Real Estate Crash thread

[4matic]

What a coincidence. At the same time many are saying that China is tanking.

Girlfriend was just offered full price for one of her China properties:

http://www.businessweek.com/videos/2...and-picking-up

And this just in:

SAN FRANCISCO (MarketWatch) — Warren Buffett was right: There are signs of life in the U.S. housing market.

Berkshire Hathaway Inc.’s BRK.A +1.73% BRK.B +1.78% Clayton Homes, the largest producer and financier of manufactured homes in the United States, reported on Friday that its second-quarter pretax earnings grew 45% on increased unit sales.

“Revenues from home sales increased $40 million (11%) in the second quarter and $103 million (16%) in the first six months, due primarily to increases in units sold partially offset by slightly lower average prices,” said Berkshire Hathaway in a regulatory filing.

Why Buffett’s betting on housing

What does Warren Buffett know that no one else does? He just made an outsize bid on ResCap loans, the latest example of his hunch that the housing market represents a great opportunity. Joe Light has details. (Photo: Bloomberg)

Last month, Buffett said there has been a discernible pickup in the housing sector and stressed that a recovery in housing will be the key to continued economic expansion.

Recent data also suggest that the real-estate market is rebounding. The S&P/Case-Shiller 20-city composite index rose 2.2% in May, the second month in a row, according to data released earlier this week. All 20 cities in the index recorded monthly gains, including a 4.5% surge in Chicago.

[liv2ski]

I hope Buffet is correct, as I am in the RE loan industry, but my pessimistic side thinks it is better to wait a year for continued gains before sounding the all clear signal to jump back in and invest in RE, unless you have a solid long term plan like MD9.

[skier666]

So we did a pocket listing (not on MLS) on our condo in SF. Its now in contract with an appreciation of 10% of original purchase price to sale price in contract in 2.5 years. Granted we lost around 10% when we bought our last condo at the height of the market in 2007, but since this place was a bit more expensive, we're in positive gains since March 2007. Doing a long close of escrow and a lease back with fingers crossed that something pops up to buy in that time-frame. However, I'm done with condos and looking only at single family homes...which is pretty tough in our price range but I digress. Most importantly, this most likely means a .00001% chance I'll make it down to NZ for some turns. Also, if you could tell my wife to stop sending me the price/size comparisons of property in Chicago proper (her family lives there), it would be much appreciated.

[schuss]

So we did a pocket listing (not on MLS) on our condo in SF. Its now in contract with an appreciation of 10% of original purchase price to sale price in contract in 2.5 years. Granted we lost around 10% when we bought our last condo at the height of the market in 2007, but since this place was a bit more expensive, we're in positive gains since March 2007. Doing a long close of escrow and a lease back with fingers crossed that something pops up to buy in that time-frame. However, I'm done with condos and looking only at single family homes...which is pretty tough in our price range but I digress. Most importantly, this most likely means a .00001% chance I'll make it down to NZ for some turns. Also, if you could tell my wife to stop sending me the price/size comparisons of property in Chicago proper (her family lives there), it would be much appreciated.

As much as I hate to say it, most bay area real estate involves smoking hallucinogenics to get it to make sense. That said, Chicago makes a lot less sense for you. On the upside, we'd get to see TR's of you skiing down grass hills and crying.

[Shredhead]

Real Estates still in the shitter in Chicago. You can get a ton of house, but the taxes are sky high. States going to implode before they ever get pension reform through the state assembly.

[liv2ski]

666, why the long escrow? That is just inviting shit to go wrong down the road. Just close it and do the rent back is my 2 cents. I hope the buyer is applying for a N/O/O loan type or the long lease back can't be in the escrow instructions as a FYI.

[Hugh Conway]

Real Estates still in the shitter in Chicago. You can get a ton of house, but the taxes are sky high. States going to implode before they ever get pension reform through the state assembly.

so the difference is you get less house and more skiing in San Francisco?

[skier666]

so the difference is you get less house and more skiing in San Francisco?

Exactly...

