pharniel writes:
read on isn't working. wirdness
pharniel | 05.21.08 - 12:09 pm | #

Calculated Risk writes:
pharniel, working now.

Best Wishes.
Calculated Risk | Homepage | 05.21.08 - 12:13 pm | #

MiTurn writes:
Affordable housing! What a quaint concept.
MiTurn | 05.21.08 - 12:17 pm | #

Rob Dawg writes:
IMO the vacancy rate is going to soar making the cap rate risky.
Rob Dawg | Homepage | 05.21.08 - 12:18 pm | #

deuces wild writes:
"Areas with fewer REOs will exhibit "sticky prices" and the prices will probably decline for some time."

That's what I expect here in the Northeast...at least in my neck of the woods (MA/RI line outside of Providence).

And if the number of houses for sale and NOT moving in my town is representative of the Northeat in general, then existing home inventory is going to soar in the next report.
deuces wild | 05.21.08 - 12:21 pm | #

Joe Klein's conscience writes:
First?


I thought Oceanside was a nice area. Is was the key word?
Joe Klein's conscience | Homepage | 05.21.08 - 12:21 pm | #

sdtfs writes:
Now guys, didn't I tell you that CR and Tanta would use the Read on/Read more option responsibly? I would say even brilliantly. Thanks CR.
sdtfs | 05.21.08 - 12:22 pm | #

Salomon writes:
CR,

One of your best, most insightful posts on the RE re-valuation process. Thanks, ...and Kudos!

RS
Salomon | Homepage | 05.21.08 - 12:23 pm | #

freakdog writes:
That's the part of Oceanside that sits right up against Camp Pendleton. I've driven through there on the way to the golf course and it's all bars on windows.
freakdog | 05.21.08 - 12:25 pm | #

Calculated Risk writes:
Joe Klein's conscience, Oceanside is spotty - you have to know the neighborhood. freakdog has it right, this area is near the base, so the vacancy rate could be higher (because of frequent turnover). This is just an example - and not a recommendation!

Best to all.
Calculated Risk | Homepage | 05.21.08 - 12:30 pm | #

Reggie writes:
A cap rate of 6% to 7% in an area with a lot of foreclosures does not sound very attractive to me. There is still decent risk involved, no diversification or rent cushion (just one unit) and rates are going to go higher, not lower - hence rewarding those that wait longer a higher cap rate. The rates you quoted may sound attractive to some small investors, but most likely to those who don't know any better. I, personally, wouldn't touch anything that is risky for less than an 8% cash on cast return, and I anticipate that cap rates are going to go a lot higher than that in the next year or two in the risky areas so realistically I wouldn't even touch them near that rate.
Reggie | Homepage | 05.21.08 - 12:32 pm | #

Ministry of Truth writes:
I guess my question is with more properties sold to be rented, should we not see more vacancies come available on the market with a reduction in rents?

The cap rate looks good now but I would be afraid we will see rents decline and the cap rate not nearly be as attractive. Or do rents "Always go up"?
Ministry of Truth | 05.21.08 - 12:32 pm | #

Cobradriver writes:
Speaking of REO's...

This turd was financed buy our friends at Doooosh Bank. Here is the pricing history...

4 /1987 IMPROVED $40,000
7 /1999 IMPROVED $49,000
7 /2004 IMPROVED $100
7 /2004 IMPROVED $95,000
11/2005 IMPROVED $157,000
1 /2008 IMPROVED $100

This home is currently listed on realty bids site. Here.

http://tinyurl.com/47mk6t

Bidding is at 39k and stalled. The best part is the minimum has not been met. This home will not sell. Why? I can find similar homes in the same or better shape for less. There are more local "Auctions" upcoming but most have a "minimum" bid. All are to high. We are also in our 9-10 month in a row where FC's pretty much equal sales. Hell ya!!!

Chris

BTW - I looked at this place and I would write a check tomorrow for 25-28k for it.
Cobradriver | 05.21.08 - 12:38 pm | #

Average Joe writes:
CR, any thought about absolute inventory of housing and its pressure on rents?

I mean, one of the obvious results of the housing boom and speculative behavior was an unprecendented response by builders to meet an artificial demand. There may be so much available places to live, whether you rent or buy that rents will be pressed down, or more importantly you may have to assume a higher likelyhood that a quality, committed renter will be readily available.

