“The Aura Of The Frantic Is Over” In California
The Union Tribune from California. “San Diego County’s housing market extended its price and sales decline last month. DataQuick reported the median sales price in September at $476,000, down $22,000 or 4.4 percent from a year ago, the largest year-over-year drop since 1993. Overall sales tumbled 35 percent from year-ago levels to 3,207 transactions, the biggest year-over-year decline since 1991.”
“Perhaps the biggest surprise came in the resale-house category, which makes up about half of the home-selling market. The September median stood at $545,000, down $5,000 from a year ago, marking the first year-over-year drop since July 1996.”
“The DataQuick figures showed an 8.1 percent drop in overall housing prices since the peak of $518,000 in November. ‘I think this is a rather ominous number,’ said Ed Leamer, director of the UCLA Anderson Forecast. ‘The news from San Diego isn’t very good.’”
“Longtime Del Mar real estate agent Chiquita Abbott said the departure of investors and speculators took much of the steam out of her coastal market. ‘The aura of the frantic is over, and that’s what I tell people,’ she said. ‘If you’ve got a house to sell, you have to adjust your price and pray someone wants it.’”
The Voice of San Diego. “The drop was the biggest dollar-amount plunge observed year-on-year by DataQuick since it started monitoring the San Diego market in 1988. ‘It is a big drop,’ said Peter Dennehy, of the Sullivan Group Realty Advisors. ‘But sales prices have even come down more than that. The median price is finally starting to come down with what we’re seeing on the street.’”
“Economist Chris Thornberg said the market will have to navigate some more tough terrain ahead. ‘All this nonsense about us already starting to see the light at the end of the tunnel, we’re not even close,’ he said.”
The Orange County Register. “The median price of an Orange County home fell for a third straight month in September, when the midpoint of all sales was $626,000, DataQuick reported today. It’s down $20,000 from the peak price of $646,000 in June.”
“DataQuick also reported that 2,664 homes sold last month, which was 34.6 percent below the number of homes sold in September 2005. It was the 10th month in a row that sales were down from last year’s levels.”
The Novato Advance. “‘Buyers..now have the advantage across the board due to the growing inventory of unsold homes,’ said Peter Neilsen, an agent (in) southern Marin.”
“The median price of a single-family home in Marin has declined as well, by about one percent from $951,000 in the third quarter of last year to $945,000 for the third quarter of 2006, according to statistics from the MLS for Marin County.”
“Steve Dickason, for Pacific Union in Novato and Greenbrae, was at a loss to explain the market slowdown, but said he expected more stability in the next year. ‘We’re not going to return to that crazy market any time soon,’ he said.’”
The Daily News. “Home sales were down 35 percent last month compared to September last year in the Santa Clarita Valley. Condominium sales fell 37 percent.”
“Santa Clarita Realtor Pam Ingram said more homes are on the market, giving buyers the advantage. ‘They’re looking for the good deals and they’re asking for below what the sellers are asking for,’ she said.”
The Press Democrat. “The housing industry, which propelled Sonoma County out of recession three years ago, is now shedding jobs as builders, mortgage brokers and real estate companies feel the impact of the slowdown.”
“The sector, which employs one in six workers in Sonoma County, lost 1,300 jobs in the three-month period ending June 30, according to a new study.”
“Sonoma County home sales have fallen hard and fast. Sales have dropped for 11 consecutive months. Prices have fallen 6.7 percent since August 2005, when the median price peaked at $619,000. ‘It took longer for the market to turn. We thought this was going to happen a couple of years ago,’ said Steve Cochrane, an analyst with Moody’s Economy.com. ‘Now that it’s turning, it’s turning faster, almost on a dime. It’s going to be painful.’”
“Overall, Cochrane said the county housing sector could lose 3,300 jobs from its peak in March. Job losses on that scale would be comparable to the previous housing downturn, when the county lost 3,800 housing-related jobs from 1990 to 1992. ‘I remember those 2½ years like they were yesterday,’ said Randy Blankenbaker, regional manager for Chase Home Mortgage, who lost five loan officers in Santa Rosa earlier this year because of a lack of business.”
The Daily Press. “One of the Victor Valley’s largest homebuilders, KB Home, has stopped building new houses in the Victor Valley and plans to lower prices to a level that brings buyers back to its communities.”
“‘We’re going to bring the market where it needs to be,’ said Rex McGuire, senior director of operations for KB Home Inland Valley. ‘And it’s not easy. It’s like turning the Titanic.’”
“He added that no new inventory would be added until the new-home inventory was brought down. ‘We’re sitting on a lot of dirt right now and it’s killing our balance sheet. We’re taking a haircut,’ he told the group of about 50 Realtors, brokers and business owners.”
“One area that is not selling in the Victor Valley is KB’s higherend luxury communities, Mc-Guire said. ‘It’s just shut down. It’s stopped,’ he said. ‘We were going full-throttle, and as soon as this market had a correction, our brakes weren’t that good. It took a little while.’”
“‘Obviously if you’re selling your home right now, it feels bad because you’re competing with 4,000 homes,’ said Caroll Yule, a broker in Victorville. ‘If you really need to sell your home, price it right. Take your 80 percent and be happy,’ she said.”
‘ San Diego-market home prices will drop more through next year, said Alan Gin, an economist with the University of San Diego. ‘It’s a very weak housing market here,’ Gin said. ‘Housing prices skyrocketed here compared to other parts of the state with a lot of speculation and people getting priced out of the market, and now we’re seeing a pullback. ‘Buyers have heard about a bubble popping so they’re staying out of the market to see if prices will drop further in 2007,’ he said.’
