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jpinpb
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| 05/13/2008 4:46 PM |
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| Sparky - Do you have self-esteem issues? Why are you offended by the term knife-catcher? It is merely a word, an adjective to describe a person who purchase a house in a declining market. Someday I hope to buy a reduced price house and I will be a knife-catcher myself. Hopefully prices won't go too much further down after I buy. I'm waiting till I find something that makes sense to me. Are up just upset b/c prices are declining? Don't take it out on us. We didn't create this situation. Talk to the greedy people who bought w/subprime loans and those who "invested" in multiple properties. They set up this bubblicious market. |
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jakob
Posts:473
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| 05/13/2008 4:47 PM |
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I like this graph too. Despite the stabilizing inventory, we are nowhere near a bottom.
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frelow
Posts:9
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| 05/13/2008 4:48 PM |
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| ridiculed |
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Sparky
Posts:143
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| 05/13/2008 4:54 PM |
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| Remembering an old saying "Never wrestle with a pig: You both get all dirty, and the pig likes it." |
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frelow
Posts:9
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| 05/13/2008 4:55 PM |
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| Is the pig buying properties in a depreciating market? |
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Brian
Posts:2210
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| 05/13/2008 5:15 PM |
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Jakob, I'm a long time reader of Jim the Realtor's. I find his posts slanted to selling because that's his job (nothing against that).
He used to say that the "primo" properties were immune, implying that he is the "expert" on those primo properties. But he no longer says that.
Now Jim is focused on foreclosures, implying that if you want a great foreclosure deal, he's the man to call.
Of course there's not way to search his post archives.
Jim is probably the most honest Realtor out there..... but, come on, his job is to sell you something.
If you visit a plastic surgeon, you can be sure that he can find something wrong to fix. And if you go to church, you could always use spiritual guidance. If you visit a Realtor, you could always buy a great house with "instant equity."
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I think of a knife-catcher as someone who bought thinking he got a good deal as prices are dropping, only to find out that overpaid.
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As as society, we look down upon irresponsible people all the time. Financially irresponsible people should frowned upon. I see nothing wrong with that. Financial irresponsibility is moral turpitude as it affects family and community.
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Omid
Posts:29
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| 05/13/2008 5:19 PM |
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| glad someone else posted the april foreclosure chart. How can you say, with a straight face, that price drops are over in the face of data like this? Please explain how a record number of foreclosures and pre-foreclosures tells us we are anywhere near the bottom of this real estate market. Really, I'd love to hear it. |
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jpinpb
Posts:1450
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| 05/13/2008 5:22 PM |
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| I agree that people that are financially irresponsible should be frowned upon. That's why I wouldn't recommend someone buy unless they can afford it - w/out trick loans, preferably 30 yr w/down and money saved. |
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Goingup?
Posts:150
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| 05/13/2008 5:37 PM |
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Anyone can manipulate a chart, one of the keys to daytrading is to find the right chart that fits the situation. You look at the wrong chart, you have no chance.
As for Real Estate, of course it's bottoming. Reading "doom and gloom" sites like Patricks is just good entertainment, but you have to take it with a grain of salt.
As for the term "knife-catcher", I've been one of those many times. The key to being successful is buying at a point the fundamentals justify the purchase. I never expect to get the exact bottom, but I'm usually pretty close. For real estate, as an investor, if I can have someone else make all my payments what's not to like?
Currently you have prices in some areas (those forclosure driven) where you can have positive cash flows. In these same areas there is zero new building in the works.
Over the course of a year or more the prices can only move one way, and that's up. Now if there is a recession or interest rates spike to 10% that changes the scenario. But everything else being equal, prices will be higher next year than they are now in those areas.
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binkyman
Posts:7
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| 05/13/2008 5:53 PM |
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Posted By jpinpb on 05/13/2008 5:22 PM
I agree that people that are financially irresponsible should be frowned upon. That's why I wouldn't recommend someone buy unless they can afford it - w/out trick loans, preferably 30 yr w/down and money saved.
Isn't that the only way to buy anyway? I might be old-fashioned, but why would anyone making less than 100K look to buy a property over, say 400K?! Why does it seem like it is of such importance to anyone to "own" something they can't even afford. I feel bad only when I see pics of a short-sale or foreclosure listing showing toys in the background...The rest seem to be flippers gone bad, oh well, hopefully they've learned to live within their means.
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frelow
Posts:9
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| 05/13/2008 6:12 PM |
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| Goingup: "The prices can only move one way" argument is how this mess got started. At least you qualified your statement with "if there is a recession...that changes the scenario." Right now a recession doesn't seem so implausible to many of us. But even if a recession were avoided, prices could very well continue on the path they have been on for two years. Regarding the positive cash flows, if house prices fall enough, rents are eventually pulled down with them. We saw this in Texas in the 80's and Hawaii in the late 90's. Rents in Florida have been going down this year. So prices do not have to go up just because of positive cash flow. |
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Just Someone
Posts:157
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| 05/13/2008 7:01 PM |
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Sparky,
"..to claim that the sky is falling and that everyone should wait to buy..."