The long escrow is to buy us time so we don't have to move in a rental with two kids, send stuff in storage, move twice etc. The rent back is only 10 days, but if we find a place, we may not even go that far. The buyers are committed, definitely an owner occupy loan, written letters about their love for the place, deposit is in escrow, expecting a baby in November, etc etc. I hear you on the 'close it and be done with it,' but in this current market in SF, the chance that they'll walk is highly unlikely. Also, we had so much interest, that it would not be a problem to find another buyer. It seems crazy, but that's the market for newish 3 bdr condo's in the North side of the city.

On a related note, I did preview an old Victorian in the Lower Haight that isn't on the market yet. Not my first choice in neighborhoods, but a full house with a backyard is pretty ideal. May throw down an offer and see what happens in the next few days.

[Shredhead]

so the difference is you get less house and more skiing in San Francisco?

Yeah, if it wasn't for my business, I'd take a small house in SFO in a second. My niece just purchase a nice, but very small house in Piedmont. Seems like a nice neighborhood?

[4matic]

Yeah, if it wasn't for my business, I'd take a small house in SFO in a second. My niece just purchase a nice, but very small house in Piedmont. Seems like a nice neighborhood?

The frisco folks will tell you its Oakland but Piedmont and Montclair are very nice if you like a neighborhood that leans toward suburban rather than urban. One negative is you are basically in the trees so it doesn't get much sun but neither does sf for that matter.

[ass-to-mouth]

Real Estates still in the shitter in Chicago. You can get a ton of house, but the taxes are sky high. States going to implode before they ever get pension reform through the state assembly.

Chicago is fine. The bloodsuckers will just keeping auctioning off assets to the arabs. What could go wrong?

http://www.rollingstone.com/politics...topia-20101018

[Shredhead]

Chicago is fine. The bloodsuckers will just keeping auctioning off assets to the arabs. What could go wrong?

http://www.rollingstone.com/politics...topia-20101018

That will be a good book. Yes, the parking meter fiasco is just one small example of the graft and corruption that is Chicago politics. CPM has already billed the city over $50 million for lost revenue
from handicap parking, street closures, ect.

[cramer]

Exactly...

The long escrow is to buy us time so we don't have to move in a rental with two kids, send stuff in storage, move twice etc. The rent back is only 10 days, but if we find a place, we may not even go that far. The buyers are committed, definitely an owner occupy loan, written letters about their love for the place, deposit is in escrow, expecting a baby in November, etc etc. I hear you on the 'close it and be done with it,' but in this current market in SF, the chance that they'll walk is highly unlikely. Also, we had so much interest, that it would not be a problem to find another buyer. It seems crazy, but that's the market for newish 3 bdr condo's in the North side of the city.

On a related note, I did preview an old Victorian in the Lower Haight that isn't on the market yet. Not my first choice in neighborhoods, but a full house with a backyard is pretty ideal. May throw down an offer and see what happens in the next few days.

that would be nice to score in the city. Does it have a garage or driveway? My buddy lives off haight and fillmore and parking is well, for lack of a better term, retarded. Its probably like that everywhere in the city, i've never lived out there with a car. I left it parked at my uncles out in walnut creek. But he always just buys honda civics and bumper cars himself into spots. Me just visiting, i just pay for a parking lot. But ive seen that fool drive around the block for who knows how long trying to snag a spot. I guess its not much worse than us commuters. At least his commute is just driving circles around his house. Worst case scenario he can double park, go take a shot and get back at it.

[supermodel159]

Exactly...

The long escrow is to buy us time so we don't have to move in a rental with two kids, send stuff in storage, move twice etc. The rent back is only 10 days, but if we find a place, we may not even go that far. The buyers are committed, definitely an owner occupy loan, written letters about their love for the place, deposit is in escrow, expecting a baby in November, etc etc. I hear you on the 'close it and be done with it,' but in this current market in SF, the chance that they'll walk is highly unlikely. Also, we had so much interest, that it would not be a problem to find another buyer. It seems crazy, but that's the market for newish 3 bdr condo's in the North side of the city.

On a related note, I did preview an old Victorian in the Lower Haight that isn't on the market yet. Not my first choice in neighborhoods, but a full house with a backyard is pretty ideal. May throw down an offer and see what happens in the next few days.

My sister's best friend just did that. Moved to the L. Haight with a small family (From a Pac Heights shoe box). They now love it. Did you get the house?

