Speculators ‘Take What They Can Get’ In Arizona
The August numbers are out for Arizona. “It was no easy summer for home sales. May was the worst May in three years. June was the worst June in six years. July was the worst July in seven years. And now August is checking in as the worst August in four years, according to the Arizona Real Estate Center at ASU Polytechnic.”
“‘Slow sales activity is spreading across the Valley,’ said Jay Butler, center director. ‘Median prices are continuing to drop in some communities, especially in the West. It’s probably a little more investor-driven.’”
“Through August of this year, there were 47,515 sales, a nearly 40 percent decrease from the same time period in last year.
“Valley homes prices dipped again in August, marking the first time that the median price of an existing home fell below last year’s levels in some areas. If August median price of $262,500 holds steady or declines this month, the region’s median home price will be below the September 2005 price of $263,000.”
“Jay Butler, at ASU, estimates the median price for an existing home would have likely hit a high of $205,000 last year if speculators hadn’t invaded the Valley’s housing market and sparked bidding wars that artificially inflated home prices.”
“Some parts of the Valley are feeling the housing market’s slowdown more than others. In Scottsdale, existing home sales during August fell to 390, almost half the 780 recorded during August 2005. In north Scottsdale, the city’s priciest area, the median price of a home was $661,000 in August, down from $705,000 in July of this year. North Scottsdale’s median used home price is also down 1 percent from a year ago.”
“Matt Keller, an agent in Scottsdale, said some investors are deciding to sell and take what they can get in the current soft market. ‘They’re pretty much saying, ‘Take it. I want to get rid of it,’ Keller said. ‘They’re still making good money..just not as much as they were hoping.’”
“Jim Rounds, a senior economist with a Scottsdale-based consulting firm, said price declines in many parts of metropolitan Phoenix are just beginning and could continue until early 2007. Also, he said, ‘new-home price reductions are right around the corner’ for the Valley as the housing market’s oversupply issue is corrected.”
“Valley homeowners who bought at the peak of the market or tapped all their equity based on higher home prices could find themselves owing more than their house is worth now.”
“R.L. Brown, who tracks the local housing market for homebuilders and real estate clients, said data through July show Valley housing starts are down 20 percent from last year, new home closings are down nearly 10 percent and sales of existing homes have fallen 28 percent.”
“‘I didn’t think it would get this low, and it is,’ he said of new home permits. ‘Frankly I don’t think there’s much expectation of dramatic improvement now through the rest of the year. It would be wishful thinking to think things are going to change in the next three months.’”
“Until the pricing drops, inventory will continue to grow and buyers will continue to stay away. ‘In a sense, that drives the new home market,’ Brown said. ‘If they can’t sell their present house, wherever it is, then they can’t buy their new house.’”
“‘We’re sort of at a drift right now,’ Butler said. ‘The only good thing is interest rates are somewhat lower. They seem to be on downward track, but lenders have tightened their underwriting guidelines.’”
Here is the ASU report, with detail on all the surrounding town/cities. Hands up everyone that wants to hand these flippers a bundle on the way out.
wow, some of those areas have been really hit hard by a sales drop. some went down in price, some went up.
“El Mirage decreased from 200 to 80 sales, while the median home price went from $219,340 to $212,750 ($220,000 in July 2006)”
wow.
Mesa too. From the report:
‘Although the record median price was $267,000 in June 2006, the rapid rise in home prices appeared to end in September 2005 with a median price of $263,000. For August, the median home price of $262,500 was a retreat from the $264,900 in July, and was not appreciably above $258,700 last August. ‘As the housing market slows, the entry level sector basically disappears, while the move-up market garners a larger share of the remaining activity,’ said Butler. ‘Thus, it is not unusual to see median prices to be fairly stable or even increase as the move-up market works to be satisfied.’
and with lower values those 100+ LTVs don’t look so good.
how could anyone be loaned more than the value of the house?
Show me a 720 mid FICO and I can get your disclosures faxed right over to you.
Crazy, huh?
