Monday, April 28, 2014

Living the alternate realty reality.

Normally you might have gotten cars from the Pacific Coast Dream Machines from this weekend, but I've been sick for a few days and I rented my place already. It took seven days. So, I'm still a slave to that house for a little longer sick or not. We were over working on the sprinkler system this weekend. Yes we are in a drought! Thankfully the new renters husband works for one of the water districts in one of the cities around me.  I wouldn't be surprised if he gets a water discount.

Down the block from my rental, a house is up for sale for 30 grand over what I listed my rental in 2007. Since I had to do a lot of shutting off of the water main in the front - I was able to see the traffic this place was getting because it just hit the market. I was pretty surprised honestly. There were an endless stream of cars. I know exactly when prices took a turn in this neighborhood. In 12 short months the prices have become eye widening. Especially after all the suffering of the previous 5 years.

One of the reasons I got caught so flat footed in the downturn was because what you see on the ground is much different than what you read. On the ground - things look normal and good. Unless you are scouring the data all of the time, you'd think bad times are behind us. Especially when you get headlines saying pending sales were up 3.4% in March. In the West this is still down 11% YOY. Here.

I suspect the slight bump in sales has more to do with the fact that interest rates are at a six month low than any real turn in sentiment. If you have good credit you have a slightly better than 50% chance of getting a rate that is lower than what I refi'd my house at six months ago at. This tells me that prices are really starting to get long in the tooth. It took rates to fall under 4.25 for a couple of weeks to get any signs of life. It isn't that hard to get a mortgage in the 4.15 range today.

My property manager who is also a realtor seems to think that house will get it's asking and more. If it does - I stand a good chance of getting PMI of my rental. The bank is requiring 30% equity since I only refi'd 12 months ago. I think the whole thing is crazy. Everyday you wake up and say to yourself - everyone is still playing along, so I guess I'll keep pretending too.

You don't know what the day will be. You only know that prices are actually rising faster than before the crisis. And it's weird that people don't seem to be bitching all that much about it.

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