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JoefromPhilly
661 Posts |
 Posted - 03/26/2008 : 12:40:57 PM
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Here is the text of the following article:
http://latimesblogs.latimes.com/laland/2008/03/california-free.html
Signs of distress are piling up in the California housing market, where prices are falling at three times the national rate of decline.
--Statewide, median sales prices fell by a stunning 26% from year-ago levels in February, with home prices dropping at a rate of nearly $3,000 a week, the California Association of Realtors reports. Further, the CAR says the Fed's interest rate-cutting campaign "will have little near-term direct effect on the housing market."
--In the San Fernando Valley, losing a home to foreclosure is now almost as common for families as buying a home. The L.A. Daily News: "During January and February, there were 1,084 foreclosures and 1,335 sales of houses and condos in Valley communities from Glendale to Calabasas, according to the San Fernando Valley Economic Research Center at California State University, Northridge."
"It's bad. It's really bad," market analyst Nima Nattagh told the Daily News.
The California Association of Realtors reports median prices fell 27.2% from year-ago levels in the hard-hit Inland Empire east of Los Angeles, 30.9% in Sacramento, and 39.1% in Santa Barbara County.
On a percentage basis, the California price meltdown is more than three times as severe as the national decline of 8.2% in median prices reported this week by the National Association of Realtors. On an absolute basis, the California meltdown is even more severe: Nationally, prices fell over the past year at a rate of $338 per week; in California, prices fell at a rate of $2,788 per week.
According to the CAR, "The median sales price of an existing, single-family detached home in California during February 2008 was $409,240, a 26.2 percent decrease from the revised $554,280 median for February 2007." The February 2008 median price fell 4.8 percent compared with January’s revised $429,790 median price.
"The Federal Reserve Bank’s recent action to reduce the federal funds rate will have little near-term direct effect on the housing market," said CAR Vice President and Chief Economist Leslie Appleton-Young. "However, Fed rate cuts should result in more favorable real estate finance rates as we move through the year."
Median home sales prices sometimes exaggerate swings in market activity. A year ago, median home sales prices in California continued to show price gains, even though the market downturn had begun. At the time, the collapse of sub-prime lending had the effect of freezing the lower end of the market. With fewer sales of less expensive homes, the market was dominated by sales at higher price points, and median sales prices showed gains.
The opposite appears to be happening now, as lower-priced foreclosed homes come onto the market, increasing sales at lower price points, while the market for more expensive homes has slowed dramatically.
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re_manager
2625 Posts |
Posted - 03/26/2008 : 12:43:26 PM
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They dropped 40% - 50% in Bakersfield. SFR's can finally cash-flow again!
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neversaynever
1044 Posts |
Posted - 03/26/2008 : 12:45:13 PM
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| *****, but totally forseeable |
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caadacjohn
599 Posts |
Posted - 03/26/2008 : 12:50:21 PM
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| and its only going to get worse (or better for buyers) |
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JoefromPhilly
661 Posts |
Posted - 03/26/2008 : 12:52:01 PM
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| How do lenders even make high LTV loans in this market? Who is buying these loans knowing that the collateral behind them is garbage? These loans are as good as signature loans, from a risk-perspective. |
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neversaynever
1044 Posts |
Posted - 03/26/2008 : 12:53:38 PM
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| Yea, anyone who takes out an ARM less than 5 years in CA should be commited. |
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peter
4640 Posts |
Posted - 03/26/2008 : 1:03:14 PM
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I live and work in San Fernando Valley, and I am seeing
miseries daily from the once-awardee C-21 office to once-top
mortgage firm where I am still hanging on. Driving to
see some desperate homeowners who are trying to cash out]
from the carcasses of thier value-diminishing homes, I have
already witness 2 street robberies during noon time. One in
Van Nuys around Woodman Avenue, east of the San Fernando
Valley and one at CVS in Woodland Hills, an area in West
San Fernando Valley not usually know for crime scenes.
One elderly woman lost her handbag while trying to enter
her car after shopping as a robber and his accomplice drove by
quickly to snatch it away from her.
I heard that Detroit also has been experiencing more crimes
during this current hard time.
Peter |
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homebroker@sbcgl
3555 Posts |
Posted - 03/26/2008 : 1:08:15 PM
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| We also do REO sales, seems even the banks cannot keep up. I have a bank they pulls a new BPO every 4 months, they price the home at $330,000 in Dec only to find out now homes pending in the low $200,000's today. It is important to price the home correctly the first day to limit further loses! |
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peter
4640 Posts |
Posted - 03/26/2008 : 5:46:46 PM
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I would expect price levels in East San fernando Valley,
specially condos, to fall by at least 30% by end of 2008.
Our in-house realtors have been struggling to get bids from
scavenger buyers but the bids are so ridiculously low, such
as an REO listed for $299,000 is being offered for $140,000.
And this is a 2 bedroom 2 bath condo.
