“Discounts May Be Considerably Greater” In California
The Desert Sun reports from California. “Home sales plummeted 44 percent in November across the Coachella Valley compared with a year ago, while the overall median home price dipped about 1 percentage point to $395,000, a new report shows.”
“Some 717 homes and condominiums sold last month across the valley, compared with 1,070 in November 2005 and 1,116 in November 2004, according to a report released Wednesday by DataQuick.”
“The California Association of Realtors, which compiles home sales and price figures a little differently, reported home sales in Palm Springs and the Lower Desert area were down about 35 percent in November from a year ago, with a 2.1 percent drop in the overall median price. CAR listed the median price in Palm Springs and the Lower Desert area at $369,900 last month, down from $377,740 in November 2005.”
“Area real estate brokers and agents said the downturn in activity last month compared with recent boom years is still a little unsettling. Some agents are faring better than others.”
“‘November was actually a little better than this month (December) and better than August through October,’ said Mario Perez, whose team closed about a dozen home sales last month. ‘It’s weeding out a lot of those agents who unfortunately got into the market late or got into the business when it was really booming.’”
“Greg Berkemer, executive VP of the California Desert Association of Realtors, said as the desert’s traditional high sales season - January through March - nears, ‘the best time to act’ may be right now for buyers and sellers.”
“‘Locally, for buyers, they will find they will pay a little less for the same house than they would have a year ago,’ Berkemer said. ‘In those areas with the greatest appreciation or with certain sellers who must sell, the discounts from a year ago may be considerably greater.’”
“Some 20,388 new and resale homes sold in six counties including Riverside, San Bernardino, Los Angeles, Orange, San Diego and Ventura last month, compared with 27,637 home sales in November 2005, DataQuick reported. Last month’s sales count was the lowest for any November since 1997, when 18,305 homes were sold.”
“In the valley, the slowdown in home sales continued a trend of the past several months. Sales dropped almost 18 percentage points in October, 38 percentage points in September and 41 percentage points in August compared with year-ago home sales numbers.”
“In October, new home sales in the valley surged by 27 percent compared with a year ago. But the increase was apparently shortlived, as new home closings dipped again by 44.7 percent in November, with a 3.2 percent drop in the median price to $398,500, DataQuick reported.”
“By mid-December, there was an inventory of 8,236 homes in the valley, compared with 5,657 in December 2005 and 2,915 homes in December 2004, Berkemer said.”
The Whittier Daily News. “Foreclosures of subprime mortgages are expected to rise dramatically in the coming months, with nearly one in five subprime borrowers at risk, according to a consumer advocacy group.”
“(Broker)Tom Adams, who has local offices in Monrovia and Glendora, said he hasn’t encountered the problem very often. ‘We haven’t seen a lot of it, but it is out there,’ he said. ‘It’s the old, ‘If it sounds too good to be true, it probably is,’”
“Adams said buyers should be wary of advertised deals that tout 1 to 2 percent interest rates. ‘Common sense tells you that at some point you’re going to have to pay for that,’ he said. ‘But the good news, except for the people who bought during the last eight to nine months, is that homeowners now have some built-in equity, so they can sell and move on.’”
“Jack Kyser, chief economist for the Los Angeles County Economic Development Corp., noted recently that some homebuyers who locked in to extremely low adjustable-rate mortgages are going to have a tough time when mortgage rates creep up. ‘You’ll see a big increase in foreclosures,’ he said.”
The Press Democrat. “Home sellers desperate to make a deal during the slowest housing market in a decade have embraced St. Joseph as a sacred real estate agent of sorts.”
“In Santa Rosa, sales of the figurines have doubled this year at Interfaith Books & Gifts, Santa Rosa’s largest Christian book and gift store. The store even ran out of them for several weeks this summer.”
“‘We ask them, ‘Do you want to sell your house?’ We tell them you’re not performing magic here. You’re only asking St. Joseph to sort of put in a good word for you,’ said Rodney Reyes, an Interfaith employee.”
“‘We try to steer them away from that it’s some sort of old wives’ tale sort of thing,’ he said. ‘They’re at a point where what they’re doing is not working.’”
“Cutting prices, paying closing costs and crediting buyers for needed repairs, homeowners have been doing more to get homes sold.”
“After three months, three price reductions and not a single purchase offer, Michele and Efrain Sifuentes wondered if their Santa Rosa home would ever sell. But buyers continue seeking good deals, knowing sales are down more than 25 percent from a year ago and many homes languish on the market for several months or more.”
“Before listing the home for sale, they put in new kitchen counters, floor tile and carpet and painted the outside. They began cutting the price when no offers came in after two weeks. Starting at $569,000, they reduced it to $559,000, then $539,000 and finally $529,000 over the next three months. But still there was nary a buyer.”
“Picking a spot in the backyard near a koi pond, Michele Sifuentes dug a hole for the 8-inch figurine. The next day, she dug up the statuette to change its position from sideways to upside down, a tip she had gleaned from reviewing Web sites and blogs devoted to the many rituals that have sprung up around the practice. Five days later, a couple made the long-awaited offer.”
“Was it coincidence? Or did faith in the patron saint of home-selling make a difference? The Sifuenteses aren’t going to test fate. They are leaving St. Joseph in the ground until the sale closes.”
‘according to a report released Wednesday by DataQuick.’
I looked for this report and didn’t find it. If anyone has a copy, please post it.
On the CAR website they list a report - but it is not available?
They ran the November numbers last week. I posted it.
I must have been working. LOL.
Note to self - Must quit working and focus more on the important things in life.
‘More Regions Reporting Declines Than Increases’: CAR’
“Picking a spot in the backyard near a koi pond, Michele Sifuentes dug a hole for the 8-inch figurine. The next day, she dug up the statuette to change its position from sideways to upside down, a tip she had gleaned from reviewing Web sites and blogs devoted to the many rituals that have sprung up around the practice. Five days later, a couple made the long-awaited offer.”
Do you have to have a koi pond for that position to work?
Sales of the statues could be a valuable metric in evaluating market strength. If say LA is 5.0% of U.S. population but 15% of figurine sales, it might suggest particularly harsh lowball offers.
