All Forum Posts by: Account Closed

Why is this sounding backward? You signed contract prior to completing property inspection? and don't have a firm idea what total repair cost will be or expected profits? You are hoping repairs don't exceed $10,000? hoping?  Before making grand plans on equity use, you want to be sure the project will be in the money.

Play nice folks! I do know some realtors. I guess it can be a challenging profession especially since many realtors work on a commission only basis. Driving some joker around to see countless properties can be an expensive gamble if they don't actually follow through.

Technically, an economic downturn is a downward shift in a business cycle that can creep into a recession or depression. But it is an economy wide phenomenon. We would have to see slowed growth and declines not just in real estate and certainly not just in San Francisco. 

There are various economic indicators. Some of the real estate related indicators include: construction spending, new residential sales, new residential construction, rental vacancy rate, homeownership rate etc. and there is much more.

Regarding the tightening of credit as you mentioned previously, extreme forms can cause its own problems. Affordability is already an issue in markets like San Francisco where along with some other areas in California for instance, you have rent control  in an attempt to battle the affordability issue.

If buyers are being 'locked out' of the market, it can lead to declines in new residential sales, builders then get nervous about building for concerns of not being able to sell, new construction takes a hit, increased vacancy rates (unsold and unoccupied properties), increased inventory / supply (price declines) etc.

This is somewhat of a misunderstanding of what bubbles are and an incomplete view of causation. 

In real estate, the stock market or any other class of tradeable asset, bubbles form and pop all the time. There is always the longterm historical mean, that 'normal' pace at which the price of an asset grows and in real estate that can be region specific. 

The tendency is that prices will have a way of eventually reverting to its mean. In the short term however, investor expectation about the future, confidence/overconfidence, speculation, emotional and irrational decisions etc. could all affect prices in ways that deviate from its historical mean. 

So there are periods when prices of an asset will accelerate with abnormal velocity increasing but eventually it will cool and decelerate to its norm. Investors start getting suspicious about how long the trend will last or the credibility of new price levels -- a form of paranoia that can in itself drive prices back to previous or lower levels.

This is a behavior and pattern you can expect regardless of what loan requirements are and has to do with consumer and market behavior, efficiency of markets, demand, supply etc...

You typically only hold the person who signed the note responsible but they are deceased. So you look to the deceased estate who can either bring the note current and determine who assumes the loan (if they choose to). 

The estate of course can choose to allow lender to foreclose on property but if they bring it current and want to assume the loan, they typically have the right to assume the loan without material terms of the loan being altered.

New York State holds the record in terms of how long it can take to foreclose but you want to go through the deceased estate.

gosh no! its not ignorance... saving the average 6% of { listing price } can be significant. Especially in areas were the average days to sell is in the 30 days range or significantly lower than national average. A property that sells for $1,000,000 at 6% is about $60,000. Can you think of a few things you could use $60,000 for?

There is regulation and then there is persecution... if you are/were in financial services, there are elements of dodd frank that just seems was meant to cripple certain facets of the sector. Overregulation can be a very detrimental.

Lawsuits often come with the territory... its almost like a cost of doing business. You rely on Zillow's Zestimate at your own risk... I personally would have a realtor pull comps on a particular property but there are times you may not have instant access to a realtor or mls based data and have to be able to utilize Zillow or any of the other sites to get estimates. 

Even realtors try to manipulate comps and so I often will have to advise the realtor to make some adjustments to a comp if the properties utilized in the analysis, area or some other characteristic do not align with the subject.

If you have the capability to capture the amount of real estate transactions such as Zillow does; not just in a particular city, state but at a country level, including granular details of those transactions, you have a right to make logical and defensible opinions about market place events and behavior. Its not just Zillow, there are other companies in the space -- Zillow just happens to have the most market share currently.

When you are looking at historical market data, transactions that already occurred, these are a matter of fact. MLS based comps are often based off of the very same transactions.

When you move from looking at historical data and attempt to forecast the future... there isn't an algorithm that can do so without any error, as there are an array of complex factors and economic events that some piece of software cannot be expected to see. If humans, including 'experts' in any field, can't precisely with 100% certainty forecast any particular event -- you can't expect zillow or the zestimate tool to.

Many websites attempt to estimate property value and there are variances between most or all of them. You do not rely on any particular one of them nor do you accept a realtors comp at face value -- you could, but that would be at your own risk.

lol... trust me. I am aware of not just Zillow's problems but the problem any company faces when it tries to design some software 'algorithm' that 'forecast', 'estimate' or attempt to 'predict' property value. 

But Zillow has access to a reasonably significant amount of historical market place transaction data and on which a reasonably correct observation can be made. It doesn't mean there won't be a few weird scenarios but for the most part, it does capture what occurred.

Its always risky to try to form broad based market opinions just off of an instance of a few observations in your neighborhood. So whats been going on in the market broadly? 

A 4% increase in San Francisco in the last year and a forecast of additional increase in the next year. The slower pace forecast may just be due to significant price gains from previous years that does require some correction.

In the US generally, the growth in the last year was 7%+ and additional price growth forecasted for the next year. Its hard to see where there have been the drastic declines you mentioned:

If the data from Zillow is correct, it does not appear there is credible verifiable evidence that the real estate market is drastically declining either in California or in the US generally.