- “Jay Butler, at ASU, estimates the median price for an existing home would have likely hit a high of $205,000 last year if speculators hadn’t invaded the Valley’s housing market and sparked bidding wars that artificially inflated home prices.”
- Existing Home should be 205K … that would be the correct price. Now, subtract for slowing economy and poor wage increases = another 15 to 20% lower than 205k.
Yes ,so they are saying that the speculators drove the prices up 25% or more than they should of gone up in 2005.
So like you said it’s got to come down more because of the oversupply and foreclosures and the slowing economy. Hell, doesn’t Arizona have a bunch of the ghost town tracts with 50% for sale signs and a bunch of vacant houses ? This is a set up for a big fall IMHO .
some comments made on the re station today-
they were joking about all of the negetive reports in the news papers, internet blogs, etc. about home prices being out of line, hard landings, etc. One of the guys on the show start quoting old newspaper articles from 10,20,30,40 & 50 years ago that are similar to todays neg. news stories with his point being that “hey, look where we are today - homes have continued to appreciate”. Another one was saying that there is more good news and reason to go out and buy now, “interest rates are low and expected to hold steady and there are great incentives for new home buyers (anyone who has not purchased a home in the last 3 years).
it’s a “drift”
a new term everyday
when can you call it a crash ?
prices off 20%+
then is it a crash
An article last week used the term “doldrums”, a condition found in equatorial oceans. A sailor, reliant on the winds for propulsion, caught in a doldrums is helplessly adrift until starvation takes it’s toll. For those employed in the RE indusry, being caught adrift exacts the same consequences. If you’re caught adrift in the doldrums you’d better have ample food supplies to carry you through until the next blow. Unfortunately, most in the RE industry failed to stock up their food stores while the wind was blowing. The end result is dire, I’m afraid.
(Have I exausted the metaphor yet?)
(No…)
Down dropt the breeze, the sails dropt down,
‘Twas sad as sad could be;
And we did speak only to break
The silence of the sea!
All in a hot and copper sky,
The bloody Sun, at noon,
Right up above the mast did stand,
No bigger than the Moon.
Day after day, day after day,
We stuck, nor breath nor motion;
As idle as a painted ship
Upon a painted ocean.
Ah…. indeed. I should have sent this out as a memo to all my commissioned agents a year or two ago
Iron Maiden rocks!!
I was just going to say that!!!
With all due respect to Iron Maiden, I believe that is a poem written by Samuel Taylor Coleridge.
That’s what I love about this blog. Not only do I get good financial advice, but I also get a refresher course on the classics.
“With all due respect to Iron Maiden, I believe that is a poem written by Samuel Taylor Coleridge.”
You don’t say.
Sorry, missed your humor.
I think he’s saying “yes, I understand that Coleridge wrote the poem, but Iron Maiden’s ‘Rime of the Ancient Mariner’ made it rock.”
LMAO!
Coleridge. Nice reference, and quite appropriate. Only magical spirits can save this ship.
The Calm, by Donne, is also an appropriate metaphor:
OUR storm is past, and that storm’s tyrannous rage
A stupid calm, but nothing it, doth ’suage.
The fable is inverted, and far more
A block afflicts, now, than a stork before.
Storms chafe, and soon wear out themselves, or us ;
In calms, Heaven laughs to see us languish thus.
…
The neighbor’s absent, nine months now
His Pulte home, a dead cash cow
He did not think investing then
Would end up like investing now
My little ‘hood is quite alarmed
To find the market thusly harmed
A few of us would like to move
A lot of us have option ARMs
A give my Realtor one more ring
To see if she’s heard anything
The number’s clearly on the sign
I hear the cars, they’re still passing
The gains were nice before they fell
But interest-rate hikes have been hell
Now, months to go before I sell
And months to go before I sell
H. Allen Smith wrote a book titled, ‘Lost in the Horse Lattitudes’. Good reading for those who still can.
“Undertow” is a more appropriate term
Eighteen months ago, a beautician/hairdresser/stylist (whatever) friend of mine got into the hot Phoenix market to “invest” in property. Lordy, if that isn’t the hallmark of a bubble, I will take my Economics degree from UCLA and shred it.
