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Just a quick Rant...

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pro fi

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So, I am a FTHB. Believe it or not, I am a professor within the CSU system and low income person (now with the furloughs) who has saved enough for a down payment on an FHA loan. I have an agent who is an honest guy and is doing business in an ethical way, as per the REALTOR code of ethics.
I have a real problem with INVESTORS and REAL ESTATE "professionals" and the quantaties of properties they are prmitted to purchase in low to moderate income areas. They buy the properties, put a few bucks into them and then rent them out driving up the cost of affordable housing for working class families. These are the same type of  investors who, after making some very poor decisions based in greed, have had similiar properties foreclosed on and forcing out innocent renters. These renters are the same people who BAILED OUT THE BANKS!!! Some unscrupulous folks are scamming the desperate FTHB into lease to own programs that line their pockets with very little chance of individuals ever being able to qualify for the "future" value of the purchase option price.
We are headed for another meltdown, lenders will refuse to qualify anyone who doesn't make at least 120% over the median income. And what is "First" about being able to qualify for special FTHB programs when you could have own a home previously, if it was more than 3 years ago.
This situation and the lack of ethical behavior is EXACTLY why our country is on the brink of ruin. For those of you who are making money of the backs of the working poor... shame on you!!! You are what is wrong with this country.
I may rent for a lifetime, but I will always be a fiscally and socially responsible member of my community.
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November 06 - Bay Point
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sunnyview

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I definitely understand your need to rant. I am sorry that more is not being done to prevent fraud and profiteering too. Being responsible has been a bit hard to take in this market when all of the less responsible folks have received all the benefits. DOn't worry though, you will not rent for a lifetime if you are responsible and want to buy. These people who a flipping, claiming the buyers credit wrongly or are still doing the investment property stacking will topple again. i believe that responsibility has long term benefits even if it has fallen out of favor in the current lending/economic environment.
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November 07
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pro fi

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Thanks for understanding and the words of encouragement.
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November 07
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Bob Georgiou, "Bob2Sell"

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I feel the same way.  To be honest with you there needs to be a law that states that in high dollar areas where home affordability is low that in these multiple offer situations either 1) Investors get charged sales tax and/or 2) owner occupied buyers get moved to the front of the line.

It makes no sense at all in areas where development is challenging land is expensive, and wealthy investors get put in front of hard working people for available homes.

Where are the polticians who are looking out for the little guy?

I urge you to write the govenor. I did! (not joking)
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November 11
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agentblu15

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Bob--
It makes no sense at all in areas where development is challenging land is expensive, and wealthy investors get put in front of hard working people for available homes.

Where are the polticians who are looking out for the little guy?

It makes perfect sense why wealthy investors are put ahead of hard-working people fr available homes-- it's all about assessment of risk for the lenders.  A wealthy investor with far more assets in the bank and a rental-income plan in place is going to be seen as a much safer risk, lending-wise, than a hard-working person who is earning and saving just enough to afford the mortgage payment.  I'm not saying this is RIGHT that the banks make decisions this way, but the logic makes sense, from a lending point of view.
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November 11
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Bob Georgiou, "Bob2Sell"

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That is ONE perspective and a very narrow one at that. From a real estate perspective I'm 100% and will do that every time as well.

This though is government policy and what is good for our communities. I liken it to "It's a Wonderful Life" where Potter was getting rich renting to the working people in his tenaments and The Bailey's were making far less money getting people into homes. Overly simplistic but makes the point.

Due to the all the factors I discussed and you recopied, if you want the weath of this nation to be placed in the hands of instituitons and the wealthy we are going to end up in a two tiered society, the owners and the workers and there will be no middle class.

I am as capitalist as the next but I understand the forces in play here. Middle classes dont exist in a capitalist nor communist economic systems. They are built through policy too much socialism and jobs suffer (look what is going on right now) too much capitalism and the middle class starts to erode (look at middle class erosion since 1980).

There is a balance and this is an opporunity to set it at the right place.
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November 11
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pro fi

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Bob, as a Sociologist, I appreciate and agree completely with you. Thanks for stating my argument so eloquently.

I have written a letter and plan to send it off to the powers that be. Something must be done about this.

