August 16, 2006

‘A Rude Awakening’ In California

Dataquick has some numbers out today in California. “Home sales in the Bay Area slowed to their lowest level in ten years as prices increased at their slowest pace since spring 2003. A total of 7,941 new and resale houses and condos were sold in the nine-county region last month. That was down 19.1 percent from 9,892 for June, and down 30.8 percent from 11,470 for July last year, according to DataQuick.”

“Last month was the slowest July since 1996 when 7,682 homes were sold. The average July sales count since 1988 is 9,158.”

“‘One of the questions being asked is how much future activity was drawn into the present in 2004 and 2005 when interest rates were at their lowest levels in decades. How much of today’s demand has already been met?’ said Marshall Prentice, DataQuick president.”

“The median price paid for a Bay Area home was $627,000 last month. That was down 2.6 percent from June’s record $644,000, and up 3.5 percent from $606,000 for July a year ago. The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $3,106 in July. That was down from $3,183 in June, and up from $2,653 for July a year ago.”

“Adjusted for inflation, mortgage payments are 22 percent higher than they were at the peak of the prior cycle sixteen years ago.”

“Sales fell 41.2 percent in Solano County, 40.1 percent in Sonoma County, 34.6 percent in Alameda County, 29.9 percent in Marin County, 29.7 percent in Santa Clara County, 28.8 percent in Napa County, 26.9 percent in Contra Costa County, 23.9 percent in San Francisco and 16.6 percent in San Mateo County from July 2005 to July 2006.”

The LA Times. “Southern California home sales fell to their lowest level in nine years last month as price appreciation continued to decelerate, data showed. Forecasting the extent of a decline is vexing to even the most veteran of housing stalwarts.”

“‘I don’t know how soft the landing’s going to be,’ Eli Broad, Los Angeles philanthropist and founder of giant builder KB Home, told Bloomberg. ‘I think we’re in for a period of a year or two years where housing prices are going to go down or stay stable, but certainly not go up.’”

“By some measures, the inventory of resale homes and condos in Los Angeles and Orange counties doubled in the last year to 39,000. Meanwhile, homes are taking longer to sell. Those factors are starting to weigh on prices.”

“In Rancho Cucamonga, most of Brock Hubry’s prospective buyers are well aware that appreciation is slowing. Yet the real estate agent makes sure they know just the same. ‘When I’m talking to them, I tell them if they’re planning to sell in the next two years that they may not make a profit,’ Hubry said.”

“Jennie and David Garcia are testing the housing market again. This time the Yucaipa couple are asking significantly less for their five-bedroom Yucaipa home. Their house didn’t sell after a four-month effort ending in July. The Garcias don’t want to lock in some of that appreciation on their Yucaipa house in the past two years. ‘We are afraid the market is going to go lower,’ Jennie Garcia said.”

“In March, they listed their home with a real-estate agent for $509,000. ‘The first week we had four or five lookers. After that there was nothing. It was pretty bad,’ she said.”

“Last week they decided to make another stab at trying to sell the house, this time on their own. The asking price is now $468,000. Two people showed up at an open house over the weekend. ‘Better than nothing,’ she said.”

“‘We are not near the bottom,’ said economist Christopher Thornberg, a senior economist at UCLA. ‘Anybody who bought a home in the last year and was hoping for appreciation to bail them out is in for a rude awakening,’ he said.”

“Orange County’s home price juggernaut slowed last month, with Southern California’s second-biggest sales declines and the region’s second-smallest price gains. July’s median home price slipped $7,000 from June’s, receding to $639,000, according to market tracker DataQuick.”

“Real estate professionals say prices finally are succumbing to reduced demand partly because of higher mortgage rates, fewer can afford a home and those who could afford one have already bought.”

“Dean Zibas, owner of a San Clemente appraisal service, said he’s seeing more homes sold after making price reductions and more homes selling for less than the recent sales of comparable properties. Mac Mackenzie, the top-producing Coldwell BankerRealtor, said he’s starting to see homes that sold for $650,000 last summer now going for around $590,000.”

“‘We’re seeing pretty substantial price reductions,’ the Irvine agent said. His advice to homeowners: sell now or ride it out for four or five years. ‘It’s not a seller’s market anymore,’ he said.”

“Bob Chapman, past president of the Newport Beach Association of Realtors, said buyers and sellers appear to be adjusting to the new realities. ‘The market is finding itself,’ he said. ‘It’s not the Disneyland-high price it was before, but it is fair-market value.’”

“With the number of homes offered for sale bumping up to 16,004 , some buyers and sellers are still at loggerheads. Two homesellers asserted that they’re not moving until someone pays their rock-bottom asking prices. ‘It’s probably not a good time to put it on the market,’ Beverly Huffman said of her San Juan Capistrano home, now listed at $729,000. But, she added, ‘I’ve got time, so it doesn’t matter. I could stay here the rest of my natural life.’”

“Bob Lang, a longtime real estate broker, i’s waiting out the market. ‘It’s going to take a while, but I think prices are going to come down,’ said Lang, renting an Irvine apartment since selling his condo in September. ‘I’m definitely looking for THE deal.’”




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181 Comments »

Comment by Pazuzu
2006-08-16 11:34:43

Who is this new arse the NAR has trotted out, was LAY not skilled skilled enough at spewing lies?

From SF paper today:

Vince Malta, president of the California Association of Realtors,…

Malta said he thinks prices will flatten, perhaps even fall, in the near term. “But don’t look for any big declines in the foreseeable future, because the underlying situation is still strong,” he said.

Aieeee… please elaborate on what the underlying strengths are you weasel.

Comment by freeloading roommate
2006-08-16 11:37:31

Ironically, SF just joined the YoY negative club.

Comment by Ben Jones
2006-08-16 11:51:26

Right, there is a table at the bottom of the Dataquick link. Marin, too.

Comment by feepness
2006-08-16 12:10:10

Oh… YES.

I just got this SF Chronicle article from my Mom-in-law, trumpeting the 3.5% BA increase.

How nice it is to be able to response with the actual numbers since they own homes in both SF and Marin! All my in-laws can say is how SF is only 49 sq miles and Marin is too crowded, etc etc etc etc. The homes are paid for so it isn’t a big deal, but the cap rate on the SF house which they rent is 3%!

Nice people but completely deluded. They are Bay Aryans and think SF is God’s gift to the planet so they would never sell there.

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Comment by sf jack
2006-08-16 13:37:10

“Nice people but completely deluded.”

There are a lot of people like that around here.

 
Comment by sf jack
2006-08-16 14:33:08

And surprisingly, only 15% are still deluded, as of now.

I just clicked back to that Lamest Paper in America (SF Chronicle) article and a poll there asks:

“Do you expect to buy a home in the near future?”

15% say “Yes, the softer market would force sellers to reduce prices”

85% say “No, the prices would still be too high”

 
Comment by east beach
2006-08-16 22:48:22

“Bay Aryans”

That is freaking hilarious :-D

 
 
Comment by sf jack
2006-08-16 13:45:10

And this makes it two months in a row that Marin is down y/y.

If I recall, June 2006 was -2.9% from June 2005.

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Comment by sf jack
2006-08-16 14:06:33

Correction.

I just saw where May was down in Marin y/y. June was up slightly.

So two of three months isn’t bad!

I think I could live with that for a while.