Anyone who owned a home prior to the equity explosion (janitor, store clerk, burger-flipper) became a potential investor. Through the loose lending standards of our day, any equity gained could be extracted with a toxic refi and thrown back into the “game” or pocketed. It’s for that reason that many a janitor, store clerk, and burger-flipper quit their jobs and “rode the wave”. Why hang on to a $11 a hour job when one could make thousands per month via equity extraction?
I like how they say that 2005 was abnormal because of investors. the problem is those people don’t go way, sure they’re not bidding up homes this year, but their shadow inventory is just waiting to be put on the market.
Exactly. But I still have to tell myself everyday that this thing will take a while for me to see a good sizable price drop. Patient….
Now THIS I’m interested in. Don’t you all love the way the RE complex has decreed that this weakness shall all end in early 2007. After years of ridiculous speculation?
I don’t think so!
it could end in 07 if prices fall as fast as the last six months and at the rate of acceleration
we could be off 30%
that ought to do it
i’ve actually read/heard several prognosticators say “2-3 years downturn” ina the last few days, and consider even THAT to be the new pollyannish nar mantra that will be in vogue for the next few months.
but if the itulip.com model is correct, this is going to play out over much longer than that, with each local bubble market retreating geographically and timewise in REVERSE ORDER of the bubble’s inflation. there’ll be several false bottoms on the way down, which may not be reached until 2012 or 2014, although most of the drop will be completed in 3-4 years (as others have pointed out).
here’s the excellent itulip series of articles on the bubble.
http://tinyurl.com/gugva
Yes, but if you look at the 1926 Florida real estate crash it was fast ,really fast. Now that might of been aided by the fact that they had a big hurricane shortly after the prices crashed ,but still. Might of been one of the reasons why everyone started investing in the stock market after 1926 which ended with you know what . In fact, the situation we have today is the opposite of 1926-1930, with people fleeing from the stock market to invest in real estate after 2000,verses people switching from real estate to stocks in mid-late 20’s.
well, even fl is only about 1 year over the peak. and there’s no reason to think the pain won’t go on for another 4 or 5 years… in fl? i wouldn’t bet 2010 would necessarily be a great year for fl r.e. appreciation.
is there? we don’t know how far down the bottom is in fl ! at least in manhattan they have to blast down through bedrock just to put in a sunken living room.
It is the same old swill we always hear from these bozos. Pay no attention to the present, for the “future’s so bright I gotta wear shades.”
tx- it’s the “2nd-half recovery” of housing bubble.
Something not factored in with these new Phx metro numbers…the FSBOs…increasing every day with flippers anxious to make every last dime on their “investment”. Talk about hidden inventory, ok Jay?
And let’s not forget the increasingly desperate attempts by agents…taking inventory off market, relisting again at either higher price, then in few days coming in with “reduced, owner motivated”…there is a variety of manipulations on these numbers, there is no good way to get an accurate read. For sure.
Still no meaningful reductions in Santa Fe prices. Irritating. The problem there is so much of that stuff is owed by very wealthy people who can weather downturns.
Then why is it for sale? If it’s really owned by “wealthy” people, they are most likely NOT to weather the storm but cut there prices to sell beacause they don’t have toxic mortgages and HELOCs resettin like the pseudo-wealthy flippers.
I expect the “wealthy” to lead the market down.
I’m talking about people like Cher and perhaps George Soros, maybe the CEO of a public company or two. People for whom a million or two means nothing. Of course to some of them, it does. I’m not in their ballpark obviously but they are the owners in some of the coolest places.
Soros has his money in Bermuda so he can escape the income tax. How do you like that you libs that your hero has skated on his obligation to pay taxes. Sorry Ben, I just couldn’t help it.
the whole point of LIBism is to get someone else to pay for your failures
free healthcare
free retirement
and bail for the community banking bill which is what the bubble is all about
free homes for deadbeats
“Soros has his money in Bermuda so he can escape the income tax.”
He’s a U.S. citizen, so he has to pay U.S. income tax on his income wherever he earns it and wherever he happens to reside.
SF market at the level you are talking about is not driven by the locals, that’s for sure. What part of SF are you looking at? Inside the city or out?
‘…the increasingly desperate attempts by agents’
Weird thing happen the other day. I was wandering through a Big 5 and a woman approaches me woth a stack (100+) business cards in her hand. Seems she’s a broker and was spreading cards around to attract work. Quite professional sounding, and have seen her ad before. In the business for years, but a totally cold call?! I took her card, and we talked awhile. As she drifted away I watched her. We were in a large mall, and as she went out the Big 5 door she kinda stopped, and looked around. I got this increbibly strong feeling she really had no where to go, as in nothing to do. She walked off to another store, and I reflected that I had seen the end of the housing bubble first hand.
I don’t know how old this gal was, but she’s probably havin’ competitive trouble from all the newly graduated 20-somethings who are getting RE licenses and pouring into the field.
No place else to go where you can put on 3-piece suit and think you’re important.
Boston Glode ran an artticle in their real estate section on the trend.
I liked the comments from various XYZ gen types who said, they felt more “comfy” dealing with people their own age.
Yup, that 3-day C1-Century licensing really imparts a boatload of knowledge.
hehehe…like these neophytes have a clue….
Sheep for sheering…BAAAAAAAAAAAAAAAAA!!!!!!!!!!!111
“I took her card, and we talked awhile. As she drifted away I watched her. We were in a large mall, and as she went out the Big 5 door she kinda stopped, and looked around. I got this increbibly strong feeling she really had no where to go, as in nothing to do. She walked off to another store, and I reflected that I had seen the end of the housing bubble first hand. ”
Absolutely beautiful prose: reads like Steinbeck 2006.
dd
“They’re still making good money..just not as much as they’d hoped for”.
Excuse me? Who’s still making “good” money? Now that 2005 is off the table how could anyone in this environment be making ANY money let alone “good” money! And why didn’t the reporter call Mr. Keller on this one?
If they bought in 2004 a typical 4 bedroom house was still going for about $168K, geting out at even $240K now sounds like good money to me also. But I’m not the greedy type.
I agree. At this point, only 2005 is underwater. Anyone else can still make historic gains undreamt of in the past.
Really? O.K, I stand corrected. But in order to realize that profit you would need to find a buyer, no? If you’re selling your own primary residence and had the benefit of actually living in it I suppose it would pencil out for 03/04 buyers. How well did those that carried a mort. payment (and taxes, etc.) on any one of the many “never lived in” homes fare?
Exactly right. There are flippers and the like still raking in HUGE profits. Very annoying, but we are still at the peak.
some 2004 action in central valley and Bahstin / cape cad
You also need to factor the carrying costs of holding onto an overpriced home. A general rule of thumb is that a home will cost you 10% per year. That’s for everything - mortgage, insurance, taxes, maintenance, etc. That 240,000 home is costing 24,000 per year to carry it. I’m guessing you could rent the same house for less than $2,000 per month, so the person who bought in 2004 is losing money (if the home value isn’t going up) they just don’t know it.
If it’s off by a third, good agents and brokers who “earn” their money should survive quite well. If they make 3 or more transactions in the OC in a year, they will survive unless they have negative cash flow investment properties.
I suspect most do. Those that have done so took a calculated risk and deserve what is coming.
OT… Everybody on here has been saying ‘07 will be worse… but interesting to the biggest HB in the US come out and say it today.
——-
D.R. Horton CEO says 2007 will be worse than 2006
By John Spence
Last Update: 2:00 PM ET Sep 12, 2006
BOSTON (MarketWatch) — DHI : D.R. Horton, Inc.
Last: 23.80+1.45+6.49%
1:46pm 09/12/2006
Don Tomnitz, chief executive of D.R. Horton Inc., Tuesday said the company is preparing itself for a tougher housing market in 2007 compared to 2006, with prices finally stabilizing in 2008. “We have never seen housing prices and demand slow as quickly as they have during this downcycle,” said the CEO of the nation’s largest home builder when measured by 2005 deliveries. “Demand has evaporated to the extent of about 20% to 30% for the industry, and in a tighter timeframe than we’ve seen before.” The use of incentives by builders to move homes in a slower sales environment will continue for the next three to four quarters, Tomnitz estimated at the Credit Suisse Homebuilders Symposium.
Right. And the stock is jammed up 6.49%. Insane.
And Apple’s stock is down. The market is a discounting mechanism. Bad news can still be better-than-expected, and good news can still be worse-than-expected. If the market reflected only current informatin, we could all make a fortune with only the slightest hint of foresight.
And yet - as the news gets worse and worse for the HB’s, their stocks don’t seem affected, and are in fact up today about 5%. WTF? Anyone smell a rat here?
“Get Shorty”
Perhaps the rat is the Plunge Protection Team helping the administration spruce up for the election. As usual, the stocks are showing almost identical trading patterns. Remember when we had free markets?
Where was the Plunge Protection Team during the dot-com implosion?
Remember, the object was to let the air out of the stock bubble. It didn’t help that you could not make a case for most of the junk stocks to ever be profitable. They stopped it where it needed to be stopped (Dow 7500)
I’ve got a novel idea. Since you know it’s happening, why not play along and make some money? Geez, to me it spends all the same, whether I made it long or short. I can hate the bubble and the lowlives who fomented it but I’ll trade em just like everything else. Why make it hard when you can make it easy?
txchick,
I gotta a couple of clowns sending me listings in Santa Fe…I’ll let you know if anything starts to budge. One friend in Lamy, who hangs with all the alternative energy greenhead trustfunders, says that many of them want to get out and go somewhere less touristed. There will be reductions on some really great places, say, starting in March. That’s my best prediction.
So…George Soros and Cher are dating? LOL.
I will look forward to hearing about that. Greenhead trustfunders, eh? Kind of like that woman who ran Roxanne’s in Larkspur (Marin County, CA) until the divorce from Sugar Daddy? Incredible place, wrote a book w/Charlie Trotter and sold raw food meals for ~$100 per, yet never made any money. Must be nice.
Here’s what I don’t get. We’ve seen sales off by about 20-30% nationally in 2006 compared to 2005. But we’ve seen that investors/flippers/second home buyers accounted for about 30% of sales in 2005. It seems that most of the investors/flippers aren’t buying anymore (sure, there are still a few left, but not that many), so just their absense alone should account for the decrease in sales. Does that mean that the average house buyer is still buying at the same rate as before? It seems like sales should be even lower than the 20-30% decrease, as most of that is attributed to fewer speculators, but that there should be fewer Joe Sixpacks buying, too. I know that some really bubbly areas are down 40-50%, but I would think that sales nationally would be down by at least 40-50% nationally due to the lack of speculators and fewer “normal” buyers. Am I missing something?
Waiting,
You know, that’s a good point. Especially since the more that “05″ rolled on the more apparent it became that much of it was speculative driven. For my money I’ve never really considered much of their frantic activity part of the inventory anyway. Much of it was done sight unseen in areas or states they’d never actually been to. Since many planned on selling their “05″ gems in “07″ (to somehow avoid cap gains) I don’t think we’ve seen a lot of that fluff in the funny pages yet. Like Ben says, 2nd homes were really just another excuse to speculate so here in Oregon while our inventory has swelled some 68% + many of those folks that built in say Bend, OR still have the delusion that they can spend a weekend a month there and still be able to sell at a profit in “07″. Their logic, not mine.
I think the only thing smart, rational people like yourself might be underestimating, is how many fools are still out there “drinking the Kool Aid” as so many have put it. They come in the form of first time buyers, flippers, specuvestors, you name it. They are looking to buy right now thinking real estate only goes up!! And also, though many realtors have already bitten the dust due to a saturated field and slower sales, new classes are crammed full of these morons!! The sheer volume of idiots is seemingly endless right now. Only when things get so terribly bad in terms of people losing their homes and money like never seen before, will the mainstream media beat it into these fools heads that real estate mania is OVER. Insanity reigns supreme right now.
BanteringBear,
Oh I agree. There’s plenty of stupidity to go around (just check Craigslist) which seems to be busting at the seams with “good deals” in places as dead as LV! Like I say, their logic not mine. There’s an abundance of knife catchers out there (but the line at the ER is growing). I don’t know of any market in the lower 48 where anyone that bought in “05″ that can B/E (net of carrying costs and RE comm.). How long will it be before we say that about “04″ and on down the line? It’ll take a miracle to stop the momentum now.
It will be very disappointing if this crash is limited to the bubble/speculative areas of AZ, NV, and FL. I couldn’t care less about those places, no offense.
Don’t worry… SoCal will get the double-whammy. First the percentage decrease will mean a much large actual dollar increase. Second, the equity lost “investing” in AZ, NV & FL will sink a lot of locals.
How about a triple whammy: homes outside SoCal will be EVEN cheaper, the exodus will continue despite the fall.
Please post that “Two months in house-hunting hell” article from MSNBC. Unfrickenbelievable
why does it seem like parents act irrational when they get kids?
here is the thing, kids have no clue whether you own the house or not. my parents didn’t buy until I was 7. I vaguely remember them saying we were getting a house. young kids don’t care, they’ll write on any walls just the same.
Doh… forgot the link
http://msnbc.msn.com/id/8422350/
At least they didn’t have to promise to feed the squirrels. I wonder how much upside down they are now?
damon,
What a difference a year makes!
Only in LA. What an idiot.
The funny thing is… when I suggested posting that article, I actually thought it was from last month. I was so stunned from reading it, I didn’t even realize it was a year old! Imagine my suprise. Yeah, it’s unbelievable how much has changed in a year. You’re right John, while having kids settles most couples into a more conservative lifestyle, some parents do some very irrational things!
Sorry to divert from the original thread.
Are these people for real…a bunch of ass-kissers(sending pictures and a letter) that alone would disqualify them in my book. All this in order to buy an overpriced POS.
The United States - land of the grovelling, the greedy, the stupid, the worthless:
“We decided to offer $81,000 over the asking price, not because we had money to throw away but because we wanted to be competitive. At our agent’s suggestion, we also enclosed a short letter about ourselves accompanied by a darling photo of our baby with pleading eyes. My first reaction was that writing this letter was a little, well, third grade. But apparently it’s not that uncommon to try to sway sellers this way.
The next evening our agent called and said we should sit down. There were 50 other offers. But the good news was that seven potential buyers were being given a chance to offer even more money with a second and final offer — and we were among the Chosen Ones.”
“At our agent’s suggestion, we also enclosed a short letter about ourselves accompanied by a darling photo of our baby with pleading eyes.”
Being an idiot who overpays is one thing, but pimping your kid in the name of thinly veiled greed is depressing.
That is funny, I remember that article without even having to visit the link.
“Aug 10, 2005″
OMG, they must have bought within a month or two of the top.
And you guys said that timing the tops and bottoms is near impossible…
And not to be mean or anything, their story brings to mind the ancient Mesopotamian phrase:
“Sucks to be you”
‘They’re pretty much saying, ‘Take it. I want to get rid of it,
These are the smart ones.
the rest feed the alligators.
In northern Arizona, these numbers aren’t published very often. But the real declines are showing up in raw land. This is from this past Sundays Flagstaff classifieds:
‘5 acres tall pines. Reduced $100k. Now $275k - gated community S. of Williams’
Probably would have sold for $4k/acre 5 years ago.
I have noticed more and more raw land hitting the markets in Washington and Northern Nevada. Although prices are still outrageous, I expect deals to be found in the coming year.