‘Housing sales in the region are likely to keep falling in the near term as prospective buyers wait for home prices to retreat more, said Mark Riedy, executive director of the Burnham-Moores Center for Real Estate at the University of San Diego. ‘There is a buyers’ strike right now,’ said Riedy, a former president of mortgage finance giant Fannie Mae. ‘They’re all kind of sitting around and not jumping in.’
‘The major correction has taken place,’ said broker Daniel Maloney, adding the media’s suggestion that the housing market is collapsing is faulty because overall prices have recently begun to stabilize rather than decline quickly on a monthly basis. ‘We have a housing shortage and a great diversified economy,’ Maloney cited as his reason for optimism.’
‘September sales fell steeply across the region, with San Diego County losing the most ground by posting 35% decline from the same month last year. Sales fell 34.6% in Orange County; 27.9% in Los Angeles County; 25.8% in San Bernardino County; 24.5% in Riverside County and 20.5% in Ventura County.’
‘Now, is when things get interesting,’ said Marshall Prentice, DataQuick president. ‘The vast majority of home buyers have done very well for themselves the past few years. As things level off, though, we should be able to quantify how many buyers overpaid during the frenzy, and by how much.’
From the UT article:
‘In Escondido’s case, (realtor) Faye Hines acknowledged that attracting buyers is difficult. She represents one seller who moved out of town and put her house on the market at $690,000 two weeks ago, reduced it to $685,000 this week and will make further adjustments every week. ‘We have so many fewer buyers than inventory – we’re totally over-inventoried,’ she said. ‘I can’t understand why everybody in the world isn’t buying. They should get off the fence and make it happen.’
there aren’t a ton of *qualified* buyers on the fence….and if they are on the fence, they will wait. faye is right about over-inventoried…..
She also right that there are so many fewer buyers. Whatever that means.
Few, divided by Many = miniscule sales per listing ….
Over Inventoried? You guys are all crazy. Daniel Maloney just said “We have a housing shortage”. Record inventory be damned, inventory is subjective, like median prices and binary logic.
Oh, just wait. We are now entering no man’s land - The holiday season. That’s when we should see the next strong surge in inventory levels and no one even looks much less makes an offer. The FBs sitting on properties that are eating them alive will begin to panic come Nov and the price cuts will soon become sharp drops. A flood of defaults won’t be far behind. All falling into place nicely…
We’re totally overinventoried and totally have a housing shortage, so buyers totally must buy NOW while there’s A. a housing shortage and 2. a totally overly inventoried like totally situation. Totally. Got it? Totally logical.
Totally overinventoried, totally buyer shortaged, totally interest onlied, totally upside downed, totally price declined, totally despeculatored. In short, totally bubbled.
“qualified” is such an Old Economy word.
LOL! Maybe we should go back to the old economy because what just happened is f**ked up!
“Over-inventoried”? Where do people get these nonsense words and phrases?
From the Victor Valley story:
‘John Dillon, a representative with Countrywide Home Loans, said the signs show that a slowdown will be temporary. ‘For the first time as a nation we’re actually seeing a levelization, a decline in prices,’ he said.’
‘levelization’ ahh yes the good old levelization. It’s such an under used word in my opinion, last employed by the captain of the Titanic… or was the chief pilot of the Hindenburg? I forget.
“‘For the first time as a nation we’re actually seeing a levelization, a decline in prices,’” he said.’”
Levelization with declines? It’s like a plateu with cliffs.
Its a perfectly cromulent word.
Funniest thing I’ve seen all week! My humorizer is emiggened!
“…..It’s like a plateau with cliffs….”
These are in Arizona …. Levelization rock formations….
Doesn’t “cromulent” mean: a word that can used as itself in a sentence?
No, Crom was the god in Conan the barbarian that was buried in a rock formation tomb.”Crom”ulent means what once stood mightily on a plateu is know buried under it.
With Arnold as our Gubuner we’ve changed a lot of definitions here in Kali-fornia.
I love when Simpsons references can be used on a blog. It is a beautiful thing.
A Simpson’s reference embiggens us all.
“Levelization” is what happened at Stalingrad
Us fail English? That’s unpossible!
Eschew obfuscation
Never use a large word when a diminuative one will suffice.
How about “swamped?”
Daniel Meckstroth, chief economist at the Manufacturers Alliance, state that ‘that the housing bubble has cracked and is declining at a pretty rapid rate’. Where is LAY and Lereah on this. Bring back Gary Watts to the rescue.
Translation: Faye has several rental properties herself and she may be up $hits creek.
Wow, even Alan Gin is becoming bearish on housing again. He was rah rah-ing more than almost any other “economist” last year. He pulled so many “fundamentals” out of his bum the last year explaining why the bubble was rational. I’ve been very angry with him. He’s been a naughty boy.
He shames USD.
Time for Mr. Gin to attempt to rewrite history. Might be difficult, but what else can he do? Admit he was dead wrong? Nah.
He already did rewrite history. It’s NOT HIS FAULT THE MEDIA’S
See: ‘Buyers have heard about a bubble popping so they’re staying out of the market to see if prices will drop further in 2007,’ he said.’
good point.
to be followed by “…….if prices will drop further in 2008.” “…in 2009.” But never worry about the actual PRICES, because the fundamentals are good. These declines are just a media driven dip. Dumb@$$.
Someone needs to Google this clowns comments. He has done a 180. His REIC checks must be bouncing!
Green Span saved economy from the dot com burst by creating the housing bubble and seem like it has been deflating. I wonder Bernanke will try to save economy by inventing a new bubble. Your thought?
