Caleb Yamanaka's Q&A

Given that the previous prices were sustained by massive amounts of cheap easy credit and low to non-existent lending standards combined with what has to be the worst example of herd investing in the history of the world, why on earth should anyone believe real estate is going to do anything other than stagnate as an asset class?HERD INVESTING!  I love that term.  The above is the hammer hitting the nail on the head.  There is a thread about "best place to invest" and for some reason everywhere is the best place to invest.  The problem is not that REA's believe that (which they truly do), the General Public wants to believe that also.  Its like getting into "any" tech stock after the bubble pop and expecting it to jump right back up.  That is what is happening now .  I don' t believe Splengs dire forecast, because at certain price points (including vacancy factors) property will cash flow and people will be able to hold on, but a sharp rise in RE pricing?  Not with tighter lending standards and so much HERD money waiting to get in the game.  The fact that there is so mu

As a Broker I do not have any feeling either way about HVCC.  It is adding another cog through the process  by introducing an AMC (third party) to liason between Appraisers and Lender's.  If anybody should take issue with this it should be the Appraiser as it mandates a 3rd party who basically are cutting Appraiser fees (which in the scope of most transactions are pretty reasonable).

Bob,I am going to answer each response individually although as a whole they could possibly be addressed.1) Do you consider a market in which multiple bids are the norm, a Buyer's market?In the under $450k price range, in South Orange County, CA, it is presently a multiple offer extreme seller's market.   Fair enough.  I do not know why, with everything else that is going on in the marketplace why one should be encouraged to bid into an "extreme seller's market".  I do not follow the logic.  Let's say you are right and the $450K and under market is now a Seller's market your telling people to buy over the last 6 months would have been spot on, but shouldn't you be telling Buyer's to stay out of the feeding frenzy?2) Have median prices, on SFR, in your area (including REO and short sales) decreased over the past 6 months?No they haven't - the median dipped a little in Dec/Jan, but has now rebounded to Oct/Nov 08 levels. While I realize that Zillow's data may be flawed, it is a good indicator of direction (IMO).  YOY I do not see any such dip and rise in the Rancho Santa Margarita chart.  Are you talking very specifically about a certain type of product or SFR as a whole in the Rancho Santa Margarita area?3.)  If median prices are decreasing it is still flawed to suggest getting into a multiple bid situation (even though you are still bidding under current comps).They haven't, and thus, it isn't - flawed thinking. As stated above.  You are seeing in the under $450K range that it is an "extreme Seller's Market".  Since you were saying that this is a buy area for the product as far back as 6 or more months ago.  Now that the market has changed from Buyer's to Seller's wouldn't the right consultation be to hold off on buying?

I'm curious, Titan.  You are located WHERE?  Perhaps you should stick to your own area when insulting people. Bob,You were telling NewBuyerdillema what is happening in your market now.  There are multiple bid situations for current REO's and you should bid above asking to secure an accepted offer.  Fair enough.Question?1) Do you consider a market in which multiple bids are the norm, a Buyer's market?2) Have median prices, on SFR, in your area (including REO and short sales) decreased over the past 6 months?Obviously we know what the zestimate says about median pricing in your area, but obviously its flawed, so what do you say?If median prices are decreasing it is still flawed to suggest getting into a multiple bid situation (even though you are still bidding under current comps).

Positive has nothing to do with finding an Agent.  Question do you pick Linda "pick me pick me" (sounds cheery, happy... positive, full of knowledge?) or choice number 2 - Azrob?... (very blunt, extremely educated on market economics and will give you the pros and cons to both the buying and selling within the market to the detriment of a potential sale)... hmmm.As an Agent that is looking for RE product throughout the West Coast, the first person I emailed when I knew I had clients looking in Tacoma/Phoenix.... Azrob.Point to the story.  Agents attitude should have nothing to do with having someone who will watch out for you.  It might make your buying experience pleasant to have a "cheery" Agent, but just because the Agent has a smile on her face doesn't mean she's not screwing you in the end.

Investment groups far and wide are forming "opportunity" funds with the same goal: Snap up real estate at the bottom of the market and sell, hopefully, at the top.No doubt that these syndicates are the ones who are profiting in this market.  It isn't a close your eyes and hope it works investment.  These people know what they are doing.Like I said in previous thread, there are opportunities in various areas, but individual SFR purchases are the least likely to yield the best opportunity.  From what I've seen, most of these "synidcates" are buying pre-REO offering and buying multiple properties at a time.  The spread on the flips is the ability to get an off-market purchase and turning the properties at below what market is allowing for "right now".For example I'm helping consult on condo complex that Financier has ability to purchase at $5M and has a potential Buyer at $6M.  Per unit the resale price of $6M is roughly $35K a unit.  Currently the other units in complex are selling at $65K.Financier has never seen property.  Its not on the market, but he brings all cash to the table and Title holder (Lender) is only talking to him.

this is a simple and straightforward question.  if you choose to add to the question then I'm sure there can be justification for Buyer B, but based on the information given its pretty easy.  Buyer A paid a lot less for the exact same property.  With everything being the same (i.e. care for home, taxes, market, etc) Buyer A carries far less risk then Buyer B by paying less for the home.

You're right...I justified buying at the same time, and the answer I provided based on that assumption is correct, but the question did not include at which time, and that my friend is the answer!Lisa,I would argue that the situation posed by the OP suggests that both properties were purchased at the same time.Either way when the person buys is not relevent.Your justification for purchasing a property at $350,000+ over the other (exactly the same property) is never a good argument.  Even by your own admission even in the worst of the worst case scenarios Buyer A and Buyer B will pay the same exact amount over the life of the loan (not including property tax and insurance for higher priced property).  By paying over $350,000+ for the same property savvy Buyer B has just opened himself up to that much more risk should the market go anywhere but up.Because these properties are like for like duplicates in same neighborhood, next to each other, in essence the same home.  The only correct answer is Buyer A.  I guess its good that other REA will push Buyer B as the right purchase, that way it can insure Buyer's who make the right decision (buying low) will always have someone to buy at the outrageous price when interest rates drop.

However, i know there are 3 houses in Hilo, hawai you should not buy. Hoang,Buying in Hilo right now will probably do you a lot better then buying in your ever falling market.So how much has your new purchase dropped since it was time to buy?

Lisa,Your logic is just wrong.  You basically justified buying the same exact home at the same exact time for $358,582.83 more then if you took the loan with the higher interest rate.