Have you got a postcard or letter lately, from some realtor, telling you they have a buyer for your house?
It’s not a scam – the realtors who have contacted me are people I recognize. They have buyers – three houses within sight of my window have sold within a week of being put on the market.
“Team Cooper” tells me, “I am working with a client who’s ready to buy a home in your area. Your home appears to be just what they are seeking.”
Well, my home is not for sale, it hasn’t been on the market for over 10 years. I guess these gals could just be trolling for customers, but this isn’t usually how they go about it. They usually send simple postcards with their name, etc, just general advertising toward either sellers or buyers who might be looking for an agent. The letters I’m getting now seem more desperate.
“…we’ve been looking for a while…”
A week later we got a slick greeting card from a Jeffries Lydon agent, declaring in big red letters, “It’s A Sellers Market”.
I’ve seen letters like this before. Back in the late 90’s, and again in the early 2000’s, the market just went wild. During the late 90’s, a friend of ours was actually out-bid on a house over on South Broadway. She had put in an offer within a couple thousand of the asking price, with some provisions, and some young couple from the Bay Area came in offering more than asking price. My husband and I had bought and sold houses – paying way too much back in ’89, during another BOOM. But we’d never heard of anybody in Chico offering over asking price.
That boom was followed by a short bust, as I recall, and then in the early 2000’s the prices started to go through the roof. About 2003 my family noticed a house a few doors down from Chico library asking $303,000, and we laughed out loud. It was sold for asking price within a week.
That spike in housing prices precipitated a building boom that has had long reaching consequences for Chico. Then city manager Tom Lando led the city on a permits binge to raise revenues. Then he floated a Memo of Understanding by council that attached “city salaries to revenue increases but not decreases…” Lando’s own salary went from about $65,000 to over $130,000 over the next few years, along with all the salaries Downtown.
And then town went BUST in a big way – another thing I’d never seen in my life – houses in foreclosure, not only in my neighborhood, but in surrounding towns. Driving through Red Bluff one morning on the way to a hockey tournament we drove through a neighborhood where almost every house had a foreclosure sign in it.
Last year my family started recognizing the signs of a BOOM again, prices going up-up-up. We decided it was time to get rid of a big old rental we had that was starting to need all kinds of maintenance – for one thing, the roof we’d put on it when we bought it was approaching 20 years old. Utility prices have gotten outrageous, and it was hard to find a group of tenants that could afford to live in it anymore.
The agents we approached were practically snapping at air. The first woman spoke openly about the BOOM going on, opining it wouldn’t last through the Winter, before we had another BUST. But she was not very optimistic about our house – she was really disappointed when she found out it had been a rental, as if renters are pigs. We didn’t call her back.
The second woman wanted to ask way too much, she wanted staging, she wanted a laundry list of superficial improvements – for example, new knobs on every cabinet in the kitchen. We didn’t call her back.
We chose a guy who had sold a house near our own home in less than a week. He wanted to ask more than we had through prudent, but we went with him. It essentially sold at Open House, the buyers offering us full price and asking nothing in return.
That’s BOOM behavior.
So I was surprised when houses started to go for even more, but I didn’t regret selling when we did for what we did. I’ve learned to trust my gut, and my gut was telling me there was a BUST coming.
So now we start getting the letters. Back in the early 2000’s, we got the same letters regarding an old house we owned over on South Broadway. We started getting more than a letter a week, from realtors as far away as Los Angeles, telling us they had investors who had money to buy multiple homes in Chico, and they were wondering if we were willing to sell. It was a good rental at that time, we had good tenants, so we just ignored the letters.
By 2006 the market was running away. The house had become a liability – we weren’t getting good tenants anymore, we were getting 20-somethings who came right out and told us they wanted a “party house.” The neighborhood was going that way, so we decided to put it on the market.
We found it had turned into an investors market – that’s a real feeding frenzy. Buyers were looking for a rental neighborhood, and they didn’t seem to care what kind of tenants they would get. The first buyers we got were doctors who had an investment group. That fell through – they didn’t like the proximity to the neighbor’s house. But, within a few days we had investors from Oregon. They offered us full asking price and the deal was done.
And then came the BUST. Three of my neighbors were foreclosed over a few months, including the house on which the assessor had based the new valuation for our house. So, we still carry an inflated valuation, because the assessor used the new subdivision that was shoved into our street for a comp for our 70 year old crapper. Those houses had started at $600,000 plus, the front house selling for about $650,000. One after another person foreclosed out of that house – it’s most recently sold for about $400,000.
That’s why they call it a BUST.
So, sorry to ramble, but I’m telling you – there’s a BUST coming, and it’s going to be a BIG BUST.
Chico Taxpayers Association 