Unfortunately, sellers’ heads are buried in the sand even more often than the statues are.
“change its position from sideways to upside down”
This is done to prepare the seller for how a lot of their loans verses equity will pencil out when a “offer” is finally received… “upside down”
Same people who vote against the inheritance tax, figuring they’re sure to win the lottery
“Picking a spot in the backyard near a koi pond, Michele Sifuentes dug a hole for the 8-inch figurine. The next day, she dug up the statuette to change its position from sideways to upside down, a tip she had gleaned from reviewing Web sites and blogs devoted to the many rituals that have sprung up around the practice. Five days later, a couple made the long-awaited offer.”
WOW, a koi pond and a St. Joseph statue…
The story leaves you wondering whether the owners were as upside down as St. Joseph’s statue.
Here we go again with the 10K every 2 weeks reduction. Hell, if you WANT TO SELL, you really have to chop off the price. Say, by a lot. In this case, if the house began at 600K and doesn’t move after 3 months, how about a 75K-100K reduction. Oh, I forgot you are already underwater, need to pay off the HELOC, the credit cards, the cars, and the vacations, and still make a tidy profit to live off of for the next 20 years before Social Security kicks in. My bad, so sorry!
Dogh! I just rote what Ya already done rote!
You have to wonder if St. Joe Real Estate in in Florida tried to use St. Joe in St. Joe county. (something like that/ I’m confused)
“The California Association of Realtors, which compiles home sales and price figures a little differently, reported home sales in Palm Springs and the Lower Desert area were down about 35 percent in November from a year ago, with a 2.1 percent drop in the overall median price. CAR listed the median price in Palm Springs and the Lower Desert area at $369,900 last month, down from $377,740 in November 2005.”
Whoa — a 2.1 percent price drop? It must be the time to buy a retirement home in Palm Springs…
“Whoa — a 2.1 percent price drop? It must be the time to buy a retirement home in Palm Springs…”
Ya, I know. I think that the excitement of California prices stalling and ever-so-slightly reducing (1-2%) has now worn off. I still follow my own perception- anything over 300-350k is way the heck overpriced enormous reductions or not doesn’t matter: I will need to see a return to a realistic price. Otherwise, others can feel free to buy. Homes are still at the 600k+ level here in the East Bay…. Looooong way to go, and I sometimes wonder if the supply of gullible anxious nester people will be exhausted enough for those prices to come down enough.
With the possible exception of San Diego, Coachella was the first California market to crack. I assure you prices are down more than 2%. They were falling this time last year, but the Sun hasn’t pointed that out.
It is really hard to tell what will happen on a city to city basis in California. The state is huge and every city is tied to a different industry. The economy in Sacramento, San Diego, and basically anywhere 50 miles or more outside the major metros isn’t that hot.
On the other hand, the economy in SF and LA is( somehow) still performing well.This in turn can affect how rapidly prices falter. Sacramento is a mess. They overbuilt the hell out of it and with the SAME style of house… over and over again, 2 inches apart. Cities like Sacramento were turned into flipper factories and as a result, a lot of people who bought there MUST sell and do so now. Notice their severe reductions in prices? they’re on their way to normalizing in the next 2-3 years.
That’s very different from here in the BA where NIMBYism and anti-development laws have prevented this kind of overbuilding except for the myriads of lofts in SF and Oakland. Since the economy in the BA is better and more people probably actually put money down on their homes, there will be a slower return to a normalized market since the owners here might be under less immediate stress to sell.It could take 5-7 years or more. I say this because while prices have stopped rising and have for almost a year, the price reductions are still barely noticeable.
I can only offer ancedotal evidence that nothing in my area ( east bay) seems to be either moving or being reduced enough to make a difference. People are even STILL buying these days, which is amazing to me. On the other hand, I overheard a couple in the grocery store discussing at the checkout line how they were going to cover their mortgage with their combined paychecks in Janurary- which I can only assume their ARM or IO was about to reset. A LOT of people here took these loans. When they reset will be when the monsters come out of the closet here and things might get interesting.
The SF Bay area, especially South Bay, has a boom and bust economy. Stock options are a mess. Given all the SOX regs there arnt any high tech companies going IPO and thus not a chance of making big and paying off that over priced home mortgage is getting dimmer. Doesnt take much for the next guy to build the better mouse trap kill off some of our local employers/jobs. That has happened too many times back in the day. The highest concentration of IO loans in the USA is in San Jose/San Francisco. Dont ask me why? They must really believe in the sunshine premium. Next time im sure someone will market fresh air. LOL
LA is an odd place to understand. 10 million people in greater LA area, what in H does everyone do for $ ?
Flip resale homes to each other is a large part of it lately. Sac has the new homes but the resale ‘flip this house’ market is huge in LA.
I believe a “Real Estate recession” will hit LA hard even if SF/Bay Area are not.
Everyone is pimpin hustling deal making 24/7 from the down in the streets up to the skyscrappers. Everyone has
an angle on how to make it big.
By Datatquick’s own numbers places like Manhattan Beach (in the top ten most expensive in US) Palos Verdes (rich) and Tarzana (TV Executive almost rich) are off by -20%. Sounds serious to me…
There is still quite a bit of value created in LA, oddly enough. The media industries are still there in a big way cranking out material, or pumping it out in the case of the more successful adult stuff. Lots of crap from China comes through LA getting set up for this market with stickers that say Choke Hazard and Contains Chemicals Known To Cause Birth Defects. All of this stuff comes with liability and there are hordes of lawyers to feast on all of that. And there is still a defense industry that is now starting to rake in major bank from automated flying death machines. LA is also one of the great milk and cheese producing centers of the US, although there are signs regulations could change all of that. In SF clothing manufacture is around five to seven billion a year on the books and LA is way bigger than that.
Just like the bubble we need to be honest about the productive stuff that is going on.
imploder - I was checking DQNEws too…
Looks like Santa Clara Valley and Santa Cruz are way down … zips with 15-35% can bee found… Med prices still too high… needs additional cutting of 15-35% over next 2-3 months to set in.
This is how it starts … little by little.. will be seeing 50% down..
