Comments on: Pollyanna Returns

By: Kris Berg

Kris Berg — Tue, 18 Nov 2008 14:01:38 +0000

Chunky – Sounds that you have positioned yourself well, and I will you the best in Italy. 2011 should look a lot different.

By: Chunkymutt

Chunkymutt — Tue, 18 Nov 2008 11:45:50 +0000

Hey Kris, just wanted to update you…my last post was the post just above this new post! As you can see…the real estate market has “tanked” to say the least…I’m glad my wife and I waited, infact, things for us couldn’t be better. Because we made the decision (not to buy in San Diego) My wife, who is a navy nurse, negotiated orders out of San Diego to Italy for the next 3 years. Looks like we’ll return in 2011 when all this mess has blown over, and the San Diego market has “normalized”.

By: Chunkymutt

Chunkymutt — Thu, 14 Dec 2006 04:49:55 +0000

I’m sure people are out there looking, I watch the numbers Kris, that’s all, just the numbers. Like the Central Bank keeping rates the same tueday (phew). I suppose to someone selling property people being out looking would be a good sign, I just want to know how many of those 18 people put down a bid or secured the property with a downpayment? Are we seeing the “bidding wars” of 2003 return? I guess we all have our system, some people I talk to just think this is the normal winter period for the housing market…business as usual. I predict a 7.8% negative correction before the next Fed announcement…which will probably be a .25% rate increase. At which time my wife will promptly remove my nuts.

By: Kris Berg

Kris Berg — Mon, 11 Dec 2006 15:16:27 +0000

Chunky,

First, this is not a blog for just real estate agents/broker. It is commentary from “civilians” like yourself that make things most interesting around here, so you are always welcome.

Second, you have obviously carefully thought through your situation and determined that making a home purchase is not in your best interest at this time. That means that you made the right decision – for you. It sounds like you have positioned yourselves well for the time when it make sense for you. You will never hear Steve or me suggest that home ownership is always the right decision for everyone at every point in time. Many agree with your wait-and-see posture, and there is nothing wrong with that. Many, however, for numerous reasons are seriously shopping and are buying homes in this market. That is what makes the world go round. And you will not see disappointment and pain when you look in my eyes; I am doing just fine, thank you, because pressure selling is not a component of my business model or my nature. It has been days since I have forced a home shopper to make a purchase at gunpoint or body-blocked them in the driveway of a listing to force a contract and pen in their hand. I am just a facilitator. When someone decides buying or selling is right for them in any market, it is my job to help make that happen. Steve held an open house yesterday and had 18 groups through (our best turnout in a long time), most of whom were very seriously looking to buy, for whatever that is worth.

By: Chunkymutt

Chunkymutt — Sun, 10 Dec 2006 20:09:35 +0000

Hey Kris, I know this is a blog for real estate agents/brokers so I’m aware of the waters I’m swimming in. I like reading what you guys (and gals) have to say. It’s important to me to learn as much as I can about the market and where it’s going, what other (more imformed) people are saying in confidence. I will tell you this much. My wife has been on my back for 3 years now wanting to buy a house, and not until I drove her up to the 4S ranch did she back off. For her it was being able to actually see what a potential buyer is paying for, and meeting that real estate representative helped a little too. That provided the much needed breath of reality to my wife. So now we’re both on the same frequency. And this is who we are. We’re both 30. Our FICO scores, mine low 700, her 890, our combined income as nurses is about 150K a year. We have too much money in the bank doing nothing for us. We own both our cars, we have no debt. We use our credit cards just to have an active account of credit. Our rent here in North Park is $760.00 for a 2B2B in a nice neighborhood, close to our jobs, close to everything. Why would we jump into the market now? Like a said, I’m a nurse, and I’m pretty tuned in to human emotion, especially disappointment and pain…when I go out and look into the eyes of these home owners or agents trying to sell me property, and not wanting to budge on the price…i see the same look in thier eyes when I tell them “thank you for your time”. We’re waiting. No granite counter top or wood floor is going to get me to budge off my line. And I think that’s what most potential buyers are thinking.

By: Kris Berg

Kris Berg — Sun, 10 Dec 2006 16:00:05 +0000

Chunky,

Yes, there is unfortunately some desperation out there among agents. I would suggest that these are not the top-rung agents, as the more experienced and estabished will continue to survive and even prosper in any market. Regarding the “Industry doing everything in is power” not to drop prices, I would suggest that it is the seller that establishes asking prices. While we certainly advise on pricing, we ultimately take our marching orders from the sellers. There would be NO advantage to an agent to holding the line on high pricing that is artificially or unrealistically high. We do not make the market; we simply market. I wish I could wield this much power.

