Real Estate Crash thread

[frozenwater]

My little real estate nightmare won't end.

Listed my place for 175kish in the fall. Had an offer for 168 but it fell through. Lots of shit happened, rented it then discovered I had to replace the sewer main to the street - low estimate was 7k, to fix.

I am now trying to short sell the fucker for 125k but still can't get anyone to bite. Ogden Utah may be tits for some, but its my own personal hell hole.

[liv2ski]

^^^^Sorry your having troubles selling. I have been watching Ogden since MD9 brought it to my attention. Definitely looks like prices have gone up in the last 12 months.

[TransplantedFromRMNP]

House next door sold first day @ $65k over ask price; $405k. Asian buyer. My fixed up short sale across the street was realtor appraised at $350k. It looks great. I'd sell it now but the girlfriend wants to rent it for her parents.

Fresh exterior. Landscape soon.



Interior



Kitchen


girlfriend

Nekkid pics of the GF plz!

[cramer]

My little real estate nightmare won't end.

Listed my place for 175kish in the fall. Had an offer for 168 but it fell through. Lots of shit happened, rented it then discovered I had to replace the sewer main to the street - low estimate was 7k, to fix.

I am now trying to short sell the fucker for 125k but still can't get anyone to bite. Ogden Utah may be tits for some, but its my own personal hell hole.

That sucks. Keep trying the short sale. The buying season is coming. you should be able to get rid of your little piece of hell. There's alot of people who foreclosed/short sold that will be getting back in the game. They've got to be tired of paying someone elses house payment again the last 5 years. I'm going to go out on a limb that they won't make the same mistake twice and will buy something they can actually afford. Your house fits that bill.

[mcsquared]

Seriously. I have no idea what is going on in Denver right now. In the past month 4 of my friends listed their house for sale. All were under contract within 2 days at full price. 3 of the 4 were cash offers. Shit makes no sense. Is it all that weed money flowing in?

[Yonder_River]

Seriously. I have no idea what is going on in Denver right now. In the past month 4 of my friends listed their house for sale. All were under contract within 2 days at full price. 3 of the 4 were cash offers. Shit makes no sense. Is it all that weed money flowing in?

That's been the norm in the desirable Seattle neighborhoods for the last year now. Everything decent goes pending in a few days with multiple offers, cash or waiving of the finance contingency and anywhere from 4-12% over list price. It's the combo of low inventory, low rates and Amazon and others continually bringing in new folks with six figure salaries.

We close in a couple days and are glad to be done with the hunt. Unfortunately, we had to pay 9.5% over list and we waived financing. Ack!!

[H0G]

The market in Denver is en fuego right now. My buyers are getting frustrated as they are getting out bid all over the place. I have an appraisal happening tomorrow and have concerns that it might not reflect what the market is doing at this moment. I am doing some touch up, then putting my home on the market to cash in on the craze before rates go back up and slow this machine down.

It will be an interesting summer...

[cramer]

before rates go back up

you pretty much nailed it. Back in the end of the 80's, houses were cheap but you had like a 10% interest rate. At least in california. Its starting all over again. No inventory, interest rates will rise, etc. Banks are going to loosen up the loans, but not like the 2000's. Alot of area's you'll still be able to buy a house. California, its pretty much over. If you didnt snag one in the last few years, you're not going to for another 10 years if you were a normal peon. No inventory = more you pay. Thats happening all over the country.

[mcsquared]

That's been the norm in the desirable Seattle neighborhoods for the last year now. Everything decent goes pending in a few days with multiple offers, cash or waiving of the finance contingency and anywhere from 4-12% over list price. It's the combo of low inventory, low rates and Amazon and others continually bringing in new folks with six figure salaries.

We close in a couple days and are glad to be done with the hunt. Unfortunately, we had to pay 9.5% over list and we waived financing. Ack!!

It is the cash offers that confound me. If interest rates were the primary driver (which I am sure is a factor) why would all these people be paying cash? Washington is also on the cusp of legalization as well. In my brain I am wondering if the two are not related.

I just bought a place in the burbs right before Christmas and rented out my place in the highlands. Kind of kicking myself I didn't just sell the place. A quarter mil sitting in my checking acct would be nice right now rather than an extra $700 a month.