Louie,
I believe 50% can, and logically should happen here in LA, and all of greater So CA. How will they hide that figure. A reported 50% off month after month for a year would kick so many people I know in the nards so hard, they would be blue b@lled zombies; blank, dribbling, fools. Burdened with the heavy warm damp loads dragging in their trousers behind them.
I know a lot of the “pimps” you speak of and for all, their “real estate” is the jewel of their “pimpin” empire. This city would be an emotional Dresden from such numbers.
I think the numbers will be a “reality”, but will the powers that be find a way to “camouflage” them?
“By Datatquick’s own numbers places like Manhattan Beach (in the top ten most expensive in US) Palos Verdes (rich) and Tarzana (TV Executive almost rich) are off by -20%. Sounds serious to me”
Took a nice short drive thru PV south ‘gold coast’ route(PV drive South)from Spedro to PT fermin. Did take a quick stop at the much-ballyhooded trump golf Course. A nice view of the pacific on a gorgeous clear day, but very few golfers and visitors to the area. Saw some of those 5/12-miilion dollar villas jutting out over PV drive. This area, the best part of PV with the most spectacular views of the ocean, simply cannot hold water against other exclusive SCal coastal communities as Pacific palisades, North/coastal Santa Monica,Newport Beach,Laguna beach, Santa Barbara, and may even fare poorly compared to Marina Del rey and Manhatten beach. Problem; lack of nearby swanky urban walkable/historical districts and shops, unlike Laguna dwtn or SM 3st promenade, or SB historical dwtn.( Sorry, San Pedro does not cut it). The shopping centers on top of PV hill are plain and pedestrian cookie cutter malls. PV simply lacks that mix of photogenic coastal land combined with a thriving urban waterfront scene to justify 5-12 million dollar villas. For that money the superrich can get an estate in SB/malibu/newport coast/p pal with far superior urban/recreational/shoreline attractions.
As an aside, there is that problem of poor soil/soil stablity along PV coast. which will create havoc with that Trump Golf course.
“LA is an odd place to understand. 10 million people in greater LA area, what in H does everyone do for $ ?”
Outside of the westside and Southbay area LA is pretty thin as far as hi-paying jobs sectors. LA Metro is, believe it or not, a pretty grimy working class/blue collarish city. Large parts of the East San Fern valley, the alameda industrial rail corridor,compton, torrance,city of commerce, sf Springs,vernon,east LA, mid-cities,city of industry,pico rivera,walnut,ect are chiefly industrial parks which do shipping, workshops, raw materials fabrication, light industries, metals re-working, chemical processing,re-assembly and re-shipping of imports,ect. Lots of the work force consists of 1st/sec generation immigrants. These jobs mostly non-union and pay around $10-15/hr. Trucking/distribution/logistics is a major LAjob sector. Much of rest of LA workforce employed in service sector,hospitality,foodservice, health care, gov,t emplymnt,constructon, and of course that decling sector, RE. There are also tons of independent mom and pop store owners, franchise owners/managers, shady businesses, swap vendors, ect. These are the type of low=to moderate paying jobs which form the shaky foundation for the supposedly ‘it’s different out-here and LA RE never goes down’ mentality which has resulted in 1/2 millian median LA housing prices.
Peter M
Very good post about LA. If there is a path of least resitance it will be found here. Imploder is correct. Once the “funny money” loans started …. even born here all you had …. “was a hand full of gemme’ and a mout full of much obliged” ……We will be the ground zero of the belly-up loan that never should have been written.
Mole Man,
I 100% agree with you. Both the bay area and LA produce a lot. That sets a floor in the price drop.
However, LA is setting records for the highest ever price to income for an urban area. It has far too many option ARMs. I believe that part of the reason LA has such high real estate (relative to income) is all of the prior equity gains rolled into trade up homes.
The question is if that rolled up equity is HELOC’d out, where is the bottom.
Imploder:
I stick with my 30% to 60% range. Why 30%? Its the minimum to justify keeping many jobs in LA. 60%? Below that prices are attractive enough to draw population/business back at a rate that ensures further undershoot won’t last long.
Of course I assume certain “constants” do not radically change. Since I am only predicting recession, that is an ok assumption. If the economy is worse than that…
Neil
In my townhome complex in Chatsworth, there are units that have been on the market for several months. One was recently sold after being on the market for 6 months, it was reduced by over 65,000 (starting price 580,000) - still way overpriced because these townhomes used to be half as much three years ago . Some of the owners have removed their units from the market. I just don’t understand how the data are not indicating how much the prices have already come down!!!!
I 100% agree with you. Both the bay area and LA produce a lot. That sets a floor in the price drop.
Considering that the typical house in LA was going for about $200k less than ten years ago, I would say that we are at nosebleed levels now and just starting to hurtle toward the floor.
As an aside, there is that problem of poor soil/soil stablity along PV coast. which will create havoc with that Trump Golf course.
And remember there is still an issue of the toxic waste dump under that Trump golf course which is leaching into the ground water and is blowing out methane…
We have houses here in the Tri-Valley with For Sale signs rotting in the front yards. I think this thing is going to bust next spring when the buyers don’t return and the sellers who took their houses off the market relist them at the same inflated prices.
Who in their right mind thinks it’s a good deal to buy a rundown 3 bedroom 1 bath POS next the railroad tracks in Livermore for $500,000+? If I’m making the 100k a year it takes to qualify for that price why in the world would I want to live in a rundow dump with a 1 car garage?
Don’t ever forget one huge factor. Inflation, and/or lost appreciation on other asset classes. With basic bonds yielding 5% , a 2% drop in the value of a home is basically equivalent to a 7% total loss including opportunity cost. Remember, even with a 0% loss yoy for the next 5 years, inflation adjusted prices will be basically (.96)^5 or 0.8154 (81.54%) of todays value in real dollars. Japan’s stangnant RE market went on for how long? 13 years now? And everyone keeps saying inflation is only going to grow. What happens if Bernake does start “helicopter drops” of cash on us? What if we see those 10-15% inflation rates? Shiiiit.
