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cball2211
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Name: Collin
Country: United States
State: California
Birthday: 2/18/1976
Gender: Male
Interests: a little bit of everything and nothing
Expertise: Dreaming
Occupation: Come up with lofty goals and i
Industry: Modeling
Message: message me
Website: visit my website
Member Since:
5/27/2003
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| Wow, don't update for a year and alot's changed. Been doing the facebook think now and it seems like everyone else is too cause I rarely see anything coming through from Xanga or Friendster anymore.
I looked back at my last post and saw how I was looking to buy a house within a couple months of that posting. A year later and I'm still sitting on the fence. However, looking at the current conditions, I'm glad I didn't buy yet.
There are 2 huge reasons that I foresee the market to continue to drop well into the beginning of next year.
1) Economy - If you live on planet earth then you're well aware of the state of the economy. Banks are closing, stocks are in a freefall, and people are in fear. When banks close, lending becomes tighter. Stocks dropping so much in the past few weeks means that the stock rich "valley" has less money to put as down payments on those nice homes. Also, most people will be holding on long term until the market recovers and that may not happen until well into the next administration which is also another huge factor as people are hesitant to make any big changes without knowing which direction the next president will take.
2) Seasonal Real Estate Market - Fall is known as the slow months as people get ready for the buys Holidays, alot less sales occur during this time.
Those two factors are causing me to hold off on buying till at least next year as the bay area may see drops of up to 20% additional in some areas which translates to another $100k or more. That's a lot of equity I'd like to have in my pocket.
Also, the main reason we were looking at another house was driven by my daughter going to Kindergarten. We have her enrolled in a Private School which is actually working out well for us. The tuition hasn't been as much of an issue as we thought and with the public school budget cut backs, I'm concerned about the overall state of public schools and how well they can maintain their current educational basis or even improve upon what they are currently doing.
Now our shift is focusing on cash flowing rental properties which, in the next year, might be very possible for the bay area.
We'll see how things go over the Holidays and I'll post again sometime in January. In the meantime, we're saving up more money in hopes of buying 1 or 2 rental properties.
Feel free to comment as I love talking about real estate. :)
Cball
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| As some of you might know, we've been looking for a new house for 2 reasons: 1) better schools and 2) shorter commute.
We have been looking at a specific neighborhood for about 4 months now and have seen some swings. Initially, prices went up about 30k in a month due to interest rates going up and the rush before summer. Now, with the mortgage industry shakedown and Jumbo loans becoming unaffordable, there has been a major drop in prices. Case examples:
1) I went to an open house for a home about 2 months ago. It was listed at 699k back then. About a month later it dropped to 689k and just this week it dropped to 629k. The house is vacant.
2) Across the street from our house is a home that was purchased by the current owners two years ago for 650k. Last summer they tried to sell it for 650k but got now offers. Now it is on the market again for 611k. After realtor fees, they're looking at a 80k loss.
3) Across the street from my in laws house is a home that was bought last year for 865k. They spent a month remodeling it before moving in. They are now selling it for 830k. Including remodeling cost and realtor fees, they'll be looking at 100k loss.
4) April's coworker is selling a house in the neighborhood we're trying to move to. The location is ideal for us as well as the size of the home. They bought their home 3 years ago for 750k. They refinanced 80k out for remodeling. Initially they were trying to sell for 830k but got no offers. They are moving into a new home and that home closed escrow. Now they are paying two mortgages and have lowered their asking price to 760k. They are looking at losing over 100k. We're actively talking to them to see if they can meet our price point which may be happening soon.
The housing market is bad right now. If you look at buying a house now, you can probably get it for the price it was back in 2004 as well as incentives. Loans are especially difficult right now if you don't have the captial for a large down payment or are doing an Alt-A loan. There are ways to do it possibly but make sure you talk to someone who knows what they're talking about so you don't get screwed.
Hopefully we buy a home in the next couple months for a cheap price. Will keep you updated.
Cball
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| Be careful who you listen to. A lot of these people are just out for their own interests and not yours. If you think you have a bad loan and are unsure of how you'll be affected, feel free to ask me any questions.
