I walked by a beautiful home here in Sherman Oaks a few months ago and had a good conversation with the RE broker. He was a nice guy, honest and not pushy...I told him that the house was a little expensive and out of my league (They were asking 1.5 million)... I went by the house again a few weeks ago and he was practically begging me: "Drew, please, just put a bid on the house. Please."...It was really pathetic. If he's in the same state next time I walk by, I'll lowball an offer, but I doubt they would sell at my bid - they'd just rent the place out rather than take a loss...
Do the calcs. What will it cost to hold per month against the potential rental income. And then find out when the seller purchased and the purchase price. If he paid sub a mil 5 years ago, put your case to the agent. I will bet that you buy a house for sub 60 cents in the dollar within 50 attempts.
I believe they paid after the purchase, renovation, etc, about 1.3 mill, though I can't necessarily believe that....they originally listed it at 1.6, but when i went over last time it was at 1.4...and OH, the desperation! Maybe a bid at 900K to see what they say...
Have a frind come in at 850 first and then your bid of 925K will be 75K higher rather than 675K under the ask. However there will be better targets in SO
Agreed...no shortage of hot properties in this area... Nothing signifies a top more than 2 RE brokers in a shoving match at the top of Valley Vista trying to place their FOR SALE signs...I saw this a few months ago...
I am curious. What is happening to all the sub prime repros especially where the lender has gone belly up.
Max.. I put a bid on a similar house a few months ago - a house they were asking 1.5 for, but could sell...Apparently they rented it for between 5200-5800/month...something like that...
In my thinking, interest rates have a dominant cycle on a much longer time frame, 50 years maybe, and also 11 years or so. I have not really done a lot of work in that area, almost nobody has, just my take. I feel that people with variables are not going to get hurt in the near term because employment is cycling higher and should continue to do so for a while. Employment falls off eventually late in the business cycle, and it is after interest rates have risen so there will be some foreclosures for that double whammy reason. People are generally pretty resourceful though, lots of them will come through with sideline employment or whatever it takes to hang on to the house. I'm not worried about the Mexicans that have bought houses recently defaulting either, their ratio of workers to houses is high, they are good renters for that reason too.
I was thinking about lifetime loans tracking the environment will be the loan of the future. No locking in for the secondary market to sell. This would have a larger effect on cycles. As an earlier poster commented, 20% of the recent loan activiity has been in floating paper. Another reaction that I have...is how the disposable income has changed over the years for homeowners. Housing seems to be the fastest piece of the pie to grow, thus removing the slice of disposable income, that usAmericans, have enjoyed. Certain sectors of our lives seem to become more efficient. Spreading out costs and profit dilutes the effect. We have not even discussed the Global economy and how independent monies affect the commercial R/E market. As we grow into the one world economy and efficient egalitarianism, China in fact seems to be the slow moving beast from the east, creeping ever so slowly into our lives. but I digress.... The next time you complain about a CEO's salary...think about the alternative...Capitalism is the energy of financial freedom. Michael B.