Canadaman writes:
The thing that struck me when I read this was..............

FIRST! =)
Canadaman | 05.20.08 - 6:55 pm | #

Blitz writes:
I'm on the road again, I can't just wait to get back on..

http://www.youtube.com/watch?v=k...h? v=kz_mwWjoGdE
Blitz | 05.20.08 - 7:04 pm | #

Ministry of Truth writes:
Why are there cars parked in the driveway of the bank owned properties?
Ministry of Truth | 05.20.08 - 7:04 pm | #

mal writes:
jeez, what f---in ugly neighborhoods.

this is the good life?
mal | 05.20.08 - 7:04 pm | #

son of zinger writes:
I appreciate his efforts, but Jim needs to have someone else hold the camera while he drives. He also needs to abide the rules and stop running through the stop signs. He's chronicling his own driving indiscretions as well as those of the buyers/sellers in his territory.
son of zinger | 05.20.08 - 7:04 pm | #

Calculated Risk writes:
Canadaman, how about an 800 sq ft house selling for $318K just over a year ago - and now being offered as an REO in the mid-$100s? With 8 or more other REOs within a couple of blocks.

Half off sale ...

Best to all.
Calculated Risk | Homepage | 05.20.08 - 7:05 pm | #

cd writes:
Wow that 900k home looks like it's worth 400K tops..Valley Center is in the middle of nowhere, Escondido is nearest city..We used to go up there to shoot rabbits and it looks like we missed a couple because someone pulled a rabbit out of the hat on that buyer..Ugly..I guess the Mt.Palomar observtory workers would like the commute!

Oceanside..well lets just think Moreno valley but close to the water..

Long ways to go..
cd | 05.20.08 - 7:19 pm | #

Canadaman writes:
Calculated Risk writes:
Canadaman, how about an 800 sq ft house selling for $318K just over a year ago - and now being offered as an REO in the mid-$100s? With 8 or more other REOs within a couple of blocks.

Half off sale ...

Best to all.
Calculated Risk
_____________________________________

Hi CR, this may be a bit wacko but, my own personal belief which may be well off the mark is to purchase a 318K house for 31.8K in cash.

That being said, I obviously have a different view of value than most people, and I personally believe we will see a point where the majority of house purchases are made with cash as no lenders are left to finance home loans.

I guess that is why people used to call me Doom and Gloom
Canadaman | 05.20.08 - 7:22 pm | #

Canadaman writes:
PS CR, I agree 318K to 100K is a drastic move........but who the f### was bidding on 800 sq ft houses? To me that is where the real insanity lies.
Canadaman | 05.20.08 - 7:23 pm | #

ShortCourage writes:
In the second video, when he said "10% off for lousy curb appeal", that's 10% off of what?

They bought it for $927K, but he said there's an REO for low 700s in the neighborhood... So I'm assuming he meant 10% off of that 700K competition, right? So something like 630K? That's a little over 30% down from the original purchase price...

Geez, I wonder what the builder is selling the new ones for (still some coming online, he said)?
ShortCourage | 05.20.08 - 7:38 pm | #

let's party! writes:
I'm waiting this market out for atleast 5 more years... Down is the only direction real estate will go.
let's party! | 05.20.08 - 7:46 pm | #

barely writes:
cd "We used to go up there to shoot rabbits"

Mmmm Mmmmm. That's some good recession eatin' ! Git any squirrels?
barely | 05.20.08 - 7:53 pm | #

Ministry of Truth writes:
Lending is still artifically loose and I do not see a new paradigm in lending. Waiting on the sidelines with cash seems like the prudent decision right now.
Ministry of Truth | 05.20.08 - 7:55 pm | #

Jim the Realtor writes:
I mis-spoke in the Oceanside video - he paid $318,000 for it in July 2004, and refinanced it a little over a year ago, getting loans that totaled $375,000!

We listed for $127,900 on Friday, and have received six offers. CFC has countered looking for highest and best offer from the participants, and it looks like it'll sell in the $140,000 to $150,000 range.

It is a split buyer pool between owner-occupants and investors. One agent told me he has purchased five of these recently, gutting them and renting for $1,200 per month. With no HOA fee and decent yards (4,500sf lot), he figures they are good investments.