It's hard to use old rent formulas when addressing the aftermath of the greatest housing bubble in history.
Average Joe | 05.21.08 - 12:43 pm | #

Mike2 writes:
A friend of mine in the Seattle area just purchased an REO in Tacoma for $185K that rents for about $1100/month. I don't see how it's going to provide them any cash flow for years to come given that they only put 10% down.

But hey, "Seattle is Different!" so maybe...
Mike2 | 05.21.08 - 12:44 pm | #

Average Joe writes:
should be "committed renter will NOT be readily available"
Average Joe | 05.21.08 - 12:44 pm | #

ac writes:

Hey did anybody notice that SRS is YoY negative? Seems like we should have a party or something.

ac | 05.21.08 - 12:45 pm | #

Cobradriver writes:
"A cap rate of 6% to 7% in an area with a lot of foreclosures does not sound very attractive to me."

Reggie,

I have never understood the 6-7% rate as good. To my parents if you are gonna screw around with the hassle of owning residential rentals you should,over the long haul. average 15%(parents are at 20%). Why? I dealt with all the minor repairs and all painting ,cleanups,landscaping etc. Now I might live with 6-7% as a passive landlord,but that is pretty much the only way...

Chris
Cobradriver | 05.21.08 - 12:47 pm | #

sdtfs writes:
It's hard to use old rent formulas when addressing the aftermath of the greatest housing bubble in history.

Yes, that's where the fun starts. I agree with what Reggie and Cobradriver imply, you ought to ask for a huge margin of safety before committing to a purchase.
sdtfs | 05.21.08 - 12:49 pm | #

Bob Dobbs writes:
"Now I might live with 6-7% as a passive landlord,but that is pretty much the only way..."

I would bet that some of the prospective buyers are already in property management. They already have the management infrastructure set up for customers, adding one or two of their own costs little.
Bob Dobbs | Homepage | 05.21.08 - 12:50 pm | #

hopeinsd writes:
I think another question is just how big the pool of investors/first time buyers is. Will the number of bidders on a property like this stay this high forever- or will they run out of money to invest while the supply of REO's keeps building? I smell an overcorrection coming as investors start running out of cash.
hopeinsd | 05.21.08 - 12:50 pm | #

tranches of like writes:
Ministry and Average Joe beat me too it...but let me add my voice as someone who'd be interested in CR's take on the housing bust's impact on rents. It would seem to me investors basing their decisions on current rents are taking a huge gamble.
tranches of like | 05.21.08 - 12:51 pm | #

sdtfs writes:
I would bet that some of the prospective buyers are already in property management.

Yes, but I would bet that they're not long term, but only been around during the boom times. For them, rents have only gone up.
sdtfs | 05.21.08 - 12:53 pm | #

Bob Dobbs writes:
"Yes, but I would bet that they're not long term, but only been around during the boom times. For them, rents have only gone up."

It will be interesting to see what happens to rents. I am aware that rents on apartments and traditional rental properties in the Modesto area -- a big bubble area -- are just struggling to stay even, even with big incentives. But there is a huge oversupply of housing there.

Contrast that with areas where housing is overpriced, but not oversupplied. These are areas that haven't had big bubble busts yet. How will rents do there?

I live in a college town with development limits (they built what they could, but it wasn't much) and a fresh supply of student renters every years. I don't expect rents to drop much.
Bob Dobbs | Homepage | 05.21.08 - 12:57 pm | #

Riggsveda writes:
820 square feet!?!? Do you think there's a kitchen? Maybe at least a cold spring out back for well-packaged perishables?
Riggsveda | 05.21.08 - 12:59 pm | #

Ceilingfan writes:
"I think another question is just how big the pool of investors/first time buyers is."

This is what I am wondering about. There has only been one sale in the area so far this year so even in my bars-on-windows neighborhood, prices are still too high. Who will the new neighbors be in the next few years, renters, first time buyers or squatters?
Ceilingfan | 05.21.08 - 1:00 pm | #

dryfly writes:
have never understood the 6-7% rate as good. To my parents if you are gonna screw around with the hassle of owning residential rentals you should,over the long haul. average 15%(parents are at 20%). Why? I dealt with all the minor repairs and all painting ,cleanups,landscaping etc. Now I might live with 6-7% as a passive landlord,but that is pretty much the only way...


Exactly - unless you enjoy being a Mr Fixit & would try to find somewhere where you could do the work for free anyway.

I did some rough number crunching on properties a buddy of mine owns - something like 8-9 rental homes all at cap rates around 10% and valuations in the $80-100K range... he either makes no money (if he pays somebody else to fix & manage these wrecks OR he has a second full time job that pays about what his other full time job pays - of course he had to BUY that second job).