Regarding the unsolicited mail from a church mailing list, shameful, if that is indeed the case.

By: Chunkymutt

Chunkymutt — Sun, 10 Dec 2006 09:24:06 +0000

Just reading all your postings and i wanted to share something with you all. This past friday, Dec 8. I took a little ride up to the 4s Ranch. I was offered an eighty-thousand “bump” on a 3B/2Bath 1600 detached that was listed at $610K…my wife and I took our %20 downpayment, our preapproved loan from USAA for 550,000 and drove back to our $760.00 a month 2 bedroom apartment on Mississippi street in North Park . Last I counted on my street alone, just the stretch between University and Upas near Morley Field…there are 6 homes for Sale, 3 that used to be for sale, now for rent, and one that has a Bank owned sign on it…you can talk about percentages and statistics all you want…what potential home buyers are seeing right now is the Real Estate Industry doing everything in it’s power not to drop the price of homes…eventually, when all these little “incentives” don’t attract buyers…what next? I actually had a representative 4S stable suggest that I should “jump on this 80K incentive before this weekend, because monday, it’ll be renegotiated down to $40k” I could hardly compose myself, she was suggesting that I see a property on friday, and hand her 530,000 on Saturday? “lock it in at 80K”. This is what “potential” buyers are seeing from the Industry right now, desperation. If I have Anthony Napoli send me one more piece of mail I’m seriously going to raise hell, because I know he got my name and address from Our Lady of the Rosary Church in Little Italy…that shitbird.

By: Steve Berg

Steve Berg — Sat, 09 Dec 2006 00:04:16 +0000

InfidelSix: One more thing for the record: Notwithstanding my Pollyanna’ish attitude, Kris and I are NOT the type of agents who make the claim that EVERY market is a good one to buy real estate. It depends on each buyer’s indiviual situation and motivation. You have got to want to buy AND you have got to love what your buying. If you feel (as many do) that the timing is just not right, then wait until you are comfortable. We are not yet done with the “flushing” process regarding prices. Hopefully, the gap will close to your price target soon.

By: Steve Berg

Steve Berg — Fri, 08 Dec 2006 23:53:17 +0000

InfidelSix: It is suppy and demand. But it’s not because San Diego has an oversupply of homes. It’s because we have an oversupply of homes at too high a price. The high prices have squished a good chunk of the demand. We have heard your story a lot lately (see Jack Tong’s comments). Excellent income, no debt, but still facing prices that are too high. There is always something to worry about regarding the timing of a home purchase. That’s why it should not be speculative. It is an investment, but it’s also your primary shelter (physical as well as tax shelter). Let’s hope that all of the legs of the tripod hold up. I’m not sure what else to say here. Many of our buyer clients end up buying something less then their dream home just to be able to begin owning a home. The smart ones are not speculators who buy with the intent of flipping for a profit in a year or two. For whatever it’s worth, Kris and I bought our first home (a very modest one) in Scripps Ranch in 1989 (at age 37 w/no kids/no pets). It, too, was not our dream home. Just about the next day, the market tanked for 6 years. I had hoped to live there for 5 years (now with 2 kids and a dog), then move up to a bigger home. I ended up loving the home and was there for 11 years. After the worst recession in my memory (at least for home prices), I ended up selling it for a (small) profit, plus got back the 11 years worth of principal paydown. It wasn’t the perfect home by a long shot, but it worked and it helped me get into my next home. I’m not sure what else to say…

By: Steve Berg

Steve Berg — Fri, 08 Dec 2006 23:20:32 +0000

Robert: Agreed re: CPI over the decades and housing appreciation. My comment regarding “tamer” inflation was a “relative” term (i.e., relative to the year before and the fact that home prices have adjusted downward in SD). We had been discussing the “relative” short term trends, also comparing them to the recession of the early 90’s and trying to examine the future based upon these trends. Re: the OER, at the moment there is an inverse relationship in San Diego between home prices (adjusting downward) and rents (going higher). Therefore, at least the San Diego component of the OER may be somewhat deceptive by putting an upward bias to the CPI at the same time home prices are coming down.