"It makes perfect sense why wealthy investors are put ahead of hard-working people fr available homes-- it's all about assessment of risk for the lenders.  A wealthy investor with far more assets in the bank and a rental-income plan in place is going to be seen as a much safer risk, lending-wise, than a hard-working person who is earning and saving just enough to afford the mortgage payment.  I'm not saying this is RIGHT that the banks make decisions this way, but the logic makes sense, from a lending point of view. "

Agentblu - the fundamental problem with this logic is that here in the SF Bay Area rents are often as high or higher than mortgage payments. For a 3/1 home in Pittsburg (a moderate income area) the rent will run anywhere between $1300-2200 a month. A mortgage in a working class neighborhood would be less than $1000. The problem is Cash buyers coming in to the market and offering below list price on homes in the 45K-120K range. As Bob suggested, there should be some sort of mechanism in place to equalize the process.

Thanks to all who responded, it is much appreciated!
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November 20
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Maybe the sellers ask to themselves "where are my cash buyers?"
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November 20
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pro fi

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Not sure I understand WP... there are many RE groups out there pooling assests to purchase these types of homes in the areas I mentioned. These are homes that are listed well below the median. If banks were to lend at market value instead of making low ball cash deals, wouldn't that help to
a)Increase owner occupied properties
b)Stabilize housing costs in these neighborhoods?

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November 20
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Tiffany Bond, "TiffanyBond"

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The only difference between a pirate and a profiteer is which side the law is on.

That being said, cash is king. So many loans fall through these days that as a seller - you pick the cash offer with no contingencies unless it is significantly lower. There is more melt down to come in my humble opinon, and when more chit hits the fan there should be enough of these properties available that you should have an easier time finding a house. Unemployment is still rising - so no matter how great other "indicators" are, there is probably going to be rising amounts of foreclosures/short sales. Also, some of the best deals I have seen are when an "investor" drops the ball and over-extends.
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November 21
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Bob Georgiou, "Bob2Sell"

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Ms Bond is an agent in Philadelphia who has no knowledge of the San Francisco Bay area market. For those reading this post we have the good fortune of being on some of the highest priced real estate in the country.

During boom times there were numerous attempts to assist lower income families to buy homes in this area. Due to cost the government programs helped a small fraction of those who desired ownership. Over the years country governments organized and put in place a series of laws designed to help who they could. To this day every developer has to create a plan for low income families. These include set asides or homes priced lower that market value for the fortunate few that qualify, city and state loan programs and shared appreciation loans, and development standards that have high density elements included.  The Community Access Lending Standard that GOP partisans point to as an element of the housing bubble did in fact help the poor get into homes, regardless of how you feel about the consequences.

The bay area has a housing shortage. You all can get google ABAG reports that state the number was as high as 300k units at the peak of the market. This collapse will not generate those numbers and developers are not going to build those numbers.  This "correction" in our area has simply eliminated the excess "fat" off price making our market leaner and put prices in line with incomes.  There is no job problem here and all other things being equal there wont be. (The 12% unemployement number in California is mostly in Los Angeles, Sacramento and San Diego. The bay area is still at 8 or 9%)

It is also a fact that the average person in San Francisco and Marin counties has substantial cash reserves in the bank. Enough so that for every high dolar earner out there they can buy two or three investment homes. The amount of money in this area is rediculous.

This phenomoneon really only applies to about 5 counties here and a few down in Southern California. San Francisco, Marin, Contra Costa, Santa Clara and San Mateo.

Here we are years later where there is a huge opportunity to help working class families (incomes of 50-90k) own homes. What is happening? Potential owners are getting pushed aside for cash buyers who are 1) turning them into rentals and 2) flipping them in 120 days for cash to owner occupiers who now are further indebted to the banks, the governments and have to work that much harder to improve their lives. This is wrong!

Right now there are multiple offers on every priece of real estate priced below 300k. I mean like a dozen offers per home. There is stability at the bottom of my real estate market.

There are simple solutions. In areas that have affordability problems like the 5 counties mentioned. These are two easy solutions. 1) Tax the pruchase of investment real estate in these counties. 2) Place owners before investors in multiple offer situations.

No one says that investors can't puchase property but what is going on right now is predatory behavior from the upper class on the middle class.
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November 21
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Well put Bob, yet again. It feels as though we are headed for another bust in the future. I just made an offer on a Freddie Mac home that was 6,000 over asking, stretching my mortgage payment amount to the hilt. This is a cheap home in the Pittsburg area... probably won't even be accepted.

It is my understanding that the first foreclosures were primarily investors who over extended. We haven't even mentioned the impact that has had on low to moderate income renters.