He has asked me a couple times to buy his properties - for a hefty cap gain profit on his side. My answer was I might take them off his hands for free - might. I don't want to be a Mr. Fixit.

Your folks numbers of 15%-20% sound about right, enough left over to make the risk (and work associated with the 'job') worth it.

dryfly | 05.21.08 - 1:01 pm | #

isamu writes:
John T Reed suggests that you will net 55% of gross rents, and that you should only consider renting with a minimum 10% cap rate.

yours in Christ,
isamu
isamu | 05.21.08 - 1:01 pm | #

Gamma writes:
slightly OT:

WCI WCI Communities credit rating cut to 'CC' on liquidity pressure; outlook negative at S&P (1.69 -0.21)

S&P lowered its corporate credit rating on WCI Communities to 'CC' from 'CCC'. Concurrently, S&P lowered its ratings on $650 mln of subordinated notes to 'C' from 'CC'. The outlook remains negative. The downgrades acknowledge that WCI is unlikely to have sufficient liquidity to repay $125 mln of 4% contingent convertible senior subordinated notes due 2023 should noteholders exercise their option to redeem the notes on the Aug. 5, 2008, put date. If WCI is unable to satisfy its obligations under the terms of the convertible notes, the noteholders would have the right to accelerate the maturity of these notes, which could in turn trigger the acceleration of substantially all of the company's debt.

one of the smaller dominos, but a domino nonetheless. I've been anticipating one bankrupt homebuilder knocking over the next, thus leading to another significant leg down...

we'll see.
Gamma | 05.21.08 - 1:02 pm | #

SurferNate writes:
rob dawg has the idea right about the rent caps/rates in o'side. with gas hitting $4+ in north county today and most individuals work 20miles away we could see a higher vacancy rates in o'side, escondido, san marcos...rent out there has been dropping while rent near the I5 is increasing.
SurferNate | 05.21.08 - 1:03 pm | #

FatalException writes:
Bob Dobbs writes:

"Now I might live with 6-7% as a
passive landlord,but that is
pretty much the only way..."

I would bet that some of the prospective buyers are already in property management. They already have the management infrastructure set up for customers, adding one or two of their own costs little.

Good point, Bob. I look at that and, like others, I suspect, think "I can easily get 6-7% in equities over the long haul, and my mutual funds don't call me in the middle of the night to complain about a plugged toilet."

But if I had already retained property management services, new investments would not add to the net 'hassle'; it would only add the the variable cost for management services.

Now, the "casual" RE investor who owns a couple of condos may not have the flexibility of property management. That's the problem with RE - there's no equivalent to a "no-load" investment. If you go in for a penny, you might as well be in for a pound. But it may be that a penny is all you've got.
FatalException | 05.21.08 - 1:03 pm | #

krish writes:
Greenspan Helped Pimco Make Billions, Gross Says
http://www.bloomberg.com/apps/ ne...refer=bondheads
krish | 05.21.08 - 1:04 pm | #

DR writes:
"Cost: $140,000
Rent: $12,000 to $14,400 per year"

What is the mortgage loan structure on this? Would the investors get an owner occupied rate which is cheaper? I would think investment properties rates would be a percentage point considering the risks appetite in the CA markets
DR | 05.21.08 - 1:07 pm | #

donna writes:
All of San Diego is pretty mixed due to low income building requirements. Every part of the county has its upscalew and lower-income areas. My city, Poway, has done a really nice job with low-income housing areas and has a range from subsidized housing all the way to multi million dollar homes in the hills. Our area is right in the middle, and has been pretty stable for the twenty years we've been here - families move in and really don't move out. Prices are very sticky but have dropped low enough here that there are sales again and even a few increases lately. We're probably close to a bottom, and will be among the first areas to pop back up again when things recover.

I think a lot of the real bubble areas were speculation hotbeds. Established neighborhoods are not going to exhibit the REO problems that are going on in the newer areas.

830 sq ft is not bad for a retirement home. We've raised a family of four in 1360 sq ft. ;^) It was our "starter" home but somehow the move-ups never happened. Funny how much more money we have than other people, and we even have savings in the bank....
donna | Homepage | 05.21.08 - 1:08 pm | #

Ministry of Truth writes:
Donna, I think that is hope talking.
Ministry of Truth | 05.21.08 - 1:11 pm | #

Nemo writes:
Apologies if this is a re-post:

FDIC’s Bair: Foreclosure Aid Is ‘Train Wreck’

Oh, Sheila...
Nemo | Homepage | 05.21.08 - 1:12 pm | #

sdtfs writes:
Exactly - unless you enjoy being a Mr Fixit & would try to find somewhere where you could do the work for free anyway.