Having already bought my positions in Iceland, Brazil, and Australia sovereign debt, I got so desperate for an India investment today that I bought into Morgan Stanley’s closed-end India fund even though it is not trading at a discount to net asset value. The fact that it was up more than 2% today alone made me wonder if you guys are all doing the same thing.
DOW is up 100 today. Bernanke on the job. $ out of housing and into the market. HBs all up. ‘Pass the koolaid please Mr. Jones’.
We had a thread about that on Piggington. Apparently he made an appearance to defend himself. It was quite comical. The idea that someone can “study” the marketplace yet be as ignorant of what is/was happening here as he is, would be funny if it weren’t so sad.
He is just starting to come around to a bearish stance, but then; thats like finally joining a rousing game of re-arranging the deck chairs on the Titanic.
That’s great. You can hear the whiny desperation in Ms. Hines’ voice.
http://associates.era.com/fayehines
email fayehines@earthlink.net
‘I can’t understand why everybody in the world isn’t buying. They should get off the fence and make it happen.’
Well, is she (Faye Hines) buying?
I hear a lot of realtors claiming that you would have to be a moron to pass-up on these oportunities but I don’t see any of them buying themselves.
Give them a break. Can you tell she’s frustrated? If I were her, I would search for another career. People who get into this field should know real estate is cyclical. Sound like she’s inexperienced. She should know that at such high prices, not many buyers are indeed qualified to buy.
Sent email to F Hines.
Dear Faye,
Since houses are such a great deal perhaps you should get off the fence and buy a few yourself. Remember. Real estate always goes up.
I’ll let you know if she responds.
They are being FORECLOSED on from last years buys!
Credit history becoming storied and GEE income down 65%!
Go figure, just when it’s agood time to buy?
Sellers are being victimized by renters who are not stupid enough to buy.
well said
Joe6, please remember: all renters are bitter and jealous, and are too stupid to know that they are stupid. Even when the market has underwent such gianormous delevelization, the renters have remained money-throwing-away renters.
Some renters even went so far as to SELL their homes and BECOME renters. How dumb is that? I mean, how could compare the interest income from a big savings account to the joys of a mortgage interest deduction? How could spending 40% to 50% of the cost of a mortgage to rent a home compare the joys of home ownership?
If it weren’t for the renters, home ownership would be at 100% right now…..Think about it!
I think she’s pissed because she’s late on her Beemer pymt. and you a-holes sitting on the fence aren’t helping any!
And think about it for a moment, if the realtors got their wish and all those renters and fence sitters jumped in and bought a house it would only delay the inevitable. Why? Because builders would just build more houses and then there really would be no more buyers left. Even if all the non-buyers bought the current RE price levels would still be unsustainable. The stagnant/falling prices have nothing to do with fencesitters. It has everything to do with mortgage to income ratios.
Another bumper crop of ridiculous REIC quotes!!
The problem is that only smart buyers and those people that were priced out are left. Most of the fools have already bought in and are sitting in in their albatroses waiting to get rich as the carry costs eat them alive.
Faye is a frigging moron and is a perfect sterotype of the idiot realtor that we discuss on this blog…bottom line is that she wants her commission. Why aren’t people buying? Hey stupid, it’s all about the price. Price that POS $685K house back to $300K which the current owners probably paid for it in 2002 and it will sell. There are no buyers because they have all been priced out. Just the montly PITI on a $685K house is probably more than what 90% of the people in Escondido earn. Escondido was the cheap bedroom community for people who couldn’t afford to live in San Diego and were willing to spend half their free time each day commuting. CATCH A CLUE!!!
“Largest y-o-y price drop”, “biggest decline”, “biggest dollar-amount plunge”, sales falling “hard and fast”, “ominous” numbers.
Something tells me we’re going to be seeing the media using a lot of superlatives and adjectives like this for years to come.
i’m surprised they are using these only 2 months after they were 180 degrees in the opposite direction
If so, we in the bubble watching world will have to make up some new acronyms, “LYOY”, “BD”, “BDAP”. LOL.
- The median price is finally coming starting to come down
- market will have to navigate some more tough terrain ahead.
- ‘All this nonsense about us already starting to see the light at the end of the tunnel,
- we’re not even close,
- Even a blind man could see this coming.
Liarreah is blind and he couldn’t….
Did I miss “soft landing”?? PS. Where is Leslie Appleton Young when we need her to spin this??
You most have been asleep. What to you usually do after you have a soft landing? That right you get off the plane. Its whats called the ‘Disembarking Phase’, where everyone gets up and leaves.
I think you mean disemboweling phase for the flippers.
I think we will indeed have a soft landing, but it’s gonna involve parachutes.
Leslie is still searching for the right moniker.
Mrs. Watts
OT: CTX has a VERY bad quarter.
http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=PR&Date=20061012&ID=6100311
I wonder how much their stock will rise?
Ok, I’m NOT a good stock analyst. But this doesn’t seem like a good thing. (my cut and paste):
1) Housing operating earnings for the fiscal second quarter are expected to approximate $230 million
2) the company expects option deposit and pre-acquisition walk-away costs to be in the $85 to $95 million range this quarter
3) Additionally, land valuation adjustments are expected to approximate $40 to $45 million,
SO….
In second quarter they made 230 mill in profit
This quarter, they’re doing worse
And they need to subtract around $140 mill in write off expenses???
Jesus, CTX is gonna go through the roof tomorrow.
I need to buy a call immediately!
We should start a pool to see which homebuilder will be the first (or next?) to have a quarterly loss.