BanteringBear,
I’m with you on that one! Although I would prefer southern NV? With a little patience we will be vindicated and I’m actually picturing an over correction to the downside. B/c there really are not many ways to finance raw land at least we’ll be working w/those that are able to deal on a cash basis. Unlike SFH’s which are now sold “by the payment”.
“B/c there really are not many ways to finance raw land”
HELOCs, HELOCs, and did I mention HELOCs? Joe Sixpack is a land speculator. I kid you not.
And by HELOCs, I of course mean on their primary residences, not on the newly purchased land…
Ben,
Wowza. Ain’t it the truth? The land listings here are just about equal to the residential, and the reductions are coming faster and deeper. And the only thing I see selling are those 40 acre ranchettes by Ashfork….home of the no stemwall 1982 mobile home with an outhouse and attached meth lab.
I have a young niece who moved to Arizona a few years ago. She’s so much smarter than the locals, of course (eyeroll). So she talked her dad into refinancing his home up here in Minnesota to go in with her on a land purchase in Arizona. She was so certain a developer would come take the land off her hands shortly for a fat profit. So certain, in fact, that when the seller told her he’d reconsidered selling the land, she and my brother upped their offer till the guy “finally” decided to sell it after all. (He saw them coming, didn’t he?)
So for the past two years, while they’ve been making payments on the land and waiting for the windfall to drop in their laps, they have been approached by two buyers. The first price offered, in January, was for half what they’d paid for the land. The second offer, just last month, was for one-quarter their purchase price for the land.
Fools and their money…
Boy, that was smart. I wonder how long she spent researching her “investment.” Land is notoriously hard to unload. I have wanted to purchase land for a few years to actually “use” it, but held back because there was no way I could/would compete with all of the builders who have been gobbling it up at stupid prices. I fully anticipate a lot of it making it’s way back to the market but the pricetags will be too high. I plan on buying from someone who has owned for like 30 years or something. Then, I will get a fair deal.
(eyeroll)
‘:’, followed by ‘roll’, followed by ‘:’
latest numbers from San Mateo
http://www.reeport.com/smc/clickhome/
http://www.rereport.com/smc/clickhome/
A couple of weeks ago, “someone” bought 20,000 DHI (DR Horton) 22.5 Sept calls and 10,000 Sept PHM Pulte Sept 30 calls. We can’t say that there were bought by one Institution, but they were bought on one day and previous open interest had been about 1000-2000 calls at these strikes. By last week the value of these calls was down 80% but today they have become big profit winners. If this run continues they will be worth 10’s of millions by Friday. I dislike conspiracy theories, but would like to know what is happening. Good earnings from Best Buy seem to be taken as an indication that the consumer is healthy, but housing sales and prices are only getting worse and the CEO’s of the HB companies are coming out this week and saying that they have never seen such a steep down turn nor can they see the bottom.
Bill, re: Best Buy, I’ve noticed they are offering 0% financing on the home theatre products. At first it was for two years, but their latest commercials state three years. I think this is playing a big part in their earnings. For some people the zero financing is not a bad idea, as long as they pay it off before the period ends. I wonder what percentage of people wind up getting hit with the ridiculous interest charges because they really couldn’t afford the product?
The bulls are running, the bears are retreating, “If I’d only bought in ‘04 becomes the new mantra!” LOL
“Dude, where’s my equity gone?”
The faster prices fall, the sooner the bottom will be reached. I believe median prices month-over-month will first turn upward not later than June 2007.
You may be right…I believe the term you are looking for is “dead cat bounce”.
When did the two-year $500,000 exemption law (for a couple) take effect?
Wouldn’t we logically expect to see a flood of inventory on the market of those who made significant gains in selected markets exactly as their two-year horizon is met?
Someone correct me if I’m wrong, but I think that was in 1997. Of course, RE was no big deal back then because everyone knew the place to be was dot bomb stocks of companies that don’t have earnings! Then after a couple years recovering from the Nasdaq crash and then 9/11, interest rates were rock bottom and the bubble is history. A 1-2 combo of the 1997 tax break and lowest interest rates in 40 years. I did not bite. I have lots ‘o cash