Ever since the credit crunch reared its ugly head last year, everyone from realtors to specuvestors to homeowners strapped to their overpriced properties all wished for a quick recovery. Fall and winter came and went with nothing but disheartening news of subprime woes. Spring was suppose to be the turning point, but we’ve heard nothing but increasing reports of foreclosures and delinquencies. After this weekend’s heat wave, I’d say summer is here and all I see are the billions and billions of dollars in upcoming rate resets over the next few years. So to those who say the spring summer will be different, I ask: Where the hell is this summer RE rush I keep hearing about?
We’ve all heard this wishful “prediction” from bankers, brokers, realtors and other hopefuls. Don’t worry, we’re going through a bit of a slump, but once spring rolls around buyers will be geared up for the summer selling season and we’ll “turn around” later this year. Um okay, that’s what you said last year and that’s what you said 6 months ago. Am I going to hear the same thing in another 6 months?
As I was out and about this weekend enjoying my time off, I passed by many for-sale signs and open houses. Some had a car or two parked outside, but most seemed empty. Perhaps the hot weather kept buyers out of the sun, but things aren’t looking too good for these sellers. Time is not on their side and everyday their house sits on the market means money out of their pockets. Whether you believe in the numbers or not, the trend is clear. Sales volume is way down from previous years and prices in all local SGV cities are sliding downward as they buckle under the crushing weight of the struggling economy.
We’ve seen the effects of the tightening lending standards and now we’re all experiencing some rather concerning economic hardship. Gas prices are through the roof with no slowing in sight, gold is off the charts and employment is weak at best. Leisure spending has all but slowed to a crawl and the falling dollar has inflation knocking at our doors. Couple this with low consumer confidence, a huge number of rate resets and the inevitable interest rate increases later this year and the US housing market is toast.
T-O-A-S-T.
So as sellers start to sweat in this heated pressure oven otherwise known as the Summer (RE) Rush, I’ll be that happy renter who’s not worried about losing equity or how long my house has been on the market. There’s no pressure to buy because I’m saving a bunch of cash every month and prices/volume have nowhere to go but down. Don’t believe me? You don’t have to. I put my money where my mouth is and so should you. If prices are going to “rebound” and everything is so fine and dandy, you should hang onto that property you bought a few years ago because it’s such a great investment. *note heavy sarcasm*
Though I agree with you completely SavedbyGrace, you are starting to sound a bit ranty.
I can’t imagine how happy you are as a renter if you’re visiting open houses and constantly writing about saving up for your house purchase. Maybe you are just like me, reluctantly waiting on the sidelines and satisfied with renting at the moment. And yes, I too constantly visit open houses and check MLS listings daily.
Having owned a home from ’99 to ’05, I’m not necessary looking forward to the maintenance and hassles of homeownership again when valuations come inline with economic conditions. However, homeownership is probably the best fit with my plans and lifestyle in the coming years.
There are plusses and minues with both home ownership and renting. People just tend to get emotional with their home choices and tend not to see their homes as investments as well as the typical housing blog writer, commenter, and lurker does.
If I sound a bit ranty it’s because I’m tired of hearing that summer rush argument from people day in and day out. It makes no sense when you look at the grand scheme of things yet I hear it everywhere I go. I guess the people on the other side of the fence is tired of hearing me rant about the doom and gloom of the housing market so that makes us even 🙂
Actually I haven’t been going into any open houses on the weekends, but merely taking notice of the ones I happen to drive by. If you or anyone else is going to them, please stop by AHB to let us know how it looks out there. Gas is expensive so it’ll be great to get input from other locals without actually going to an open house.
Technically I can stop renting right now and purchase a home with a hefty downpayment, but I’m happy with my situation and don’t mind waiting for a better deal. I guess you can call me a bargain hunter.
For all those with tons of cash on hand from not buying in the housing mania and proud of the fact that our RE is going down the toilet, GET A LIFE! If all of you are as smart as you present yourself you won’t be wasting your time blogging aimlessly on this site just to get some attention! I’m not your so call successful person so I have plenty of time to waste away on this and many similar site like this one!