 
Comment by Inspired
2006-08-16 15:39:28

Yesterday someone posted a link to
http://www.ocfliptrack.blogspot.com
The information on this site is truly enlightening about the state of So. Cal’s. real estate market.
There homes listed last purchased in 2004 that can’t make the closing costs and come out whole if they sell the place at list!

 
 
 
Comment by lalaland
2006-08-16 12:08:26

Hm, I wonder how the SF Chronicle RE section will spin the y-o-y price drop — in San Francisco, no less. My guess: No mention of it whatsoever.

Comment by feepness
2006-08-16 12:11:23

There you go… click on the link I just posted above. 3.5% overall BA increase is the only thing mentioned.

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Comment by sf jack
2006-08-16 13:41:58

I’ve said it before and I’ll say it again.

The San Francisco Chronicle is the lamest major city daily newspaper in all of America.

It’s embarrassing.

 
Comment by chris 415
2006-08-16 13:58:13

The Chronicle is awful - you get more objective reporting in Mother Jones magazine.

 
Comment by Ozarkian from Saratoga CA
2006-08-16 16:42:42

I LOVE the SF Chron. Not the business or news section, but the Home and Garden is really about the best there is anywhere in the country. Many kudos to Lynnette Evans, the H&G editor. I still read H&G in the SF Chron even though I now live in flyover country.

 
Comment by Spykeeboi
2006-08-16 22:12:12

Okay. I’ve always thought the Chronicle was put together in someone’s basement… while they were stoned. The San Jose Mercury News, if I’m not mistaken, has significantly higher circulation–and much better writing.

 
 
Comment by Larry
2006-08-16 12:20:41

Actually new construction is up yoy… if you do drive to the city you may see new sky scrappers of consdos near the ball park… there is plenty more new homes in other parts of the city. Anyone tells you there is no more land inSF needs a good smack down!

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Comment by Josh
2006-08-16 17:51:28

I work right across from the ball park and I can tell you those condos are not selling. The condo building next to my office has about 10 condos and has not sold them all yet. It’s been finished for at least 4 months already.

I talked to one RE agent and they told me that about 1500 condos are going to be available in that area over the next year. The price wars will be starting soon!

 
 
 
Comment by chris 415
2006-08-16 12:12:00

Wow, the San Francisco median went down y-o-y! So, now you can pick up an ‘average’ house (a 1 or 2 bedroom condo. or a 2-bedroom row house in the Sunset) for only $771K. Better hurry, they’re not making any more land here you know.

Comment by sf jack
2006-08-16 13:43:46

Any place you’d really want to live in would be much higher.

In any case, these prices will probably be around the same as they are now in 2012 or so.

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Comment by SouthOCRenter
2006-08-16 12:43:57

Unfortunately there are still underlying “strengths”. The job market is still strong, interest rates are still low and more importantly lenders are still willing to give suicide loans to just about anybody. These were the underlying strengths that propelled this market and they havent gone away yet.

Comment by dwr
2006-08-16 12:46:36

interest rates and nonexistent lending standards may have facilitated the creation of the bubble (job market? please), but psychology is what made the bubble happen. And that psychology is changing very quickly.

Comment by SouthOCRenter
2006-08-16 13:17:07

Yes, but you will still have uninformed people buying due to these factors, while buying may decrease, until these factors go away, I doubt we will see any significant drop.

I think we will only see that kind of drop when these factors start to go away. Until then housing will be mostly stagnant.

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Comment by dwr
2006-08-16 14:04:39

Sure. Inventory is up approximately 100% and sales volume off 20-40% depending on location, but prices will stagnate. Check back in six months.

 
Comment by wawawa
2006-08-16 16:02:08

I agree with dwr, after Christmas is going to be nasty for many people.

 
 
 
Comment by Brandon
2006-08-16 13:22:39

Isn’t a good portion of the job market linked to the bubble? Here in Idaho, construction was the largest contribution to job gains.

As the RE market declines, so will some good jobs as well as income. How about these RE agents with reduced income from slower sales and lower prices. Sales will be slower at the Hummer dealership as the RE agent won’t renew their lease. The Hummer salesman, in turn, will have less income and on and on…..

Comment by SouthOCRenter
2006-08-16 14:19:29

I agree, that may happen, but what you are doing is projecting a declination of the job market. I am willing to bet that will happen. But currently as of today the job market is still strong, hence its a strength as described. You can also project increasing mortgage rates, increased reserve requirements, bond values, etc. But I am only speaking to todays data without the speculation of what tomorrows data will look like.

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Comment by dwr
2006-08-16 14:22:53

maybe you need to define a “strong” job market. Is full employment in low-paying jobs a strong job market?

 
Comment by SouthOCRenter
2006-08-16 14:48:57

good point, I will define the job market as market not being much different now then it was during the last 4 years making it a non-factor in reduction of housing prices currently.

Basically, I am looking for changes in data. The job market has not yet changed, lending standards have not yet changed.

Things that have changed include:
1. Interest rates
2. housing volume
3. foreclosure rate

Of these three, housing volume is the most significant change so far. But you must factor in the other data. This leads me to the conclusion so far that prices will stagnant or drop a small amount in the short term. Now if the fed starts raising interest rates, increases reserve requirements, or the real estate job losses are not absorbed by something else. Then I will revise my statement. But until then IMHO huge housing price drops are not in the short term picture.

Now, if I was to project long term, I would say we are in for some huge price drops. I would project job losses, interest rate hikes and larger reserve requirements. Now how long these will take is anyones guess.

 
Comment by Derek H
2006-08-16 15:54:23

I would just add one more thing by saying that I think most everybody who could buy already did, and that lack of demand will create downward pressure on the market. Sure, there will always be new buyers coming on line, and that may even create a little “dead cat bounce”, but I doubt (I hope not?) too many people are going to buy just as they see the market heading over the cliff. . .

 
 
 
Comment by nnvmtgbrkr
2006-08-16 13:23:28

Your eliminating the key factor here. The mania, the hype, the emotional push that fueled this bubble is/has evaporated. You can feel it now - and once it sets in and really gets going, which it has, no amount of intervention by the Fed or anyone else is going to keep it from running it’s course. The same principle that applies on the way up, applies on the way down.

Comment by SouthOCRenter
2006-08-16 14:22:05

not at all, that is a weakness I agree, and it influences housing, but its not going torpedo it. Emotions change with the wind. I dont see any long term value in it. Maybe if there was a way of quantifying it with some mathematical formula then we can measure its effect. Until then, all we have is anecdotal evidence.

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Comment by grush
2006-08-16 15:35:02

Mania can be quantified.

It makes sense to buy an asset if you believe the future price will be more than the current, and that difference is worth the risk. Conversely, it makes sense to sell an asset if you believe the future price is lower than the current.

If people believe past gains in an asset price predict future prices (and they mostly do), then that belief will cause more people to buy (see above). If people believe that past losses predict future losses, they will sell.

This simple bubble pattern could be measured based on a sampling of attitudes toward an asset’s future price and the change in that asset’s price in the recent past. The predicted future price change relative to the recent price change would likely correlate well.

In short, once you’re past the peak in an asset bubble (which we clearly are with housing), “emotions” do NOT change with the wind.

 
Comment by SouthOCRenter
2006-08-16 15:55:03

hmm, then here is the challenge. Give a figure. Quantify this for us.

 
Comment by We Rent!
2006-08-16 16:54:45

Inventory, no?