Phenomenon called gravity. What goes up, must come down...
Some people were too honest to over buy on the upside, because we can do math, and really want to understand how to game the future system, one where income, price and stability are back in the equation.
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jakob
Posts:473
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| 05/13/2008 7:06 PM |
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I like the idea of buying foreclosures for the cashflow too. However, THIS can't be good for rents. The coming recession will wreck the numbers I'm afraid.
 
From: CA EDD
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jasonj
Posts:55
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| 05/13/2008 7:57 PM |
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I like the term knife catcher, and will continue to use it.. if you buy in the next six months, I will call you a knife catcher and if I buy in the next six months, I will don the title and expect JP and Brian to call me so.
That is all. |
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LoonyQT
Posts:894
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| 05/13/2008 8:09 PM |
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This is a national article from a bullish happy-touter with vested interest.
San Diego is not at the bottom since the foreclosures are only now really starting to hit the 500K-1M market. Given that this price range represents the majority of decent homes for decent families - those who make less than 100k and have nothing else to fall back on as they are leveraged to the hilt will walk away from their depreciating assets whether they really want to or not.
I live in a 700k average neighborhood in PQ, and I rent. My neighbor "moved up" from Mira Mesa at the peak - there are 2 wage earners, a grandma helping with the kids, and a brother helping with the rent. They currently owe the bank 13k according to realtytrac.
The "good" neighborhoods like mine are only starting to feel the pain of the irresposible loaning/borrowing craziness. I have talked to a bunch of reps at trustee holding companies (because yes, I am actively looking for a "deal" for my primary residence, but those are still few and far between) - the bottom line sentiment by those in-the-know is that things are only going to get uglier before they get better.
I have lots of coin that I am itching to make a nest with, but it doesn't make sense for me to spend waaaaaay more than I rent to be house-poor. I am a real, pre-approved potential buyer, but I'm still sitting on the sidelines. But, I still drive myself crazy daily looking at the going-ons in local real estate.
If you want to live in Chula-juana or the ghettos or in a condo, the market may be closer to the bottom, but all-in-all, the market in general here in SD has quite some room to depreciate a bit more. |
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russey
Posts:11
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| 05/14/2008 12:08 AM |
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I'm always in agreement with Brian. I think people like GoingUp? have a skewed perspective.
The link below make a good case for further price declines:
http://www.californiahousingforecast.com/commentary/2008/5/13/incomes-predict-a-40-further-decline-in-san-diego-prices.html?ref=patrick.net |
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Sparky
Posts:143
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| 05/14/2008 5:32 AM |
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NEW YORK (Reuters) - Mortgage applications rose for a second consecutive week........
http://news.yahoo.com/s/nm/20080514/bs_nm/usa_economy_mortgages_dc |
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jpinpb
Posts:1450
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| 05/14/2008 8:44 AM |
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| Sparky - russey posted a california housing forecast. You posted a U.S. economy mortgage. Are you moving out of California? I'm sure in other states that aren't bubblicious, they continue to sell, especially in the spring |
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lee
Posts:79
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| 05/14/2008 8:45 AM |
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I think for anyone to make such a broad assumption that "anyone buying now is a knife catcher" would be unfair and simply not always true. You would have to dissect the exact deal to tell if it was a smart or poor choice of a purchase.
Case in point, I've seen some foreclosures going for less than half the price they went for back in 2004 (probably at 01/02 pricing, which is historically where they should be) and they are in good neighborhoods. Meanwhile people on the same street are still trying to sell for over 500k. The point is that you can not simply group all purchases into the same lump sum and assume that "oh, that home's value will plummet more". I disagree. I think you would need to look at the specific deal in relation to comps on that area as well as how far the home has ALREADY declined. Plus every home is different... so there are all sorts of variables at work here; which makes it hard to generalize.
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jpinpb
Posts:1450
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| 05/14/2008 8:53 AM |
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| lee - if someone bought at 2001/2002 prices, pretty safe that prices won't go down much further, but as I posted a thread, I saw units go for sale for 2000 prices!!! And it was not in any bad area as one would think. It was in Hillcrest/Mission Hills 92103 on Jackdaw where 3 years earlier sold for 705k on the block, this one sold for a little over 500k. Everyone thinks only the interior or bad areas are getting hit. I've been posting NODs and foreclosures along the coast. If I bought a place I really liked that was back to 2002 prices, I would consider myself a knife-catcher b/c there's a good chance w/the stealth inventory and more loans to reset, that prices will further decline. There was a place I was considering and waiting to hear from bank. I like it and makes sense to me financially. That doesn't make me less of a knife-catcher if I buy it. |
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