Your area still has responsible renters in it, I would guess. In the last couple years I have come to view practically everything as disposable, water heaters, stoves, bathtubs! How many bathtubs have you been able to break in your life time? Given all that, fixing stuff is still a pleasure, especially compared to dragging out the toilet auger.
sdtfs | 05.21.08 - 1:14 pm | #

Average Joe writes:
Nice post Nemo.

The best sentence in there: "The problem, she said, was that mortgage servicers don’t have the resources to do the widespread loan modifications that are necessary."

Tanta 101.
Average Joe | 05.21.08 - 1:16 pm | #

b writes:
Donna -

Have you seen the HELOC numbers recently? It will take a little longer, but every neighborhood is going to get hit, even the rich and established folks.
b | 05.21.08 - 1:17 pm | #

sdtfs writes:
Holy moley! I just look at CW's REO.

http://countrywide-foreclosures....s.blogspot.com/

They must have just stopped listing to reduce the workload. Only 3,351 in CA with the increase in FC's statewide?

WooHoo, I can't bear the suspense. When is BofA gonna announce something?
sdtfs | 05.21.08 - 1:21 pm | #

sterlingerl writes:
I find the "housing market is linked" graphic really disturbing. Surely this is a lot of the problem.

Across America, people were hoping to ride the bubble up to the mansion, flipping and profiting along the way, with no real thought to settling the final bill, as long as they could manage the monthly hit. Where did this idealogy come from? What average family in America really needs more than, say, the second house, if we're honest. There was a time when people saved for years for that first down payment, building a good credit rating along the way. Then they saved many more years to move up. These moves happened over decades. Finally, one day, they celebrated when the mortgage was paid off. How did the entire psychology of a nation change so much in a generation?

There are various housing bubbles around the world now, but I think the constantly flipping up, with EVERYONE feeling entitled to live in hideous tacky mansions, seems to be a uniquely American phenomenon, and I think America will be disproportionally hit for this folly.
sterlingerl | 05.21.08 - 1:22 pm | #

Nick writes:
Gotta chime in that 7% cap rate seems awfully low, especially when there's likely to be some short-term capital loss, higher than average risk of "subprime" renters, and the distinct possibility of rental prices decreasing as more properties become available for rent in the area. I would think new investors would want upwards of 15% cap rate in a risky area, and the areas which are suffering the most from foreclosures are going to be inherently risky investments.
Nick | Homepage | 05.21.08 - 1:26 pm | #

Anonymous writes:
The U.S. Federal Reserve will undertake a $75 billion 28-day Term Securities Lending Facility (TSLF) auction on Thursday, the New York Fed website announced on Wednesday.

http://www.reuters.com/article/ b...D00021720080521

More power Mr. Scott. Fule for the oil bubble.
Anonymous | 05.21.08 - 1:30 pm | #

yogurt writes:
How did the entire psychology of a nation change so much in a generation?

It started when Americans voted out a President who told then what they needed to hear in favor of a President who told them what they wanted to hear.

In 1980.
yogurt | 05.21.08 - 1:36 pm | #

Bob_in_MA writes:
Prices here in western Mass are just 5% off peak (almost 3 yrs ago), foreclosures are up, from a very low number, but sales seem to be holding up.

The vast majority of homes here qualify as conforming, but local banks charge hardly any premium for a jumbo, 6.375% vs 6.125%.
Bob_in_MA | 05.21.08 - 1:43 pm | #

Bob_in_MA writes:
I didn't mean that to sound as if I'm sanguine about the future. However, I do think it's clear we are going to spend/inflate our way out of this, or at least try to.
Bob_in_MA | 05.21.08 - 1:46 pm | #

JS writes:
It started with a president who made Americans feel weak and helpless such that they would vote for a President who told them what they wanted to hear.
In 1976.
No, no, wait. It started with a President who resigned in disgrace so that they would vote for a President who promised moral integrity.
In 1972.
No wait, it started with a President who could not end civil strife so they voted for a Law and Order president.
In 1968.
No wait...
JS | 05.21.08 - 1:46 pm | #

lama writes:
The WSJ had an article yesterday which showed the tenacity of prices in quality downtown locations, including San Fran, Chicago, NYC, Boston. The article contrasted the severe downturns in outlying suburban locations in the same markets.
lama | 05.21.08 - 1:46 pm | #

jag writes:
Jimmy "I know everything" Carter?

