Wednesday, September 2, 2009

Wistful...

I've been thinking about this, and yesterday's comment got me going to write about it.

The reason the discussion has gotten boring is that during the Bubble frenzy, bubble blogs like this one and SM Distress etc were a refuge to discuss the coming bust with others who saw the handwriting on the wall. Now, even the biggest douche knows that it was all a bubble and that prices are going down hard.
Three years ago I was reading the valiant bubble bloggers documenting there was a problem, vs. the MSM and REIC who still insisted there was no such thing. (We were painfully right.)

They inspired me to start tracking inventory in Santa Monica, then to be a blogger too. From 'what should I cover?' to seeing I had readers, to having one start his own Santa Monica Distress Monitor, I loved the camaraderie among bubble bloggers and commenters, each with their own attitude.

It's also a lot of work to keep a blog going. A few reached national stature. Remember Calculated Risk's original header, above? Others I read daily are Barry Ritholtz's The Big Picture, Karl Denninger's The Market Ticker, and Charles Hugh Smith's Of Two Minds. Those guys must do nothing but write their blogs!

More wistful are those that have gone pretty dormant, but I still check back from fondness for their writing. Pete Viles gets special mention, for starting the LA Times's LA Land blog. After leaving the Times he popped up with Original LA Land, but hasn't kept it up. Keith formally ended his vivid Housing Panic and sequel Soot and Ashes, but fortunately still comes back with more.

Others I check back on include OC Renter's Bubble Markets Inventory Tracking (little new, but you can email him at ocrenter at gmail for access), Marin Real Estate Bubble, May 5th and Everything After, Neil's Real Estate Comments, and South Bay Beach Cities Housing Bubble.

So what about Westside Bubble? No, I'm not going away, but as you've seen I haven't had the time to post like I used to. My main focus lately has been limited to documenting statistics that forecast housing prices here, but I do have some current house stories on tap. And I'm sure you all follow WarChestSM's.

29 comments:

Anonymous said...

Westside Bubble
your efforts are really appreciated - very much appreciated - by all of us

I humbly suggest that your readers do the work to discuss individual properties in detail.

I myself am especially interested in situations in which a developer bought a piece of land, got a construction loan, and finished a nice house and now can't sell the house for more than the value of the construction loan. The bank that made the loan knows they are going to take a hit.

I want to go directly to the bank and buy the construction loan from them at a discount. I believe I can get myself in to a home at a bigger discount by buying the note from the bank rather than by buying an REO

I want to discuss this if there are others on this blog with experience in this

Westside Bubble said...

Thanks, Anon, and good suggesion. Really, any post here can (and does) become an open thread.

If any of you would like, I'd be happy to post text and photos you email to me (westsidebubble at gmail) for discussion. That would be easier than just a suggestion to write about a particular property.

Matt said...

Well thank you for all the hard work you have dedicated yourself to. You probably can't truly realize the impact of your insights on those of us interested in L.A. real estate and trends. It has been truly empowering to be able to check in with you and read your trenchant analysis about specific properties. It has helped me keep my cool while I'm dying inside to buy a house on the Westside. Your blog reads part business page, part human interest, and part crime blotter. I check in several times daily to see if you have a new post. Please keep up the good work.

Wooster said...

Open your blog to guest posts, so some of us with a quick take on a certain property and a desire for others to hear about it can put something out there without having to lay the groundwork for a following as you so graciously did. For example, I'm am a residential land developer on hiatus who is always looking at the development side and, while I'm terrified of doing so in Santa Monica and never get involved in one-off spec homes, I'm always looking at the opportunity to find a new deal. I'm interested in Sunset and Ocean Park and will gladly send you something about a few things I see around here.

