Comments on Pacific Beach Housing Bubble Blog: Why people fall into foreclosure so fast

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2009-09-28T12:23:10.135-07:00

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I'd pay 150k for that. So I suppose I'm not buyin...

2007-05-13T09:02:00.000-07:00

I'd pay 150k for that. So I suppose I'm not buying.

Nice analysis. When you ask why would someone pur...

2007-04-30T16:16:00.000-07:00

Nice analysis. When you ask why would someone purchase that house last year only to flip six months later my gut tells me greed. Why else would anyone do this when all other indicators were pointing to a decline in prices?

And the range is ridiculous. It just goes to show how uncertain sellers have become. They hold out hope that they can break even or let the bank take over. Why would this person chase losses? Either foot $100,000 which they probably don't have or have horrible credit for 7 years. Frankly bad credit doesn't carry a stigma so I'm thinking most folks are going to send the keys to the bank once they find out they are swimming underwater with their mortgage.

Enjoy the blog.

Doctor Housing Bubble

anon 7:39That Costa Rica person spams my posts dai...

2007-04-27T19:54:00.000-07:00

anon 7:39

That Costa Rica person spams my posts daily with the exact same comment trying to get people to buy his crappy real estate. I delete it every chance I get, but sometimes it stays up too long. I gotta go into blogger and see if I can figure out how to ban that one guy from commenting.

You are right, Costa Rica is not a good buy right now. Hell, even Mexico is looking overpriced. Honestly, if you plan to buy out of country, you should purchase a place in Ireland. You can still buy a house on the coast there for about 200,000 euro, they have great free healthcare, and some good beer. Plus you already speak the language... kinda. I plan to stay in the USA myself though.

Anon 10:45,
Thanks for the update. The information you guys dig up and post in emails and comments is something you won't see on any commercial real estate website because there is no corporate benefit to it, but we, as consumers, benefit a lot from getting the information that takes a little bit of digging to turn up. That's one of the reasons I started this blog in the first place, and I appreciate seeing people post their own findings and start their own blogs as well. Good stuff, Thanks for reading and commenting guys!

Craig,My take on it is that I think the best bench...

2007-04-27T19:45:00.000-07:00

Craig,
My take on it is that I think the best benchmark for prices is rent. Back in the late 90's, you could rent a place for about what the mortgage would be. Obviously this depended on financing, down payments, credit, etc.., but the number was within reason. Back in 1998, I purchased a condo in Lake Tahoe, and my mortgage + HOA fees (with 20% down) were basically the same as people next door were paying for rent. Although if I had purchased in 1996 (the bottom of the last real estate cycle), I could have saved another 10-15%. I had a fixed rate 30 year loan at 7.5%, which was considered GREAT for that time.

Two years later, prices had doubled, but rent was about the same. Rent has gone up a little bit since then, so I made a very gross approximation to say that a price point 2001 is probably what rent is today. I'll concede that it may be as far back as 1999 or 2000, but I don't think the downswing below rent will be all that large unless financing completely dries up for housing. As long as freddie mac and fannie mae continue to finance conforming loans (loans less 417k with 20% down), people will be able to buy. (albeit, prices will have to drop enough for people to afford down payments and actually qualify for these loans). If housing was left completely to private bank financing, I would be on your side that a huge downswing below rent will happen.

Let's keep in mind though that prices are still over 2x rent, so we have a long way to go even with my "optimistic" outlook.

kely- stop overbuilding costa rica. it is getting ...

2007-04-27T19:39:00.000-07:00

kely-
stop overbuilding costa rica. it is getting ruined by all the development. besides the fact that the condos and houses are way overpriced for the cost of living there.

Sven,On your previous post you said that if prices...

2007-04-26T19:25:00.000-07:00

Sven,

On your previous post you said that if prices fall below 2001 levels then we have basically eliminated the bubble. Although I don't disagree with much on this blog, I think I will disagree with this statement. I think the bubble was around in the late 90s. I guess San Diego might have been different but here in Los Angeles, things were getting a bit out of whack as far back as 98 and 99. Also we know that asset prices don't just revert to the mean...they usually over react and go below (not that you have argued against this). But still, I think that in a bit of time, properties may available for late 90s prices.

On another note, the west side of Los Angeles is still looking like San Diego was one year ago. Prices seem to be stalling but traffic at open houses is up and there have been some significant sales recently. People on the west side are in denial because "its different here"...Los Angeles is going down hard. You guys are fortunate to have things crashing so quickly

I think you did an expose on some Pico places. Wa...

2007-04-25T23:43:00.000-07:00

I think you did an expose on some Pico places. Was looking through zillow, looks like a neighbor got the clue and is also trying to sell, undercutting the first lister, check it out:

http://tinyurl.com/2hogd4

It looks like a few more Serramar homes in La Mesa...

2007-04-25T22:45:00.000-07:00

It looks like a few more Serramar homes in La Mesa are up for sale. Some below their purchase price and it looks like they may be competing with the developer. There is one avg. price per sq. foot outlier It’s the home with the lowest overall Sq footage and is listed $100 per sq foot more (!) than the others. I haven’t seen any closed sales. It will be interesting to see what these homes go for and what the builder may be offering as an incentive.

La Mesa Location Price SQ FT PPSF
3980 Denver Dr $740,369 2,728 $271
3890 Sacramento Dr $820,000 3,127 $262
7575 Chicago Dr $865,000 3,384 $256

3810 Milwaukee Ct $799,000/$859,000 3,150 254

7760 Highwood Ave 3,987 $950,000 $238
7624 Seattle Dr $799,876 2,077 $385
7680 Seattle Dr $899,000 3,128 $287
7580 Chicago Dr $932,000 3,727 $250
AVG P SQ FT $275

Link to homes in La Mesa http://www.sdlookup.com/MLSListings/tabid/72/rid/109/ltype/0/Default.aspx?srtcol=12