There are 47 of these half-duplexes for sale:

26 short sales
18 bank-owned
1 probate, and
2 'normal' sales

Foreclosures for everyone!
Jim the Realtor | Homepage | 05.20.08 - 8:00 pm | #

Elvis writes:
CR,
Half off sales of previous fraudulent sales seems to me to be fraudulent half price sales.
Elvis | 05.20.08 - 8:01 pm | #

ShortCourage writes:
Jim the Realtor,

I didn't realize you would be on this thread... Any response to my post above at 7:38pm (re: your target price on the second video, and what are builders selling the new ones for...)??

Thanks.
ShortCourage | 05.20.08 - 8:08 pm | #

gomer writes:
Question on that valley center gated community:

I may be wrong, but isn't that the entrance from "Back to the Future I, II, and III".

If I am correct, which house does Biff live in, or Marty McFly.
gomer | 05.20.08 - 8:09 pm | #

Godspeed writes:
I agree with mal's post. Anyone who pays that kind of money to buy a house like that in the desert deserves what's coming to them. To me, personally, the value of those homes is zero.
Godspeed | 05.20.08 - 8:12 pm | #

rich writes:
Jim,

It made me proud to see you run those stop signs with the camera in your hand. You go!

Great way to protest.

By the way, just exactly what are you protesting against?
rich | 05.20.08 - 8:56 pm | #

angryrentersaver writes:
"It is a split buyer pool between owner-occupants and investors."

What kind of group is this? Are some of the buyers listed as owner occupants so they can get a better mortgage rate?
angryrentersaver | 05.20.08 - 9:02 pm | #

Jim the Realtor writes:
ShortCourage,

Here is the activity this year in Valley View Ranch in Valley Center:

8 active listings, ranging from $715K to $910K. Of the eight, six are short sales, one is an REO, and the other is a builder offering. They have another not listed in the MLS, both are in the $800,000s.

The active listings are averaging 112 days on market. Sellers (and agents) must figure either somebody will come along someday, or it's already too late, and they're just waiting for the banker's rep to knock on their door.

There is one pending, the builder's model with nice view of Palomar Mountain. 4,626 sf listed for $841,500, and it went pending three weeks ago.

Only one closed sale this year in the tract, and that was in January - 4,213 sf closed for $711,000.

If mine came on the market at $699,000 it would be the price leader, but with the lousy curb appeal, I'm figuring it'll need to be substantially lower (hence, my add. 10% off).
Jim the Realtor | Homepage | 05.20.08 - 9:20 pm | #

Anonymous writes:
Interesting data from his blog that refutes the 20%+ headlines from DataCrack and Shriller:

Recent Comp May Sale, same sf

$684,000 - 2/08 $722,000 (+5.5%)

$815,000 - 1/08, $792,000 (-2.8%)

$876,000 - 12/07, $815,000 (-7.0%)

$845,000 - 4/08, $820,000 (-3.0%)

$1.015 M - 1/08, $1.045 M (+3.0%)

Plus/minus single digits, sure doesn't sound like the disaster everyone is looking for! And this is in one of California's worst markets...
Anonymous | 05.20.08 - 9:24 pm | #

Zoomer writes:
Is this the one?

Says it got sold for $745K in Feb 2008.
Zoomer | Homepage | 05.20.08 - 9:26 pm | #

Ralph Soone writes:
CHICAGO FED NATIONAL ACTIVITY INDEX IN A MAJOR LEAGUE RECESSIONARY NOSEDIVE...

http://www.chicagofed.org/econom..._data/ cfnai.cfm

No wonder the boys at CNBullC kept this one off the air...(And to think the media & Wall Street herd are still BSing the public into us "skirting the recession"....what a complete farce, IMO)

Perfect storm "trifecta" of real estate depression, major credit crisis, and now 1970s style oil crisis (1970s if we're lucky) beginning to rear it's ugly head....

Good luck to all (we're gunna need it)
Do your own due diligence
RS
Ralph Soone | 05.20.08 - 9:29 pm | #

Thomas writes:
Deleting Comments now? Hmm...you don't reveal yourself publicly, you clearly have an agenda and now you won't allow comments with data that counter your agenda. I'm betting that this blog is your way of talking down the market, while you buy at rock-bottom prices.