Perhaps not just a loss, but perhaps the next BK.
You’ve missed the most important element of any analysis. Given what you foresee, where would place the fair value of the stock today? And where would you place it tomorrow? If this view is different from the markets you can place your bets. You can throw in all the bad news you have and come up with a price of XX, if the market is lower than your analysis, then it is still a good buy even with the bad news.
How do you predict what rating the GS or JPM judge in the Keynesian beauty contest will give CTX with these great new numbers?
CTX off almost 5% after hours. It will end up off 2% or more tomorrow, and another 2% after the 24th, and another 5% after the housing data for Sept comes out a few weeks after the election.
Holy toledo batman………..call the PPT !!!!!!!
And call off the election!
No conspiracy nut label need apply (I know, it’s the last remnant of a tool in the rethuglican toolbox). What happens in November is that September data is in the reports. Anyone tracking the market in So Cal knows this is really when sales fell off a cliff. What’s has come out most recently until now reflects July-early August data, mostly from deals negotiated in May and June, before sentiment had crashed and bubble articles were largely a blogger phenom.
BTW: CTX down 5.5% today. My puts are making me smile again after a rough month or so. As for the 2006 elections, “bring em on!’
Yes the other NEws that I thought every one would be interrested in besides the Centex admission..was the 20% over estimates from a PAWN shop lender….
New product is NOT selling becasue real home buyers can’t sell..that’s normal poor market…
PAWN shop lender reports higher Interest income in Q3 as they lend to people who do not have the cash or assets to seek help some where else.
Down in AH about -5%. JPM and the rest of Team Wall Street ran this mutt up with OPM for weeks. Now, the widows and orphans own it, and the masters of the universe are busy pumping (in preparation for dumping) the rest of the mangy dogs in this pack. Ain’t capitalism great?
It’s not pumping and dumping when those guys do it. It’s called upgrading and downgrading. Of course they would never think of frontrunning the trade
CTX just gave a reality check.
Good thing for CTX shareholders that homebuilder stock prices go up, come hell or high water…
“Steve Dickason, for Pacific Union in Novato and Greenbrae, was at a loss to explain the market slowdown, but said he expected more stability in the next year. ‘We’re not going to return to that crazy market any time soon,’ he said.’”
Steve, I would say it will be about 12 to 14 years at least till we get a crazy market. Takes time to get a new crop of GF’s.
If this is the 1929 of real estate, it could take a good 40 years to see another round of irrational exuberance.
Hmmmm, it only took 3-4 years between the Naz bubble and housing bubble.
Computers have speed everything up. In 5-10 years we will have some other dumbass bubble.
Crappy public education have speed everything up to.
Yup, grade inflation makes everything seem inflatable.
Indeed. No Child’s Behind Left Without Merriam-Webster’s Collegiate 11th! Or else, like, their, like vocabularies will be all, like whatever or something, you know?
And to the afore-mentioned Webster: OhnoyouDINT put ‘nuke-u-lar’ as a correct pronunciation for ‘nuclear.’ Damn thee, metathesis! BushCo wins again!
Idiot…it was screwed up long before Bush added his fair share…Idiot.
I seem to remember Carter pronouncing it “new ck ee are”
Frantic buying is over, frantic selling is just around the corner. Why can’t folks make rational decisions?
Of course, many of us wouldn’t even have been born if we all made rational decisions. My parents were clearly not made for each other.
The rationality of a decision to have kids is questionable even if the parents are well-matched.
No surprise since the need to breed predates the invention of rational thought by a couple of million years.
“I can’t understand why everybody in the world isn’t buying. They should get off the fence and make it happen.”
OK, dingbat, tell your clients to knock $200K off their asking prices and maybe something will happen.
Can’t wait for the NorCal/SF numbers to come out. Usually out a day after the southland numbers. Hoping for evidence of the same trend, which everyone in NorCal has seen anecdotally but has yet to be corroborated by market stats.
“I can’t understand why everybody in the world isn’t buying.”
Help! The levelization of overinventorization is an aberration beyond rationalization!
I hate to correct your grammar Future, but didn’t you mean to say:
Help! The levelization of overinventorization is aberrational beyond rationalizableness!
Oops, my badliness.
‘We have so many fewer buyers than inventory – we’re totally over-inventoried,’ she said. ‘I can’t understand why everybody in the world isn’t buying. They should get off the fence and make it happen.’
Ummm… Faye? Everybody in the world is not buying because they are a shit-load smarter than you honey. Next question please? I have time for juuuust a couple more…
And because they can’t buy because they are trying to sell their existing house to do so . . .
But… totally if we continue to be overinventoried and underbuyered, poor Faye will be underBMered. Those lease payments are totally overincoming the totally undercommissioned real estate brokers. Totally.
Which begs the question of why exactly these surrealtors beleive that it is a better deal to pruchase real estate and to rent an automobile.
“The DataQuick figures showed an 8.1 percent drop in overall housing prices since the peak of $518,000 in November.”
Well since Moody’s predicted a peak to valley drop of 8.4% through 2Q 2008, so the worst is over in San Diego, right? Right? Hello?
“Prosperity is just around the corner”
–H. Hoover, 1932
Could this be the answer?
http://media.americancomedynetwork.com/FILES/MexTourism.swf
That’s right — just 0.3% more drop to go through 2Q 2008, and that’s it.
Funny, I noticed the same sort of thing in the Sonoma County numbers. Median is already down 6.7% from 2005 peak (to $575K from $619K), but Moody’s is predicting only another 1.1% drop from the high by mid-2008. Whew! Good to know the bottom will be $570K. We can all make bids accordingly.
