For all of you who watch Jim “I’ve Sold All My Real Estate” Cramer’s program, “Mad Money,” I’m not sure he’s said the above on his show.
But on this video for TheStreet.com (he’s a co-founder,) he really doesn’t say anything people didn’t already know if they have been reading regular stories. However, his “If your house declines 20 percent in value, it’s really important to sell it,” comment is ridiculous, as if the hundreds of people in Antioch and Pittsburg don’t already know that (and aren’t having a lot of success in a market flooded with inventory.) Duh.
His other comment, “It’s smart to walk away” part is what’s getting a lot of attention.
Some people fear his loyal viewers will hear this and act. I’m not sure that Cramer is that influential, but maybe I’m wrong. Also here’s what Cramer said before:
Hindsight is 20/20.
Secondly, real estate isn’t and shouldn’t be treated as a stock. It’s a great longterm investment and always has been (unless you live in California City.) It wasn’t until recently people started treating ther homes as a cash cow with increasing short-term rewards — which is what led to a lot of people getting burned when the market busted.
My sister expects to buy a home for herself and her partner on my moms’ death (money from estate.) The trust will not be more than $350,000. Can my sister buy a home in Northern California for half of the trust? Or is she being totally unrealistic?
Well, $350,000 can buy a house here even in the East Bay, provided you aren’t easily intimidated by cosmetics or sweat equity (meaning fixing it up yourself.) I found something in Antioch, Bay Point (the three-bed, two-bath one to the left has an asking price of $340,000,) Brentwood, Concord, Martinez and Pittsburg (lots in Antioch and Pittsburg.)
But if you’re asking can she afford something in San Francisco, probably not. A smaller house in the East Bay is much more possible now than it was even two years ago, and with the rising foreclosures seems destined to continue. Even with $175,000, it’s a sizable down payment. Even if the house is $500,000, with the down she’s only going to be making payments on $325,000 — which according to my calculator (and using 6.5 percent interest) that would be roughly a $2,112.50 monthly payment on a 30-year, fixed-rate mortgage.
So, although $175,000 doesn’t sound like a lot, it’s enough to make a good dent in even a Bay Area home.
(All you mortgage brokers out there, am I leaving anything out? Any good loans that I’m missing?)
I think finding the right house is like finding the right mate. You look around, your eyes darting over the inventory and your inner voice says, “Nope. No way. Next. You’ve got to be kidding. Maybe, if the color wasn’t Pepto Bismol pink. Ugh. Eeeuuww.”
Then after looking for a while you may see something that makes you go, “Hmmmm. Maybe. Maybe I’d like to go on a date with that one.”
My new beau was a little older, definitely interesting but not exactly what I was looking for. I wanted a classic Victorian or Craftsman and that blessed palm tree in the front yard. But this one was almost a Craftsman, at least if you took off the enclosed porch and squinted a little.
I had to see more to be sure. Only one problem. It was priced out of our range. About $25,000 more.
Now, dear reader, you and I both know the housing market blows like the North Wind in March right now, so the possibility of making a low offer is high. The chances of being able to sell right away are also much lower.
Unfortunately, the home had only been on the market for two weeks. What’s a real estalker to do?
So I called Agent 2.0 (the other is gone) and asked her advice. She asked the pertinent questions and then suggested, “I think you should wait for a month before you even look at it.”
A month is enough time for the seller to panick a little, she said, and warm them up for a lower offer.
So, I am waiting until August to see this maybe house. Perhaps it will be nice and what we’re looking for. Maybe.
In this new report from DataQuick Information Systems Inc., Notices of Default rose significantly in the state while actual foreclosures were at their highest rate in the company’s 19-year history.
In Trustee Sales, or actual foreclosures, numbers were startling. Contra Costa County foreclosures jumped five-fold from last year’s 62 to this years 778 (1,154.8 percent,) Solano County rose from 36 to 324 (800 percent) and Alameda County went from 69 to 480 (595.7 percent.)
While foreclosures tugged property values down by almost 10 percent in some areas eleven years ago, their effect in most markets today is still negligible. However, the continued rise in NoDs means that the number of homes lost to foreclosure will continue to increase in the second half of this year.