To the note buying guy above:

For good properties you are not getting any discount on buying notes right now. There are tremendous costs associated with processing your own foreclosure. It also may never get that far and you are stuck with tying up your money with a very low yield and a lot of headache while REO and performing straight forward deals pass you by. You might also get into a huge court battle and realize you are missing some documentation while the seller is telling the court you or the bank agreed to interest abatement or deferment. I'm just saying you might find yourself on the wrong end of deal with a talented legal manipulator who ultimately screws you. That, or the fed gets crazy and enacts laws that force you to cram down some of the value. You never know. most of these problems can be dealt with more easily when they arise on a case by case basis on a pool of loans where you have an average yield on your investment, some strikeouts, some walks, some hits, some HR's, but on one single-family home loan you just might lose all your money.

Anonymous said...

Westside,

I wrote that comment, which you quoted from.

Just wanted to say thanks a bunch for keeping this blog up. I was an early follower and poster on here from way back when. Your blog did indeed provide a very useful place to discuss the coming crash, at a time when the real estate frenzy was so ubiquitous that it was very, very hard to find any media source that is informative and aware of the dire situation.

As I've frequently said, the financial media is next to useless. All of them missed the crisis entirely, with very few exceptions (like Krugman at NYT).

But this is also why these kinds of blogs are still very useful. True, the debate has gotten more "boring" in that there is no controversy about whether we are in a massive bubble. We are. But the media is as ignorant as ever when it comes to finance in general, some sources are unrepentent for missing the whole thing and are back to pumping the market because that's what sells advertising.

In other words, we still need a place for accurate non-biased information, and frankly, a place to vent frustrations at the utter stupidity of the markets. We're not going to get that anywhere else, and certainly not from the kool-aid dispensers at CNBC or WSJ or your local Realtor.

Worse, there is now complacency. Roubini is now more focused on expanding his franchise. Krugman got it right on the crisis, but since then has had nothing useful to say that is predictive--he has been proven dead wrong about nationalizing the banks, and is more interested in pursuing his social justice agenda than analyzing data. LA Land posts about trees and "hot properties". Calculated Risk remains, SM Distress, and this blog.

Incidentally, I think in this "boring" period of tracking the decline of the bubble, the interest is in just featuring interesting individual listings, like Warchest at SM Distress does so well (and props to the new Hollywood bubble blogger and MB Confidential). It's informative in tracking the decline, and it's very fun to do. But listing the inventory changes in West LA is very informative too, even if it doesn't always generate a ton of discussion.

Thanks for all the great work here, I hope it continues!

ARTI

Westside Bubble said...

Thanks, ARTI, glad this has been useful!

One narrative you've seen me focus on lately is that the same kind of people who denied the original bubble now claim it's already bottomed. Like they've said every spring, predicting recovery in the fall.

But the same facts that documented the coming bubble burst show it's not over on the Westside.

dan said...

Indeed. Thank you.

At the moment, we're tracking he decline. But the bottom will eventually come. If you have a sense of when that is, please keep us in the loop.

Anonymous said...

The thing about the bubble deniers and realtors that really drives me crazy is their ominous warnings that once the bottom is hit prices will move inexorably up again and you will have missed your chance. Somebody posts crap like that in comments on this blog and on SMDistress regularly.

Please. The housing market is nothing like the stock market. It is very slow-moving. I bought my current house in West Hollywood in 1993 when another bust was ongoing. In fact, prices for similar houses on my street didn't bottom for another two or three years, although the difference was a matter of about 7 or 8 percent from what I paid. When the housing price bottom has arrived it will be painfully obvious because things will just scrape along at that level for at least several selling seasons. Since things are still moving down quite visibly we are obviously NOT at the bottom.

I'm not in the market for a house in Santa Monica. I want a house in Los Feliz or Silverlake. While the top has unmistakably come down, the middle tier in those areas has been infuriatingly sticky. I read this blog and SMDistress because ultimately what happens on the westside will blow back to the areas I'm interested in.

Anonymous said...

I have been a faithful reader of your blog for quite some time now. Thank you very much for taking the time to give all us such detailed and useful information about the westside. The comments posted were definitely interesting, but as most of us hide behind the veil of "anonymous" secrecy and leave the heavy work to you, I'm not sure it is fair to call the conversation boring. Please continue on and thank you again!

