Real Estate Crash thread

[supermodel159]

Just found out the house I grew up in is in foreclosure. Mom sold it in 2003 for $1.35 million. Buyer financed 100%. Re-financed in 2004 for an additional $225K. They had been trying to short sell since last summer. No takers. Family moved out last month, and the home is set to be auctioned off 9/14. This is in Marin County.

You can be proud your past home was part of the melt-down.

How much do you think it'll go for at auction?

[powder11]

Anyone ever do a deal where the buyer in a condo building purchases the next door unit, to blow out a common wall to create one big unit? My next door neighbor put their place up for sale and they need to move quickly, so we may be able to get a great deal on the place. We love the building, but I'm already stressing about 1) the HOA, 2) Financing, 3) City of SF, 4) etc, 5) etc......

Just throwing it out there...

live in it as a big unit and then patch up the wall when its time to sell and get two for one.

[rideit]

I know of five young couples that have closed on houses here in Victor in the last month, almost all of them moving over from JH. One guy got a house on the golf course at Teton Springs for $330K.

Bargains to be had...

[ass-to-mouth]

You can be proud your past home was part of the melt-down.

Meltdown? What meltdown? 4matic's neighbor just sold his dumpy house for $30K over asking. The realtor's phone was ringing off the motherfucking hook! THEY CRUSHED IT!!!!

How much do you think it'll go for at auction?

I have no idea. I'd like to think the bank(s) will get royally ass-fucked, but I'm sure they'll find a way to make back their money and turn a nice profit. The bloodsuckers always come out on top.

[skier666]

That's pretty much the norm in NYC, so I can't believe SF is any different. Best way to get a two bedroom is buy the apartment next door. As Tim says, there may be issues with selling, (big apartment, HOA fees will be high), but the only issue that I think you would face would be to keep wet over wet when you make your architectural changes.

Thanks for the opinions. We have a 2bdr/2ba and our next door neighbor is a 1brd/1ba plus den which would create a 3br/3ba plus den dream unit. Our kitchens backup to each other and the common wall which includes a gas fireplace mirrors ours exactly. The quick idea was to take out the wall and leave the fireplace so its like a 'fireplace pillar' and create one large kitchen. The place is super modern with concrete floors, so an open floorplan would be quite nice.

Its a 20 unit building but if we combine our units, it would be the largest. The HOA is great and most of the other owners are extremely friendly to each other, so I don't see huge opposition. Ideally, I would want one loan for the whole thing, one HOA payment, and one property tax bill. Of course, the cost of blowing out the wall, and creating one nice large kitchen, may be a deterrent as well. We'd plan on staying for quite a while.

I have calls in with my agent, banks, and the original builder to discuss whether we should give up or go for it. :-)

[supermodel159]

Thanks for the opinions. We have a 2bdr/2ba and our next door neighbor is a 1brd/1ba plus den which would create a 3br/3ba plus den dream unit. Our kitchens backup to each other and the common wall which includes a gas fireplace mirrors ours exactly. The quick idea was to take out the wall and leave the fireplace so its like a 'fireplace pillar' and create one large kitchen. The place is super modern with concrete floors, so an open floorplan would be quite nice.

Its a 20 unit building but if we combine our units, it would be the largest. The HOA is great and most of the other owners are extremely friendly to each other, so I don't see huge opposition. Ideally, I would want one loan for the whole thing, one HOA payment, and one property tax bill. Of course, the cost of blowing out the wall, and creating one nice large kitchen, may be a deterrent as well. We'd plan on staying for quite a while.

I have calls in with my agent, banks, and the original builder to discuss whether we should give up or go for it. :-)

I've got an idea, buy the place next door, open it all up except wall up the kitchen and bathroom. Call it a studio, and rent it out for $1000.

On my own real-estate adventures....My original escrow close date was the August 17th, then it became the 20th, which quickly was bumped to the 27th...NOW, we are drafting another extension, as the seller and our lender are not agreeing on anything. The joys of buying a home in CA.