Wasn’t that from now? So another 8.4% and all the buyers will come running back with their option loans and … Oh wait, I heard these loans will get harder to get in the next few months…
i’m in sebastopol,and no that prediction from moody’s was a correction from the peak.santa rosa has already corrected more than 10%,and west county is very close.as a loan broker i watch my area very closely,and the few homes that are selling now are priced at fall ‘04 prices,,and are in very nice shape.the new guidelines have yet to have an effect,but it won’t take long.an informal poll of 8 of my co-workers showed that none were aware of the new guidelines,nne were newbies to real estate.?????
It should be of great concern that Moody’s facts in such an obvious area are so wrong. I cannot see how they can predict credit risk effectively given such a rash underestimation of the facts of housing.
That’s easy to explain: they can’t.
I cannot see how they can predict credit risk effectively given such a rash underestimation of the facts of housing.
——————————
When one considers how all the MBS/ABS & related derivatives were rated…
The elephant in the room…
$5K off a $700K house is not exciting. It’s more annoying than anything else.
I’ll just be happy when they stop the “seller will entertain offers between $X00,000 and $Y00,000″ crap.
Please, what’s there to entertain? Look at the offer and accept it, or not.
When I sold my SD condo the realtor FORCED me to “entertain” offers between a certain range. I of course took my true wish price, and made that the low range. After a furious bidding war, I actually got more than the higher range limit… but I still took it.
I guess I was willing to “entertain” a higher range than previously thought.
So stupid.
I’m sure the appraiser wasn’t entertained by that winning bid.
That just lets buyers know who’s not a motivated seller and who not to waste their time with. Those houses will sit for a long time.
Yeah, what is that, a 0.7% drop? How is that not insulting?
i was looking at san diego condos and i e mailed the zip guy that i wont even consider making an offer on a home with a price range.price ranging in a tanking market is the most absurd thing i have ever seen.also im not buying now, the deals will be sweet in 08,09.
Bottom feeder-that is a great thing to tell a realtor. Bravo
That $5K off is a signal of an out-of-touch seller. Who wants to deal with buying from someone who is out-of-touch with reality when there are so many other homes to choose from?
DataCracked:
September 19, 2006: “Indicators of market distress are still largely absent.”
October 12, 2006: “Indicators of market distress are still at a moderate level.”
Ha! So if they were “largely absent” in September how could they still be at “moderate” level in October. Talk about sugar-coating the truth…
they dont sugar coat nothin, they flat out lie.
Great post I cross posted it at OCR’s Lansner blog on the Dataquick numbers.
Do all these negative numbers mean Gary watson’s crystal ball was wrong?
How can that be?
Everyone set him up to be so intelligent.
Stanley-
I checked out some homes in your area (PV Estates) over the weekend. Things seemed pretty dead at the open houses I attended. I also went to the outdoor mall nearby (in Rolling Hills maybe?) and was shocked at how empty it was.
that mall was a big mistake even before they remodeled it years ago. Someone should suggest they turn it into very expensive townhomes.
frantic has just begun
holloween / arson
biggest ever !
Don’t put ideas into the head of the builder whose unmarketable spec house I am living in. My rent pays only 1/3 of his carrying costs.
“‘We’re going to bring the market where it needs to be,’ said Rex McGuire, senior director of operations for KB Home Inland Valley. ‘And it’s not easy. It’s like turning the Titanic.’”
Ha! I think he might want to think over his choice of analogies a bit more. What happened to the Titanic?
I think he meant to say raising the Titanic. That won’t happen for a good long time though.
Where’s Dirk Pitt when we need him?
I couldn’t stop laughing when I saw his word of choice.
Has Gary Watts fled the country yet?…..or does that rectal secretion think that he can salvage redemtion in the last two and a half months of the year.
I just noticed this week that ,one of his loyal OC realtors finally replaced his infamous double-digit gain prediction on her realtytimes OC market condition webpage.
“rectal secretion”
Bwhahahahaha………
What a classy way to say “sh*t”
Good one “nnvmtgbrkr”
Check this stuff out: http://rprclients.com/CTX-06201HomePlay/CTX-06201HomePlay.html
Talk about creepy. This is in that master-planned community in Oxnard.
“During HomePlay, actors representing a family will interact with each other as if the new Trellis Model Home at RiverPark were their actual home. Our HomePlay family will be taking part in all the happenings that could take place in a real household.”
“I told you we shouldn’t have bought now…”
“How are we going to pay the mortgage when the rate adjusts?”
“…the nice people on the Blog said ‘Wait’, but noooo…”
“What does ‘negative equity’ mean?”
“…buy now, or be priced out forever, you said!”
“The mortgage broker won’t return our phone calls!”
“I think we should see other people…”
Hilarious! Forget “HomePlay” actors –we should start a troupe of Ben’s BubblePlay actors and start going to open houses.
I get to be the dog.
That is just too funny
Harm,
It just might be time to pull out the big guns (Ben’s bloggers going to open houses). Imagine if around 10 of us walked through home after home, remarking how overpriced everything is.
Then, we could go for pizza & beer afterward!
Sort of brings new meaning to “master-planned”. Given the common man’s contempt for freedom, if they’d lower the price and up the “master” I’m sure they could find some buyers.
“Talk about creepy”
F***ing weird.
“First Ever English and Spanish Presentation”
very appropriate for the lovely town of Oxnard…
Now I’m sure we are in the Twilight Zone, Rod Serling where are you? Please pop out from behind the curtian soon!