Pretty smart strategy. Wonder when people will catch on...
Thomas | 05.20.08 - 9:30 pm | #

Nemo writes:
What happened with the "cash for keys" offer?

Inquiring minds want to know!

P.S. Suggested title for some future installment: "REO Kooky"
Nemo | Homepage | 05.20.08 - 9:30 pm | #

Jim the Realtor writes:
The former owners turned down the cash-for-keys offer, because they would have to vacate in two weeks. They have five kids, and he said it would take until mid-July before he could get out.

A local eviction attorney confirmed that lenders can give former owners a three-day notice to vacate, and I'm not sure why they don't. Probably the PR nightmare that would ensue.

JTR
Jim the Realtor | Homepage | 05.20.08 - 9:34 pm | #

Ross writes:
Back in my war mongering days, I'd take a flight up to oxygen and say "To paraphase FDR, we have nothing to fear but fear itself. But up here, fear gravity because it's the LAW". Did this every day until one day I get this riposte " There ain't no such thing a gravity. The earth just sucks"!

Kinda reminds me of these "Homes". Seems the only true values are in other countries like Chad or Bang The Dish.
Ross | Homepage | 05.20.08 - 9:35 pm | #

Jim the Realtor writes:
Anon at 9:24

To be fair, those stats are from 92130, the best performing zip code in SD County.

Although SD looks like one of the worst markets, I think we're just one of the earliest to fall.

The Dataquick numbers today had us looking better than most SoCal counties.
Jim the Realtor | Homepage | 05.20.08 - 9:43 pm | #

calhousingbear writes:
At $140k and assuming you can rent for $1,200 a month, my back of the envelope math says that those houses are cash neutral. So I can understand why the large number of offers and investors.

The 64,000 dollar question is will rents stay at $1,200 a month or will they go down? Also will there be even more REO such that the downward price trend continues.

50% off in less than two years is for Real Estate stunning. But so was the ramp up in price.

Any thoughts on if these will see price drops further or if these low end homes have hit the bottom?

Jim, CR, others?
calhousingbear | 05.20.08 - 9:50 pm | #

cd writes:
barely, couldn't shoot the squirrels but their's some good crappie and bluegill fishing in nearby lakes too...

Realtor Jim- Where are those homes in oceanside? In the gang zone or near the base? I could see investing and renting to a couple of our countries finest but I have to say 80-90K for those duplexes is my range..
cd | 05.20.08 - 9:51 pm | #

JT in SD writes:
Good work Jim!

You've truly put the "real" in Realtor.

Coming from a fellow long time realtor...

Cheers
JT in SD | 05.20.08 - 9:51 pm | #

4shzl writes:
Canadaman:

Not Doom and Gloom at all-- just sensible, with some familiarity with history. Major bear markets bottom at ten cents on the dollar, give or take a nickel. BFD. No one in this this country will starve -- so let's just get it over with.
4shzl | 05.20.08 - 9:53 pm | #

barely writes:
Ralph Soone, Wow, on the report. Scary stuff. Definitely in recession territory. Released today?

Embargoed for release:
8:30 am Eastern Time
7:30 am Central Time
May 20, 2008

Have you forwarded to CR?
barely | 05.20.08 - 10:11 pm | #

Jay writes:
Interesting thing about Oceanside, It has some of the most expensive property in San Diego County(because of Ocean front property) and from the video some of the least expensive. There is a ton of property under $250,000 within 4 or 5 miles of the beach. You can also buy brand new homes 6,000+ square feet on an acre of land for under $1 million. Yet 50% off the peak seems to be the norm.
Jay | 05.20.08 - 10:11 pm | #

burnside writes:
calhousingbear,

I think interest in purchasing those for rentals must arise from running the numbers - and that involves making some assumptions about how crowded the rental market may become and what pricing will look like over the next few years.

People may have a fair business plan in mind, but the rental market can be brutal in a downturn.