You have to be either kidding or daft.
jag | 05.21.08 - 1:53 pm | #

radman writes:
Leads one to believe that Presidents are a bunch of no good sonsofbitchs.
In 2004
No wait.....
In 2000
No wait..... the real President in 2000 never had a chance to be a sonofabitch.
But in 2008 we are FUBAR, Presidentially speaking.
radman | 05.21.08 - 1:56 pm | #

Ethan writes:
yogurt - 1:36 pm

I agree. Jimmy's "fireside chat" about energy usage while wearing a cardigan sweater was either the bravest or the truest or the dumbest thing I've ever seen on TV. Probably all three.
Ethan | 05.21.08 - 2:01 pm | #

NoVa writes:
Its sunshine in my America, the home of the free
Where old ladies rest easy at the "Park and sleep."
Thank glod I have a job in this "troubled economy."
To bad it is all their fault - you stupid sheep.

Oh lord, I got mine
Oh lord, I got mine
Don't expect me to help you
Sunshine

My kid wears designer clothes and her Iphone bills are out-of-sight
I am 50 pounds overweight
I dont care - its my glod given right
If glod loved you - you would have had a better fate.

Oh lord, I got mine
Oh lord, I got mine
Don't expect me to help you
Sunshine

Screw you and Obama too
I've got automatic weapons that I never fire
Watch your step or I will outsource you
On the airline of life I am a frequent flyer
NoVa | 05.21.08 - 2:07 pm | #

Anonymous writes:
Obama, McCain proposals for U.S. economy

http://www.reuters.com/article/ b...141327920080521

Short the dollar.
Anonymous | 05.21.08 - 2:09 pm | #

gab writes:
$140 grand is still $170/sq. foot.
That still strikes me as high, given the location and quality of this abode.
gab | 05.21.08 - 2:09 pm | #

deflationary jane writes:
In 2000, my rent on a 1/1 in midtown Sacramento was 570, in 95' it was 400. Now it's 1150. Salaries increased 1996 to 2000 and then flattened. Add some deflation in 06 and inflation over the last 8 yrs and my region is taking a beating on wages. The fundementals on even rents are way out of wack.

Yet every "investor" I've talked with recently thinks they will be running at a slight loss now but will either increase rents next year or sell in two or three.

Locally, we had speculator purchase a small 3/2 foreclosure for 210k. Decent neighborhood and rents are about 1300 mo. After the repairs, they list at 1600 mo - no takers. I still see it listed on CL, and every few weeks they lower the price by 25 to 50. So far, they are down to 1400, which brings me back to my point.

How can rents keep increasing during a deflationary period with increasing inventory? Remember these are the households with the most mobility.

Turn the heat up on lease costs enough and renters begin to double up. Turn them up more in the face declining wages and employment opportunites, and they move on to more affordable locations, further erroding the vacancy rate.

I don't see this ending well for anyone jumping in now, especially as layoffs really haven't begun yet in earnst.
deflationary jane | Homepage | 05.21.08 - 2:11 pm | #

sportsfan writes:
I didn't mean that to sound as if I'm sanguine about the future.

Bob, its okay to sound sanguine about the future. It helps to balance out the comment section a little.

But I do agree that significant inflation is about the only option left for the economy.

I guess the trick to feeling sanguine is to figure out how to do well in an inflationary world.
sportsfan | 05.21.08 - 2:39 pm | #

tai writes:
Wait until the winter comes in the Midwest and Northeast. With the price of natural gas and heating oil up over 100% in the last several months, there should be some movement to warmer weather areas.
tai | 05.21.08 - 3:20 pm | #

KnotRP writes:
My cousin (managing 5+ rental homes) says he's seeing lots of bounced checks,
and has evicted folks in the last few months.

6-7% leaves no room for mistaken reasoning.
KnotRP | 05.21.08 - 3:25 pm | #

dilbert dogbert writes:
Gads! Please don't any casual/inexperienced investors even think about running a couple of single family as rentals. You will get taken to the cleaners.
I rent my old house mostly as a way of holding for the kids and preserving the Prop 13 and the step up in basis. Making a real profit is not in the cards for us. We want to make it possible for the kids to return to the area which has priced out any with median incomes.
We are at the endpoint of spending about 60K to return the house to rental condition after one bad tenant.
We are lucky to be in a hot rental market, so far.