Dan said...

Great blog. You also mentioned quite a few other blogs in your honor roll.

One of the better blogs is Doctor Housing Bubble, good reading there too.

Anonymous said...

Westside,

Your blog is a daily check in for me....I want to buy a 'done' house in Sunset Park, as I think discretionary 'fix up' money like HELOCS and Construction loans will be expensive and hard to get for a while.

Wooster, you seem to be looking at the same market....although I sense you are looking at teardowns/lot vlaue/fixer uppers. Not to take anything away from what you are doing, but do you have a sense of the 90405 market and can you comment on that here?

Thanks

Melissa

The Marin Real Estate Report said...

Great information. I have been coming to your blog for sometime now. Your efforts are appreciated and I wish you still had time like you used to, but I will take what I can get.

Anonymous said...

Any info on the monster size home being built on 2010 Hill St in 90405?

It was torn down a few months ago and now there's a 4k sf home finishing framing on the site. Looks like a basic Tuscan, but maybe it's for the owner. I have no idea. It's a definite case of too big for the lot. Previously it was a small, lemon yellow abomination that posted a For Rent sign approximately two weeks before demo (that is hilarious to me)

Anyway, if that thing comes to market anytime soon they are doomed. Too much house for the street. I'm still confused about attempting to rent it a few weeks before demo.

Anonymous said...

my typo above - meant to say spec after Tuscan. Also, forgot to mention it was sold for $998k in 7-08.

Anonymous said...

I love this blog and the stats. Please just keep up with whatever you can.

Needle Brain said...

Thanks!

Anonymous said...

I'm a 2006 vintage bubble blog commenter.

I stop by here a few times a week.

Thanks for all you do and thanks for the heads up on Keith being back in action. Pete Viles too. Pete was the true (and probably the only) MSM bubble blogger.

Anonymous said...

Can you comment on this post from another blog -

basically the person posting says that the last buyer got the property for 18% under market value by buying REO

I keep hearing stories of people getting killer deals in REO - like Laurel in Manhattan Beach which the bank sold for a 59% discount in REO

How do I find out about REOs in 90402 and 90403

if i go to realtor dot com will the REOs clearly say REO?

I want to not waste my time bidding on a property held by an individual - I want to go straight to the REOs and only look at REOs

any help would be appreciated

____

After reading all the issues re recent appraisal problems since the new HVCC law went in effect on May 1, 09....I knew not to get my hopes up even though we are in escrow with a place that we reallllllllly love. So we were told by the bank that everything cleared except the appraisal review. Knowing that we only had 19 day loan/appraisal contingency period....we asked the bank to order the appraisal on Day #1 of the escrow. Field review was done on on Day #5 and we even provided copies of 2 comps (recent sale within the last 90 days) for similar unit in sqft in the same building and next door building to the guy while he was there. He said that based on the 2 comps ...the unit can be appraised at our "offer" price, but he'll have to go back and take at look of all other recent comp within the area.

Well, he did appraise the property at our offer price (thanks to the recent sale in EVO @ $450-$500/sqft.....it balances out all the recent shortsale/REO sale in the area, but we were told that the Bank also needs to perform their own internal review of the appraisal report received. So we waited for almost a week and was told that it's coming in wayyyyyyyyy lower than our "offer price". Apparently, according to the county recorder's record, the Seller had purchased the property (3 months and some days ago) as a REO and she paid all cash for it and the sale price is 18% lower than our "Offer Price" so the bank's internal reviewer thinks the actual value is no where near our offer price. (Don't they have to factor in other recent comps?...it seems like they are basing the value on the last sold price of the said property which was heavily discounted because it was last sold as REO). I can honestly say that the property is worth a lot more than what the Seller had paid months ago...but yes, he/she did received a killer deal.

