Was talking to a guy looking to buy an investment property in Temecula, CA. He told me about this one house he had looked at... He said it was at ~$380k two years ago...now listed at $239k. The guy said that the house hit the market and got 19 offers in 4 days. According to him there is a lot of competition from investors in the sub $250k market over there.
Good story.... thats one of reasons I've been less bearish on this down turn than in some of the others that I've experienced. Still lot's and lot's of money chasing good deals out there. Whether that means just a prolonged painful bottom must like 80-85 or a quick recovery much like 91-93 remains to be seen. But I'm grateful for the posts
Central FL Seeing an uptick in multifamily apartment building construction and new commercial building construction - all over the last 2-3 months. Echo what has been said elsewhere in this thread - aggressively priced homes moving but much of the market remains stagnant & seems overpriced. Seems like a lot of folks buying zillow's inflated estimates and only slowly lowering their prices. Many homes in desirable areas have been on the market > 6 months. In the peripheral suburbs, catastrophic foreclosures, REO's, etc...
What are rental yields on a property like that? If it yields 8% a year after property taxes I can easily understand why it receives so many bids. Downturn or not, a property that pays off its 15yr fixed @ 5.5% is a good investment to have.
I agree with your pricing. But, I disagree with you characterization as a dump. The newer the subdivisions, the more upsidedown. . I have clients with homes that used to be close to a million or more in South bay, which are now half price. View homes, golf course lots etc. Not dumps at all. Formerly a sketchy area, but some very nice subdivisions with new schools. The builders were letting anyone qualify and now people no longer want to 70% of their salary to be in an upside down home. If it was going up they would refi and take cash out. Which was the traditional way to make money in much of California for years. If you buy into my thesis then you know we are going to pancake down -- absent some serious intervention. everyone knows Californians can't afford their homes - now the banks are letting them buy them unless they can afford them. By the way there is still a ton of cash out there. 30% of the offers I am seeing are cash offers. Investors are make offers which currently pencil out. But - I would be concerned that rents will come down in the future after this dislocation stabilizes. Right now there are thousands of empty homes - forcing rents up. I suspect that will change.
I live in Coachella Valley, Ca. --- Palm Desert, Indio, Palm Springs, la Quinta There has been some activity in the market but sales volumes deltas have been pretty consistent with long established seasonal trends. Volumes are down from prior years ~20% Homes in the upper price points, 750K and above appear to still sell. Joe 6 pack homes are dead unless priced to sell. Incomes still don't justify prices. Some of the sales IMHO are to investors hoping the market will turn for a flip or cash flow thinking rents are rising... rents are flat to down from what I see. Seen a few in my area that are flip type deals and they are getting smoked. A 500K house two years ago is having a hard time getting bids at 280K, but, it's a great bargain (note sarcasm re: realtor speak)... based on the inflated price a few years ago. Reality, it's still overpriced by about 30%. Unfortunately it would only rent for about 1200-1400 which still makes it CF negative. I have noticed that homes that have wishing prices are for sale right next to a foreclosed home. Wishing price is 385-425K... foreclosed home is 285-300. Makes the foreclosed appear to be a "value". People are falling for this all the time. More and more homes are falling into default and that inventory is hidden for the most part at this point. When banks can't adequately address offers on REO properties, you have a problem. That shadow inventory is going to crush the market as a previous poster stated. I've been negative on the market for about 3 years now and will continue to be until there is a fundamental change in the macro environment. Homebuilders saying it sucks and will for a few years is a start. I've noticed some statements that are of the "come to jesus" variety. It's a good start, so we are still a ways off from a stable market.
I live on the upper west side of manhattan. I bought a place early 07. I've been watching the RE market since 06. I've been waiting for a crash or at least a price decrease, I haven't seen it. Talked to a few agents they say properties that are different(outdoor space, view etc) sell top dollar fast, but average apartments are taking longer to sell, but not cheaper. So that sums it up no price decrease just longer to sell. One thing to keep in mind is many if not majority of deals in manhattan are all cash. It makes it much easier to get board approval. Also, heavy european buying recently on dollar weakness.
We have about 6 "mature" sub divisions with about 6 different sytle homes. This has been my tracking model. These homes appreciate about 4% a year long term. (I've checked this). As sales got hot, these homes went from an average price of 230k - 250k to 279- 299k. Now these homes are listed back to where they were in the 249 range. It seems to me, the appreciation is on hold. These homes are upstate in Saratoga county, NY. These subs are a good representation because there is an excellent school system, large state work force (Capital District) and somewhat economically insulated. The new subs divisions that were built recently competed against my model. Many >500k to upgrade or 300k homes that were smaller but "new". There are more for sale signs around, so I imagine supply is greater than demand. Also, there seems to be more commercial property for sale. I'm pretty sure my daughter lives in Washoe County, place is expensive, she is always broke.