 
Comment by feepness
2006-08-16 17:22:25

Give a figure. Quantify this for us.

The difference between the total cost of ownership vs the total cost of renting is the premium paid for owning.

Any amount in excess of the historical average can be ascribed to temporary factors, most likely the mania.

You can run your own numbers of find someone who has.

 
Comment by tj & the bear
2006-08-16 22:04:33

Emotions change with the wind. I dont see any long term value in it.

Ever hear of Elliott or Kondratieff waves? All economic cycles are simply expressions of mass psychology, the pendulum swinging from optimism to pessimism and then back again.

 
Comment by Spykeeboi
2006-08-16 22:07:55

Emotion, especially consumer motion, can certainly be quantified. That’s the whole gist behind the monthly Consumer Sentiment Index, uh, whatever it is. Gosh, there are just too many carefully herded sheep to believe that the marketers haven’t made good use of the quantitiative tools of social science…

 
 
 
Comment by dannll
2006-08-16 13:38:44

Great job market…in Chindia…and the wonderful ’service sector.’ Unless they have reclassified burger flippers as production workers.

 
Comment by Hoz
2006-08-16 13:53:03

From Warren Buffet in 1999 “Corporate profitability in relation to GDP must rise. You know, someone once told me that New York has more lawyers than people. I think that’s the same fellow who thinks profits will become larger than GDP. When you begin to expect the growth of a component factor to forever outpace that of the aggregate, you get into certain mathematical problems.”

A mathematical problem akin to unaffordability?
In a recent survey 1:3 people were worried about losing their homes not because of mortgage payments, but because of taxes and utilities.
50% of Americans are earning less today than 5 years ago when adjusted for CPI inflation.
“Prices of goods imported into the U.S. rose 0.9% in July on the back of high oil prices, the Labor Department said Friday.”
Dr. Bernanke’s comments regarding the pause in interest rates, “Inflation pressures seem likely to moderate over time, reflecting contained inflation expectations and the cumulative effects of monetary policy actions and other factors restraining aggregate demand.”
The “other factors” are the first ones caught in this disaster.

 
Comment by Inspired
2006-08-16 15:51:03

South OC renter…
What part of the job market is strong….Berger King openings and Starbux stores?
Do these offset the airline,steel, auto,auto parts, hi-tech., telephone sales & answering, mortgage refi’s officers, wild cat truckers, drugs,& NOW construction?
Oh, that’s right we just can’t seem to find an article that confirms these people are collecting unemployment….the builders are just going gang busters building another 700,000 homes this year no one will live in…….despite sales being down 25-56% YOY, they are being good citizens with “no lay offs”……
Pass the rum matey!

Comment by SouthOCRenter
2006-08-16 16:01:44

Inspired,
AFAIK employment rate is not down, the median income is not down. Wouldnt people transitioning from high paying jobs to burger king jobs lower the median income?

Sure, real estate job losses may come, but how do you know they wont be replaced by something else? nobody predicted that the tech bust job loss would be replaced by the housing boom job creation.

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Comment by Inspired
2006-08-16 17:17:39

As for the employment rate:
see any LABOR report in the last 12 months.
Schedule A-12…”Alternate methods for computing underUtilized labor”.. This number BURIED in the back is how LABOR was reported 12 years ago, Now they make telphone calls….When that started sounding “bad” high unemployment…CLinton had the “telephone survey AVOID inner city Area codes….NOT BAD..the great unwashed won’t know any better!
If you had reviewed the DOL report you woud KNOW that since MAY 2005 thru July 2006 the highest AVG.Unemployment rate is 9.1% and lowest is 8.4% Current 8.8%.
As for Govt. reported MEDian income Who knows?
But for certain the US savings rate has been consecutively negative for the past 7 years. Yep 7 of the 13 yrs. when this has occurred since the Benevolent FED has had the controls…
You may verify this on http://www.safehaven.com article 4960 I believe.
Now since Median incomes have risen we have spent more than 106% of it…….
..So after the great housing bubble our Net worth versus Debt is nearly 10% worse than 5 years ago!
“long live the consumer, he is spending himself into serfdom!

 
 
 
 
Comment by Sammy Schadenfreude
2006-08-16 19:07:28

Malta said he thinks prices will flatten, perhaps even fall, in the near term. “But don’t look for any big declines in the foreseeable future, because the underlying situation is still strong,” he said.

Naturally. All those soon-to-be unemployed folks in the construction, RE, and mortage industries will simply become actors and actresses in the Entertainment industry. All those suicide loans will be paid by Iran and Venezula in a spontaneous act of brotherly love. Overtaxed energy grids will suddenly regenerate themselves and cosmic energy from the stars will replace fossil fuels. All those illegal immigrant hordes will suddenly feel a yearning for their home countries and return, bearing their anchor babies with them. So you see, friends and neighbors, Malta has a vision for the future that you naysayers clearly lack!

Comment by Anachronist
2006-08-17 10:41:29

All those illegal immigrant hordes will suddenly feel a yearning for their home countries and return,

This one might be true, if the downturn is bad enough. 100% IO loan resetting, and no papers? Pull up stakes and head back to Chiapas.

 
 
 
Comment by Larry
2006-08-16 11:36:00

“Two homesellers asserted that they’re not moving until someone pays their rock-bottom asking prices. ‘It’s probably not a good time to put it on the market,’ Beverly Huffman said of her San Juan Capistrano home, now listed at $729,000. But, she added,

‘I’ve got time, so it doesn’t matter. I could stay here the rest of my natural life.’”

BAHAHAHAHAHAHAHAHAHA

Then why are you selling ? You got to love people who are in denial… This one is going to swallow a BITTER pill when the time comes… When this seller wakes up … it will already be down over 35-40%.

Comment by lefantome
2006-08-16 12:06:43

This could be a new trend …… tombstones with addresses on them.

Comment by nancy
2006-08-16 12:37:55

This could be a new trend …… tombstones with addresses on them.
don’t forget to include the asking price

Comment by Derek H
2006-08-16 16:01:30

It’s the way they used to do it back on the farm…

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Comment by AZ_BubblePopper
2006-08-16 13:32:21

“tombstones with addresses on them” AND, I-O OptionARM loans, granite countertops & matching granite headstones in the yard with Price Reduced engraved next to RIP.

Comment by Ozarkian from Saratoga CA
2006-08-16 16:46:01

Thank you AZ_BubblePopper for coming up with a new use of all of those granite countertops that are stored in warehouses around the country (and the world)! Luckily the greatest generation is busily dying off and the front edge of the baby boomers are “in process”.

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Comment by Chip
2006-08-16 17:34:22

“Luckily the greatest generation is busily dying off and the front edge of the baby boomers are “in process”.

Whoa — that’s pretty edgy for even the hardest-hearted of the posters on this blog.

 
Comment by Ozarkian from Saratoga CA
2006-08-16 18:26:54

Yeah, I agree. So sorry. I’m one of the baby boomers myself, almost on the leading edge. Just about everyone bashes us on this board so I thought I would join in :-)

 
Comment by lefantome
2006-08-17 00:52:41

O.K., sorry …… I meant the house WAS the headstone …..

Not that granite doesn’t go on the exterior ….

 
 
 
 
Comment by nnvmtgbrkr
2006-08-16 12:57:17

But, she added, ‘I’ve got time, so it doesn’t matter. I could stay here the rest of my natural life.’”

