Figuring that 100% negative cash flow is really sucking, and they can't sell without taking a massive loss, desperate homedebtors are now putting their biggest mistake(s) out there as rentals, hoping this whole "housing bubble" nonsense just blows over and BAM they can make their big killing when the market improves in a few days.
Yup, this is going to end badly. So, so badly.
Cold Sales Give Renters a BreakVacancies, Prices Affected as Owners Lease What They Can't Unload
As home sellers grew more frustrated with the slow local real estate market in recent months, they abandoned their for-sale signs and put their homes up for rent. That has increased choices and cooled prices for tenants in one of the tightest and most expensive parts of the country.
But the climate had changed: Fewer than 700 new condo units were sold in the fourth quarter in the region, according to Delta, compared with 1,327 in the third quarter and an average of more than 3,000 units per quarter in 2005.
"My Realtor advised us to rent the condo for a few years, which is what I'm trying to do," Goel said. "Eventually the condo market will improve. But at this time, it is oversupplied."
January 05, 2007
Housing Crash Predictable Thing #2285: Desperate homedebtors and caught flippers give up on selling and put their dead inventory out as rentals
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23 comments:
This is exactly what we chose to do here in Tucson. Currently renting a brand new house in a very nice neighborhood from some poor guy up in Mesa who bought it as a spec home at the worst possible part of the bubble. We pay about $600-$700 less per month to rent than if we were to buy it from him for what he is asking. He surely must still be upside down in his payments, but it's a mutual benefit for us now at least. We get to live like kings and save the money towards a hefty down payment so we can scoop a foreclosed "McMansion" for pennies on the dollar. I can't wait! All it takes is patience and a little bit of knowledge. Oh....and enough common sense to not listen to the realtor's standard "BUY NOW OR BE PRICED OUT FOREVER!!!" babble. Give me a break!
I live in the same area and have been low balling the hell out of people. I see a problem when an older house sold for $180K two years ago and now they want $380K, ain't going to happen. Hell I have a friend who owns a block house up north and paid about $80K back in the 90's, he said his neighbor has been trying to sell his house (almost identical) for over $500K!!!! Retards is all I can say. Plus this goddamn town has no industrial or economic infrastructure, so it beats me how all these people can afford to live in 300K+ shacks...
Why would I want to rent from a confirmed greedy fool, who will sell the house out from under me at any time convenient for him and most likely inconvenient for me? The financial stress will leave many speculator housedebtors little choice but to try to do so.
To entice me into his mess, I would need a long lease, with clauses for me to get out and to stop him from pushing me out, as well as a very favorable monthly rent. I will need the extra money to move when the house turns over - one direction or another. Does anyone know what happens to a renter when the bank takes back the house?
ezoc said...
Why would I want to rent from a confirmed greedy fool, who will sell the house out from under me at any time convenient for him and most likely inconvenient for me? The financial stress will leave many speculator housedebtors little choice but to try to do so.
To entice me into his mess, I would need a long lease, with clauses for me to get out and to stop him from pushing me out, as well as a very favorable monthly rent. I will need the extra money to move when the house turns over - one direction or another. Does anyone know what happens to a renter when the bank takes back the house?
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1.) I am covered financially against all of these aforementioned situations you spewed off. We both signed a rather extensive contract which his Realtor prepared to protect both parties. Security deposit will be returned in full to me at the end of the lease. Standard procedure.
2.) BRAND NEW HOUSE. Rent is $1325. PITI & HOA would be nearly $2000 a month, possibly more. Can you do the math yourself or should I?
You don't scare me with your "Buy now you poor renter sucker" tactics. I will buy when the market returns to its normal levels and not a moment before.
Nice try Realt-whore!
ezoc - I do not work at the U of A
"EZOC said...
...... Does anyone know what happens to a renter when the bank takes back the house?"
You are out of luck, like major! Your rental contract with the "homeowner" has no bearing on the real homeowner (the bank) when they show up with the sheriff! Happened to a neighbor who had to move real quick right in the middle of his lease!
I don't know if you can get insurance to cover this type of incident. My neighbor found out the language in the rental contract to cover this was only as good as the landlord’s ability to reimburse my neighbor for his stress, time, and moving expenses.
The landlord made some bad business deals and went bankrupt, so he didn't have a cent left by the time the bank went into action.
Not the best scenario to be in as a renter!
sinis said...