[liv2ski]

Oddly, most areas I look at are still 25%-30% below 2005-2006 highs (2nd home areas). Amazingly, parts of CA (the Bay areas, LA, Orange and San Diego counties have increased about 20% from the 2010/11 market lows, due to low rates, and banks keeping their REOs and seriously delinquent properties off the market in 2012, while they negotiated the Robo signing settlement with the FEDs.
It will be interesting to see how this plays out moving forward. Rates are about .75% higher than a few months ago (but still at historic lows), and the settlement is done. Will the banks start to foreclose on owners that haven't made a mtg payment for 2+years now and release that inventory? That delinquent inventory is 3 times what is listed on the SD MLS, so there are homes available. It is just a matter of when the banks will release them. If the FED steps back from purchasing $40M a month in stocks and bonds, rates will normalize (5%-6% range) and the banks should still be able to dribble the inventory out to support prices over the next few years.
So barring another unforeseen economic even (like 2008), the present market conditions may be the norm for the next few years.
Those that bought in the last 2 years, will look like the smart ones, if everything holds together and you guys all know what I think about that long term prospect.

[Benny Profane]

http://www.cnbc.com/id/100522314

"People in Las Vegas talk about shadow inventory to the point where nobody really wants to talk about it anymore, said Mike Brunson, a local appraiser. "People will argue and say it isn't, but I can name a dozen people off the top of my head who have been in their houses for over three years without a payment."

Brunson called Las Vegas the Titanic of the real estate market. It was once thought unsinkable, and even now that the worst is over, he still thinks the market is on a well-provisioned life raft, not on solid ground.

"The only thing that concerns me is that we have been here before and the market itself is not what is driving the price increases. It's not that we have new employers coming in and creating tens of thousands of new jobs that are leading to people buying new houses. It's 'Las Vegas is on sale,' and investors are buying up everything they can in the used market.

[Yonder_River]

It is the cash offers that confound me. If interest rates were the primary driver (which I am sure is a factor) why would all these people be paying cash? Washington is also on the cusp of legalization as well. In my brain I am wondering if the two are not related.

I just bought a place in the burbs right before Christmas and rented out my place in the highlands. Kind of kicking myself I didn't just sell the place. A quarter mil sitting in my checking acct would be nice right now rather than an extra $700 a month.

I've been told cash buyers are a result of either folks saving lots of money while sitting on the sidelines (we put 33% down), maybe bringing in family money to bridge the financing gap, having cash from a previous home sale....and then the craziest thing is at least here there are foreign buyers looking to put money somewhere (mainly from China where they are limited in RE investment) so they snatch up homes they can rent. It definitely isn't the pot industry here that is fueling anything. We have a better, higher paying economy up here than in Denver and most places so that is really helping all of this move along.

Oddly, most areas I look at are still 25%-30% below 2005-2006 highs (2nd home areas). Amazingly, parts of CA (the Bay areas, LA, Orange and San Diego counties have increased about 20% from the 2010/11 market lows, due to low rates, and banks keeping their REOs and seriously delinquent properties off the market in 2012, while they negotiated the Robo signing settlement with the FEDs.
It will be interesting to see how this plays out moving forward. Rates are about .75% higher than a few months ago (but still at historic lows), and the settlement is done. Will the banks start to foreclose on owners that haven't made a mtg payment for 2+years now and release that inventory? That delinquent inventory is 3 times what is listed on the SD MLS, so there are homes available. It is just a matter of when the banks will release them. If the FED steps back from purchasing $40M a month in stocks and bonds, rates will normalize (5%-6% range) and the banks should still be able to dribble the inventory out to support prices over the next few years.
So barring another unforeseen economic even (like 2008), the present market conditions may be the norm for the next few years.
Those that bought in the last 2 years, will look like the smart ones, if everything holds together and you guys all know what I think about that long term prospect.

Foreclosures aren't affecting the core Seattle market from what I've heard. Just like you say, the banks are releasing the few that there are to renovators. They buy a house for $300k that has 2,400sqf of renovatable space and then sell it for $750k. They can't finish them soon enough.

I hear ya on the long-term though....but since we just bought, I'm hoping the chickens don't come home to roost too soon.

[char]

It is the cash offers that confound me. If interest rates were the primary driver (which I am sure is a factor) why would all these people be paying cash? Washington is also on the cusp of legalization as well. In my brain I am wondering if the two are not related.

I just bought a place in the burbs right before Christmas and rented out my place in the highlands. Kind of kicking myself I didn't just sell the place. A quarter mil sitting in my checking acct would be nice right now rather than an extra $700 a month.

Hedge funds?

[Benny Profane]

Seriously. I have no idea what is going on in Denver right now. In the past month 4 of my friends listed their house for sale. All were under contract within 2 days at full price. 3 of the 4 were cash offers. Shit makes no sense. Is it all that weed money flowing in?

Good theory. Certainly puts Co. high (heh) on my list to retire.

