I guess that idiot mortgage broker from earlier today isn't believing articles like this one...
Boy, if you know anyone in Cali looking for a home today - please send them this link..
Calif Housing Market Could Pull Homebuilders To New Lows
Watch out, California. Your housing market is about to get smacked.
The Southern California housing market is "in the early stages of a tsunami wave of cancellations and price cuts," predicts JMP analyst Alex Barron. Home builders with big exposure to this market could potentially take a hit that's even bigger than the beating many took in Florida.
Barron, who recently returned from a three-day tour through Southern California, said he sees similarities between market conditions in this area and those in the troubled Florida market.
"Demand has hit a wall" in Southern California as skyrocketing prices over of the past few years have made homes less affordable, said Barron. Builders have responded by offering higher incentives and steep price cuts, and by allowing buyers to put down shockingly small deposits - of less than 1% - on homes, he said.
"Deposits below 1% are a very ominous sign as it signals to us that demand is very weak and homes have now become very unaffordable," said Barron.
"If it's a $700,000 home and suddenly the builder has cut the price for similar homes to $650,000 or $600,000 - and you only put down a $5,000 deposit, why wouldn't you walk away from it?" he asked. "We would expect cancellations to rise dramatically in coming months as it will be relatively painless to walk away from such a small deposit."
August 22, 2006
The Southern California housing market is "in the early stages of a tsunami wave of cancellations and price cuts,"
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18 comments:
There is no housing disaster. Just make a reasonable offer.....about 80% below what the idiot wants.
anyone get the feeling it's falling apart really fast now?
Man, I was just looking at Fallbrook Ca. Northern San Deigo and there is a TON of houses for sale and the town is not that big. What is going on there? If you were to cash out you should have done it a year ago.
I keep hearing this, and all I want is the same news for NORTHERN California.
San Francisco? Please? Some of us want to get a little hovel of our own up here, but are waiting for reasonable, which never seems to be on the way.
the california housing cancer will spread from the foot (mexicalisandiego), through the midsection (mexilosangeles) to the head (san francisco) but its going ot take some time
"Anyone get the feeling it's falling apart really fast now"?
Yes! More news all the time on the RE bubble. Today, Yahoo finance has articles about keeping up the Jones, and plummeting housing prices, house auctions and more, seems like everyday there is some negative RE article to read. What happened?? RE only goes up?!
It's all starting to snowball~ by Dec when loans re-adjust it will be spectacular~ The Trifecta will begin:
Sellers that are just putting their houses on the market, are competing with tons of other stale listings, and the interest rates going up and loans re-adjusting.
What is a desperate seller to do? Drop the price fast - not just a measley 5-25thou, like whats happening now, but a hundred thou or more at a time. The sellers that cant afford to reduce much will unfortunitely be "OUT" of the game. Only forclosure option is left for them.
It's sad that a lot of naive folks will get hurt, but everyone must do their homework when buying a home, and not pay any price just because RE doesnt always go up...
AND. . .you forgot December 10th!. . .PROPERTY TAX day in California. . .all those 600K houses will have a nice $4500 Property Tax bill a comin. . .more in some (Mello Roos) (don't ask - it's a Calif Special Assessment District). . .areas. . .
Vela:
Dont assume all folks are selling because they are strapped. Most people i know who listed last summer or this year was because the read blogs like this and wanted to not leave any money onthe table when the dive went into effect. I myself listed a home this year not because I couldnt afford it (bought pre-bubble price with a 30 r , 5.375 rate) but because I wanted to cash in before it got left at the table. I sold just under what I listed it for. If I wold have gotten a lowball offer I wold have just taken it off the market. Simple as that.
I dont know where you live, but in the bayarea and here in Reno its flipper territory, and most loans are I/O or adjustable.
Glad to hear you are safe in your mortgage and just want to cash out because you know what happens next...
what's with the Rodney King riot picture? What's showing some black dude dancing in the street cause he dragged some white dude out of his truck and smashing his head with a brick?
Oh, its because he was turned down by some white dude for not giving him a loan for his shack costing $700,000 and his credit score is 400?
But seriously, why this picture?
Can't we all just get along?
Maybe this picture because LA will once again be ground zero for riots.
OMG, it brings back scary memories... I was working in SF at the time, the city closed down Bart without warning, had to get on a packed transit bus with my boss to travel across the bay bridge over to Oakland, where her husband picked us up and they drove me to San Leandro. I remember sitting in my apt, with the drapes drawn, watching the news during curfew...
I'm sure we havent seen the last of Riots or curfews in Los Angeles and other metropolitan cities...
Anyone have any verdict stories?
Last Sunday's LA Times open listing section had several listings with headlines like "bank owned." I leaf through it fairly regularly just to get a laugh and hadn't noticed that before last Sunday. The first wave of foreclosures are hitting the market in So Cal.
People are "building" houses in Southern California? Where? Between the mountains and the ocean there is no room left!
Agree that the so cal market is softening but more in some areas than others. I'm still waiting for prices to come down in Pasadena and its not happening, at least no MAJOR price slashing there.
It's not the sane homeowner that going to get hammered. It is the people who used their homes for a ATM and owe way too much and the home isn't worth it. But all bets are off if the job market stumbles.
opened_eyes, you forgot one: a major terrorism incident. After he retired, Gen. Tommy Franks was asked about his thoughts on a nuclear terrorism incident in this country. He said that it would probably end constitutional government in the U.S.
So add a nuclear or bio-chem attack to your scenario and you can kiss the Bill or Rights goodbye.
the picture is appropriate. The homeowners are going to get a beating, and that guy just got a beating.
Why does it have to be racial?
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