Looks highly speculative to me.
burnside | 05.20.08 - 10:11 pm | #

Blitzer writes:
Re: Fractured Fairy Tales

In the Family Guy episode "The Thin White Line", Peter pulls a lion's head out of a compartment, after which Rocky appears and tells the audience, "And now, here's something we hope you'll really like." (a parody of a running gag where Bullwinkle accidentally pulled dangerous animals out of a hat instead of a rabbit, and then Rocky would say that exact same line).


New Trend in Biofuels Has New Risks

http://www.nytimes.com/2008/05/2...iofuels.html? hp

ROME — In the past year, as the diversion of food crops like corn and palm to make biofuels has helped to drive up food prices, investors and politicians have begun promoting newer, so-called second-generation biofuels as the next wave of green energy. These, made from non-food crops like reeds and wild grasses, would offer fuel without the risk of taking food off the table, they said.

But now, biologists and botanists are warning that they, too, may bring serious unintended consequences.
Blitzer | Homepage | 05.20.08 - 10:45 pm | #

Elvis writes:
burnside,
Looks highly imprudent to me. I think the buy is from 2011 to 2014.
Elvis | 05.20.08 - 10:47 pm | #

Shnapstafarian writes:
Thomas - the rule here is puff, puff, pass - aight?

WTF r u talkin bout?'
Shnapstafarian | 05.20.08 - 10:50 pm | #

Elvis writes:
"But now, biologists and botanists are warning that they, too, may bring serious unintended consequences."
Blitzer

I know about windmills, and, if you want to see unintended consequences and the slaughter of songbirds and raptors, hang out under a power windmill. These things are now gigantic, sprouting like weeds across the wind swept regions, and function like th Black Plague for birds. Killing a huge amount of birds cannot be good for farmers, but the insects must like it.
Elvis | 05.20.08 - 10:52 pm | #

Blitzer writes:
As I look back at Fractured Tales, I see some correlations with The Housing Bubble: http://tw.youtube.com/watch? v=ne...feature=related

Furthermore, I think Jim The Realtor should read this and think about some deeper issues: http://en.wikipedia.org/wiki/ Ele...Electra_complex
Blitzer | 05.20.08 - 11:09 pm | #

Jim the Realtor writes:
cd,

These are in a community called Hermosa off N. River Road on the way to the back gate.

One of the realtors that made an offer on behalf of a client has already purchased five of these for himself, and sold four others to clients. With rents around $1,200 and no HOA fee, it makes sense.

But will it get better? The middle of May is prime time - I think you'll see closed sales in here under $100,000 in 4Q08.

The fourth quarter is the best time to buy - most everyone else gets busy with school and the holidays, and anyone selling has to be desperate.
Jim the Realtor | Homepage | 05.20.08 - 11:12 pm | #

Elvis writes:
The fourth quarter is the one one do best with on video games. I'm warmed up and ready to rock!
Elvis | 05.20.08 - 11:18 pm | #

burnside writes:
Elvis,

I'm no good at projecting when to reenter the housing market, and I don't give much credence to prognostications; I just try to see as clearly as I can where we are and what forces are actively at work.

What's interesting me lately is this phenomenon of closed - or closing - investment opportunities. Because people can't see anywhere reliable to place their savings. One by one, every prudent avenue for preserving capital has come to look unreliable. The opportunists of every stripe have, this time, created a kind of endgame for retail investors.

Believe me if I, who have never to my knowledge had an original thought in a long life, am looking at it this way, then surely there must be vast numbers who got there ahead of me, are thinking this now, or will wake up to it tomorrow.
burnside | 05.20.08 - 11:28 pm | #

Elvis writes:
burnside,
The dumb money buys early. Since you aren't dumb, I presume you won't.
Elvis | 05.20.08 - 11:35 pm | #

dude writes:
Dumb money, or at least dead money...
Way too early, by my guess, as well.
dude | 05.20.08 - 11:38 pm | #

Troy writes:
Somebody bought a place for $927K . . . which is basically twice what I can afford on my comfortably upper middle class dotcom salary -- and the system needs to bribe people $2500 just to leave after they won't pay any more?

Meanwhile in my rental in Sunnyvale the owners changed the lease to make me pay $3000 to break the lease, AND raised it another $100/mo.

oh, and if I'm late 5 days, they'll get the sherriff to boot my ass, plus I'd be liable for any damage I caused, of course.

