WEATHER »

Home-Buying Madness


Thursday, July 11, 2013
Article Tools
Print friendly
E-mail story
Tip Us Off
iPod friendly
Comments
Share Article

There is a madness and frenzy in the real estate market that we are fueling. Why are we foolishly hiking up the prices to purchase a home? Did we not learn from our mistakes in the last bubble?

If we stop offering overinflated prices which are hundreds of thousands of dollars over the asking price, the real-estate market will stop playing us as fools. Except for all-cash buyers, the average young family has seen escalating prices and terms and exorbitant payments to get loans. A family must send both parents to work and let the kids fend for themselves just so the house payments can be met.

What is the psychology of those buyers who will pay any price as long as they get “the deal”? If they would just back off, the real-estate market would get back to a normal pace. How silly it is that a Goleta home that no one wanted at $250,000 is selling a few years later for over-asking at $700,000. No work has been done on the home for 40 years.

Where were all the buyers then and who are they now? It would be interesting to study the minds of those individuals or investors who are fueling this frenetic frenzy. How does one person need many homes and others will have none?

Comments

Independent Discussion Guidelines

For some excellent insight, read these two articles at Mission and State:

Which Way, Santa Barbara:
http://www.missionandstate.org/which-...

Santa Barbara's Changing Demographics and Housing Trends:
http://missionandstate.org/ms/wp-cont...

EastBeach (anonymous profile)
July 11, 2013 at 12:37 a.m. (Suggest removal)

Crazy.

Ken_Volok (anonymous profile)
July 11, 2013 at 12:40 a.m. (Suggest removal)

You guys obviously have no clue about the concepts of supply and demand as well as investor psychology. The lower end of the market is being supported by investor and rental demand and low interest rates. The higher end by move-up buyers and wealthy buyers that have increased confidence due to higher real estate values and a great stock market.

Of course, all real estate is local and the SB market has some similarities and some differences with other real estate markets.

When Karen says "back off", does she mean back off buying or back off living? If you aren't buying, you're renting what someone else has bought. Unless you co-habitate, you're contributing to the higher demand.

Botany (anonymous profile)
July 11, 2013 at 8:14 a.m. (Suggest removal)

Obviously.

Ken_Volok (anonymous profile)
July 11, 2013 at 8:18 a.m. (Suggest removal)

I just Zillow and found many a home in the Foreclosure market for sale. Also check with the real estate agency's for foreclosed or "Pre" foreclosed homes, those are the ones that the owner refuses to leave or is making minor payments on to show good faith even though the Bank wants to sell the house for a repayment of that home. I know, buy a pre-foreclosed home and toss the owner out but Hey! This is an Obama Nation where anything and everything goes.

dou4now (anonymous profile)
July 11, 2013 at 8:36 a.m. (Suggest removal)

We are experiencing a contrived after-bubble. Only the dumb-money is buying now.

80% of non-performing mortgages have yet to be processed:

http://money.usnews.com/money/blogs/t...

The fake recovery was contrived through coordination between the federal reserve, the federal mortgage agencies, the comptroller of the currency and the private banking cartels. The foreclosure process has been constricted by new laws and banks have moved to a strategy of holding REO properties. The federal reserve is holding $3 trillion worth of toxic MBS and is still buying at a rate of 40 billion per month. The federal government is now guaranteeing 90% of all mortgages. Congress is complicit because they will not get re-elected in a down market.

When the crisis hit, the federal mortgage agencies upped the conforming loan limit from $417K to $729K and is requiring only 3.5% down. When interests rates begin to rise these mortgages will suddenly be under water.

Don't be a fool. The banks are desperately trying to transfer an impossible debt burden to the consumers by selling off inventory at inflated prices.

Thanks to Ms Ellen for shining a light on this problem. It's nice to see a healthy discussion in the midst of the propaganda.

Peace.

native2sb (anonymous profile)
July 11, 2013 at 4:01 p.m. (Suggest removal)

EB - Thanks for the links. Interesting stuff.

Botany (anonymous profile)
July 11, 2013 at 5:31 p.m. (Suggest removal)

High density housing?

Local rail system?

These are interesting but separate issues. Why is SB real estate on welfare? Why do million dollar homes need to be bought by the government? Aren't there more urgent causes? Better uses for three trillion dollars?

And why is MTD cutting routes? Brazil is rioting over that.

Mortgage rates will go up and rent will go up. Death and taxes.

native2sb (anonymous profile)
July 11, 2013 at 7:50 p.m. (Suggest removal)

@Botany, you're welcome. Pretty interesting reads, chock full of data in a readable format. I couldn't even begin to summarize those articles, there's so much info about how SB has been changing and why.

EastBeach (anonymous profile)
July 11, 2013 at 9:32 p.m. (Suggest removal)

Forgot to say some of Mission & State's insightful article is based on SBCAG's most recent Regional Growth Forecast:

http://www.missionandstate.org/ms/wp-...

EastBeach (anonymous profile)
July 11, 2013 at 9:38 p.m. (Suggest removal)

event calendar sponsored by: