The Repetition Of Past Behaviour
Readers suggested a topic on the current markets. “How will the (already started) decline play out this time? Jingle believes in some ungraphable pattern like a parabolic plateau, but things aren’t quite the same as last time. This crash seems more like squeezing out the investors and flippers and starting back with the decline on the regular owners that should have proceeded further 2 yrs ago. Not as many foreclosures, not the increasing unemployment?”
“I’d be happy to see 2011 prices in my area again, but this time with houses you could actually buy rather than ones being held in reserve for some real estate investor group. Oxide thinks if this happens then the investors will come back.”
One said, “More interest rate cuts ? Oh wait they can’t go any lower..”
A reply, “Have you ever tried to suspend any one or more of the Thermodynamic Laws? It can be done but the energy required to do so cannot be sustained indefinitely.”
To which was said, “Actually no you’re never suspending the laws of thermodynamics. The law says you need extra energy, you put in the energy, law is followed. Now, if you are equating ‘energy’ with ‘Yellenbux,’ yeah, I agree. It can’t be sustained indefinitely. But for me it doesn’t have to be sustained indefinitely. It only has to be sustained long enough where buying beats renting for the same duration.”
The Dallas Morning News in Texas. “More than one in 10 houses that are put on the market in the Dallas area have a buyer within three days of the sign going up, according to Redfin. And almost 40 percent of Dallas-area houses sell within two weeks, the Internet real estate marketing company reports. In Austin, more than 20 percent of houses are under contract to sell within the first three days of listing. The fastest selling market is Denver, where more than 27 percent of houses sell with 72 hours of hitting the market.”
“This spring’s Dallas home market is even more frantic that last year, agents say. ‘It’s insane,’ said Scott Schueler with Keller Williams Realty. ‘Sellers price it at the top end of the comparable sales and still get multiple offers, beyond anyone’s expectations.’”
KTAR in Arizona. “A real estate expert says it’s costing less to buy a home here. ‘The median single family sales price is $195,000. This is the lowest since August of last year,’ said Dean Wegner. ‘In fact, home prices have slowly been going down every month this year.’ But that’s not a bad thing. ‘Last year we saw double digit appreciation, and that’s unsustainable,’ Wegner said.”
“Wegner says if the real estate market stays where it is now for the next two to seven years, everyone would be quite happy with the real estate market in Phoenix. Wegner said he believes that if prices are ‘anything more than this, you’re going to see appreciation. Anything going further down from here, you’re going to see upside down, you’re going to see short sales again, and you’re going to see foreclosures.’”
The Register Guard in Oregon. “Foreclosure filings climbed 78 percent, to 139, in Lane County in the first quarter of this year compared to the same time in 2013, according to RealtyTrac. John Helmick, CEO of Eugene-based Gorilla Capital, is not surprised by the jump. He predicted in January that Oregon would be one of the few states with more foreclosure starts in 2014 than in 2013. The reason: A change in state law that went into effect last summer requires lenders and homeowners to go through mediation before a home can be foreclosed on.’
“That change didn’t avoid foreclosure for many distressed homeowners, Helmick said. Those people were so far behind on payments, on houses worth less than they paid, that foreclosure was inevitable, he said. What it did was create a backlog of homes inevitably headed for foreclosure, he said, many of them ‘zombie’ homes that were in bad shape, abandoned and left to deteriorate further. A few years ago, about half of the houses his company bought were abandoned, vacant homes, he said; today, about 82 percent are.”
“These houses can compete for buyers, he said, but he doesn’t think the number of homes his company will put up for sale at any one time will have a major effect on the market. Home sales are affected by a number of factors — ‘how well the economy is doing, employment, mortgage rates,’ he said. Gorilla’s homes may have a small effect on the market, Helmick said, ‘but a change in interest rates would have more.’”
The Irish Times. “A couple of weeks ago, I wrote a column about the fact that nothing has changed in Ireland politically. Because I’ve been thinking about where we’re at, right now, 2014, more and more. The issue now is not only the opportunity to change things for the better actually gone, but that the government is relentless in erasing the past, walking around like the lads from Men In Black waving their memory wand neuralyzers in our faces.”
“I occasionally throw an eye on what houses are going for in Dublin. One interesting property struck me the other day, which could act as a parable for the property market right now in the capital. A two-bedroom cottage in Stoneybatter that sold for just under €110k last summer went sale agreed after the asking price was set at €250k recently. There you have it folks, it’s those memory wands again.”
“Now it’s not like our property bubble burst generations ago, thus excusing the repetition of past behaviour. In terms of the wider context of history, our monumental property screw ups didn’t happen ‘just yesterday,’ they happened five minutes ago. Of course there is a supply problem in Dublin. But one of the reasons for that issue of supply is the countless people who are in negative equity. There’s little movement in the market because people are stuck. Stuck in places they don’t want to live in. Stuck with houses and apartments they don’t want.”
“A property bubble is not just being created, it’s already there. And now people want to buy again. Despite the property mistakes made five minutes ago, those who kept their heads down and didn’t fork over money during the first property boom are out looking for properties, and day in day out, the asking prices are creeping up, ten, twenty, thirty, forty, fifty, sixty grand. I’d say estate agents are in a tizzy. They probably don’t even know what to price most properties at in the city. Can we not see that this is THE EXACT SAME THING that happened previously? It’s a micro version of it, but it’s the exact same.”