[Benny Profane]

http://www.nytimes.com/2013/03/11/op...e-moon.html?hp

March 10, 2013 ‘The Man Who Sells the Moon’ By SIMON ENNIS The notion that one man can lay claim to all the extraterrestrial bodies in our little corner of the galaxy sounds preposterous. Yet Dennis M. Hope, 65, of Gardnerville, Nev., the subject of this Op-Doc video, believes just that. For three decades, he has built a thriving business by “selling” land plots in space, on places like the moon, Mars and Venus. Of course, he has no legal authority to do so. How does he get away with this? He told me that, back when he was a ventriloquist in the days before he “owned” the moon, his dummy taught him a valuable lesson: you can say anything you want to anybody as long as you smile.

Some call him a con artist. One can argue that he’s part of a hallowed American tradition, whereby land speculators sell plots of useless land on the next “frontier,” from the southern swamps to the western desert. Or maybe he’s just selling amusing “novelty items” (as his certificates acknowledge, in fine print), like pet rocks, which are perfectly legal. Personally, I think what he’s doing is acceptable. Even if Mr. Hope’s lunar land certificates have no financial value, they do seem to provide another benefit. The moon inspires awe — its white blankness is the perfect backdrop for any kind of dream we might have. Feelings of optimism and wonder can be worth quite a lot.

Full disclosure: I am a lunar property “owner” (Mr. Hope was generous enough to give me an acre at the end of our time together). Yet I have no plans to develop the land anytime soon.

Simon Ennis is a filmmaker in Toronto. His most recent documentary, “Lunarcy!”, from which this Op-Doc is adapted, is having its United States premiere at the South By Southwest Film Festival and will be broadcast in April on Epix.

[Shredhead]

It is the cash offers that confound me. If interest rates were the primary driver (which I am sure is a factor) why would all these people be paying cash? Washington is also on the cusp of legalization as well. In my brain I am wondering if the two are not related.

I just bought a place in the burbs right before Christmas and rented out my place in the highlands. Kind of kicking myself I didn't just sell the place. A quarter mil sitting in my checking acct would be nice right now rather than an extra $700 a month.

Interest rates work both ways. Investors don't like the 1% money market rates and would rather take a chance on getting a higher return on a rental property.

[Hugh Conway]

and then the craziest thing is at least here there are foreign buyers looking to put money somewhere (mainly from China where they are limited in RE investment)

China isn't "limited" in RE investment. In China Real Estate is the major investment open to the public and has been going up up up(stock markets a sham). Plenty of the foreign buying - particularly now - is corruption cash diversification.

[grrrr]

The market in Denver is en fuego right now. My buyers are getting frustrated as they are getting out bid all over the place. I have an appraisal happening tomorrow and have concerns that it might not reflect what the market is doing at this moment. I am doing some touch up, then putting my home on the market to cash in on the craze before rates go back up and slow this machine down.

It will be an interesting summer...

Has not made it up to the foothills though. 2 out of 3 houses in my neighborhood for sale right now.

[liv2ski]

Hedge funds?

Could be. I had an interview today with a new client. Guy is a very high producing loan officer (about $25M a month in closed business). Anyways, guy tells me he read in an industry mag that stated recent sales have been as much as 70% cash offers from investors in the Sunbelt States. (I had read 34% in San Diego). He also mentioned Black Rock has bought an obscene amount of real estate over the last 12 months. From talking to his Realtor clients, they are stating it is very common for a property to have 5 offers in the first day and one will be all cash from an investor. Clearly with so much investor/cash deals going on, we are far from a normal market. Once again, the FED has pumped another RE bubble thanks to it's ZIRP. Like all FED bubbles, this one too, will end badly IMO.

[cramer]

Oddly, most areas I look at are still 25%-30% below 2005-2006 highs (2nd home areas). Amazingly, parts of CA (the Bay areas, LA, Orange and San Diego counties have increased about 20% from the 2010/11 market lows, due to low rates, and banks keeping their REOs and seriously delinquent properties off the market in 2012, while they negotiated the Robo signing settlement with the FEDs.
It will be interesting to see how this plays out moving forward. Rates are about .75% higher than a few months ago (but still at historic lows), and the settlement is done. Will the banks start to foreclose on owners that haven't made a mtg payment for 2+years now and release that inventory? That delinquent inventory is 3 times what is listed on the SD MLS, so there are homes available. It is just a matter of when the banks will release them. If the FED steps back from purchasing $40M a month in stocks and bonds, rates will normalize (5%-6% range) and the banks should still be able to dribble the inventory out to support prices over the next few years.
So barring another unforeseen economic even (like 2008), the present market conditions may be the norm for the next few years.
Those that bought in the last 2 years, will look like the smart ones, if everything holds together and you guys all know what I think about that long term prospect.