I guess I’ll finally be making over 100k, and my shitbox apartment will finally not be worth living in, and oh boy, then i guess I will buy a house! Hopefully by then overly bearish attitude will be priced into the market, and my contrarian buy will net me a nice little rent saving asset at a discounted price. In the meantime, I’ll keep paying off student loans at 4% with minimum payments, puttting my leftover money in a 5% yeilding money market account, and save my pennies on the 1% difference. (of course I have better yeilding asset classes, just making a point). Then it won’t frigging matter to me that interest rates are at 17% again, because I will pay CASH with all the money I have saved.
That’s if your job doesn’t get outsourced. Come on…you really think those “helicopter drops” are going to make it to your bank account via wages??? We’re not going to get inflation. The Fed has to protect the dollar hegemony no matter was BS is spouted about helicopter drops…ain’t going to happen.
No longer a question of IF but when… Read the Book… “The world is flat” for more insight.
Great book
A sobering read, while we’re on the subject….
http://financialsense.com/editorials/casey/2006/1228.html
We are not going to have wage or price inflation like the one back in the 1970’s. Those events were driven by union strikes and oil embargoes. If anything, interest rates will continue to remain at historical lows. Slugish grown + price deflation will more likely occur.
Did you read the article?…..or maybe you fall in the “this time it’s different” camp.
What you just described is not inflation.
Mark my words, there will be credit destruction (M3) and asset price deflation (houses and luxury goods) because that is what fueled this whole mess. The fed can really only control credit (M3) and that is just “pushing on a string” because eventually, people will not be able to service anymore debt. In order for “helicopter drops” to work, the money has to make its way into your bank account ultimately. Short of handouts, how is that going to happen?? With the specter of outsourcing to cheaper locales (china, India, etc) do you really think it’s likely that J6Pck is going to get a 100 or 200% raise to catch up with housing prices??? Not likely. If that did really happen, then interest rates will be sky high and we’ll slip into hyperinflation. Do you really think the Fed want’s this to happen? That would mean we lose reserve currency status (oil no longer denominated in USD) and no more foreigners buying our treasury notes. The Fed would lose all their power. In the end, they will defend the dollar…FBs, GFs, Ameriquests, Wamu’s be damned. This one is too big for a bail out…
Ameriquest, Wamu be damnded……word to your mother….if only they would let the excess truly bleed out, but the Wamus, Wells, HSBCs, Citis, JP’s & Goldmans are the folks who truly run this country and this is just too big a hit to let themselves or frat bothers take….not sure of the way out but there is not enought lunesta in our world to keep uncle Ben from thinking about the path every night…….What would a Wells Fargo do with every third house in CA worth a third of what was on the books????????
Ordinarily, I’d agree with you, but this time it’s different (no pun intended). Suggest you read Mish Shedlock’s “Bernanke’s Box”. Big Ben is trapped between a bad alternative and horrible alternative. One (Hyperinflation) is worse than the other (Deflation).
Sure a lot of major banks will get burned, but they’ll just be bought out by someone else. If those GS traders want their kids to have the same opportunities, then they will not not allow deflation either.
You’re right. The fed has no out on this one. The dollar is toast.
Got gold?
Love gold (at least it’s real and hard to get unlike a derivative)….but JWM tell us how the future plays out in your estimation…..Darryl
“…then they will not not allow deflation either” Sorry, meant to say inflation not deflation…doh.
“With the specter of outsourcing to cheaper locales (china, India, etc) do you really think it’s likely that J6Pck is going to get a 100 or 200%…”
While on the subject of outsourcing jobs to India, particularily in the financial and identity information services industries. You might want to see the video news report about the increasing levels of credit card and identity theft taking place in India. It is about 46 minutes long. Very informative about the transmission of sensitive, personal information to foreign countries.
Interestingly, I was chatting with a guy about the unprecedended outsourcing to India, and the real estate price run ups in India.
The guy is an tax account from india. And he thinks that as prices of real estate and other goods begin to go up with the escalating levels of outsourcing of jobs to the region, that their incomes will have to begin going up as well.
And besides that, I just saw a news report about former and current employees and managers in the banking industry in India that are selling customer information as a kind of underground way to make more money on the side. And I suppose if employers don’t pay their employees decent livable wages, that we will see more data and ID theft taking place in India or other countries that are not paying their people livable wages.
Comments?
“With the specter of outsourcing to cheaper locales (china, India, etc) do you really think it’s likely that J6Pck is going to get a 100 or 200%…”
While on the subject of outsourcing jobs to India, particularily in the financial and identity information services industries. You might want to see the video news report about the increasing levels of credit card and identity theft taking place in India. It is about 46 minutes long. Very informative about the transmission of sensitive, personal information to foreign countries.
Interestingly, I was chatting with a guy about the unprecedended outsourcing to India, and the real estate price run ups in India.
The guy is an tax account from india. And he thinks that as prices of real estate and other goods begin to go up with the escalating levels of outsourcing of jobs to the region, that their incomes will have to begin going up as well.
And besides that, I just saw a news report about former and current employees and managers in the banking industry in India that are selling customer information as a kind of underground way to make more money on the side. And I suppose if employers don’t pay their employees decent livable wages, that we will see more data and ID theft taking place in India or other countries that are not paying their people livable wages.
Comments?
I don’t where your “tax account” friend is from in India. But he must not be familiar with real estate prices in places like Bombay. Prices of apartments there have been higher (per square foot) than Manhattan and second only to Tokyo - for decades! The folks doing the credit card processing will never be able to make enough money to pay rent, leave alone buy a place in the established Indian cities.
Anyway, the financial companies are all aware of these issues. They’re in the process of mandating the use of software/hardware combinations that enfore information flow controls.Barring the use of a photographic memory, it will be incredibly hard to steal sensitive data in a few years.
I meant “tax accountant”. He is also a CPA with an MBA from UCLA.
I believe he was not speaking of Bombay. I think he was speaking to second level and lower cities/town/villages. And as the next level down has a real estate boom in price, the american companies and other investors move to the next level down to set up their off shore companies.
I believe the reason that India has seen a fairly recent real estate boom in price, generally speaking, over the last 2-3 years, according to this fella I am speaking of, is that India had a change in their rules of non Indian citizens or companies from owning real estate in India. So now there has been a flood of outside capital/investors buying up real estate and/or setting up copanies in India.
Do you have further comment on this? please share.
Let’s blame in on the frogs! Damn. I am partially a frog -
I bought two homes in Salton City in June ‘05 during the height of the mania but luckily was able to get out of them this past summer since the developer couldn’t deliver them in time (*WHEW*). I can’t tell you how happy I am that we didn’t get saddled with these POS’s.
I’d like to think I’m both part of the problem (the housing bubble of the past few years) AND the solution–trying to drive down the prices. For anyone keeping track, I think I’ve convinced the wife to rent for up to another year here in West LA until the tsunami hits (huzzah!)
Were they vacation homes; one for Summer and one for Winter? Why not four and then you could name each one for a season…..or twelve and organize them by the month?
Here is a story about a large CA discount ($550K = 20% off the seller’s original wishing price) …
———————————————————————————
Investor’s Guide 2007
Consider renting
If you got out of the market when prices were high, bank those proceeds.
FORTUNE Magazine
By Ellen Florian Kratz, Fortune writer
December 13 2006: 9:24 AM EST
NEW YORK (Fortune) — Stephen Levy knows how lucky he was to sell when he did. He put his San Diego penthouse on the market in August 2005 for $2.65 million, more than double what he had paid for it in 1998. That October he got an offer for $2.25 million but turned it down. It would be months before he got his next offer. Luckily for him, he was finally able to sell, closing for $2.1 million.
http://money.cnn.com/2006/12/12/magazines/fortune/realestate4.fortune/index.htm?postversion=2006121309
I feel so sorry for this guy. By turning down the first offer, he lost 150K! Like that kind of money grows on trees.
Sarcasm off!
Ask anyone who’s gone through the selling process……the first offer is almost always the best offer.
My nephew had a house in Houston he bought in ‘04, put a ton of money in it, and had to sell in ‘05 due to a divorce (that’s a story in and of itself….talk about cheaper to “rent” than to “buy”..wink.
He listed it for $975k which would give him a $100k profit. He was insulted by a $955k offer, the first…..and last he got. Months later he was trying to rent it out rather than lose it altogether.
P.S. Couldn’t have happened to a more deserving person….LOL
Houston.
$975K !!
That’s a plantation.
Bwaa
Not compared to the 1.6 mil my friends just bought in Houston, but of course they needed 5000 sqft for the two of them.
I guess that puts paid to the old “there’s no bubble in Texas” canard.
“the first offer is almost always the best offer.”
I agree. I think this has to do with the buyer knowing the market (were talking a very specific market here) better than the seller.
Why?
Because as the seller just put his house on the market, the buyer has likely already looked at a number of houses in that neighborhood and/or comparable houses. At this point, the seller is still wishing for a price but the buyer has been in the market for a while. The buyer already has a good idea what his/her money will buy.
Also, an offer received quickly may just mean that that particular buyer has been looking for a while, not that the house is super special.
“Ask anyone who’s gone through the selling process……the first offer is almost always the best offer.”
I have found this true, and not just when selling a house. Jobs, selling cars, etc… Don’t ask me why. I try keep it as a reminder in the back of my mind.
975k in houston?? what did they move graceland or something?
Go to realtor.com, search Houston, narrow the area to the “old money” section around U of H. Last time I checked on his listing there were a couple dozen that price or higher.
With falling values today that statement is true. However in 2003 you could set your price and the market would come to you. Yes, the good old days.
I know someone who recently sold a place in Newport Coast. It was priced below some of the other similar homes listed and it sold $150K lower than similar homes. Luckily he got out before the others start chasing the market down!!
” know someone who recently sold a place in Newport Coast”
Did a drive into NCoast community once. Must be some of the most expensive super McMansions/villas built in the OC.
‘We ask them, ‘Do you want to sell your house?’ said Rodney Reyes, an Interfaith employee.’
There’s just something funny about bookstore employees handing out RE advice in California.
Why? They’re probably more well-read than a majority of the realtors here.
But it does provide the metaphor of shoe shine boys giving out stock tips before the ‘29 stock market crash.
It’s where all the doctors and dentists go for advice…
well, most bookstore employees are literate at least, so…
Religious bookstores at that. Jesus saves, Moses invests, and people have to buy a house why again? Did all the modest people just give up on that?
“Adams said buyers should be wary of advertised deals that tout 1 to 2 percent interest rates. ‘Common sense tells you that at some point you’re going to have to pay for that,’ he said. ‘But the good news, except for the people who bought during the last eight to nine months, is that homeowners now have some built-in equity, so they can sell and move on.’”
Explain to me how someone who bought a 400k house with a 1 or 2 percent mortgage rate has built in equity. Usually this type of loan has negative amortization built in to it. If they financed 100% at a starting rate of 1.5% their payment would be $1,380 but since the real rate of the loan is at 6.5% their payment should be $2,528. That’s a difference of $1,148 that gets added to their mortgage principal balance every month. So after 1 year they no owe $413,776 on their house. How is that buit in equity?
Does the realtor BS never stop?
You forgot to add in the double-digit price appreciation.
I hope that you were being sarcastic.
I’m glad you noticed
lmao gs
It is interesting that if you put in double digit appreciation into a financial model, almost any purchase price is justified. If I believed in that fantasy, I would take out a suicide loan too.
Hmmm, that sounds vaguely reminiscent of the good ole dot.com valuations based on “eyeballs”…pets.com anyone??
Remember when they used to try to value these stocks on their “burn rate?” You know things are pretty upsidedown when your value increases as your cashflow gets more negative.
You know, there’s a cardgame named burnrate
http://www.cool-studio.net/index.html
“Greg Berkemer, executive VP of the California Desert Association of Realtors, said as the desert’s traditional high sales season - January through March - nears, ‘the best time to act’ may be right now for buyers and sellers.”
More realtor BS here too…
kind of like the traditional hunting season… best time for deer and the hunter.
“Greg Berkemer, executive VP of the California Desert Association of Realtors, said as the desert’s traditional high sales season - January through March - nears, ‘the best time to act’ may be right now for buyers and sellers.”