In Contra Costa County, NODs jumped from 725 last year to 2,316, or 219.4 percent, and in Solano County numbers went from 350 to 1,065, a 204.3 percent increase. In Alameda County, notices of default went from 649 to 1,612, a 148.4 percent increase from last year.
Roughly half, 54.6 percent, of the homeowners in default emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe. A year ago it was 88.0 percent.
I look at the Real Estate Transactions every Sunday and so should you. Because if you want a real glimpse of what the real estate market is doing and where it’s going, it will give you the best gauge (albeit about six weeks ago.)
Basically, it’s a record of all the homes that closed about three or four weeks ago. So you can see (mostly) the real price paid and what seems to be selling. (I say mostly, because it doesn’t show that the seller paid $10,000 in closing costs or $5,000 to buy down a point off the mortgage.)
I can’t help but look at the Lamorinda stats and the cheapest house. It never seems as if that house on 180 Toyonal was advertised, right? Only $515,000? It probably was for more.
It’s even a better tool if you’re following real estate in your area. Where I live, a house we nicknamed “The Prison Yard” for its zero landscaping (no trees, no bushes, no flowers but lots of concrete) and institutional gray exterior, was initially selling for $599,000, went down to $499,900, and then finally sold for $455,000.
Please, whatever you do, don’t think in terms that the house somehow lost $150,000 in value.
Wrong. The price of the home is whatever someone is willing to pay for it. If no one is willing to pay $599,000, which no one was, that’s not the price. And no amount of wishing, hoping or dreaming will make that happen.
If you read my story today, you know of the foreclosure auction to be held on Saturday at the Hilton Concord Hotel.
The real estate agent in the article, Cecily Tippery, said that better deals might be had before the auction. So, what’s stopping you from contacting the property agents right now? Simply visit Hudson & Marshall’s auction online brochure of properties and find the applicable agent.
At least go see the property if you’re serious about buying it. And remember, buyer beware!
From reader Mike Flaherty: It is informative to know how builders feel about their industry. Is their any direct correlation to the stock market or the overall economy?
I love smart questions! Direct correlations are difficult, especially for a truly unique situation we’re in right now (And I would say yes, there is an effect on the stock market!) Economists are kind of stumped as to what it means for the overall economy. They understand a recession causing a housing downturn, but a housing downturn without a recession?!? I think it’s unprecedented.
So all eyes are watching to see what will happen. Is it enough to push us into a recession? Or can our economy rally?
As for Wall Street, Bear Stearns Cos. announced Wednesday that its two failed hedge funds were depleted due to bad betting on subprime loans and that their investors had to suck it all up. Basically their money is gone.
“The Bear Stearns hedge fund debacle will be the main theme weighing on markets today,” said Juergen Lukasser, who helps manage $20 billion as head of equities at Constantia Privatbank AG in Vienna.
According to DataQuick Information Systems Inc., the East Bay housing market had a tough June. No surprise to real estate agents, brokers and title agents, who have been watching this rollercoaster since last year. Although all counties experienced a drop in sales from last year, Solano County experienced the worst June in 19 years. Prices also dropped from a median home price of $475,000 to $419,500.
Alameda County median home price hit $605,000, the highest on record for the real estate information service since it started 19 years ago. Contra Costa County’s median home price was $597,000.
According to the National Association of Home Builders, builders lost confidence in the housing market — the lowest point since January 1991. Now, what does that mean? It means they don’t feel that great about crappy sales and huge amounts of inventory. The NAHB puts out a monthly survey to measure attitudes about the next six months. The number 50 is the midpoint with anything above being good and below being more negative. The national number was 24. Eeep.
I think it would be strange if they didn’t feel a little unsure about what’s going on. Everyone else including buyers, sellers and real estate agents aren’t feeling too great about the market either.
I was looking at listings and realized there’s not a lot of million-dollar homes. I don’t meant $1.1 million or $1.25 million, there’s plenty, but straight-up $1 million.
The closest I found was this home in Antioch for $1,000,001. Why the extra $2? Doesn’t America want a bargain at $999,999? Doesn’t that sound so much better than $1,000,001?
Perhaps I just don’t get it.
NOTE TO BROKER/AGENT: If you’re paying $1 million for a house, you want to see more photos. Just where are those travertine and oak floors anyway?