What a society we've got here.
Troy | 05.21.08 - 12:17 am | #

Elvis writes:
Troy,
You are a bad negotiator. Maybe you should consider a job as a computer geek. Oh, wait a second...
Elvis | 05.21.08 - 12:28 am | #

linear algebra writes:
so, Jim the realtor, welcome. It's nice to have somebody from that tent in here, contributing, rather than blowing smoke or snorting something. you must feel like you're close to Ground Zero these days. that's ground zero, not zero valuation. my question to you--how does a sucker rally in a down market play out in something as illiquid as real estate?
linear algebra | 05.21.08 - 12:57 am | #

ShortCourage writes:
Jim the Realtor, thanks for your response. And we appreciate the videos, regardless of your camera work or driving tactics!!
ShortCourage | 05.21.08 - 1:20 am | #

sterlingerl writes:
Why would anyone choose to live out there? How do they get those five children to school (drive?). How do they get to the supermarket? the cinema? the gym? (drive / drive / drive???). No wonder you all moan about $4 gasoline. That gated community should just be bulldozed, it's so ugly. All of it. Just raze it to the ground. What an idiotic concept.
sterlingerl | 05.21.08 - 1:57 am | #

checker writes:
Slightly OT: Option ARMs start to bite:

"'Oh really, they told you that?' asked Bryant when he heard Wachovia's response. "That is not a true statement as far as I am concerned," He pointed out to CBS 5 Investigates he only brings home $3,000 a month, and the full payment is for more than $4,000."

Sad story: http://cbs5.com/local/ mortgage.w...s.2.728889.html
checker | 05.21.08 - 2:03 am | #

Berserker writes:
Near palomar, eh?
More suburban sprawl producing light pollution in the vicinityof a world class observatory. Neighborhoods like this should go back to the stars.(and the rabbits)
Berserker | 05.21.08 - 3:09 am | #

Sarah writes:
Um, Thomas, perhaps your comment appears to you to have been 'deleted' because you posted it on a different thread. Or a different blog for that matter. Tanta and CR's way of handling trolls is similar to the practice that got Satchel Page his nickname. They take their ball and bat and go home, leaving the loud-mouths and name-callers to play amongst themselves using broomsticks and dirt clods.
Sarah | 05.21.08 - 3:22 am | #

Anonymous writes:
$150k for a property that is rented $1,200 a month?

That's a rental yield of 16 percent, what an investment!
Anonymous | 05.21.08 - 3:37 am | #

sdtfs writes:
That's a rental yield of 16 percent, what an investment!
Anonymous | 05.21.08 - 3:37 am | #

calhousingbear writes:
At $140k and assuming you can rent for $1,200 a month, my back of the envelope math says that those houses are cash neutral.

calhousingbear has it right, costs really eat up that profit margin.
sdtfs | 05.21.08 - 4:39 am | #

kett82 writes:
There is a lot of blue sky in those pictures...I don't see much of that here in Chicago...tends to be a lot gloomier. Just looking for positives here!

Best regards,
kett82 | 05.21.08 - 7:50 am | #

Dark Sun X writes:
There are lots of costs in rental property that so many would be landlords just don't factor in. Also, one needs to assume that there will be 2-3 month periods when you don't get any rent do to eviction &/or turnover. 16% - borderline.
Dark Sun X | 05.21.08 - 8:33 am | #

Dark Sun X writes:
"due" to - not "do"

I hate when I see mistakes like this and here I just made one.
Dark Sun X | 05.21.08 - 8:34 am | #

Vega writes:
Thanks CR and Jim the Realtor!

As I watch the video for the house that sold for $927,500, I think, "That house is miserable! Who could possible pay that much for it?"

Then I remember where I live, NYC, and I remember that people pay that sort of money for apartments 1/5th the size!

Prices seem pretty crazy everywhere. Bank credit knew no bounds.
Vega | 05.21.08 - 9:14 am | #

Anonymous writes:
San Diego county is still living in level 3.

Wait until gas hits over $5.....or it gets rationed......got multiple plates????

Ciao
MS
Anonymous | 05.21.08 - 10:44 am | #