Dr. Housing Bubble 09/07/2014
Big money investors pull out of California dramatically: Large purchases from LLCs and LPs for trustee sales are down by over 80 percent from peak reached in 2012.Follow the big money has been an adage on Wall Street for many decades. If that philosophy holds true for real estate as well, big money investors are signaling something regarding California real estate. Big investors have entered the single family housing market in a way that is unparalleled in history. We truly are in uncharted waters here. It is clear that the investors pulled the market up from the graveyard and gave it a substantial boost. It is no surprise then, as investors exit the California housing market that sales have waned and inventory has slowly started to pick up. A good way of seeing big money demand is to look at purchases made under LLCs or LPs since these are your big money Wall Street and hedge fund players. They are interested in deploying large sums of money versus your crap shack aspiring flipper or buyer. What is clear is that large buyers have pulled back in a dramatic fashion.
Big money pulling away from California
Wall Street is obsessed with profitability and examines things like price-to-earnings ratios. For rentals, your earnings come from rents and your price is the market value of a home. Simple enough. The fact that housing values inflated very fast has put the question of valuation to the forefront of these big investors that scour the numbers carefully. The results? Purchases from LLCs and LPs are down by over 80 percent from their peak in 2012.
The drop in big money purchases is rather clear:
http://www.doctorhousingbubble.com/big-investors-california-llc-lps-purchase-volume-cash-sales/
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and happy you found a wonderful home and good neighborhood friend. 
After years of shopping, I had a deal in place but walked away, then watched as the prices rose and rose, I was about to be priced right out of any hope.
I bought at auction, caught a break, tiny place but dreamy and remarkable.
It's rented right now while I prepare to downsize and sell current home, which took a huge hit in value and isn't likely to recover any time soon.
...so the drop in value of the first home is part of the package.
Congrats on owning outright.
The first place I found could have been a cash purchase but was only 360 sf, not even a one bedroom.
The auction place is about 450 sf and has a full ocean view, but no cash purchase.
If I can pay it off in five years, I'll be delighted.
I'll also be close to retirement age.
and settling in soon to your new abode.
We've got an ocean view as well. I set the alarm on my phone to remind me each night of the sunset, and if it looks to be a good one I take my glass of wine to the back yard and toast the evening. I never seem to tire of this ritual!
My place closed and I took possession on Valentine's Day this year.
GF and I slept on an inflatable mattress with windows open and the sound of the surf was amazing.
The sounds, the sights, the view are one part, but I also like the spirit and vibe of the neighborhood.
People pick up trash and dog poop, they say "hi" in a genuine way, and you can start a conversation with folks.
Just nice stuff that makes life worth living.
Between then and roughly May 14, three months, I had to repair and replace and upgrade and furnish.
I also got a permit as a vacation rental, it is income property for now but I can stay there when it's vacant.
It's been fun to be there and it's nice to be able to have it pay for itself while I market my first home and sell my stuff.
Someone is in it now through the end of October, then I get it back and am letting friends use it for a week.
I am still living in home one, but when able to I go over to the ocean.
It has been a pleasure talking with you.
The best to you and yours and perhaps our DU paths will cross again!