If you really want to con naive folks into buying IE RE the best time is from december thru march. Then the air is clear and fresh, the landscape is clothed in green, and you get good views of the mountains. By the time you get these folks suckered into an IE home, april comes and behold, brown sooty smog blanket, scorched barren landscape, and 100% stifling heat 8 months of the year, not to mention nasty brutish commutes thru areas more and more resembling tijuana slums.
But the good news, except for the people who bought during the last eight to nine months, is that homeowners now have some built-in equity, so they can sell and move on.
So the “good news” for this housing market is that people who bought sufficiently long ago can sell at a profit (assuming you don’t count the transaction costs and the high carrying costs versus rent) and get out of the way of this freight train?
What’s the “bad news”?
Sorry for the off topic, but I have a question. By renting from a Management company, am I better insulated from the risk of a bank forclosing on the property I am renting? I am about to sign a lease on a brand new condo, and I would like to not have to move again in 6 months.
Sorry, but this is funny in an odd way. If you think about it, its now come to the point where as a renter you should ask your landlord for his SS number to run the credit report, a personal financial statement, and the last 3 years tax returns so that you can qualify him/her. Need to make darn sure they can carry that negative cash flow for the duration of your lease.
I have been thinking about that myself. I am seeing a lot of 1 and 2 year old product being dumped on the rental market right now, and my current lease is up in February. If I rent on of these places from an FB, I would like to know they are not so f@cked that they will need to sell the place out from under me. Realistically, I plan to wait until August when I will have a wider selection of desparate FB’s to chose from.
I asked much the same question last Spring.
Auction Heaven in 2007 responded and said no way don’t rent from an FB.
I didn’t.
It took me a while but found a great place that the landlord has owned since the mid 1960s.
It has sentimental value and he may move back in a couple of years.
Hold out and rent from longtime owners with reasonable cost basis in the homes.
OR if you like moving a lot just rent from an FB.
Hopefully all the FB’s looking for renters will depress the whole market.
This is the single most valuable tip I’ve picked up since reading this blog in Summer 05. At that time I was desperate to move out of my apartment and rent a house. I had never considered the probability of the landlord selling/being foreclosed upon.
i wish i could find out if my landlord is missing payments. i would love to move.
my last landlord was a flipper, nitemare.
Renting from a management company is better than renting from an out of state investor, especially those who paid too much and the rent does not cover the mortgage. For instance, if the condo you want to rent costs $300k to purchase and the rent is only $1200/mo, watch out for this. This type of house is usually intended for flip, but unable to flip and therefore renting it out to you at a loss. Those who use management company are usually those who can afford to pay for the management. But not always the case.
Not really. The owner’s status with his loan and his bank has nothing to do with whether or not he has hired a management company. However, if you find an SFH that is handled by a management company, that could indicate an absentee (and possibly accidental) landlord. The situation is different with multifamily - the owners are usually absent, and their use of a management company is normal. Also multifamily owners are usually better capitalized than SFH owners, since you can’t get a liar loan to buy an apartment building.
In your case of renting a condo, I would be surprised if the owner is stable, unless it’s a repartment situation where the developer is renting out units because they can’t be sold. And even then, a repartment situation is probably a sign of financial distress.
Thanks for the info. I zillowed the property, and based on the taxes it looks like they paid 321,000. 3 bed/2.5 bath and 2 car at 1350 in Temecula. It’s a condo property with one shared wall and the basic Association amenities. Assuming a 30 year @ 6% and 20% down, it would roughly be 1500 (P&I) + 400 (tax) + 135 (management) + 100 (HOA)= 2135! Ouch, -785 before maintenance! I’ll have to ask for verification that the loan is current at the before signing.
Temecula…well we rented there after selling our home in No. County and had contemplating buying property there. Here’s that story….
The couple we rented from had sold their home in Vista, CA in early 2004 and bought a place in Temecula for 280K right away. Then he & the wife were going to be the next Donald Trumps and “flip’ houses and make all kinds of money. They bought the place that we rented (3bd/2.5ba for 1500/mo. NOT incl HOA) on 1.5% Neg ARM loan for 285K the same year from a distressed (unemployed) seller, along with a smaller one (1100sq.ft) around the corner for 250K all with money pulled from ‘equity’ in their house. Then they rented the house back to the former owner who TRASHED it. This cost them 10K to replace floors, carpets, WALLBOARD and tile that the dogs & slobs destroyed. So two months (w/no rent) after fixing everything, we rented it in Feb 2005. Four months later, he can’t rent the place around the block and decides to rent it to his 20 yr old son & friends for “whatever they could pay’ rent. Seriously. Then in Oct. 2005 he re-fi’s the place we’re in and now owes 385K. They are liv’in large now, big cars, boats, vacations, and are going to be RICH, RiICH, RICH…
Well we get great job offers back in BA and leave in Nov 2005. Our old landlords? Well they’re hat’in life these days I hear…HALF the houses on the street are for sale. A model like we rented, is currently is listed for 385K. The larger models are listed for 400k *since AUGUST* are STILL for sale. Poor Phil, his loan reset in Oct and he’s only collecting 1500/mo in rent. Don’t know how the ’son’ rental worked out
And don’t even get me started on my brother-in-law in S. Jose who bought in 2003 with the same kind of loan….or the mid-50’s couple in O’side that owned for fifteen yrs. and pulled out 80% of the equity, then used the same kind of loans to buy ‘flippers’ in AZ….
“Temecula…well we rented ”
Did some trips out there in 2005-2006 and there was a tremendous amt of new tract housing construction going up in and around the temecula area. In fact, the entire SW riverside region(some would include SW riverside in the IE) has seen an explosive growth in new tract construction, from Banning to lake elsinore and from corona to temecula. My estimation is that at least 20,000 new houses in the pipeline will be added to the existing stock just in the SW riverside region in 2007. Overbuilding in this area will result in reduced prices, which is already ocurring in such places as hemet and San jacinto, where new SFH;s are already under $300,000. Call it the sacramento/ Phoenix syndrome.
Just astounding. The stories keep coming in.
Know a 50’s lady who owned outright her house and pulled equity to buy two buildings, both with trash tenants in Central California, Lamore or that area.