OK buyers, you know how to play poker, right? What do you do when you know someone is obviously bluffing? That’s right, you call their bluff. You’re the one holding the cards, so you sit tight and sweat ‘em out. Who stands to lose the most right now. Well, let’s see…inventory continues to swell, so that house you want is still going to be there tomorrow…rates are sitting tight, so despite what the realtors are telling you, there will still be good rates tomorrow….let’s see, what else..oh yeah, YOY is at best flat-lining, if not going down. So 6 months from now that house you’re looking at is going to be, at the very worst, the same price. No need to sweat that out….. Yep, you’re holding the cards. Sit tight and break your opponent.

Comment by Premature Curmudgeon
2006-08-16 15:30:47

We’ll have our own little Miss Havisham in OC …

From Dickens’ Great Expectations:
Miss Havisham - Miss Havisham is the wealthy, eccentric old woman who lives in a manor called Satis House near Pip’s village. She is manic and often seems insane, flitting around her house in a faded wedding dress, keeping a decaying feast on her table, and surrounding herself with clocks stopped at twenty minutes to nine. As a young woman, Miss Havisham was jilted by her fiancé minutes before her wedding, and now she has a vendetta against all men. She deliberately raises Estella to be the tool of her revenge, training her beautiful ward to break men’s hearts.

 
 
Comment by Mort
2006-08-16 13:48:00

‘I’ve got time, so it doesn’t matter. I could stay here the rest of my natural life.’

I can see it now, I’m having a vision of thirty years from now. A “for sale” on the front lawn. The house has peeling paint and shutters banging like in an old Alfred Hitchcock movie. The main character, the daughter of a real estate agent goes to check on old Bev’. with her BF. They pry the boards off from in front of the door. It creaks open. The house is staged with flowers, now withered and covered with dust. Inside they find the mummified remains of Ms. Huffman sitting in a chair, clutching an old cell phone. Cobwebs are everywhere. Her final words? I’m not giving it away

Spooky.

Comment by HARM
2006-08-16 15:11:31

:lol: You should combine forces with the author of “Fall of the House of Flipper” and write a screenplay.

 
Comment by Premature Curmudgeon
2006-08-16 15:44:10

From Great Expectations:

Miss Havisham - Miss Havisham is the wealthy, eccentric old woman who lives in a manor called Satis House near Pip’s village. She is manic and often seems insane, flitting around her house in a faded wedding dress, keeping a decaying feast on her table, and surrounding herself with clocks stopped at twenty minutes to nine. As a young woman, Miss Havisham was jilted by her fiancé minutes before her wedding, and now she has a vendetta against all men. She deliberately raises Estella to be the tool of her revenge, training her beautiful ward to break men’s hearts.

Comment by Premature Curmudgeon
2006-08-16 15:44:58

Apparently I’ve got a trigger finger.

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Comment by robin
2006-08-16 19:37:22

2036 - Just appraised at $729,000 - :)

 
 
 
Comment by SouthOCRenter
2006-08-16 11:40:20

The Orange County Register print edition had this subject on both the front page and the front page of the business section with big bold letters on both pages telling everyone that housing is dying. I wish I remember the exact wording, does anyone have it?

Comment by SouthOCRenter
2006-08-16 11:50:50

I found it. Its “Cooling Trend”

Page 1 of OCRegister:
http://www.ocregister.com/ocrfrontpage/

I couldnt find page 1 of the business section.

 
 
Comment by Larry
2006-08-16 11:41:22

“Mac Mackenzie, the top-producing Coldwell BankerRealtor, said he’s starting to see homes that sold for $650,000 last summer now going for around $590,000.”

Come on Mac just tell the buyers there are multiple offers already and they will have to overbid 5-10% on the asking price.
There is no way any buyer can confirm this.
Its the oldest trick/scam in the book for realtors.
There is bound to be some idiot who will fall for it and we will be back to our old double digit appreciation.

Comment by feepness
2006-08-16 12:31:40

I can’t wait to be telling sellers I’m considering several homes and they will have to lower their price 5-10%.

Comment by SouthOCRenter
2006-08-16 12:39:36

That would be great, create a selling frenzy where sellers are actively bidding down their asking price in order to get your business. Rotate between 5 sellers, presenting each with the latest offer and ask them if they can beat it.

Comment by sf jack
2006-08-16 13:54:40

Great idea - the opportunity to present a number of lowball offers (the kind that are not low enough until you feel embarrassed) and see who accepts.

Of them (the remaining “acceptors”) ask if they can go lower because you have others on the table.

Sounds like fun!

“… And you must come back at least once a month and feed the squirrels for me - thanks.”

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Comment by Larry
2006-08-16 15:34:26

“… And you must come back at least once a month and feed the squirrels for me - thanks.”

BAHAHAHAHAHA

Good one JACK !

 
 
Comment by We Rent!
2006-08-16 14:01:57

That’s how I bought my car.

Toyota of El Cajon, Carlsbad, Kearny Mesa, Escondido… They all have the SAME product - how, oh how, can they possibly attract my business?

Price. :mrgreen:

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Comment by Chip
2006-08-16 17:43:18

Feepness — I’m pretty close to doing that. There’s an area I’m looking in where I am willing to make only lowball offers, factoring in the expected decline in prices over the next 3-5 years. Once the agent fully understands that cash is ready and waiting for that one lucky seller who wants to end his or her pain swiftly, then I can tell her to dangle out there her cash buyer — bring on the selling offers. Nothing nifty or spectacular, but the approach could enjoy a short and lively life as the price plunge accelerates and nears bottom.

Comment by Larry
2006-08-17 08:58:59

“Spread the word … now we know how to take down those SOBs.”

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Comment by Lander
2006-08-16 11:50:13

Sacramento Sellers “Cut and Run,” Median Price Drops 5% YOY

“Sacramento County posted urban California’s steepest year-over-year fall in home prices during July as more buyers waited out a slumping market and sellers showed increasing willingness to cut and run.”

“Median sales prices for both new and resale homes and condominiums fell 5 percent below July 2005 levels, according to La Jolla-based researcher DataQuick Information Services. For existing single-family homes, the largest segment of the market, prices fell 3.2 percent below July 2005 to $353,250.”

Comment by SoBay
2006-08-16 12:29:56

Those prices need to get to the $190k’s

 
Comment by crispy&cole
2006-08-16 12:55:48

I feel vindicated!! So real estate DOES GO DOWN!!

 
Comment by Vmaxer
2006-08-16 13:41:54

The smart sellers took the 5% cut in price, and ran.

 
Comment by Norcal Ray
2006-08-16 14:43:55

SAC is really overpriced considering the salary levels. The house price/income ratio must be higher than the SF Bay Area. I know there are some people living in SAC that commute to the Bay Area since the jobs are higher paying. Considering gas and time, it isn’t worth the 2 hour plus commute one way.

Comment by sfbayqt
2006-08-16 15:38:57

“Considering gas and time, it isn’t worth the 2 hour plus commute one way. ”

You can probably add at least another hour for the accidents that slow traffic to a crawl. Even with that, folks with that kind of commute (consider Tracy to central Bay Area) think they have a great deal simply because on the weekends they have their VERY OWN grass to cut!

BayQT~

 
Comment by Larry
2006-08-16 15:39:55

I knew a few who moved to be closer to their new employer they eventually get a job at. So the commute lasts only a year or so.