I agree with Cobradriver and Dryfly.

You can use the 160 GRM to estimate when to look to buy vs rent but only for that purpose not to be a cash flow investor. One needs a very large cushion to make money in SFH.
dilbert dogbert | 05.21.08 - 3:36 pm | #

eh writes:
A good portion of Oceanside is an armpit. (Being in the vicinity of camp Pendleton is not a plus in that regard.) The fact that a crackerbox there sold for more than $300k shows how crazy the housing insanity was.
eh | 05.21.08 - 3:37 pm | #

radman writes:
Oil @ $133.17/bbl, UP $4.19 today!!!
What'll THAT do to heating oil? And midwest and NE real estate prices this winter? Things are really going to get ugly. Next up..... nuclear resource war?
radman | 05.21.08 - 3:46 pm | #

Gamma writes:
Jane-

well said. I'm hardly an expert in real estate, but in this environment it's not needed. Just come common sense.
Gamma | 05.21.08 - 3:58 pm | #

Tom Lindmark writes:
Great article. I particularly like your point about the variability of home prices within a given city. I have been able to lay my hands on some data sources in Phoenix that show marked variations on a zip code specific basis. The Case/Schiller and OFHEO statistics have their place but they can also lead in the wrong direction. Since the problems are so site specific it seems to present a good argument against the government howitzer bailout approach and in favor of a market based approach to the issues.

Wasn't it Paul Volker who, when warning about an over reliance on statistics, quipped to never try and wade across a river with an average depth of three feet?
Tom Lindmark | Homepage | 05.21.08 - 4:17 pm | #

Tom Stone writes:
In My experience the minimum cost is 2 months rent when a good tenant leaves.A bad tenant can cost you years of profit,and I wouldn't touch less than 8 units if I needed consistent cash flow.Oh and you had better be good at basic maintenance or the contractors will eat your cash quick.And no one has mentioned the lovely rent control and "fair eviction" laws many cities and counties have passed.4 years ago,an eviction attorney told me he required $6k up front,and not to expect any rent for at least 6 months at best if I had a justifiable eviction in Oakland.Nothing like being a landlord man,the checks just roll in every month,you gitchoua a option loan and when you have a vacancy just make that minimum payment...Son you are gonna get rich!
Tom Stone | 05.21.08 - 4:52 pm | #

Donna Is Right writes:
So, I'm guessing the point of this blog is to talk down the market. Pick the worst real estate areas, especially ones that shouldn't have gone up and are of very low quality and then point to the price declines and vacancies as examples of how the entire market is doing. Shame on you. And the litany of echo-chamber commenters in here is ridiculous as well. Have fun convincing each other that the sky is falling. BTW, my house is up since 9/07 and I live in the Bay Area. All of my very prime friends are being outbid in their search for houses that have been "taken down by subprime". Continue the communal delusions -- they're entertaining.
Donna Is Right | 05.21.08 - 5:32 pm | #

quartz writes:
I suspect the "investors" bidding on this property intend to flip it rather than rent it. There are still a lot of people out there who see flipping as viable if they can get the property at low enough price.
quartz | 05.21.08 - 5:44 pm | #

prolly old news.. writes:
http://www.capitolweekly.net/ art...=x4ptlrmv0w0r6x
prolly old news.. | Homepage | 05.21.08 - 5:54 pm | #

darius writes:
I have access to some inside REO data from Chicago area. hundreds coming online all the time. The banks are overwhelmed in processing them. There are some interesting deals. In my own subdivision there is/was a REO. All brick, 7 years old, ~4000sqf. House like this would sell at the peak for about $600k, bank got it at $325 and listed it at $475k. I can check how much it sold for if it did.
darius | 05.21.08 - 6:00 pm | #

Deborah writes:
The math isn't bad now...

But what happens when rents decline?

My friend had her condo in Florida rented for $900. When those people left she tried to find new renters for $600. I think it has been empty since last summer.
Deborah | Homepage | 05.21.08 - 6:55 pm | #

KnotRP writes:
Donna is Somthing> So, I'm guessing the point of this blog is to talk down the market.

I'm guessing you suck at guessing correctly.
KnotRP | 05.21.08 - 9:06 pm | #

yogurt writes:
BTW, my house is up since 9/07 and I live in the Bay Area.

The only way to find out the market price of your house is to sell it, sweetie.
yogurt | 05.21.08 - 10:46 pm | #

Donald writes:
I agree with the 20% cap rap minimum in this market.
Donald | 06.05.08 - 7:15 am | #