Thanks for taking this on! You are definitely one of the good guys!
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November 21
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It is not ALL bad when the bank sells the house to the cash buyer at lower price, which drags down the home prices in your neighborhood, which may turn out to be good for you.
To Bob Georgiou,
"These are two easy solutions. 1) Tax the purchase of investment real estate in these counties. 2) Place owners before investors in multiple offer situations."
Are CA business hadn't paid enough tax already? Beside of the investors put the money into the economy at the time it most needed, the investors help to bring down the rental prices and it is good for the working class.
There is not need to worry about "no home to buy", at the certain time, the new listings will go to the market at the market price, and the amount of homes on the market and employment will balance the home prices to the affordable level for majority of American (working class).
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November 21
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Tiffany Bond, "TiffanyBond"

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Oh Bob. I am in Philadelphia for grad school (JD/MBA)...where I moved because it is ridiculously cheap compared to the west coast - but that is geography and has little to do with what real estate markets I follow. As it turns out I am interested in, and follow, several markets. What makes you think I have no knowledge of the CA markets? I'm from the west coast and have many good friends in the area.

Just because someone has enough cash to purchase a few homes - it does not mean they will choose real estate as their investment vehicle. I also think that what the market looks like now will differ from after the new year. My guess? Christmas receipts are not going to be so in the black this year and the ripple effect may throw us to a second downturn. If this happens vulnerable industries will take a hard beating. The SF market has a number of vulnerable industries: tourism, financial services and approx 85% small businesses (link). Let's talk in a year and see where unemployment is, ok?
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November 21
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You should not to hurry to buy the house, in Southern CA, the foreclosures are start to rise and more home for sales on the market because of slower season, by the way there is the house for everyone, who has the willing to be the homeownership.
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November 21
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Mjor investors in this area (Pittsburg) are either flipping or doing rent to own deals that are increasing the rental prices in this market, specifically Bay Point and West Pittsburg. I am in a hurry to purchase because with the CSU furloughs, my income has decreased 10% with another decrease possible within the next 6 months. My rent is now more than I make and eating into my reserves. Why spend the $$ on rental deposit when I could purchase a home?

Not only that, but I have wanted to purchase a home in this area for years and I am worried that this window will close again before I am able to do so,
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November 21
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Tiffany Bond, "TiffanyBond"

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Pro: you don't have an email up, but if you drop me a line I'll give you a few places to start that aren't totally appropriate to post on here. They won't benefit me at all, but they are a little unconventional.
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November 21
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WP wrote -
Beside of the investors put the money into the economy at the time it most needed, the investors help to bring down the rental prices and it is good for the working class.

The investors are the only ones being PERMITTED to put money into the economy with this situation. Neighborhood stability will decrease crime, improve property values and thus bring local money back into local neighborhoods. Low rent isn't good for low/moderate income people, at any time their lives can be disrupted by an owner/investor not paying their mortgage. They is also no rent control in these areas, making the situation even worse.

There is not need to worry about "no home to buy", at the certain time, the new listings will go to the market at the market price, and the amount of homes on the market and employment will balance the home prices to the affordable level for majority of American (working class).

The home I just made an offer on was listed for $73K 6 months ago. Now, it is at $105K, this is the pattern in Contra Costa's working class communities now. One more adjustment up, and these homes will not be affordable for many of the people who we are talking about.
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November 21
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When I am came to US, My thinking was same as your, "How can I buy the home with $5.25 per hour wage?", It turn out there is opportunity for everyone and never too late to buy the home, In Los Angeles, the home prices are lie on the inflation line right now (your area may do as same), there are not guarantee the home prices going up or down in the future, but again the foreclosures are start to rise (end of CA 3 months moratorium) and more home for sales on the market because of slower season and the employment picture is not too shine for the time being. It is good to start to look for the home, however it is not necessary to buy right now, only buy when you see it as the good deal or affordable for your income, the otherwise "DON'T".
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November 21
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Bob Georgiou, "Bob2Sell"

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For the recordf I am opposed to taxes here in California and they are very high but I am not completely ignorant of the fact how tax policy influences behavior.

Look at the $8000 tax credit. People are beating themselves over the head to get that money. Cash for clunkers spurred auto sales. People make tax avoidance decisions all the time. Home ownership in the SF bay area must be the priority due to the lack of available housing. I do support efforts to put owners before investors.
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November 23
 

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