 
Comment by John in Rocklin
2006-08-16 16:20:16

Sacramento Report:
There are lots of Flippers who closed on homes in the last 12 months who are getting stuck. No buyers. Now the home builders are blowing out their unsold inventory at 20% below what the Flippers paid. $750,000 home, now at $625,000. Prices over $200/sf, now at $150-175/sf. And guess what, these builders are getting no buyers, either. 100 homes in the “blow out” and only 5 reserved (and have to move to contracts, if they stick). Banner advertizing, full page adds. Still nothing. It is going to get more butual. Check out latest Business Journal Article: http://www.bizjournals.com/sacramento/stories/2006/08/14/daily30.html?f=et76&hbx=e_du

 
 
Comment by thejdog
2006-08-16 15:40:54

Median is skewed in Sacarmento….prices are down 10% YOY especailly Elk Forve & Natomas.

 
Comment by thejdog
2006-08-16 15:43:53

EDIT: Elk Grove

Comment by John in Rocklin
2006-08-16 16:27:51

Sacramento Update: Elk Grove, Rancho Cordova, Natomas, Lincoln: All TOAST. Hundreds of flippers bought homes in 2005, closed recently. Now the builders are turning on them and dropping prices by 20-25%. Old price paid by Flipper 30-days ago: $749,000. New price asked by builder last weekend: $625,000. And guess what? Out of 100 homes in the builder inventory at blow out prices, only 5% “reserved”. 20 weeks of inventory, if all the reservations stick. The pain is just starting. See the Sacramento Business Journal article: Home sales down 45% this month, 34% YOY. Brutal. http://www.bizjournals.com/sacramento/stories/2006/08/14/daily30.html?f=et76&hbx=e_du

 
 
 
Comment by chris 415
2006-08-16 11:51:10

“His advice to homeowners: sell now or ride it out for four or five years.”

If every flipper out there takes this to heart, we should have a tsunami of even more houses for sale and then cratering prices. Tons of people in Cali won’t be able to stick out their suicide loans for five years!

Comment by nnvmtgbrkr
2006-08-16 13:07:24

You nailed it. So now people start putting 2 and 2 together and realize how hosed their market is. All the ARM resets, all the people that barely qualified at their start rates, all the people who have been cannibalizing their equity to live, because they only make 50K a year and their house payment is $3500 a month, all the neg cash flow investment properties, ect. Yeah, sure……you guys just go ahead and hang in there for another four to five years - no problem.

Comment by Norcal Ray
2006-08-16 14:47:45

It happens every boom cycle. People say I will just hold on since RE goes up long term. But the reality is very few people can afford negative cash flow investments for a number of years. As you said as more people understand this there will be a surge in sellers. Adding on a recession will push more to selling before it hurts even more.

 
 
 
Comment by ck
2006-08-16 11:51:56

“Bob Chapman, past president of the Newport Beach Association of Realtors, said buyers and sellers appear to be adjusting to the new realities. ‘The market is finding itself,’ he said. ‘It’s not the Disneyland-high price it was before, but it is fair-market value.’”

Um, Bob, how did the market go from ”Disneyland-high price’ to fair-market value without declining appreciabily?

Comment by dwr
2006-08-16 12:04:49

ck,
if only one reporter would ask such a question, just once, I would be satisfied.

Comment by KirkH
2006-08-16 12:44:54

We need a secret blog-reader-ops mission to infiltrate the newsrooms of America. We will pry off their Ctrl keys so they’re forced to think instead of copy-pasting crappy colloquialisms and mistaking marketing for the dismal science(econ).

Comment by dwr
2006-08-16 12:49:56

This is how it seems to go:
reporter: “So Mr. Realtor, what is going to happen next?”

Realtor: “This year, instead of spring being the relatively strong season (which it’s been for 99 of the last 100 years), it is going to be late fall and winter when sales volume goes through the roof.”

reporter: “Thanks, I have everything I need.”

Is it so hard to follow up with “why?” or “how?”. Isn’t that what journalists are taught to ask: who what where when why and how?

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Comment by lefantome
2006-08-16 13:16:53

Not when you’re a journalist that owns 5 condos…..

 
Comment by KirkH
2006-08-16 13:40:55

Exactly right lefantome. If a reporter owned $300,000 worth of GM stock would you believe their perennially sunny forecasts?

 
Comment by KirkH
2006-08-16 13:43:49

…maybe that’s why they call it the 4th estate.

 
Comment by dwr
2006-08-16 14:21:46

“Not when you’re a journalist that owns 5 condos…..”

That’s why I was only asking for one journalist.

 
Comment by LA Renter
2006-08-16 14:34:37

Reporters don’t make enough to buy condos at post-2000 prices. The fact is, there is enormous pressure in newsrooms to appease Realtors. It’s all about precious advertising dollars. You won’t find really aggressive, good news reporting about the bubble bursting until it’s so obvious that newspapers look ridiculous not reporting on it. That’s what I love about the blogosphere! And I’m a former reporter.

 
Comment by HARM
2006-08-16 15:15:21

“It is difficult to get a man to understand something when his salary depends upon his NOT understanding it.”
–Upton Sinclair

 
 
 
 
 
Comment by arlingtonva
2006-08-16 11:56:05

It’s not the Disneyland-high price it was before, but it is fair-market value

Fair-market my a@#$. Prices have rocketed up 100% in 4 years.

When I do decide to buy and the realtor drives me around to 50 different places and I still don’t buy, it’s statements like this that will help remove any guilt I may feel or sympathy for the realtor.

Comment by huggybear
2006-08-16 12:24:26

I’ll go ahead and wait until prices get “below market value” then.

It still looks like Fantasy Land pricing to me with prices sitting at the top of the Matterhorn Bobsleds rollercoaster. I’ll think about buying once we hit the water at the end of this ride.

http://www.mickey-mouse.com/dlfantasyland.htm

Comment by MB Renter
2006-08-16 13:33:41

Splash Mountain.

Comment by Rainman18
2006-08-16 19:45:08

Sign in front of house for sale:

You must be this ‘high’ to buy.

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Comment by Derek H
2006-08-16 16:14:07

How about “20,000 Leagues Under the Sea?” You have to have a little grey hair to remember that ride, but you also have to be a little grey to remember when houses were underwater as well.

Comment by Chip
2006-08-16 17:50:05

Derek - wow — you just brought back memories. When I was a little kid, my folks traveled to LA to visit my aunt and uncle, who took me to Disneyland a month or two after it opened. All I really remember about it now was that I couldn’t sleep the night before and, oddly enough, passing Knotts Berry Farm on the way.

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Comment by Derek H
2006-08-16 16:15:06

How about “20,000 Leagues Under the Sea?” You have to have a little grey hair to remember that ride, but you also have to be a little grey to remember when houses were underwater as well.
http://www.20kride.com/

Comment by Derek H
2006-08-16 16:15:52

Sorry, I wanted to throw in the url and didn’t realize the first one posted.

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Comment by DinOR
2006-08-16 11:56:54

Marshall Prentice at DQ is scrambling for answers so he offers that perhaps much of the demand that should be there today was drawn into 2004/2005 b/c of low int. rates?

Well, maybe. Maybe that could be true but I prefer to view this as BLOWING UP YOUR BOOK!