Anyone else have to give blood to get a mortgage?

[Benny Profane]

[skier666]

Case Shiller generally uses 'the entire Bay Area' for the San Francisco clarification, so the numbers aren't very accurate.

From my research, most SF proper listings are selling at 2006 levels. There's extremely few properties selling above 07' sales prices. It's almost like people are being more realistic with their listing prices.

Just for example, a two bedroom condo in Pacific Heights in an ok building sold for $850k recently when the last sales price in 05' was $485K.

[P_McPoser]

That's absurd!

[iceman]

That's absurd!

What is? .....

[soho]

I have calls in with my agent, banks, and the original builder to discuss whether we should give up or go for it. :-)

Really 666? Is not going for it even an option?

[P_McPoser]

What is? .....

Big City real estate prices, they blow my mind!

[skier666]

Another one....Pacific Heights -1bd/1ba

$291,000 (07/28/1998)

$520,000 (08/28/2009)

or in the same area - 3br/2ba (super old, needed work but in great location)

$482,000 (03/20/95)

$1,215,000 (08/20/09)

[Benny Profane]

SEPTEMBER 10, 2009, 3:32 PM ET
Too Gloomy? Whitney Predicts 25% Home Price Plunge

Bloomberg News

U.S. home prices–which have already tumbled nearly a third from the 2006 peak–could plunge by another 25% as high unemployment levels continue, according to prominent banking analyst Meredith Whitney.

It’s a gloomy prediction that comes as the housing market is showing some signs of stability. Further price erosion would mean that more homeowners could find themselves owing more on their mortgage than their house is worth, a particularly tough position if there’s a job loss. Homeowners who are unemployed and underwater are often unable to sell their homes and forced to walk-away, adding more fuel to the foreclosure crisis. Still, it might be welcome news for potential buyers looking for a bargain.

“I think there is no doubt that home prices will go down dramatically from here, it’s just a question of when,” Ms. Whitney, known for accurately predicting troubles for Citigroup Inc., told CNBC Thursday. “…If you look at the drivers for unemployment, I don’t see that reversing very soon.”

Home prices have taken a beating since housing went bust, particularly in the once overheated bubble markets. Las Vegas, where rampant construction transformed large swaths of desert into neighborhoods, has plunged by more than half, according to the S&P/Case-Shiller index.

But the index’s latest results also showed modest improvement. Prices fell 14.9% in the second quarter when compared to a year earlier–better than the first quarter’s 19.1% fall. It was the first positive quarter-over-quarter comparison in three years. Denver and Dallas have even managed four consecutive months of positive returns.

While few think home values have reached a bottom, some consider the 25% figure a bit harsh.

Moody’s expects a drop of about 10% from current levels, and the declines will continue late into next year, says analyst Joseph Snider.

While S&P/Case-Shiller shies away from predictions, David Blitzer, chairman of the index committee, thinks Ms. Whitney’s is estimate is too negative. While prices may fall further, “a 25% decline from here sounds very steep, he said. “To say that we’re only half way through this sounds pessimistic.”

[skier666]

Finally, a SF condo update....

In contract to sell current place -11.31% decrease from original purchase price in Feb 07'. Oh well, could be worse....at least will still have positive equity.

But, also in contract to purchase a better place, brand new in Cow Hollow (pre-mls listing) for a reasonable discount. We initially had a formal offer to buy his (the builder) for a slight premium and then he'd buy ours for an extremely fair price, just to get us into his unit. But, a 3rd party jumped in to buy our place, so as an incentive he slashed his price to sweeten the deal.

Rates for jumbo loans are pretty good right now. Got quoted a 5/1 Interest Only ARM at 4.65% if you are of the risky type ....with a 10 year at 6%

[GiBo]

I'm thinking of walking. I'm over 50% upside down. I have a $1,500 house payment on a 50 year old, 1000 sq ft, one bath house that needs some major upgrades. I could go rent a sweet house for $1,100-1,300. I want to move in 7-8 years when my kids are off to college/career and I doubt it's going to recover the 50% by then. Why should I stay?