Maybe they should put on little skit dramatizing the relationship between financial distress and domestic violence.
Bizzare. Of course they normally tell sellers to leave during open houses so that the house doesn’t seem too much like “somebody else’s space.” Just as “feeding the squirrels” was one of great stupidities of the inflating real estate bubble; hiring actors to “stage” a house and make it look lived in may be a great sign that the bubble is rapidly deflating.
“Economist Chris Thornberg said the market will have to navigate some more tough terrain ahead. ‘All this nonsense about us already starting to see the light at the end of the tunnel, we’re not even close,’ he said.”
If you listen to Thornberg’s entire speeches and not the written blurbs, he’s been quite bearish for a while.
I happen to agree with hom. We’ll be in the middle of the tunnel in 3Q2007 with no light and the flashlight batteries will have just died…
Neil
Guess it depends on your definition of bearish. He’s certainly not been a bull of late, but cite me one example of him predicting a price drop. His statements to me sound like something Lereah would agree with.
He’s not a bull or bear. He’s one of them new Plateauists that believe housing is way overvalued but will plateau for the next decade while salaries catch up.
I lost the link, but I’ve listened to some of his presentations and comments like “Orange County is different, they’re going to get hammered” sound bearish to me.
So I have I. Every single one of them says prices will stay flat. Orange County’s ECONOMY will get hammered but not home prices. Listen again.
Here’s the video:
http://tinyurl.com/ym4dbd
He sums up by predicting that prices will stay level (nominally) while salaries/rents etc. rise to meet them. I think he said six years.
This was a little while ago though.
I just don’t think that’s possible. For incomes to catch up in six years would require wage inflation at ~16% since houses peaked at about two and a half times what they were in 1999. (1.16 x 1.16 x 1.16 x 1.16 x1.16 x 1.16 =2.43) There is no conceivable way that current prices could be supported at an inflation level of 16%. If we assume NO premium over inflation for the mortgage issuer, on a $450,000 interest only loan, the monthly payments are ~6,000/month. Thats $72,000/yr building no equity at all. The idea that any buyers that stupid can be found beggers the imagination.
Of course the mistake I made in the above is that we would have to subtract the nominal wage inflation that has happened since ‘99 from the amount that wages would have to increase. The rest of my back of the envelope figures were conservative enough that my point still stands.
Dang! Where do I sign up for the 16% per annum wage inflation?
Since 16% pa wage inflation would probably be driven by greater than 16% price inflation I think I’d rather pass. Of course global wage arbitrage means that this combination is difficult to imagine without a serious collapse of the dollar on the currency exchanges
“If you listen to Thornberg’s entire speeches and not the written blurbs…”
Good point. Sound bites are for sheeple.
Getstucco,
You’re at fault for having me think of the “idiot masses” as sheeple. I’m not sure where you got the word, but its mime is spreading.
Neil
new to the bearish/conspiracy undeworld of internet message boards and blogs are we?
Feel free to think of them as “idiot masses” if that makes you feel better about the world. And don’t kill the messenger.
OMFG this can’t be real.
Mega-Storm Signposts !!!!!!!!!
http://news.goldseek.com/GoldenJackass/1160673957.php
My conspiracy wacko detector went off at the paragraph about electronic voter fraud.
Really? You might want to take a look at the 9/06 Princeton study on the Diebold machines…. Just the latest in a series of credible examinations of the horrifying ease with which the machines can be accessed… Congress even pretended to be shocked..
The MLS stats for the Boise area just came out:
Sep 06 homes sold down 40.53% vs. Sep 05. Median home prices still up 20.03% vs. Sep 05. Median price is now 240k.
Over the last few weeks, new home subs have been advertising heavily on the radio and TV with various promos such as no payments for the first 3-6 months. All we need now are lower prices.
Meh, they should name them “Sub-Zero” loans. Next they’ll be paying people for the first year if only they’ll just sign on the dotted line.
You mean like offering them free cars and vacations?
HIC,
Perhaps this is why most people subconsciously associate ‘renter’ with ‘loser’ and ‘homeowner’ with ‘winner’. We’re still using a linguistic framework originally conceived during the Middle Ages, when landlords were just that, and in order to own property literally required having a royal “Title” (of nobility) conferred on one by the Crown.
Perhaps we should work towards popularizing new terms to replace the archaic feudal nomenclature: homedebtor/mortgage-serf/FB for landlord; saver/nondebtor/freeman for renter, etc.
Sorry –was responsing to 14:18:17 comment by House Inspector Clouseau re: seller’s use of the word “entertain”, but didn’t post my reply in the correct location.
I thought mort-gage (death-pledge) pretty much covered the negative part.
True, but how many mortgagees know the literal meaning & origins of the word?
Sorry to be VERY technical, but the borrower is the mortgagor, not the mortgagee. I am the mortgagee. The mortgage, as stated above, is a pledge. The FB pledger is the mortgagor. Us mortgagees may not know the origin of the word either but we know enough not to end up in debtor’s prison.
AZ Lender, would a female borrower be a mortgagette?
Backstage: since “mortgagor” is the masculine form, “mortgagrix” might fly. Like “executor”/”executrix”
BTW, what do they call mortgages in non-latin-root languages like Japan, India, China?
Not sure about the Asian ones you mention, but German is something like “Hypothek”. Weird, huh? I have NO Idea where that came from, but it stuck with me as I had some dealings with the now-bought out “Hypo-Bank”, full name being Bayerischen Hypotheken- und Wechselbank (Bavarian Mortage and Exchange Bank).
