Friday, August 04, 2006

Silly Flipper Games

Owners will gift new 2006 vw beetle convertible to buyers upon successful close of escrow.
A little desperate are we?
  • Located in San Rafael
  • 3 br 1 ba, 1254 sq ft., built 1947.
  • DOM = 58 (if that statistic can even be believed)
  • Price Reduced: 06/22/06 -- $800,000 to $775,000
So the asking price has been reduced a whole 3% and (surprise, surprise) they still can't sell it. So now instead of just lowering the price they are throwing in a brand new car. What fool buyer would fall for that trick? (Sadly, probably a lot.) If it was me I'd tell the seller "No, you keep the damn car, I've already got one thank-you-very-much; just lower the price." You, the buyer, would be much better off if you insisted that the seller subtracted the value of the car (MSRP $22,120), a depreciating asset, from the sale price of the house so that you would then pay less on property tax every year.

I am posting this just in case there are still people out there sufficiently deluded to still believe that Marin is so "special" that games like this don't or can't happen for whatever fuzzy-warm feeling makes you feel more secure.

Oh, right, and before I forget... this house last sold for $750,000 in June, 2005 (so the present owners are just hoping to break even after the closing costs are factored in). Before that it sold for $581,000 in May, 2003. Yeah, right, flipping doesn't happen in Marin because we're just sooooo special. No "specuvestors" here. Nope.

And then there is this one found by a reader:
This house was listed last summer for $799k, dropped to $769k, and sold at "100%" of its listing price on 7/29/05. It is back on the market at $815k and the only thing I see that has changed is the interior paint color.
I don't feel the least bit sorry for Marin speculators (or real estate speculators in general). Speculators are a big part of the problem and are to a large extent responsible for the affordability crisis in California. Ask yourself -- do you really want to bail out these people as things get tough:
A surge in long-term rates [following a Fed pause in raising interest rates] will immediately translate into higher mortgage rates, putting the final nail in real estate’s coffin. The bubble is finally dead, may it rest in peace. Unfortunately the same can not be said for those who bought into it, and those who financed the speculation. For them, and the entire nation for that matter, the real estate nightmare is just about to begin. [Source]

9 Comments:

Anonymous Car Lover said...

I don't care about the house, I love that car!

How about $750,000 for the car and you keep the house?

Car prices will keep going up and up, and this may be my last chance!

Aug 6, 2006, 1:15:00 AM  
Anonymous seattle price drop said...

The House just passed a Bill called "Expanding American Home -ownership Act of 2006" (HR 5121).

It seeks to extend the upper limit on FHA loans and extend 100% funny money loans, etc.

In the past month we've seen NAR/Lereah and Legislators BOTH pleading with Ben Bernanke to "be careful" when it comes to the housing market. Which indicates to me that EVERYBODY knows that home prices are "in danger" of coming down.

Therefore, the timing of this Bill is suspect.

It goes before the Senate next.

Petition anyone?

Aug 6, 2006, 4:19:00 PM  
Anonymous hwftw said...

in berkeley it would be a stretched yugo.

Aug 6, 2006, 7:54:00 PM  
Blogger Marinite said...

seattle price drop --

That's discouraging news but it is not surprising and probably is too little too late. It reminds me of what was going on last time when housing was collapsing and the gov tried to intervene; didn't do any good:

http://tinyurl.com/8ryol

Aug 6, 2006, 8:21:00 PM  
Anonymous seattle price drop said...

Hi Marinite-

Thanks for the link.

All I found in terms of Gov. trying to "help" was at the bottom when they tried and failed to encourage people to buy, after people were already at the "sick of RE" stage.

Maybe I missed something.

I hope you are right that it won't help.

Although there are more people out there aware that RE is going down, there are still too many buying, all over the country, who are not paying attention to anything.

So yeah, I'm worried and wish I'd known about this bill before.

Apparently only 7 House members voted against it. I'd like to know who they are so I could separate the wheat from the chaffe in my mind.

I think one was from CO. Big surprise! One of the highest foreclosure rates in the nation. Perthaps he's taking seriously the damage that squeezing into way too expensive homes can do to a populace? While the rest of the House party's on.

These people make me sick.

It's supposed to have a harder time passing in the Senate.

Aug 6, 2006, 11:58:00 PM  
Blogger Marinite said...

I just took a look at what info I could find on that bill and it looks like that bill is trying to keep the first-time house buyers buying. I think they know that if the first-time buyer cannot buy, if that bottom rung stops, then the whole housing market stops as move-up buyers cannot find buyers for their houses. That's where all this hope that rich Chinese (insert your favorite foreigner) will swoop in and buy our POSs. Pretty pathetic really (that hope that is). The Legislature is, for some reason, just trying for forestall the inevitable.

Aug 7, 2006, 1:09:00 PM  
Anonymous seattle price drop said...

Did you see who the 7 lawmakers were who voted against it?

I'd really love to know who these lonely 7 legislators are who have an ounce of integrity.

One was from CO. but that's all I know.

It's surprisingly difficult to get news on these bills.

The us.gov site is not intuitive. maybe there's a reason for that?!

Aug 7, 2006, 5:56:00 PM  
Anonymous Anonymous said...

Integrity? Who do you think is opposed to letting FHA help people with moderate incomes get affordable loans?

It's the subprime lenders who are making a fortune off of them because there's hardly a house in California that qualifies for an FHA-backed loan anymore who are lobbying against HR 5121. FHA already backs 3 percent down payment loans so it's not a great leap to go to zero percent. You still have to demonstrate that you can make the payments.

Even if prices come back down to earth, people who aren't making dot-com salaries will have to go the subprime or Alt-A route if FHA isn't allowed to come into the 21st Century.

Why does everything have to be a conspiracy?

Aug 7, 2006, 9:36:00 PM  
Anonymous Anonymous said...

Seattle price drop: forget about us.gov. Federal bills are keyword searchable at Thomas

The House version of the bill is HR 5121

In the Senate it's S 3535

Aug 8, 2006, 2:49:00 PM  

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