I’m primarily interested in South Pasadena, San Marino, and Arcadia. So I do drop in on open houses if they seem interesting. For the most part, realtors are getting better at limiting the use of cliches such as “It’s a great time to buy…”, etc. Well-priced homes attract a lot of gawkers and overall, I have seen more foot traffic lately.
I’m seeing homes in Arcadia being discounted slightly. In San Marino and South Pasadena, many homes get sold at or above asking price. For instance, this home just sold for $2,000,000 which is $301,000 over the asking price of $1,699,000
http://www.redfin.com/CA/San-Marino/2735-Carlaris-Rd-91108/home/7011305
I’m not really surprised as I’m firm believer in efficient markets, especially with the advent of MLS listings freely accessible to anyone with internet access. I think homes really do sell for “market price”, so it’s a good strategy for sellers to underprice and get fence sitters off the fence.
I’m waiting patiently, though not happily, on the sidelines for the market to correct. I’m actually expecting my first child soon and am dealing with nesting urges. Thankfully, I made a decent gain (even though I was not trying to time the market) on my last home so I can probably pay mostly cash on my next home.
I anticipate that we will see a couple of false bottoms that will lure market-timers out into buying a home. But we probably won’t see the real bottom for at least a couple years out. There might even be a chance that I will buy before the real bottom if housing becomes a good hedge against inflation, financial crash, dollar crash, etc.
No, I’m not proud that our country is facing another financial crisis due to greedy lenders and idiotic buyers.
Are we blogging for attention? Of course. The more people I can help avoid being a knife catchers, the happier I am.
Creating niche websites is a side hobby of mine but 90% of that energy is spent on AHB because I get to share real-time news with fellow like or unlike-minded readers. Like you, I also spend plenty of time on housing websites!
By the way, I still appreciate having you drop by because sometimes I do forget that life exists outside of this housing bubble.
Wow…
No I’m not proud that our RE market is going to hell. I wish we never had the crisis to begin with, but the fact is that we’re in unchartered territory here.
If I wanted to waste my time I wouldn’t be doing this. I’d much rather be sitting by the pool enjoying my lovely afternoon than dealing with bitter people who have nothing better to do than troll housing sites.
I still think that San Marino and South Pasadena is significantly better than most of Arcadia and hence, can demand the premium. Most of Arcadia is still just for your average working family and don’t have too many homes that can demand these outrageous asking prices I’ve seen thus far. The only exception would probably be the Upper Rancho Santa Anita Oaks and Whispering Pines area.
People have different lives so it makes sense that people buy/sell at different times for different reasons. Buying at the bottom isn’t necessarily the way that makes the most sense for everyone. If you find a house you like that you can comfortably afford, I say go for it!
Btw, congrats on the new addition to your family 🙂
Of course we’re happy seeing the price coming down!! If you’re a home owner but not a speculator, you’re not gonna have problem paying mortgage and you can wait till the price comes up few years later right?
We’re buyers that have to face those greedy realtors, bankers, sellers…etc. few years back when trying to buy a decent affordable house for family to live. What we got?? “oh I don’t think the seller will even come close to the price you want me submit….don’t even bother to submit since you got no chance…there’s another one’s bidding on this house also, you’d better add more….”
Hey at that time we didn’t hear about government would “bill out” renters or any seller would feel sorry for us either. Why should we feel sorry for people who can not afford the houses now? They shouldn’t buy anything they can not afford in the first place.
If you’re one of them, I certainly not feel sorry at all either.
I still can’t believe it. All this talk about bailing out the FBs but no one wants to help the responsible folks who worked hard to save a decent downpayment!
I personally know of friends and family who are in distress due to this housing crisis. They got themselves into a non-conforming loan and now hope the government will save the day before their ARM or IO mortgage resets.
Do I feel sorry for them? Absolutely not because do you know what happens when people lose their homes? They can still RENT. Just like the millions of homeowners in the past, these families will be forced to SAVE and earn the privilege of owning a home.