Realtors and mortgage brokers have “pumped up” the numbers on everybody they could get their hands on and then some. They beat this thing like a rented mule! They got the most out every sale humanly possible. This is the result. When you’ve gone to your book of clients and told every last one of them to buy XYZ stock and you don’t care if they have to borrow a ski mask to get the money, YEAH, great payday now, but expect lean times ahead! Even if XYZ does real well (it ain’t) your clients will need to recover financially before they earn, inherit or sell other holdings. This takes time. In the case of RE b/c it was done with every last “borrowed” dollar it’s going to take a long, long time! Start liking it!

Comment by AZ_BubblePopper
2006-08-16 13:56:53

Much worse than that as the speculators, who loaded up, are now searching for willing buyers that are already up to their eyeballs in debt. This is called market exhaustion, where all the highly leveraged buyers take a bath as the market freefalls.

And…”The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $3,106 in July. That was down from $3,183 in June, and up from $2,653 for July a year ago”

DQ is at it again. That avg mort payment of $3,183 I-O OptionARM is gonna hurt when it peaks out. That is a LOT OF $$$$$$$ given the avg income is around $55K. There’s sill taxes/ins/maint etc and fuel prices to contend with. Top Ramen will be beyong their budgets. There will be a lot of stubborn FBs forraging around for food in dumpsters until they say uncle and set their keys on their bank’s countertops.

DQ should stick to putting imitation ice-cream onto cones.

 
 
Comment by ChillintheOC
2006-08-16 12:02:45

The RE agents will become the “bears” best friend here very soon by getting the word out that the dreaded “D” word may be coming (declines…) - then we’ll see a stampeed for the exists.

Comment by AZ_BubblePopper
2006-08-16 14:16:57

Declines coming? As reported, they are already present in many markets. Once we start seeing double-digit declines in many markets, panic will be in abundant supply ;-)

 
 
Comment by Joe Momma
2006-08-16 12:16:23

A rude awakening is already here for a lot of realtors. I hope you guys saved some of those fat commission checks.

We all know most of you didn’t!

Comment by Chrisusc
2006-08-16 12:46:17

There will be an awful lotta BMW’s, Hummers, Sea Doo’s and Harleys for sale in the next year or so… I doubt that the average realtor had enough foresite to sock away say 50% of their commisisons for a rainy day. It will get ugly once they all have to look for jobs, which will in turn put downward pressure on low end wages like at Wal-Mart (already pretty low), Payless and the outlet malls.

There is a R.E. office in my office building and they dont seem to be as smug as they were on average say 2 years ago…

Comment by Chrisusc
2006-08-16 12:48:15

sorry, “foresight”, what was I thinking, I might have to work at Wal-Mart too…

Comment by gadfly
2006-08-16 13:11:19

Let’s just hope the depressed, desperate and despondent flippers aren’t looking through their “front sights” in the days to come. :-/

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Comment by implosion
2006-08-16 20:53:41

Nah, it’s OK so long as the front sights are closer to them than the rear sights.

 
 
 
 
Comment by Rancho Cal
2006-08-16 14:52:36

A couple who are friends with my wife bought a house in Temecula, CA in February for $620,000. They are building a shopping center across the street behind it and its about 1/2 mile from the approach side of a small but busy airport. Both husband and wife work in real estate. They already had to pull their kid from Kindercare and put him in a home daycare becase they can’t afford Kindercare any more. I believe from my personal contacts with RE people that realtors and mortgage brokers are going to prove to be some of Greatest Fools in this whole bubble.

Comment by grush
2006-08-16 15:50:03

A house I was thinking of putting an offer on (before I knew about the bubble) was purchased instead by the seller’s own agent. She planned on flipping the house in a year and offered to rent it to me until then. I politely declined. I often wonder what she actually sold it for since San Diego has been flat ever since.

Comment by Rancho Cal
2006-08-16 16:04:19

You could look up the latest sales data on Zillow.com if you remember the address.

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Comment by Derek H
2006-08-16 16:20:58

Right. Not all of them are shysters. I think many more were just True Believers, drinking the Kool-Aid right up ’till the end.

 
Comment by Chip
2006-08-16 17:57:09

Cal — I’ve seen a lot of that here in east central Florida. A lot of agents apparently got so caaught up in the hoorah that they bought into it themselves, hook, line and I/O.

 
Comment by Chrisusc
2006-08-16 19:41:50

I know quite a few people who bought in Temecula/Murrieta since 2003 and they are probably all hosed from refi’ing. Also know some builders’ agents that bought homes to flip, and they still haven’t. Also know some folks (four families at last count) that are Bk’ing right now from having too many house payments. One couple gave back the Navigator and the Chrysler 300, because they couldn’t afford their main POS KB home, let alone the second that they thought they would fip. When i told them it was a mistake to buy and that the market was slowing, they told me I didn’t know what I was talking about. That was over a year ago…funy how things change and quickly.

 
 
 
Comment by SoBay
2006-08-16 12:28:46

“‘We’re seeing pretty substantial price reductions,’ the Irvine agent said. His advice to homeowners: sell now or ride it out for four or five years. ‘It’s not a seller’s market anymore,’ he said.”

FINALLY….someone has the scales START to fall from their eyes.

 
Comment by mr x
2006-08-16 12:35:42

LET THE BAILOUT BEGIN! THIS IS WHAT IS COMING FOR EVERY MARKET IN THE US FISCAL RESPONSIBILTY WILL BE CROAKED BY THESE FB - BLAME THE LENDERS TOO FOR GIVING THE BUMS THE MONEY

 
Comment by mr x
Comment by San Mateo, Bitch!
2006-08-16 12:50:26

If the private sector wants to bail out these FBs then so be it. I strongly object to a dime of taxpayer money being spent on efforts such as this, however.

Sickening.

 
Comment by kipper
2006-08-16 13:05:57

I would just love to be a fly on the wall at some of these banker/FB charity refi’s. “Now Mr. and Mrs. Barker, it says here on your tax return that you make a combined income of $42,000. and you have 2 hummer payments of $930. apiece and the mortgage principal on your home is $872,341.58 does that about cover it? No? Oh, I do see here some credit cards and the what? Which bank gave you the HELOC? …..”

 
Comment by Vmaxer
2006-08-16 13:40:12

“All of us are affected because it deflates the real estate market,” said Stephen Pike, vice president of North Easton Savings Bank, a coalition member.

He admits that he want’s to use the bank’s money for her own self serving interest. I wonder how big the mortgage is on his McMansion.

 
Comment by Rental Watch
2006-08-16 16:02:00

Another reason prices come down slower than they go up. No one wants to stop home price appreciation. Everyone wants to slow it’s depreciation.

Comment by Chip
2006-08-16 18:00:24

“Everyone wants to slow it’s depreciation.”

Heh, heh…not everyone.

 
 
 
Comment by Housing Bear
2006-08-16 12:36:27

So, when can we expect some significant price reductions? This is a slow motion event. zzz…wake me up when it’s over. lol I have been renting for 3 1/2 years, and I guess that I sold waay too soon, nevertheless, sitting on a pile of cash waiting for a good entry point to pull the trigger.

 
Comment by wawawa
2006-08-16 12:39:21

San Bernardino paper say:
“Real-estate experts were jolted by a report Tuesday that showed regional home sales slowed to the lowest level for a July since 1997.”

experts my @$$

Comment by SoBay
2006-08-16 12:51:30

Since they are the ‘Center of the Universe’ … has the galaxy experienced a ‘jolt’

Comment by SunsetBeachGuy
2006-08-16 13:29:20

So Bay:

You misquoted a poster here.

