Anecdotal Foreclosure Observation

SacRenter, you're "fascinated" by the "frenzy" while long time real estate investors are licking their chops. The situation in which we find ourselves is when/how fortunes are made in real estate. I know several successful real estate investors who have waited a long time for this moment. They have visions of sugarplums dancing in their heads because we're nearly exactly where we were when they made a fortune THE LAST TIME.
 
[quote author="SoCalGal" date=1208339096]SacRenter, you're "fascinated" by the "frenzy" while long time real estate investors are licking their chops. The situation in which we find ourselves is when/how fortunes are made in real estate. I know several successful real estate investors who have waited a long time for this moment. They have visions of sugarplums dancing in their heads because we're nearly exactly where we were when they made a fortune THE LAST TIME.</blockquote>


ROFLMAO... no... seriously... ROFLMAO... OMG... must... regain... composure.



Okay, what I want you to do is go to the foreclosure auction. I want you to scan the people there, and figure out who these "investors" are. If you can tell the real pros from the wannabes, then you will notice the pros shake their heads way more than they ever lick their chops. You have to be on some planet made of Kool-Aid, if you think investors are chomping at the bit. My gawd, the banks have been dropping the minimum bid from the NTS amount by $200k plus, and still no bidders. Not a single home was bought by an investor today, and it is a rare occasion when they do. There was a home in Mission Viejo that went back to bank for half the NTS amount, and a home in North Tustin that went back to the bank for over 30% less than the NTS amount. This is the NTS amount, not the appraised value, otherwise the % would be worse.



Don't you dare say I am just a doom and gloomer, and I suggest you check my <a href="http://ocecon101.blogspot.com/2007/01/foreclosure-comparison.html">foreclosure comparison from January 2007</a>. I was off, way off, and the foreclosures hit 647 mark by mid-April, let alone half way through the year. The 2008 Q1 foreclosures broke the 96 record, and once the NOD data is available it will break it as well. The NTSs were greater than resale home sales, this has never, ever, ever, happened.



The real true real estate investors are waiting and watching on the sidelines. In fact, they have gone in hibernation, and they realize there will be plenty of wannabes who will get burned. I think I may be watching one get burned on my own street. I am not trying to be a jerk, but for gawdsakes, please keep your head above the sand, and see the true reality of what is happening. This comes from a 3rd generation Southern California real estate investor, who has the 2nd generation agreeing and supporting his theory. Fortunes are made in RE, but when sugar plums are dancing in wannabes heads, then you, them, and anyone else who believes this will only end up with dry rotting prunes.
 
[quote author="graphrix" date=1208361326]The 2008 Q1 foreclosures broke the 96 record, and once the NOD data is available it will break it as well. The NTSs were greater than resale home sales, this has never, ever, ever, happened. </blockquote>


Interesting statistics. What happens when the lenders own all the inventory and there are not enough buyers to take it all? Is there any limit to how much they will lower prices to find buyers. MasterofdaMoney believes banks will not take prices below rental parity -- at least not by choice. I wonder if regulators will step in and force liquidations even when prices are already greatly depressed?



We live in interesting times.
 
<blockquote>planet made of Kool-Aid,</blockquote>


Drinky the kool-aid makes you sad. :down:



<object width="325" height="250"><embed src="http://www.youtube.com/v/youtube" type="application/x-shockwave-flash" width="325" height="250"></embed></object>
 
[quote author="IrvineRenter" date=1208393635][quote author="graphrix" date=1208361326]The 2008 Q1 foreclosures broke the 96 record, and once the NOD data is available it will break it as well. The NTSs were greater than resale home sales, this has never, ever, ever, happened. </blockquote>


What happens when the lenders own all the inventory and there are not enough buyers to take it all? Is there any limit to how much they will lower prices to find buyers. .</blockquote>


The banks <strong>will not</strong> hold back inventory to keep the price up. Banks are not in the real-estate business.



If the properties fail to sell individually, what will happen is that the banks holding the properties will put several properties together as a package (say 10 or more) and sell the whole package at a deep discount to investors with money. That's were the real gold will be found in real estate.
 
[quote author="movingaround" date=1207881525]ha ha! not moving there - trying to figure out what to do with a house that is there - family owned.



Fresno has become so smoggy - it is sad - there is definetely some beauty in the fig trees and grape vineyards and the warm valley summer nights!</blockquote>


Two words: insurance job.



I used to work in those vineyards. I even foreclosed on a couple of them.



[quote author="biscuitninja" date=1207888456]No Vasoline,

Ha ha, its not that bad... but really, i woulden't want to live there.

-bix</blockquote>


No, my supercharged friend, it really is that bad. I miss Fresno the way some people miss the clap or prison.
 