[Stu Gotz]

Not that uncommon for folks to walk away. If you can suffer a dinged credit score, it may not be a poor financial decision.

http://www.latimes.com/classified/re...,2560658.story

[khakis]

I'm thinking of walking. I'm over 50% upside down. I have a $1,500 house payment on a 50 year old, 1000 sq ft, one bath house that needs some major upgrades. I could go rent a sweet house for $1,100-1,300. I want to move in 7-8 years when my kids are off to college/career and I doubt it's going to recover the 50% by then. Why should I stay?

apparently the cool kids buy the nicer, bigger house next door for half of what you owe on your current house (get the loan as an investment property) then stop making payments on the first one and let it go into foreclosure. That way it's an easy move and you already know the neighborhood

Sounds like you owe $250k on a $125k house? I'd walk.

[Hutch]

I'm thinking of walking. I'm over 50% upside down. I have a $1,500 house payment on a 50 year old, 1000 sq ft, one bath house that needs some major upgrades. I could go rent a sweet house for $1,100-1,300. I want to move in 7-8 years when my kids are off to college/career and I doubt it's going to recover the 50% by then. Why should I stay?

Gotta love that anti-deficiency statute. Don't have those everywhere.

[GiBo]

I know, I've had two very good finance guys (who I respect as people too) tell me it was the smart thing to do. Just seems wrong to me. But damn, I'm going to lose my ass! And for what? My varible will adjust in four years and the bank won't even discuss re-working the loan. I know it's just my upbringing that gets me all moral on this shit, but they don't seem to give a shit about my situation so why should I care about them?

I owe $225k on a house that would go for about 115-125k.

[liv2ski]

Buy another home (get the loan as an investment property) then stop making payments on the first one and let it go into foreclosure. That way it's an easy move and you already know the neighborhood
Sounds like you owe $250k on a $125k house? I'd walk.

The above is what I would recommend doing if you have 25% down (due to a N/O/O purchase). If you turn the home back in to the lender under the present rules, a conventional lender will ban you for 4-7 years. FHA is 4 years and VA is 2 before you can get a new loan.

[Benny Profane]

The above is what I would recommend doing if you have 25% down (due to a N/O/O purchase). If you turn the home back in to the lender under the present rules, a conventional lender will ban you for 4-7 years. FHA is 4 years and VA is 2 before you can get a new loan.

A conventional lender wouldn't even answer a call for a decade, I'll bet. They're making it hard on anybody and everybody today, even if they have 25% down and a good job. If it wasn't for the FHA, the entire bottom of the market, which is pretty much the market, wouldn't even exist today. It's kind of amazing that they are still lending at 97% first loan and 125% HELOC, but, hey, they have you and your children to support the profligacy.

Either way, chances are good that your house may never see the mortgage amount for 20 years. The only way it will shoot back up is if option ARMs were available with just a signature or two down in some office space in the strip mall. That ain't happening for a very long time. So, yeah, walk. Save your money for the next house in maybe 5-7 years, if the government is still handing out such a sweet deal, although chances are good that the interest rate will never be as low as this in your working lifetime. Trust me, in 5 or 6 years, everybody's credit will be fucked, so you won't be an outcast. If they have money to lend, they'll find you.

[Benny Profane]

[RootSkier]

Do pictures of wrecked McMansions give you a boner, Benny? You are a sick fuck.

[mcsquared]

It is kind of an interesting ethical discussion. One of those "would you steal to feed your family" kinds of things that is, unfortunately, not a mere hypothetical for lots of people these days.

So it sounds like you would be saving $200-300 a month by bailing and renting. I guess you gotta ask yourself if the $200-300 a month is worth the moral compromise? If at some future date you want to be able to say to your children that although you may not be rich, you kept your word even though the rest of the world didn't. Things will come back around. And when they do you might be one of the few who never missed a payment. Or you could be one of the Benny Profanes sitting in some apartment on a mattress stuffed with that $200-300 a month you saved.