"In one example cited in
the charges, Tran borrowed paid $655,000 for a house at 4355 Leigh Ave.
in San Jose, according to the criminal charges and Landmark's lawsuit.
Su Casa collected over $20,000 in commissions and fees from the
transaction. The house was then "quickly refinanced" by Tran, the
district attorney said, for an additional $120,000, despite there being
no equity in the property. Such "flipping scams" commonly use
inflated appraisals to strip money out of a property, according to an
affidavit by a district attorney's investigator, leaving the lender
with a property worth far less than the money loaned.
To obtain the loans, Tran allegedly provided false rental histories, in
which Vuong claimed to be his wife's landlord, phony employment records
and false statements of assets
But it also drew lawsuits
from lower-income, Spanish speaking buyers who said they were persuaded
by Su Casa agents to buy houses beyond their means with tricky,
subprime loans that now are adjusting to higher interest rates, forcing
them into default."
Cball
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| http://www.engadget.com/2007/06/28/jobs-pulls-an-oprah-12m-in-iphones-for-all-apple-employees/
Looks like we'll have his and hers iPhones! :)
http://www.engadget.com/2007/06/29/iphone-multi-city-lineblog/
PS some people are crazy. Co-workers, April, and I went to valley fair for lunch today and there must have been at least 200 people in line already waiting for iPhones. Dayam. Glad everyone is hyped up to buy one. Makes all the work worth it. Just got back from China. Going to sleep...
PPS. iPhone Launch party tomorrow for iPhone employees. I'll take pics.
Cball
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| So if you haven't been watching the news lately, then you've missed out on a lot of things going on that's affecting interest rates. For those interested in loans, this will be interesting information. Essentially, there are two big things going on:
1) Huge drop in the stock market. Due to the drop in the stock market, a lot of investors have pulled out their money expecting a bear market and put it into Bonds such as the 10 year treasury bond to retain stable growth rather than a loss. What this does is it lowers interest rates because, since there is a high demand for bonds, the government can offer lower interest rates to buyers of bonds. Makes sense?
2) Major lenders selling off, tightening, or stopping subprime lending. This causes a lower number of people that are able to get a loan. It tightens the lending process and requires borrowers to prove that they are good borrowers and thus, many of those who got loans during the big housing boom when it was easy to get a loan may no longer qualify to refinance. Thus, if they are in a bad loan or an adjustable and need to refinance, they may not be able to. Therefore, we are looking at two major factors that can affect our local real estate market
- Fewer buyers because they can no longer qualify for a loan
- More homes for sale because borrowers with poor credit scores may not be able to refinance and will need to sell
Both of these directly affect our localized housing economy. Fewer buyers so lower demand and more sellers so higher supply.
This brings me to my second point. Recent articles have stated that sales are getting better and we might have leveled off on the housing price decline. My realtor friend once again sent me a chart but said that he believes now is a good time to sell. The way my friend thinks is if you are not intelligent to understand the data, then you are a good person to sell to.
Anyways, if you look at the charts, sure prices might increase because the number of homes sold per month is stable in Santa Clara county at about 500 houses per month (excludes condos). However, if you look at the number of homes available, it's down at less than 2000. That equates to a 4 month supply. In contrast, if you look at the summer months of last year, there were almost 4000 homes available versus 500 houses selling per month. Again, the basics of economics supply vs. demand. (Damn I should have done economics instead of engineering! haha)
Ok, so what this means is that because there was low demand during the summer of last year, housing prices went down. Now that supply is lower, of course things will balance out. Buyers will buy homes that are in good condition or in a good location (i.e. schools). Multiple offers may even be given for these homes. However, homes in poor condition or in bad locations are staying on the market or having to reduce their asking price. Many people pulled their homes off of the market when prices started declining and they couldn't sell their home (ask any realtor and they'll tell you the same). But notice now that homes are starting to come back out withe newspapers saying we might have reached the bottom of the bust, interest rates are still low, etc.
What I expect is that homes will once again flood the market. So supply will increase but demand should stay relatively the same due to the issues I refered to earlier, tighter lending standards. What this means is quite possibly, we will see a continue deline in a few months once homes flood the market.
We shall see, in the meantime, I'm looking at stable investments for my money.
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