So we are now in the process of "contesting" the internal review and providing them those 2 comps that we also provided to the field appriser (both properties were sold in the last 45 days) and hoping that they'll come in closer to our offer price. This is indeed very very frustrating....I thought the whole idea of the new HVCC is so lenders will rely on a 3rd party to give them unbiased opinion .......it seems to me that the bank is relying on their own opinion w/o performing their own field review?!?! I don't even know if this "desk reviewer" is located in California or familiar with the area that we are buying.

ughhhhhh we have allllll the ducks lined up perfectly....great credit, clean financials, downpayment, etc.....
and now we have this "internal review" roadblock which is entirely up to the lender's mercy.

our agent is advising us to seek back-up financing options (go with another lender) ....but we really don't want to waste a credit pull if every lender is going to do base the property value with some "desk reviewer".

Happy said...

Great job, Westside!!! Consumers needed to be empowered. You've helped a few people from financial ruin.

Anonymous said...

Yes this is a good point

REO is cheaper than buying from a home owner

Wooster said...

Good luck trying to snatch an REO on the cheap in Santa Monica unless it's junk. I'm aware of all of them in process and have some inside bank contacts, but still don't see a great discount taking place. I think the best you could hope for at this point if to lead the market down with your purchase, but at the same time you'll be sifting through a very limited set of options. You can stick with low offers on for-ale inventory and probably have about the same luck and results. Or you can wait awhile until it heats up more and you get better options. You would have to be extremely fortunate with the planets aligned to get something that you actually want. I made a few offers last week on construction notes for spec homes in the Bay Area. They both have NOD's filed. I'm actually hoping to cure the problems, maybe reduce the principal, and get an above 10% return on my investment from the borrower, then hope the borrower can get out from under it through a sale or mortgage then pay back the principal for some windfall on the back end. If not, then at least I get free legal on the foreclosure thanks to my wife. Big long shot.

speedingpullet said...

Hey Westside Bubble - thanks so much for keeping this blog going for so long! I've had you bookmarked for a good couple of years now, and I'd miss you if you went...

I'd add my voice to other's and suggest you open up the blog to 'guest' bloggers.
Ben Jones over on Housing Bubble Blog has been doing it for a while now, as his business has taken off and he's more busy.
Its actually pretty interesting to read other's opinions and interests, and it would take a load off your shoulders.

Anonymous said...

I agree with the REO/foreclosure comment. There are NO good SFR in REO/Foreclosure in SM!

Anonymous said...

WHY

Why are there no REOs in SM selling at a huge discount

I call your attention to the laurel property in Manhattan beach

Bank sold that for 59% less than the last sale price

why can't we see items like that in sm

Anonymous said...

TAKE MY ADVICE
IF YOU HAVE NO CHILDREN THEN DO NOT BUY IN FRANKLIN

YOU CAN GET A SWEET DISCOUNT ON HOUSES NOW BY BUYING OUTSIDE FRANKLIN

EXAMPLE - NICE THREE BEDROOM NORTH OF MONTANA ONLY 1.5 MILLION (ASKING)

CHECK IT OUT 717 11TH ASKING 1.5 AND WILLING TO SELL FOR LESS

YOU WOULD NEVER GET THAT IN FRANKLIN

Anonymous said...

I am new here. What does the acronym REO stand for?

Westside Bubble said...

Sure, Anon. REO stands for "Real Estate Owned" - by a bank, following foreclosure.

Westside Bubble said...

Thanks, everyone, for the kind words! They're good encouragement to keep going, and reflect the community that has come together here.

Regarding Dr. Housing Bubble, I like him too, he just didn't fit in either my big-national-blog or missed-dormant-blog categories.

Anonymous said...

just wanted to say "THANKS"! when we moved here 2 years ago, we were in shock about how quickly people were still jumping into buying homes, getting nothing down loans..and we got sucked in too. we had our loan, and were in the 2nd or 3rd round with the seller when we really sat down and read this blog and westside bubble. it ultimately persuaded us to wait and holy sh*t are we glad we did! i was laid of last year, my husband was last week, and we wouldn't have had any way to cover our WAY to high payments that the bank told us we could afford! thank you.