There are mostly property thieves and scavenger buyers in
the market now, but it's good that they are here to provide
bottom-line liquidity to the market. Just like in any
crime scene, once in a while a property thief gets his wish
by being able to buy at 50 cents to a dollar and it is possible
now with REOs and builders' closeouts.
So, I am not surprised that there will be a free fall, not
in all areas though, only in traditionally depressed areas known
for urban ills.
Peter |
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aspiring1
1321 Posts |
Posted - 03/26/2008 : 6:30:51 PM
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Peter, San Fernando Valley is in the HPI Index of the top 20 declining metropolitan areas in the US. I can imagine how crime will increase there.
My daughter goes to school in the Valley and just last week there was a radio broadcast announcing Van Nuys residents to lock their doors and windows, and stay inside - due to a local robbery. When I figured out where it was, it was blocks away from her school. That will really have a downward effect on values in that area. |
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ppulatie
2259 Posts |
Posted - 03/26/2008 : 6:50:31 PM
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I live in the East Bay in Antioch. To give real meaning to stats, note the following.
Went to contract on my home in Jun 02, $432k
Aug 02, model home sold for $458k.
Mar 04, same model sold at $525k.
Oct 04, same model at $600k.
Jul 05, it was $710k.
Apr 06, it was $750k.
Jul 06, mine was $720k.
Jun 07, $580k
Today, maybe $335k to $360k, thanks to foreclosures. And there are 7 identical models that are REO's for sell around me.
Need I say more?
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celloshred
1854 Posts |
Posted - 03/26/2008 : 6:57:36 PM
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| seriously, who robs an old ladies purse? anyone with a grandma knows they only keep $7, gum and half-eaten candy wrapped in a reciept. if its the day after a bar-mitzvah, she may have some dinner rolls in there too. |
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rtrefflich
3417 Posts |
Posted - 03/26/2008 : 7:03:58 PM
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| Just picked up a short sale on a property in San Diego, a condo conversion that sold for $275,000 two years ago, there are six in the building, four are now bank owned, on the MLS for $119,000-$128,000, thats 2/3 drop, not half, another one on a loan I did last year, property appraised for $385,000 and now the ones in the unit are selling for $190,000! |
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mantixmortgage
2717 Posts |
Posted - 03/26/2008 : 7:08:13 PM
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lol celloshred
but honestly im waiting for prices in the nice parts of the valley and westside to go down so i can cop something nice to live in. nice places around there are still pretty expensive. plus i have a house in valencia that seems to be holding its value based on comparables (knock on wood) but its behind a gate and near private schools and stuff |
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rtrefflich
3417 Posts |
Posted - 03/26/2008 : 7:11:02 PM
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Robert,
Don't know if you are working with an agent, but I work a lot of short sales and foreclosures in UT and CA and we have a lot of experience dealing with the banks. We get things at a great discount (I buy a lot of things at .50 on the dollar) Let me know where you are looking and I can see what I can find for you. It is just a matter of negotiating with the bank to find the right deal.
quote:
Originally posted by mantixmortgage
lol celloshred
but honestly im waiting for prices in the nice parts of the valley and westside to go down so i can cop something nice to live in. nice places around there are still pretty expensive. plus i have a house in valencia that seems to be holding its value based on comparables (knock on wood) but its behind a gate and near private schools and stuff
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mganovsky
2074 Posts |
Posted - 03/26/2008 : 7:14:11 PM
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| In Florida we have the same thing but I want to make a point here. when prices were out of control I never heard one media source or realtor complaining of the over priced market to try to stop the investor flipping that caused the rapid growth in home values. Infact Realtors them selves were causing it by buying new construction and flipping the property even before they had CO and making 50 or 60K per home, so give me a frigging break. The out and out greed in this country caused the overly priced market, Realtors continued to show properties to folks that they could not afford then turned the people over to use then wallstreet got involved and dropped there pants and gave the banks an avenue to sell the loans. I do not feel sorry for any out of work realtor they caused there own demise. The market will right itself just give it time. |
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mantixmortgage
2717 Posts |
Posted - 03/26/2008 : 7:15:40 PM
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| thanks rich but i think im cool for now |
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rtrefflich
3417 Posts |
Posted - 03/26/2008 : 7:17:08 PM
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Are you talking about the two lines:
"Real Estate never goes down"
"It's always a great time to buy" (I do believe in this one however)
quote:
Originally posted by mganovsky
In Florida we have the same thing but I want to make a point here. when prices were out of control I never heard one media source or realtor complaining of the over priced market to try to stop the investor flipping that caused the rapid growth in home values. Infact Realtors them selves were causing it by buying new construction and flipping the property even before they had CO and making 50 or 60K per home, so give me a frigging break. The out and out greed in this country caused the overly priced market, Realtors continued to show properties to folks that they could not afford then turned the people over to use then wallstreet got involved and dropped there pants and gave the banks an avenue to sell the loans. I do not feel sorry for any out of work realtor they caused there own demise. The market will right itself just give it time.
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