I live in the same area and have been low balling the hell out of people. I see a problem when an older house sold for $180K two years ago and now they want $380K, ain't going to happen.
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Do you live in Chicago? Very similar situation here.
3 for sale in 06
none sold
2 are rented
one is vacant
another renter just moved out
another for sale sign
Good luck greedy fool
Does anyone know what happens to a renter when the bank takes back the house?
This depends on where you live and varies from state to state. Here is Florida, the rental contract supercedes the sale or foreclosure of a rental unit. If your rental is sold or foreclosed on, the new owner (bank, company, person, whoever) can not force you to leave until the lease has expired. The flip side is that it's a good idea to get out because they won't give a damn about maintenance.
In some markets it is insane. You can rent a house for $2500-3000/month that is being listed for $1,500,000 in Coral Springs, FL.
Housing will never sell for pennies on the dollar, since if the America was to even come close to that situation, their would be riots and a massive crime wave.
Also who would lend you the money to buy a house?
http://tinyurl.com/yfxarv
I first saw this story on the local news earlier this week and thought WTF, 16,000 new homes being built!!Olympia Group is nuts. But then I thought this developers is not stupid and won't spend a billion dollars if there wasn't a market for these homes. The first homes won't be ready until 2008 and as the article says they may time it ust right.
Thoughts.
No real estate bubble south of the border.
Returned from Costa Rica a few days ago. There was an add at Playa de Coco about an ocean view condo for $58,000., "Owner must sell". More typically there were two bedroom units from $75,000 - $125,000. at places with pools and security. These prices were higher because it was oceanside property. The prices were cheaper inland. Saw a lot of Americans down there as the tropical climate was nice in the winter. Had heard of Americans retiring in Mexico because it was cheap. Saw a little house on the road to Tamarindo Beach with a sign in the front yard, "AA Meetings in English".
I think the gross national income per person down there is under $5,000. a year.
Costa Rica also had a better health care system than the US doncha know?
Phoenix:
01/01: 48,213
01/03: 48,621
01/05: 49,348
01/06: 49,614
Let the games begin.
??????
Phoenix:
01/01: 48,213
01/03: 48,621
01/05: 49,348
01/06: 49,614
Let the games begin.
LA Inventory:
01/2007 32,273
12/2006 35,015
11/2006 38,779
10/2006 40,261
20% reduction in 3 months
Boston Inventory:
01/2007 12,655
12/2006 14,038
11/2006 15,907
10/2006 17,155
09/2006 16,851
08/2006 16,988
07/2006 17,545
06/2006 18,022
05/2006 17,361
04/2006 16,014
29% reduction in 3 months
That's a seasonal effect. Inventory numbers always go down in the fall.
Annonymous said, "No real estate bubble south of the border.
Returned from Costa Rica a few days ago. There was an add at Playa de Coco about an ocean view condo for $58,000., "Owner must sell". More typically there were two bedroom units from $75,000 - $125,000. at places with pools and security. These prices were higher because it was oceanside property. The prices were cheaper inland. Saw a lot of Americans down there as the tropical climate was nice in the winter. Had heard of Americans retiring in Mexico because it was cheap. Saw a little house on the road to Tamarindo Beach with a sign in the front yard, "AA Meetings in English".
I think the gross national income per person down there is under $5,000. a year."
No bubble? $5,000 a year, 2 1/2 times income for home price, house should cost $12,500 not a condo for $58,000...11 times income, not to mention the more typical price of 22-30 times income and people say bubble in California where homes are ten times income or other high cost cities where maybe four to five times income?
The logic here is like saying there is no bubble in London because rich Russians are putting down cash at $8,000 a sq ft for a house but doesn't matter that the locals can't afford that price?
charlatan said...
Housing will never sell for pennies on the dollar, since if the America was to even come close to that situation, their would be riots and a massive crime wave.
Also who would lend you the money to buy a house?
at pennies on the dollar couldn't many just use savings?
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That was exactly my point. Thank you.
Half Full? Half Empty? As we say in New York - I think it's poisoned! The game is fixed, the media is in on it and what's the old saying: "If you look around the table and don't know who the sucker is ... it's YOU!" No doubt, tons of pain for some ahead.
Yeah, in American we've never seen rioting, let alone a civil war or a great depression. Nothing bad can ever happen here. Let's all say this together now, "Nothing bad ever happens in america". This will certainly divert it from ever happening right?
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