[schuss]

As I said in my PM, I'm in the Lower Haight-ish area for the next month. Area is blowing up. Rents are up $500+ in the past year with easy access to all parts of the city+highways and some decent restaurants.

[Danno]

about to close on a ridiculously low 3.5% refi. and two houses for sale on my block for tens of thousands more than mine supposedly is worth (via tax assessment, zillow, etc).

[Supermoon]

about to close on a ridiculously low 3.5% refi. and two houses for sale on my block for tens of thousands more than mine supposedly is worth (via tax assessment, zillow, etc).

Yeah, our real worry when pricing out house was what it would realistically appraise for. Im sure we could have gotten 10k more if we were just worried about the market price. Luckily our appraisal went through at 5k over asking.

[skier666]

Yeah, the whole Octavia corridor has plans for development all the way up to Hayes, so I would expect some spillover into the Haight/Webster zone but of course, I'm speculating.

My sister's best friend just did that. Moved to the L. Haight with a small family (From a Pac Heights shoe box). They now love it. Did you get the house?

That's basically our same scenario.

Seller just signed the contract so now dealing with the banks and escrow timelines for the sale of our current place and purchase of the new one. Pretty stoked that we'll actually own land with a house, backyard & garage in SF.

[supermodel159]

^^^ Awesome!

[char]

So... wtf is the difference in real estate "blowing up" now as opposed to pre 2008 "blowing up"?

[Missing Sock]

So... wtf is the difference in real estate "blowing up" now as opposed to pre 2008 "blowing up"?

The buyers actually have a job and income?

[Mazderati]

Here's a good resource that covers all of Utah. Not sure what other states do.

www.utahlegals.com

Belated thanks.

[Kevo]

Serious question-

With middle class incomes being stagnant, what do you all expect to happen to real estate prices when mortgage rates go up?








Because I'm not sure it will be pretty.

[cramer]

Serious question-

With middle class incomes being stagnant, what do you all expect to happen to real estate prices when mortgage rates go up?








Because I'm not sure it will be pretty.

I think it all depends on the job market and where you live. If you live in CA, your housing value is pretty much certain to rise and already is. It's a 10 year cycle down here. We'll never see the prices we saw in 2006 for another couple decades id imagine, but people like the sun and people get tired of paying rent. Alot of the people who foreclosed are going to be eligible to buy again and already are via FHA.

Compare CA to WA or OR, well id imagine prices will stay pretty much what they are now up there with your standard uptick before we saw the big boom. There is no big tech, tourism, farming, etc industry in those places. At least not on the same level. They all come down here and spend there money to visit the beaches, the disneylands, the the tahoes, etc. Their values rise like every 30-40 years in those type of states. The baby boomers all retired and moved to places like AZ, WA, FL, OR, NV, etc to retire. I doubt those areas will see another boom until us babyboomer kids retire in another 20 years and sell our houses like they did and move somewhere cheaper to live high on the hog. Thus driving up the values in those areas.

I think you are going to see normal growth like what you saw in the 90's. Houses are cheap, people bought them in the late 80's, held them for 10 years, sold them and then moved to by something bigger in another state. My buddy bought his first house in 89. He said his interest rate was like 10%. I really dont think interest rate matters. I think the job market controls who is going to buy a house and who isnt. Rent is very high now. People have to be taking a step back and be like, hmm, if i bought a house, my monthly is cheaper. My .02 is who cares about the interest rate, its still VERY low, people that can buy are buying and will continue buying. Its the owners of houses right now that i think will change the market once they are ready to sell and upgrade and or move.

All the strategic foreclosures are out of the way. The only ones going to walk now is if they lose their job and are underwater. I've got alot of friends underwater, but they are working so they are sticking by their place. Most of them have had their places for 10-20 years, so i can see why.

[Benny Profane]

All the strategic foreclosures are out of the way? Dude, there's something like 10-12 million people in America underwater on their mortgages. That's why inventory is so low - nobody can afford to sell their house, because they have to bring a lot of cash to the closing table just to get out from under that thing.
It's not as though wages are inflating to justify half million dollar homes for the masses. I know you live in the Bay area, which isn't really reality, especially when the FHA is supporting 700,000+ mortgages with low interest rates and 3.5 down. Don't get too complacent. This is far from over.