BiggerPockets

anybody read the article in yahoo news last night?

http://finance.yahoo.com/real-estate/article/104340/Housing-Meltdown;_ylt=Ai901LEwyqLqzknB1gjFYe5O7sMF

Some " speculators" are calling for a 25% reduction in price in real estate? I honestly cant see that happening in some markets but sure would be nice to get a nice house for a good price to start out with here in over priced silicon valley.

Hello there James-

It would seem that this is not a recent change and that things will continue to get better and better for the avg buyer. Opps there goes the neighborhood for all of us investors. I have seen properties in
Los Angeles drop $150K-$200K and are still not moving after 4 months.

So it would seem that things are going to keep getting better and better, and perhaps worse and worse. But what will happen if all these investors keep plumiting with all these losses on their books? Hmmmm....

hey flipper

im actually in the 95123 san jose zip code.

im lovin the price drops. currently im savin every penny to get into something i can pour some sweat equity into.

Just rented out one of my unit to a tenant that was loosing their home due to a shortsale, their payment was increasing $900 every 4 months!
This was my second tenant who move in due to shortsale. Kinda feel bad for these people cause English is there second language.

Many places in the Bay Area is doing fine, it really depends on the type of asset and location you are in. I live in West San Jose, not to far from Cupertino, couldn't afford a home there where home values have increase. Homes in good school district seem to be doing fine. As in any business, it all about location, location!! Sure there are many homes that have decrease in value but it's not in areas that I would want to live in.

Originally posted by "Wheatie"

That article, as well as one in the current Economist, mentions the demographic changes that bode badly for the housing market going forward. In addition to all the fallout from this recent run-up, we're also entering a time when many people are going to be retiring. Youngsters buy houses, seniors sell them.

Jon

Jon,
on even more philosophical note:
just wondering if the same is gonna hold for STOCK MARKET ( i.e. seniors unloading their 401k shares and youngsters eagerly buying them......hehe)
atarget :pup:

I basically agree with you , Jon. What we are seeing now on Wall St. is well controlled and " moderated" process of unloading common stock held by gradually retiring baby boomers. That slow but sure march downhill is a real killer for all kinds of shortsellers, speculators but also for an average John Doe - a stockholder, who was accumulating shares for tens of years and now , that it's time to retire and high ( and unpublished) inflation strikes hard, he will liquidate his holding position just to acquire means of survival. As for real estate market, the former and the latter are mutually connected ( interconnected ?) by means of demography of retiring baby boomer generation. With uncertain economy ( inflation turning into hyperinflation ?) John Doe and Jane Doe will not need the big empty nest they just paid off. It will boost the supply of property inventories everywhere. And it will add to current ( and not ending soon) general RE slump in America. It will - and actually is as we speak - curb spending of American working class, due to the obvious fact that their biggest asset starts melting. And that will again add to severity of RE depreciation. Not a bright landscape....... Not even for RE investors ( in fact, any investors) - due to low speed of deterioration of the biggest world economy. Because investors: either in equity markets or in RE markets can only make good profit with presence of abrupt changes merkets' trends. Be it bullish or bearish - they can always pull the money out of it. But when the valuations are only slowly rolling down the hill, everyone is losing.........
atarget

Anybody of the California crowds living in Malibu? Can you give me a market update on the area? Always wanted to buy a place there.

I am sure the high end is doing just fine. What about the $1m-$2m price sector SF home?

Thanks

Originally posted by "**********"

Lito,

Banks and Wall Street Investors are taking MAJOR write downs as a result of the sub prime melt down.

There are hundreds of thousands of bank owned properties all across the nation. Some places worse than others, like CA!!!

It's a numbers game and relates to sub loan securitized and Wall Streets appetite for bogus loan portfolio's for several years. The investors were duped and the Fed ignored the whole situation.

There REO's are bringing down the values of all other properties and there are several other factors.

Also when these investors sell of the REO inventory in volume portfolio's this also hurts the overall market.

There are so many factors an so much of a mess that we will NOT see ANY signs of recovery for at least 6-10 years (in many hard hit area) as far as what the experts who know their stuff say.

We have NOT even started to see the REO and bank wreckage as of yet! This is all just beginning.. Our banks are being bailed out by foreign countries as well.

MANY CEO's of mortgage and banking firms will be heading to prison as well, you will see. The industry is in DEEP trouble!

Not nessaseraly ceo going to jail for the loans ive seen the dea shut down companys and take owners to jail for forgery and stuff on reverse mtg but it all has to do with the appraisers that should go to jail for bringing in higher values some leners dont ever require a 2055 appraisal review thoes ones are there fault they might run comps in the area for a certain radius but there so overwelmed with all the loan in the last 13 years that there no time for them to do it or there just lazy/incompitent !

I am seeing 3 bedroom homes in Contra Costa that you can get in contract for around 100k to 150k! That drop is way over 25%

Nobody thought we would see this three years ago but hear it is. I know quite a few people who are holding this properties and renting them with positive cash flow.

I have been contracting these with banks and selling them to buy and hold investors for a small profit on each deal. Properties like this are not hard to find here in CA.

Banks are making things more and more difficult however given your criteria I have access to over 40 portfolio lenders that are still lending to investors in CA. Get in touch if you would like to chat sometime.