Arrghhh.. “Bavarian Mortgage and Exchange Bank”. Sorry ’bout the spelling.
we call that hypothecation in real estate speak when trying to impress the receptionist.
住宅ローン “JuuTaku Roun”
-A LiveHouse (Home) Loan
It’s called “Mortgage” in India too if it is for real-estate. If the loan is for things (like cars), it’s called a “Hypothecation”. You frequently see taxicabs with “Hypothecated to So-and-So bank” written on them. They are required to do that if they bought it using a loan and haven’t yet paid it off.
True dat. Was talking to some friends who are in the REIC (one realtor, one title chick, one appraiser and one mtg broker). All gen-xers (like me) who lost out in the dot-bomb scheme and reinvented themselves in the REIC. All were agreeing that if you buy a home “you’ve really accomplished something.” Of course I still rent. I said “Well, if you own a home, you have accomplished something. But no one owns their house anymore” to which I got a cacophony of real estate always goes up and its special here in orange county.
This is OT, but do you all know where the word “villian” comes from? It comes from the French word for “peasant”.
Very interesting. I did not know that.
But do you happen to know the where the word “villain” comes from?
It takes “experts” to come up with this stuff.
http://www.chron.com/disp/story.mpl/ap/fn/4252575.html
Duh!
Just had a realtor cold calling at our door in Mountain View CA - wanting to know if we wanted to sell our house - told him we rented - wanted to know if we’d like to buy a house.
Does that mean my area is still in demand or that the realtors are desperate for business.
I wish now I hadn’t told him we rented - if he’s really desperate he might try to look up the owners and persuade them to list it!
Claire, I can’t help but wonder how the cold-calling Realtor would have reacted if you’d told him that you were just house-sitting.
Or if she had to go check on the special lighting in the basement.
if I recall, there was about one realtor per listing in the South Bay.
If the city of Santa Barbara has to sponsor its lawyers and doctors to buy homes in town, it’s not difficult to see why prudent middle-class buyers are mostly gone for good. With real buyers gone, there is no way the correction won’t overshoot.
Long time no see goleta. Inventory in my South Goleta neighborhood has gone from 2 at the beginning of the year (of which one sold, apparently to 2 or 3 foolish 20-something couples) to 6 or 7 as of now.
Claire:
Your realtor comments remined me of the FULLER Brush saleman who went door to door when I was a kid!
Using median sales price YOY is misleading. Don’t forget that.
The house in a neighborhood that sold for $800K last year is probably selling for $700K now. But buyers can now buy a house in last year’s $900K neighborhood for say $780K. The numbers that are recorded are $800K last year and $780K this year. Thus, it’s not a lie to say the median selling price is only a little lower YOY. It’s just misleading.
It would be interesting to see the statistics (if they exist) showing the median price reduction percentage, from the initial asking price to the final sales price. I’ll bet it’s well above 10%, especially in places like California and Florida.
I’m a broken record on this point: The actual sales should be released as spreadsheets, with sq ft.
2000 sqft home comparisons then become possible.
Dataquick has the sq. ft. numbers…but month to month they can be quite ‘noisey’.
‘The major correction has taken place,’ said broker Daniel Maloney, adding the media’s suggestion that the housing market is collapsing is faulty because overall prices have recently begun to stabilize rather than decline quickly on a monthly basis. ‘We have a housing shortage and a great diversified economy,’ Maloney cited as his reason for optimism.’
Wow. Some idiot is actually still spewing the “land shortage” bullsh*t. Either this guy has been in a coma for 3 years or he’s behind on his payments for his H2, Best Buy act, 5 flipper property, credit cards, etc. Yeah, we know the answer to that one…
I guess he missed the big orange balloons over the McManion tract homes advertising “NEW HOMES FOR SALE” in bold letters.
“Economist Chris Thornberg said the market will have to navigate some more tough terrain ahead. ‘All this nonsense about us already starting to see the light at the end of the tunnel, we’re not even close,’ he said.”
We have at least 8-12 weeks of further price declines to come out of the woods, right Chris?
‘Buyers have heard about a bubble popping so they’re staying out of the market to see if prices will drop further in 2007,’ he said.’
Many of them probably first heard this from Alan Gin himself
So I saw something I hadn’t seen in a long, long time the other day.
‘Owner Will Carry For One Year.’
What seemed surprising was the address:
Pacific Coast Highway, Huntington Beach.
Are we on the verge of a ‘Owner Will Carry’ explosion?
Sure is getting interesting, and fast/.
P.s…
Go Tigers.
(I’m from Michigan, and Old Guys Rule. God Bless Kenny Rogers.)
I see that all the time in commercial/rental properties. Was this a residential?
This IS, not was, a listing for a 2/1 condo on PCH at I believe, 13th Street. WAAAAAAAAAAY overpriced at $699,000…but still…
…the desperation of the ‘Will Carry For One Year’ caught my eye, and made me all warm and fuzzy.
Is this just the beginning of ‘really, really, really creative financing’?
Oops. It was 12th Street. Here’s the link to the CL ad…
http://orangecounty.craigslist.org/rfs/215084218.html
I wonder if this is one of those viewless interior condos.
The Orange County Register. “The median price of an Orange County home fell for a third straight month in September, when the midpoint of all sales was $626,000, DataQuick reported today. It’s down $20,000 from the peak price of $646,000 in June.”
Gee, I thought everyone in “the OC” was saying this is different than any other downturn, that there’s no military/high tech job losses to cause the downturn, like the 90’s. At least that’s what everyone said in the escrow business I worked in there. Yes, escrow, realtor, and sellers alike all confirmed that September was the time to buy. As was August. And July. And you get the idea.