<blockquote>SacRenter, you?re ?fascinated? by the ?frenzy? while long time real estate investors are licking their chops. The situation in which we find ourselves is when/how fortunes are made in real estate. I know several successful real estate investors who have waited a long time for this moment. They have visions of sugarplums dancing in their heads because we?re nearly exactly where we were when they made a fortune THE LAST TIME.

</blockquote>


But <strong>SoCalGirl</strong>, even if you are correct and "long time real estate investors are licking their chops", my point was that the people I'm talking to <strong><em>are not investors</em></strong> much less "long term investors." They are average joe type people who are already upside down on their own mortgages and, in some cases, going to be in huge financial difficulty unless the market begins to turn. These are the same people who got majorly screwed THE LAST TIME (as you so boldly put it) when your "long time real estate investors" sold them the very homes they couldn't afford.



So why, in the name of all that is good in this world, are they so quick to buy the sales pitch now? They can't afford to be investors the same way they couldn't afford the houses they are currently living in. So allow me to be "fascinated" and I promise you I will humbly bow before you if this market turns by the end of 2008 if you promise that you'll still be posting here at IHB when it doesn't.
 
You'll see homes in Sac bounce to 100x rent. It did in the last bust a la 1994 when I was around.



With the exception of the crowd that Bix runs with, there are no investors buying homes.
 
no vas - do you know if fresno area went that low last time too (100 X rent)? If it did - that would give me some excellent ammunition in the next 'family discussion'.
 
In 1999, my wife and I looked at a home that sold for $155K. It was brand new, and would rent for about $1200 a month. That was pretty standard.



Fresno never ran up in the late 1980's the way Sac did, so it never fell off. I remember in like 1990 Sac had a 60% premium over Fresno, and by 1995 they were about even (rents in Sac were still 40% or so higher). In a sense, Fresno was different back then because there wasn't a good stock of SFRs to rent unless you went to some of the more marginal parts of town (which would be south of McKinley in 1980, south of shaw Shaw in 1990, and is probablly south of Herndon now). There has been radical expansion of that town, but there isn't much work there if you're not a grower, or work for an agriculture related service business.



I spent the first 31 years of my life there before I tossed in the towel and moved to SoCal. I'm really trying to not 'burn the cow'. but IMO there isn't a compelling reason to be in Fresno. Anyone who was speculating on SFR's in Fresno needs to have thier head examined, becuase unlike Newport where there isn't any developable land to speak of, there are hundreds of thousands of acres that are prime for development in the Fresno area. The older neighborhoods get the more they just decay away.
 
that is great info no vas! No speculation here - my parents grew up there and the family house is now vacant and needs some work but is still generally in good condition. Had a flipper offer for 'as is' that fell through and some members of my family are trying to convince my father to rent it out because even his offer was much lower than everyone thinks we should get for it. I think we should suck it up - do the basics that need to be done and get out now. But some others just can't get past that fresno 'doesn't cost that much' and 'probably won't go down much more' blah blah blahh. I get my father convinced and then he goes and talks to someone else and we start all over again.....



A funny story for you - my husband is from back east and the first few times I brought him out here guess where he loved to go - FRESNO! He just thought it was so different than anything he had seen or anywhere he had been - and he loved all the vineyards and the nut trees! surprising!
 
There are four NTSs in Rancho Santa Fe and one of them is in The Covenant. Geez. And all have first mortgages of more than $1,200,000 and one has a first of more than $1,700,000. How many folks with mortgages of more than $1,100,000 realize that $1,100,000 is the absolute most than one may use for the mortgage interest deduction. My experience is that most folks with more than the allowable interest deduction amount do not have a clue that the mortgage interest deduction is limited by amount and other factors, and they deduct all their interest setting off red flags in the IRS computers.
 
[quote author="awgee" date=1209247805]My experience is that most folks with more than the allowable interest deduction amount do not have a clue that the mortgage interest deduction is limited by amount and other factors, and they deduct all their interest setting off red flags in the IRS computers.</blockquote>




????? Are you saying that most folks with mortgages over $1M do their own taxes...



NO WAY..



Everyone I know uses an accountant.



You must only hang w dumb flippers....
 
could be possible... million dollar mortgage? you probably need an annual income of... I say, $65k/yr is good.



sincerely,



2005 mortgage broker
 
I must say that buying right now isn't all that bad. A went in with a couple of people to buy 200 units for a failed condo offering. We essentially got it for 60ish% off the asking price. We even got a few other incentives to purchase. I guess i'm just saying go for the deal you know you can live with as well as something that will at least have a little bit of devaluation built into it.

good luck

-bix
 
You must log in or register to reply here.
Back
Top