IE is the center of the sphincter.

Comment by peter m
2006-08-16 21:06:11

Was driving thru rialto/Fontana and saw a Large Century 21 sign on corner of a large vacant lot. It was completely spray painted with Graffiti. That sums up the IE RE market!

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Comment by peter m
2006-08-16 22:03:37

http://www.sbsun.com/news/ci_4187664

“John Husing, a Redlands-based economist who studies the combined San Bernardino/Riverside county area, said he does not think the end of this housing boom cycle will be a repeat of the early 1990’s….
Employment gains in Southern California have been strong for some time, and the unemployment rate in the two-county area has never been lower in the last 42 years, Husing said.”

This was the guy who said that “we are the center of the universe” in that IE Conference.

This is a quote From SBSun:

‘San Bernardino County registered its slowest year-over-year appreciation rate - 11.6 percent - since December 2002, as the median price climbed to $366,000, up from $328,000 in July 2005.’

MR Husing is a bit delusional about the true state of the IE:

I just went thru Colton, Rialto, Fontana, and Rancho cucamonga, a quick drive by tour. Amazing to see all those 80-100 yr old dilapilated clapboards on trashed out lots are worth $366,000. Funny to drive thru these areas and see these old run-down rural clapboards/rustic shanties interspersed with vacant weedy lots, and suddenly you come upon a brand-new cookie-cutter standard subdivision completely walled off with a high brick wall to separate their owners from the wretched dilapilated shanties and the views of construction/truck yards.

I wonder if Mr Husing will be eating his words by next year. A recession will turn the IE into one vast graveyard of unfinished, abandoned housing and commercial projects, and turn his fantasy projections of low unemployment into 10% UE rate nightmare.

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Comment by peter m
2006-08-16 22:20:01

I want to qualify the description of the IE just posted my mentioning that Rancho Cucamonga is a better organized city/region as far as urban planning goes, at least for IE standards. Still a lot of new construction going on in RC, in both residential and commercial. Don’t know the status of RE bubble nor the Financial condition of the average RC resident(probably indebted to the hilt) but at least on the surface RC appears to be a clean, organized IE burb, which is somewhat of a rarity.

 
Comment by bruin
2006-08-16 23:49:04

Rancho is definitely a better city than the others, but the house prices are higher than much of OC. Makes no sense.

 
 
 
 
 
Comment by nancy
2006-08-16 12:49:28

“Coalition bankers said many homeowners took out loans that were inappropriate or that financed homes they couldn’t really afford by offering low payments for an introductory period.”

Boo hoo waaaa!

Comment by wawawa
2006-08-16 13:56:36

There are some genius out there!! And they are paid high dollar.

 
Comment by implosion
2006-08-16 21:06:53

And where were the coalition bankers when these people took out inappropriate loans?

 
Comment by LossAngeles
2006-08-17 00:02:23

LMFAO Nancy )) !!!

 
 
Comment by Venting
2006-08-16 12:59:38

Ok, I just want to get this off my chest.
A year ago, a guy I worked with, prob making 50K - 60K bought a house in the all-exlusive Darien, CT. for $960k! with his gf! I have no idea how he did it, even if with an optional ARM!
Then come a developer who bought a 1200 sq ft house for $980K. I asked him why, he shrugged as if I’m an idiot, and said he didn’t have a choice. I walked away and thought to myself, yes you do have a choice, you just picked a really bad one.
Then I started to push my mom to sell her 100 year old house which she bought in 1998 for $186k, because her neighbors sold their same exact house for $450! and two month ago, she finally sold it for $420! I bought some plasters and stuff tried to stick the tiles on the wall in the master bathroom so that they won’t fall off before the insspector came. I wouldn’t even pay $180k for that POS.
Now me, I make well over six figures, and the fact that I can’t even afford mom’s old house is just shocking! but if I look at all those idiots who “didn’t have a choice”, I feel a little better.

Comment by Mort
2006-08-16 13:37:48

You did right by your mom.

 
 
Comment by Markmax33
2006-08-16 13:10:31

I went on my weekly San Diego Condo Sales Center tour today. As usual I saw a few new things.

1. Cosmopolitan square completed demolition of the proposed site and has revised plans that are being reviewed by the city. As I was walking by the building site today, I noticed the signs had all been spray painted with graffiti and part of the site was being used as a parking lot. I doubt this project will EVER break ground.

2. I went to the Vantage Point Sales Office. The project has 679 condominiums!! They JUST broke ground 3 months ago because they JUST hit the 40% sales figure, which is probably what the lender required. They are currently 43% sold out which means they have 387 condos to go. They told me that all you need to secure a purchase is 5%. I wonder how many of those people are gonna ditch that 5% down as this market folds. They are already offering 7% off of the listing price before negotiations.

3. By my estimate there are approximately 2000 condos for sale in condo sales offices in downtown San Diego + FSBO units + what is listed in MLS. We probably have about 4000 units on the market as we speak, with plenty more coming.

That is all for now. Contact me if you would like to join the tour next week at yahoo id: markmax33

Comment by Orion
2006-08-16 23:37:38

So Markmax33, did the condo sales babes hit on you or what?

 
 
Comment by Jim
Comment by OCDan
2006-08-16 13:28:34

By the looks of that place, $150K tops, probably more like $100K. I doubt the neighborhood is that appealing.

Comment by cashedin05
2006-08-17 01:46:59

Sale History
09/16/1997: $75,000

From the looks of that place, even 75k seems high…but now its worth 350k….LOL

 
 
 
Comment by leosdad
2006-08-16 13:30:54

“‘We are not near the bottom,’ said economist Christopher Thornberg, a senior economist at UCLA

No, we are right behind the top, and cannot see the bottom yet. But we will, ultimately, don’t worry…

Comment by arlingtonva
2006-08-16 13:44:19

What’s going to happen to the economists that had such rosy analysis just 6 months ago? Their words are forever captured on the internet, undermining their credibility. You would think their lack of intelligence or integrity would ruin their careers going forward.

Comment by We Rent!
2006-08-16 14:15:45

Don’t worry about them. Americans are, as a whole, stupid folk. Remember that guy who “did not have sexual relations with” that girl some 35-40 years his junior? Half the country still LOVES him - and, they’re DYING to elect his wife!!!

(P.S. - Don’t get all political on me, now. Yale damaged its image sorely by accepting Bush Jr.)

Comment by Linda in LA
2006-08-16 14:32:40

Clinton lying about his sex life had no economic effect on anyone. And this country had a lot less debt and no housing bubble when he was in office. Hillary could certainly do no worse than “Dumbya” has.

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Comment by NYCityBoy
2006-08-16 16:12:08

You’re right. We didn’t have a housing bubble under Clinton. We had a huge fukking tech bubble. How was that any better?

 
Comment by B. Durbin
2006-08-16 19:51:13

“You say to-may-to, I say to-mah-to…”
:D

 
Comment by Rainman18
2006-08-16 19:57:51

The Housing Bubble affects all of us because everybody needs shelter of some kind (houses). Nobody needs Pets.com

 
Comment by Jim D
2006-08-17 10:31:18

Nobody needs Pets.com

And noone ever did, which was the problem. :-)

But noone needs to own a home, either. I never have, yet somehow I breathe.

 
 
Comment by Doug_home
2006-08-16 20:58:21

president Bush got into Harvard business school with a C+ undergraduate average.

