion in arms adjusting by the end of next year, and there is going to be a recession/depression starting in the 4th quarter, bringing the perfect storm, mark my words!"
Honestly it seemed like you might be right except for the fact that people can re-finance their ARMs and keep paying lower amounts.
There's not going to be a big problem.
Actually, it is a "myth" they can refinance, they really can't. thus the problem begins.
What do you mean they can't refinance? Hundreds of thousands of people have refinanced their ARMs so far this year in California alone.
3 Reasons they won't be able to refinance.
1. They won't have the equity.
2. A loan program won't be available that they qualify for.
3. Interest Only won't be available.
Therefore, they will be stuck in their loan.
Hey Stinker I mean Thinker - Get some fresh air - You Need it - the only thing that has not changed in a year is YOU..
To the thinker...
Patience my son, all in good time. Rememeber the breather lets us buy more gold, save more cash, realign our position, sharpen our thoughts, get out of debt, focus on the target.
This is the crash no one will escape from.
Good luck
Hey ???said...
What about the other 3.8 million. Take off your rose colored glasses. Let's not forget how to read stats.
I'm just not seeing the panic ... if anything, foreclosures are down right now along with preforeclosures.
Let me tell you a little something about huge runups in speculation.
It's not because of something somebody needs. It's a stock or something that somebody doesn't need.
So houses aren't the same. They aren't something that people can just dump. They dump it they've got nowhere to live.
So it's not going to drop like stocks or something.
Your not seeing the panic? That is because your a freaking idiot who can't see the crack behind your momma's butthole.
As I said in another thread, housing declines(even economic declines in general) are like a choo choo train. They start slowly and pick up speed as they move on. Considering that Appreciation nationally is now flat during the height of the season for the CONUS, that is a BAD omen. This baby will pick up a good deal of speed on the way down this fall. By January 1 2007, panic WILL be in every housing market. I expect a major selloff of the worlds exchange markets as they figure out the 2003-06 growth cycle is over and contraction is likely. The key is when this recession begins in 2007, is whether it turns into a depression in 2008-09.............or not.
While I hate to use 29-31 as a example. You talk to somebody in July 1930, they wouldn't tell you there was a depression, probably just a nasty recession that began a year prior. Talk to them again in July 1931, they would tell you things have completely collapsed.
The "there is no panic here" crowd are a bunch of stupid pansies that can't for the life of them see the road in front of themselves. They are also the type that will get burned if this thing turns really nasty in 2008-09 period.
consider the U.S. population growth for a moment ...
http://www.npg.org/popfacts.htm
"The U.S. population is growing by about 3.2 million people each year."
Then tell me that 4 million houses is a lot ... you guys are numbskulls.
And then furthermore, tell me which 3 states had the highest percentage growth ... Florida, Arizona and Nevada.
See a correlation between housing prices and population growth yet?
So shut the frack up ... get with the gravy train.
bubbleshanker have you done so little research as to not realize you can buy /sell futures in real estate now on the CME.
So if you want to short Florida you can.
Foxwoodlief - Right on!!!
>>> Foxwoodlief: For 30 years I've always said, "No, that neighborhood is too expensive, won't pay those high prices, and lo and behold even with the money we've made in other markets the one's we really wanted to live in are even more out of reach than before.
I 100% agree with you, and have been through this myself. I have about 20 years experience and buy and hold of quality is the way to go, even with paying a little more. (Not talking bubble here).
When I started out, I wanted a house on the beach, and they were going for the outrageous price of $385,000 south of Boston in the early 1980's. Fast forward to years later, and these same houses are now over $1.6M. A $385,000 house it now well within my reach, (for cash) but a 1.6M would require a mortgage and a big nut each month. An the house can get washed away in a big storm....
It is hard for younger people to think this long term. When I was younger, not only did it seem forever, but I found myself having to move in order to enhance my career in the industry. If I stayed in one house, I would have limited my opportunities. Because I decided to sell and rent for a while, it left me the flexibility to pursue the job that placed me in a better financial position today.
So my argument is to buy for long term, but if you are young, your career is going to be a more likely reason to want to sell, as opposed to trying time the market.
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