There's not too many out there that are 2+ years delinquent anymore. I'd know, the bank I work for hired 10's of thousands of people to deal with that mess 3 years ago. They did 1 of 4 things already. Modified them into 40 year loan terms, reduced principle balance, had them short sale or in worst case scenario, foreclosed on them. Why do i say there is not that many out there anymore? We have MASSIVELY reduced these groups and the rest were all converted to retail (conventional loans). So the investors out there hoping for inventory to go up, its not going to happen. They aren't going to make that same mistake twice. Even if they are sitting on homes, its in their better interst to just sit on them and let housing prices go up and release houses strategically based on inventory in certain markets. The banks are shifting gears and are going to start lending again. Great time for them too. Interest rates are on the rise. Thats more cash in their pockets. Every market is different obviously. But the big markets, i'd expect to see some nice gains over the next few years in housing prices. just my .02.

liv2ski, you're obviously a little more of an expert than me on the whole real estate game. But this shadow inventory in my opinion, doesnt exist. At least from the actions my company is taking.

[liv2ski]

liv2ski, you're obviously a little more of an expert than me on the whole real estate game. But this shadow inventory in my opinion, doesnt exist. At least from the actions my company is taking.

Not an expert or I would have bought a bunch of rentals with my IRA last year. As far as Shadow Inventory is concerned, Dr Housing Bubble lists on his blog, the units/percentages of 90+ day delinquent homes in So Cal. If that number is 3 times the listed inventory, I have to make an educated guess that some of that is sellers trying to short sale their present place and the vast remainder is inventory the banks haven't foreclosed on yet and the people live there without making a mtg payment. They will be future foreclosures for sure IMO.

[cramer]

Not an expert or I would have bought a bunch of rentals with my IRA last year. As far as Shadow Inventory is concerned, Dr Housing Bubble lists on his blog, the units/percentages of 90+ day delinquent homes in So Cal. If that number is 3 times the listed inventory, I have to make an educated guess that some of that is sellers trying to short sale their present place and the vast remainder is inventory the banks haven't foreclosed on yet and the people live there without making a mtg payment. They will be future foreclosures for sure IMO.

Hey dude, expert or not, you are doing it right. It's tough down here to to even get your hands on property. I just happened to luck out and catch a property down here during what i would call a "historical" meltdown in the bay area. It's not going to happen again. We both know that any house you buy in the bay area, will rise in price.

With all that said, sure there will be foreclosures and short sales, but i don't see them affecting the market. Just my .02 from what i'm seeing in my companies actions. If you are in california and own a house, you are seeing your value come back. There is a shitload of folks just waiting for their house to come back to even. These are the ones who bought back in 2000-2004. Hello refi boom. Anyone looking for a job, hit me up, i can get you a loan processor job. My buddy told me he got 800 bonus for closing 10 loans. 800 bucks is alot of money, especially when their checks are like 1500. It's going to be nuts the next couple years.

[4matic]

Girlfriends parents moved into my across the street short sale flip. Her 84 y/o father dropped dead in the house 3 days after they moved in. I was skiing and arranged for mortuary pickup at 10:30 pm. Dude was a horse too; rode his bike the day he died. g/f in China for final services and mother is not coming back. Chinese have a long mourning period.

Because the house is in limbo I had a local r/e agent over today and she estimated the price at $370k. A 75% increase in value since July when I bought it. I've done $15k in repairs and improvements and might add $5k more at the realtor recommendation. My problem is a good one to have. If I sell now (while the iron is hot) I have to pay short term capital gain. I'm sure I can work a deal to close after my one year date (July) where it would be long term cap gain. If I marry the broad I can get my income under the zero cap gain rate filing jointly.

Or, the r/e agent also does property management with very reasonable fees and will ask $1850 a mo. If r/e prices stay firm and inventory improves rents will drop some. (Funny how that works). I really don't enjoy the landlord experience and will gladly pay for the service.

My contractor, who is awesome, and the new landscaper are both Chinese and barely speak english. I'm using Google translate to work with them. What could possibly go wrong?

We also have another property in the neighborhood. That one is girlfriends money bought with my credit. It's a nice house but imo needs a lot of work and has dual tenancy which sucks ass. I'm going to recommend we sell that one.

Rates made a move down this week so sellers market is going to be very hot for a few weeks.

[iceman]

Can't you do a 1031 exchange if you sell? Or would you not want to buy more real estate?

[4matic]

Can't you do a 1031 exchange if you sell? Or would you not want to buy more real estate?

That is an option which requires more research before I sell. I'm not a fan of IRS monkey business and 1031 can bite you.