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Comment by IL_NC_IN_CA
2006-08-17 03:00:25

I heard he got in because of his stellar military service. :)

 
 
 
Comment by bombo_buster
2006-08-16 14:30:28

Don’t worry about that. They will be the most zealous RE bears. We’ll be too busy counting the dead bodies than to remember what those fools were saying 6-9 months ago.

 
Comment by Chris in La Jolla
2006-08-16 15:24:43

Don’t you know the economist’s motto:

Often wrong, never in doubt.

Comment by We Rent!
2006-08-16 17:01:53

“It’s this way, let’s go!”

(”How can he be sure?”)

“I’m Buzz Lightyear - I’m ALWAYS sure!”

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Comment by feepness
2006-08-16 15:29:44

What’s going to happen to the economists that had such rosy analysis just 6 months ago?

What will happen is:

1) Those that were dumb enough to listen to them will keep listening to them.
2) Those that were smart enough to do their own research will continue to ignore them.
3) Those that didn’t pay any attention at all will continue not to care whatsoever.

Not only is a sucker born every minute, but they stay a sucker their whole lives.

Comment by Awaiting bubble rubble
2006-08-16 20:45:22

“What’s going to happen to the economists that had such rosy analysis just 6 months ago?”

I remember watching CNN the day after the Sept 11, 2001 Terrorist Attacks. An “expert” analyst with a great deal of confidence said something to the effect that human nature is universal and there are very very few potential suicide bombers in the world, in fact almost nobody could be so thoroughly brainwashed as to negate the basic survival instinct. He said the number of humans with suicide bomber potential had been reduced significantly on 9/11. Then we invaded a country picked by neoclowns with no actual ties to 9/11 or WMDs and there are suicide bombings there regularly. And elsewhere. It’s becoming a daily event. And this guy was soooooo confident. Smug. The religionist perspective (faith is greater than reason) has come to dominate our country in the past six years to a degree rarely seen before.

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Comment by feepness
2006-08-16 21:52:22

The religionist perspective (faith is greater than reason) has come to dominate our country in the past six years to a degree rarely seen before.

You either have an extremely poor grasp of history or a highly religionist perspective yourself — with a different twist.

 
Comment by Spykeeboi
2006-08-16 22:35:35

I agree… don’t confuse faith–which has its own type of reasoning–with religion–which has a long and unsavory past in these States.

 
Comment by awaiting bubble rubble
2006-08-18 21:37:42

So you both think people buying absurdly overpriced houses and Bu$hco’s foreign policy are the result of a reasoned cost benefit analysis? I actually think such things are the result of a complete loss of analytical ability on the part of American consumers/voters. This is a direct result of an hysteria of faith that has rarely been this influential in our history.

 
 
 
 
Comment by Larry
2006-08-16 15:42:59

“No, we are right behind the top, and cannot see the bottom yet”

your ahead of the curve on this one. When the general public realize this prices will drop like a stone.

 
 
Comment by Claudia
2006-08-16 14:28:29

“‘I don’t know how soft the landing’s going to be,’ Eli Broad, Los Angeles philanthropist and founder of giant builder KB Home, told Bloomberg. ‘I think we’re in for a period of a year or two years where housing prices are going to go down or stay stable, but certainly not go up.’”

Good ol’ Eli Broad. He’s been around long enough to have survived several recessions, even the really nasty ones. I’m sure he saw the writing on the wall a long time ago.

Comment by Claudia
2006-08-16 14:31:52

I just looked him up and found that Eli Broad was born in 1933. He’s a “Great Depression” baby.

 
Comment by RobertCampbell
2006-08-16 14:39:23

Of course Eli Broad knows what’s coming. Anyone who’s been in the home building business for that many years knows the cycles of boom and bust. Most small builders go broke during the downcycles. Only the smart ones survive to build another day.

Robert Campbell

Comment by Norcal Ray
2006-08-16 14:57:11

Yes, he must know but can’t really say due to legal constraints. You can’t make billions of $$$ and not know. Like the high tech boom, quite a number knew what was going to happen but why should they tell the public. They have nothing to gain and something to lose by telling.

 
Comment by Joe Schmoe
2006-08-16 16:13:01

Agreed, they all know. I had dinner with the president of one of CA’s largest residential construction subcontractors last year. His company has around 4,000 employees. He told me that the market was headed for a huge decline. He’s been planning on it all along.

I am pretty sure that all big fish knew that what was happening. A lot of them even seemed to feel that this was the biggest boom in history. Didn’t a bunch of the big commercial investors basically sell their entire portfolios? a guy in San Francisco did that, IIRC.

 
Comment by Claudia
2006-08-17 05:37:49

You gotta wonder how many people listen when old Eli says “house prices aren’t going to go up.”

I even loved his “I don’t know how soft the landing’s going to be” because, in my heart, I know he is saying “There’s a very bad landing ahead.”

Eli is no fool.

 
 
 
Comment by hank
2006-08-16 15:00:17

The first-time buyers in Bay Area at this point of the cycle and these rental yields have to be really financially dumb. They are effectively working and paying for someone else’s retirement.

 
Comment by lovpunani
2006-08-16 15:22:22

What do you do when one of your friends is selling his house (by the way he said nobody has look at his house yet) and another one is thinking of buying?

This is in the IE were our resident economist, John Husing, still says everything will be ok because we have jobs.

Comment by feepness
2006-08-16 15:34:58

What do you do when one of your friends is selling his house (by the way he said nobody has look at his house yet) and another one is thinking of buying?

Introduce them and ask for 6%?

Comment by Rental Watch
2006-08-16 16:07:28

LOL. Be “generous” and only take 5%.

 
 
Comment by NYCityBoy
2006-08-16 16:14:35

Don’t say anything. Neither one will listen to what you have to say.

 
 
Comment by cactus
2006-08-16 17:54:03

http://biz.yahoo.com/ap/060816/fisher_economy.html?.v=7

“Richard Fisher, president of the Federal Reserve Bank of Dallas, also said while the economy is cooling because of a surprisingly severe housing slowdown and rising energy prices, there is no recession in sight.”
——————————————————————————
Suprised at the “severe housing slowdown” ? A federal reserve bank president, how do you get that job? Are they really this clueless?
Recession not in sight? So it looks like we will get a Recession based on this guys track record.

 
Comment by rotary13BT
2006-08-16 18:01:15

I think everyone on this blog should start emailing all of their local papers and call their bs on all the fluffing of the housing market they have been doing. Refer them to Bens blog if they want to see what’s really going on with the market. I can’t believe they still add into their articles that the prices are still going up. Of course they are going up because only 2 houses sold and some idiot bought them at inflated prices!

Comment by Ozarkian from Saratoga CA
2006-08-16 19:16:11

OK here’s your big opportunity to inform residents of Silicon Valley! The home page of the Murky News headlines this article:
Bay Area home sales post slowest July in 10 years

Go to the related blog entry and add your comments! I put in the first comment — simply a link to Ben’s blog.

 
Comment by Sunsetbeachguy
2006-08-16 19:21:12

We already did that for the OC Register.

Check the archives on or around late March or early April 2006.

Jon Lansner, their lead business writer took questions here and answered most of them and sidestepped a couple of them.

Other posters have done the same for their papers and been published.

 
 
Comment by LossAngeles
2006-08-16 23:56:52

I could stay here the rest of my natural life.

Then why are you listing it you stupid twat?

 
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