Friend in nearby town owns three properties and has been living off the equity for 10+ years….she had a few more she flipped. Now she has 70k is credit card bills, and the loan on the house she lives in will re-set in coming months. She’s in her late 50’s, with a few dogs and a few cats and getting religious. I tried telling her but you know how that goes. Just a couple of months ago she e-mailed me and told me “I see what you were saying.” But she still hasn’t done anything.
My brother owns a small apartment building in San Francisco. He had a dot.com job, that turned into a dot.bomb job, and was unemployed when he got a 125 to buy the apt. building with tenants from hell in rent control SF.
Whew.
As a serial renter (Bay Area), I have strict requirements for rentals. I like to rent from an individual who owns the building outright and has years of experience. Talk to other tenants. Once you rent, establish a good relationship in which you cooperate to fix problems. Oh, and rent in a rent-controlled area!
I have been contemplating a rating system of Rental Property owners… something like an eBay comments system for people wanting to rent property.
Nothing like getting the real deal from previous tenants on the quality of the property and management, such as any isssues on how long it takes to get things repaired, harrassment or communication problems.. does the owner do what they said they would do in the rental agreement. Do they do it in a timely basis. etc.
And to be fair, I suppose a property rental owner could get a chance to comment too. And they can can say if the rent check was received in timely basis and if the property was taken care of by the renter, etc.
Then we can have a track record on these fly by night property rental owners, to know a little info about them before we set up home in that rental property.
The same thing can be down for roommates, and such.
I think I’ve thought up a great new business! I’m going to manufacture Greater Fool figurines. St. Joseph figurines are not doing much good but a “Greater Fool” figurine should work much better. The figurine will show a potential buyer holding an exotic mortgage in one hand and a dunce cap on his head.
“holding an exotic mortgage in one hand”?
Ummm, what exactly might that lool like? Elongated, brown & squishy, somewhat turd-like?
Perhaps more like a ball and chain? A noose?
Maybe that’s not a mortgage at all that they’re hanging on to?
I like the ball and chain example. Or maybe a large millstone. Not sure the turd thing would work.
I’m picturing Atlas carrying the world on this shoulders.
Holding his nuts like he just got kicked.
A management company, by itself, does not offer any protection against foreclosure. The landlord still owns the house and pays the mortgage. They just collect the rent (keeping a percentage for themselves), and in some cases they may provide maintenance services for the owner.
As some have pointed out, the use of a management company may indicate a more “professional” landlord, but I wouldn’t bet on it.
Many times a tenant. Treated better by individual landlords than by mgmt cos. Best situations were 2-family houses w/ landlord right downstairs. Maybe not much avlb in CA.
that is a outer borough ny thing landlord downstairs or up in a 2-family dwelling. i had that exact situation years ago and it was a nightmare, the old bat was always on my case be careful
I too have had the best experience with individual landlords in small buildings. (Not sure I would want them living in the same building though.)
They tend to appreciate renters who satisfy what I would consider the bare minimum, i.e., pay the rent on time every month, don’t cause trouble. Apparently this is not the norm among renters, so it’s easy to look like a “model tenant.”
This pays dividends when they decide to keep your rent unchanged for years at a time (I think my record was six years), they unsolicitedly ask “anything you would like in the way of upgrades in your apartment?”, and give absolutely glowing recommendations to future landlords when I do move.
Not surprisingly, I’ve never experienced any of these things when a property management company was between me and the landlord.
wow after 10 yrs of o Tony and Babs got a new jag and a new porsche and blah blah blah Tony this Babs that o they are rich what’s wrong with us… Tony the RE Flipper, that is, not his real name. He bought new one in Palm Springs about a year ago and hasn’t worked except to flip for last 5 years or so. They not looking quite so smug last i saw them… o this could get good. Actually i will feel bad for them if the worst happens, but it is rich to see wife muzzled. Almost ex-wife at this point, mostly as a result of this OC Lifestyle shizzle. well that’s one good thing that came of it, huh? It is good to be single I think.
Are you talking about that one episode of flip this house where the guy remodeled a 1950’s home in Palm Springs and put big red door on the front. He then got this great off the cuff appraisal from a realtor for like $932,000 and he was so happy. Last I head he had it listed in the 600K range.
I wish they would do a flip this house reunion episode and show all these guys wearing clothes from the goodwill, pushing shopping carts, and eating ramen noodles.
no i am talking bout guy who lives round the corner. some of these RE people turned into Scarface these last few years, just drunk on power and needing ever-increasing doses. It’s a shame cause this guy was a good house buyer/seller when he started out, he has a great house in newport beach with pool, big yard and all you could want. he paid 300k he said, about 10 yrs ago. But I think he is HELOCd to gills on it now to buy fizzled gas station deals, Palm Springs houses, etc. Meanwhil i sit here at lowly job wasting time on housingbubble.com and squirreling acorns away…
Think big and smart and you will do better.
Even a very, very mild recession will completely and utterly wipe people like this out. All the stories you hear about FB’s don’t even consider all of this type of thing.
On another subject, I have the impression lately that the REIC complaining about the MSM and their 40 million campaign to influence RE has had some result. I keep hearing stories about how the RE market has turned around based on some meaningless YOY statistic hyped by those who have vested interest only in selling houses. My personal opinion is that by doing this the MSM is doing everyone a grave disservice as it will only instill false hope in hopeful sellers and false confidence in those that still think it is an opportune time to HELOC or refinance into an even bigger problem.
The more this plays out, the more I think 2007 and beyond is really going to be pretty bad for a few years until it reaches some bottom.
flip this house reunion show would be hysterical
they do it with intervention on a&e
it could be a combo intervention flip that house where the
junkie ends up squatting in the flip
LOL, I saw that episode, what is it about a red front door that makes sellers think they can jack the price up another 100K?
‘But the good news, except for the people who bought during the last eight to nine months, is that homeowners now have some built-in equity, so they can sell and move on.’”
Tom Adams…just another broker talking out the side of his ass. He must have some secret potion that no one else knows about because he makes it sounds so easy. Either that or he is just another uneducated fool who has probably been a broker since 2004.
