Today's "home prices falling" news is sad. So was a former $750K median home price in Silicon Valley

[Amerigo Vespucci]

I know I'd probably have a different perspective on this if I were a home owner and watching the value of my major investment continue its journey into the sewers.

But I will never forget a photo that appeared in an issue of Metro, one of the local papers, at the peak of the "Dot Com" boom. It showed what looked like a tool shed on a small dirt lot in East Palo Alto...a town most working-class people were afraid to drive through in broad daylight. It was a realtor's ad for a "fix-'er-upper" home, listed at $250K. It made the "Bug Tussle" shack that the Clampetts moved OUT of look like the home in Beverly Hills they moved INTO.

I just moved out of a Santa Clara home I lived in for three years...tiny, 50-year old single family home with a 1 car garage. No fireplace, no air conditioning, basically 3 SMALL bedrooms, a VERY small bathroom, a living room, and a kitchen, all held together by termites and ancient wiring. When I moved IN, the houses on that street were listing at $650K. When I moved OUT, they were in the low $400K range.

They're STILL overpriced. I know the "value" equals what people are willing to pay, but anyone who's read my posts knows what kind of shit goes on in that neighborhood (like the meth lab, busted by the Feds, DIRECTLY across the street). Lots of punk-assed "gangsta" shitheads and people who walk their dogs and stand there while they shit on your lawn, never picking it up. They'll do it if you are STANDING there. You have to YELL at them. Cars broken into, kids from the high school getting high in front of your house and leaving fast food wrappers and cigarette butts everywhere.

So it's SAD, but it's also a "market correction." Those shitholes were NEVER worth $600-$750K, and I feel bad for anyone who bought one at that price, but the fucking party had to end at SOME point.

:rant:

Home Prices Falling Fast, Eroding American Wealth And Threatening Recovery

First Posted: 12-10-10 12:05 PM | Updated: 12-10-10 12:27 PM

http://www.huffingtonpost.com/2010/12/10/home-price-fall_n_794414.html



Plunging home prices hammered household finances in the third quarter, eroding homeowners' wealth and making them more vulnerable to foreclosure. As prices are expected to continue falling, the economic recovery could face a major stall.

Millions of homeowners saw their most valuable asset decay between July and September, according to recently released data from the Federal Reserve, as they lost a portion of the stake they can claim in their homes. A series of new reports reflects home prices are continuing to decline, increasing the pressure on America's tepid housing market. Until the market finds a bottom, the foreclosure epidemic will feed upon itself, analysts say, as foreclosed properties drive home values down. With the unemployment rate hovering near 10 percent, and with companies showing historic reluctance to hire, the housing drag poses a significant impediment to an economic recovery.

By the end of this year home prices will have dropped $1.7 trillion, or about 7 percent, according to Zillow.com, a real estate data provider. This decline has accelerated: Since August, home prices have fallen 7.9 percent, data from Clear Capital, a Truckee, Calif.-based real estate research firm, show. It is the steepest decline in home values since the height of the financial crisis in 2008, said Clear Capital senior statistician Alex Villacorta.

Worse, home prices are forecast to drop an additional 10 percent next year, according to a recent report from Fitch Ratings, a major credit ratings agency.

Americans' grasp on their homes is weakening.

[Recursion]

1. Not for me

It means I might be able to afford to buy a house some day. (Which seems to be your point.)

[Amerigo Vespucci]

3. Yes, that is my point...homes are for people to live in

I get the "investment property" angle.

But at the height of the "Dot Com" excess, attention turned toward building crappy, pre-fab, TINY "condos" for first-time home buyers, since they could no longer afford a "real" home. Apartment complexes with paper-thin walls began "refurbishing" them for resale as condos, often adding "French doors" and fake marble countertops and a splash of paint...in other words, lipstick on a pig. I moved out of such a complex in 2003. The one bedroom units were selling for $200-$300K. That's just FOOLISH, no matter HOW you slice it.

They sold, largely to a lot of multi-generational families. A common sight in my final days there was the 20-somethings and their parents, with grandma or granddad, walking with them to view the model units...a more desirable option to either having them stay at home or putting them in a nursing home, I am assuming.