After all, it is “the OC”. Everyone wants to pick up, move, and live there, especially in north OC, with bars on your windows, graffiti on your neighborhood walls, and a one-hour each way commute to work. All for the low, low price of $700,000.
Hopefully this time next year, it will be $300,000 average. Less would be nice, but I’m not expecting sellers and the realtors who cheerlead them, to give up that easily.
Jason you are correct and the south part of the county is even worse. I suspect some of these people will “hang in” until the OC Sheriff literally forces them out of the home with his hand on the gun in his holster. If these people are digging in for the long haul now with some very creative financing, we are in for a long slow ride downward indeed!
I hope everyone saw this…the budweiser commercial saluting the homebuyer who bit off more than he could chew
http://www.inman.com/blogger/bradinman.aspx
I better link
http://www.youtube.com/watch?v=TxylHPnoloI&eurl=
Not really a budweiser commercial, I don’t think. Funny nonetheless.
From the SD-UT article:
“The overall third-quarter median price for all housing, $482,000, was 2.8 percent below the same period last year, the first year-over-year quarterly price decline since the fourth quarter of 1995. That was about the time the real estate recession of the early 1990s was bottoming out.”
So the 1990s real estate recession took from 1990-1995 to bottom out (six years) but this time is different and will bottom out next year — a record short time for a real estate recession to bottom out after the longest protracted period of mania housing price inflation in San Diego, not to mention US, history? Careful about believing what the “experts” say; you could even get stucco; boy could you get stucco.
Interesting new factor in the economy: sudden rise of agricultural commodities. We’re getting a move in grains we haven’t seen in decades, led by wheat, but extending to corn, OJ, coffee, etc. - generally blamed on drought in Australia (wheat), Hurricane Wilma (OJ in Fla., etc. But feels almost like the oil situation, with a high demand/tightly-balanced market, and quick to spike higher, unlike in previous supply disruptions.
Currencies weak, farmland scarce? Food has been so cheap, relative to incomes, for so many years - could that be changing L/T?
Don’t get too excited by the latest blip in a noisy time series.
On the other hand, we as a globe, are so close to carrying capacity that the incipient climate flux could really catch us by surprise. Noise or warning bell?
Every time there is a bearish article about CA, Ben gets about 150-200 comments. How many of you guys are actually looking for an opportunity to buy a piece of RE here (if so, what and where) when this thing bottoms out, or are most of you guys just enjoying the chance to gloat over the FBs? Either one is fine, just curious how many potential buyers we have here.
Did’nt you hear were fence sitters. No I take that back everyone on this blog is waiting for sellers to put in Koi ponds, then we will buy. What are you doing market research or something, if so please come back in the morning we are all trying to get some sleep, Geez!!!!
I’ll start buying when CA coastal properties again cash flow with a 30y fixed and 20% down. I may buy a house to live in before then.
That’s right… no koi pond, no sale. And no f-ing upside down statues buried in the yard either.
No rush, we are only in the cupcakes and sports tickets stage, we haven’t even gotten the full lobster and champagne treatment yet, may as well live it up.
I won’t be making any offers unless the squirrels that come with the house are well fed by the previous owners for a duration of 12 monthes after close of escrow.
Not potential buyers but “frustrated wannabe buyers.” Count me in. I suspect a GF rally sometime next year when the median declines 10%.
Potential buyer here. Waiting for all the FBs to be shaken loose by the downturn, which I believe will take many, many years (and a recession/depression in there, somewhere).
We need to see how pensions/SS/healthcare/demographics pan out over the next few years. It’s possible we all need to allocate even less income toward housing as we need to make up for lost retirement (pensions/SS/IRAs/401ks — resulting from deflation and a stock market crash). Who knows? But we should really take a long-term approach to this, IMHO.
I’m a potential buyer. I’m also enjoying watchin the FB’s go down in flames. Not because I am sadistic, but because nothing else will result in the drop prices that will be necessary for me to get a house.
I am interested in California, because it affects affordability in my town (Ashland ,OR). Never intending to move to Cali though, unless Santa Barbara goes down to
I love to gloat and rant about bubble popping there in CA. It is vindication for me. Hearing the FB stories solidifies my decision to leave and never turn back.
may be i will keep yr 2000 price as base and have 3%-3.5% increase annualy. (thats my annual pay hike).
damn!! bart train rates go up more than that. cable rates go up more than that.
ok. i will have 20% down and aggresively try to accommodate 15yr fixed.
when will that be? not in the near future it seems. barely 2b townhome sellers are expecting 600k.
Agricultural commodiites are becomming a ‘hot item’ because of the increasing drought conditions and odd weather patterns in prime growing areas for food staples; grains,fruit etc- reasons global warming. Which in the next 10-20 years will have a greater impact on us- not in 50-100 years, thought as a time frame 5 years ago.
read more about that realtor Faye Hine’s listing in Escondido here.
My ex-wife called me the other day for some advice (she still trusts my advice, if not me ;)). Her new hubby, a cop/”real-estate investor,” is screaming mad because she won’t let him use the large sum of money she brought to the marriage from the sale of OUR home (thru divorce) so he can pay the mortgages on his “investments” in Victorville that won’t rent or sell. My advice: “absolutely not. In fact, see a lawyer about distancing yourself from this guy’s impending bankruptcy.” Poor gal.
Another great combination of career and real estate investor. At least he could collect rent and serve his own evictions in uniform. I would give him a much better chance as a landlord than some of the other odd professions now in real estate and soon to be landlords