[Recursion]

4. Yeah. I try not to "I told you so" my friends

But I made a point of not participating in the debt economy; they said I was throwing my money away every month on rent, but I'm not going to buy until I have enough to put down at least a significant stake as a down payment. Now they're underwater or unfortunately in some cases being foreclosed upon. Which, incidentally, I don't think should be described as the end of the world; then they're just renters again like I still am, and I don't consider this some horrible state.

[Amerigo Vespucci]

8. I had a friend...who was a Realtor...try to talk me into buying a townhome with an A.R.M.

Thank Christ I said "no." This was about three and a half years ago.

And the irony is that things got so bad, he had to leave the real estate business and resume his prior career, selling industrial sprinkler units.

[Recursion]

13. People started thinking of the borrowed money that paid for the house as "theirs"

It reminds me of one of my friends (who ended up way underwater). The first time right out of college he got a credit card he came in exuberantly and said, "Guys! They just GAVE me $5000!" My other roommate and I shared a "this will not go well" look, as we often did when he came in exuberantly.

[Skidmore]

2. Wow. $400K range is way too inflated for

what you describe as your home. A house like that would go for $30-40K in our area with lots of dickering because of the work which needs to be done on the electricity and for pests.

I don't see letting the air out of housing costs as entirely a bad thing. Affordable shelter is needed for many and that just isn't affordable.

[Amerigo Vespucci]

5. If you went out the front door and to the left...

...a house on the adjacent street went for $450K a little less than a year ago. I asked a few neighbors "How the HELL could THAT happen" and they said it was because it had a few more square feet than the surrounding homes. DIRECTLY behind their back yard...within just a few FEET...is a stone creek that, on EVERY major holiday, becomes a gathering place for the local "gangstas" and other assorted assholes who like to get drunk / high and toss fireworks into the creek, because it is usually empty, and when they land in that big stone bowl, they make twice as much noise as they normally would.

$450K.

And yes, your comment "Affordable shelter is needed for many and that just isn't affordable" nails the exact reason why I posted all of this.

:patriot:

[Luciferous]

6. I used to watch those house flipping shows, and a lot of them took

place in California. I was always in awe that people actually paid those ridiculous amounts of money for houses that would be less than 100k in my area... of course I realize that California prices are going to be higher, but some of those prices are just insane.

[NNN0LHI]

7. I thought a foreclosed house in my subdivision that sold for $300,000 four years ago sold for ...

... $200,000, but I found out this week it actually sold for $139,000. So I know mine is wort shit now.

Don

[SoCalDem]

9. The house next door to us was foreclosed, vandalized & finally sold for $63,000.00

Two years ago it sold for $335K..

Talk about our value going in the toilet.:)

At one time we had SEVEN with "bank-owned" signs in the yards. This block has 14 houses on it :(

Lucky for us, we plan to NOT move...but it sucks to know that if we had an emergency and needed to sell, we would lose a LOT of money..

[NNN0LHI]

11. Jeebuz

Good news is that was the only foreclosure left in this subdivision right now. At a time there was one other but someone who lives out here snapped that one up for his daughter and son-in law right after it went vacant.

Bad news is that there are several other homeowners living out here who are out of a job right now and are currently on the ropes.

:(

Don

[Warren DeMontague]

10. I'd be mad if I paid 3/4 of a Million dollars and still had to live in the South Bay.

No offense.

They still playing Mike Savage on KSFO down there? What an asshole.

[Newsjock]

12. Savage has no Bay Area radio home these days

He went to KNEW and got dropped from there earlier this year. Pity.

KKKSFO is still going strong, though.

[Warren DeMontague]

14. That guy is a real piece of ....work.

I used to tune into KSFO every once in a while, just to piss myself off.

I'm not sure why.

[andym]

15. How is the market in the richer towns: Palo Alto, Los Altos, etc?

It seems like their values are climbing again toward very unreasonable values. I saw a two bedroom, one garage 850 sq foot house in Palo Alto listed at over 1 million dollars recently.