Just make that the last twenty-eight to twenty-nine months, and his statement is reasonable!
az_lender,
You’ve gone soft. While it won’t be reported for a while, we’ll soon be at 2003 prices. So that is 38 to 39 months…
Neil
Is it my imagination or have the news outlets been reporting that RE is on the rebound. Funny, how pysychology works when you stop reading this blog for a few days.
It is not your imagination. I have definitely noticed it too and I believe this is the direct result of the NAR’s 40 million ad campaign. They have bought the MSM off. Money talks in this country, and 40 mill ain’t chump change.
If you listen to the stories carefully though, they are all based on meaningless stats hyped by those that make their living off selling houses.
The local paper has run a big ad twice a week here. And the words ‘housing bubble’ have never been printed.
well ben as cnbc,kudlow liareah et al have proclaimed
a soft landing
im glad the bubble is over
take care everybody
move along, no bubble here
Sorry, but a $40M national campaign IS chumpchange.
I’ve seen their GRP buy and it doesn’t come close to doing more than a brand awareness campaign. In January you’ll see a few national ads with the logo and the message. They will support the message with “sustaining” buys on radio; primarily satellite. The campaign ends in October so by then they think everyone will be back in the buying mood…..yeah, right! LOL
To do a true national PROMOTION, they’ve got to spend more than three times that amount…….
rentor
No you are right, I have seen the same shallow reporting my self. Now the stockmarket has bumbed up a bit more, I am sure the wiseguys fully beleive they totally earned the hugh bonuses that got.
Hey happy days are here again as long as the stockmarket is rising. You will not hear much from the MSM even if the home market goes down…. except the tidy lecture about reading and understanding the loan you sign for.
When developers build crap like this you know the bubble is going to burst? How did this guy ever think these units would sell looking like this??
http://wibiti.com/images/hpmain/429/154429.jpg
From http://www.yochicago.com
“Balconies are a tight fit at Hoyne! Condominiums
by Joel Hoglund
Hoyne! Condominiums
We can only hope buyers at Hoyne! Condominiums feel as much enthusiasm for their new balconies as developer CBM Partners feels for the street on which its 16-unit condo conversion sits. The building, located at 6410 N Hoyne Ave in West Rogers Park, has two- and three-bedroom condos with steel balconies that, aside from looking like an old fire escape, don’t allow for much privacy in the narrow courtyard. Units have exposed brick walls, stainless steel appliances, granite countertops and Brazilian cherry floors throughout. The vintage building has been rehabbed with a new roof, new plumbing and new electrical systems. Prices range from the $210s to the $260s.”
Looks like the new LA central Jail.
“Prices range from the $210s to the $260s.” Here is San Diego that would be an absolute bargain.
“Picking a spot in the backyard near a koi pond, Michele Sifuentes dug a hole for the 8-inch figurine… Five days later, a couple made the long-awaited offer. Was it coincidence? Or did faith in the patron saint of home-selling make a difference? The Sifuenteses aren’t going to test fate. They are leaving St. Joseph in the ground until the sale closes.”
This really doesn’t seem fair — that god is on the side of the home sellers who stick a statue in their yard. The home buyer doesn’t have any idea that this holy statue is working against them, and that god will be punishing them by coercing them to make a foolish offer. Isn’t there a prayer or an incantatation or something that the potential home buyer can perform on a property to thwart the statue’s effect?
Here’s the Snopes article on the St. Joseph statue activity.
http://www.snopes.com/luck/stjoseph.asp
1% in Coachella Valley. No way.
I know 1st hand about properties that have declined 10% over the last year.
You have to remember that they are using median. Big $$$$ homes are still selling pretty well and keeping that number higher than it should be.
I agree about the drop in price at the median level. The development I live in Indio, had the same model I rent, sell for over 520K 12-18 months ago. Now, you’d be LUKCY to get 410K. Homes have been on the market, vacant for over 1 year with no price reductions and no viewings… Hmmmmmm. Overpriced, come on now, couldn’t be.
I hear all sorts of info about contractors laying off half their staff. Customers trying to return furniture they bought 6-12 months ago cause they can’t afford the reset on an ARM/IO loan.
Homes that sold last year as base models for 400K let say… now the same home has 40-80K in upgrades (pool, tile, granite, carpets) but sells for the same 400K. The home sold last year isn’t worth anywhere near 400K, regardless of what the current owner that bought last year thinks. The reported numbers are so full of fluff it’s not funny.
ok, had the 2nd glass of wine, how about a anti st joseph’s statue, we sell it to buyers to help them avoid the “falling kife” I hope none of the nuns that tought me can track IP addys…
Thats some real crack someone is smoking…
Im looking at DQNews for Santa Clara and Santa Cruz and see some real deep declines double digits in price… but not there yet…
Steady as she goes for a deeper dip…
http://www.dqnews.com/ZIPSJMN.shtm
that 1% is all nonsense….
“Home sellers desperate to make a deal during the slowest housing market in a decade have embraced St. Joseph as a sacred real estate agent of sorts.”
I said it before, now I will say it again…
Sellers, Sellers, Sellers…
“Don’t put poor Saint in grass,
Pull own head from A$$…”
Why pull own head from A$$ when sellers no longer have to dig, plant, turn, etc? Seller-assistance is just a PayPal away.
http://virtualstjoseph.com/vsj/index.htm
“You do not have shipping or tracking problem. No waiting for delivery. No messing around with dirt and trowels. No snoopy neighbors will see you plant the statue. 100% confidential…Payment via Paypal, Visa or Mastercard couldn’t be any easier.”
The news should be reporting the incentives and kickbacks given to the buyer that reduces the effective amount the seller actually receives for the sale . Any other industry reporting details of effective gain from sales would be reporting incentives and discounts that were taken from the profit margins . Why should it be any different for the REIC/NAR . In fact, because real estate is such a big purchase ,people need the information to be even more accurate.
Perception is reality.
For the sake of the country, this has to be kept going. Oh, please please please let there be a spring bounce, please let the boom continue, please let the consumer consume. We have this “war” to fight, a crumbling infrastructure, all these illegal aliens to support, an election coming up, and countless other things. We just can’t have this, we can’t we can’t. What can we do to help keep the credit spigot open?
That’s what the news is essentially saying.
At this point, a little bit of credit tightening will pretty much be like “a little bit pregnant”. If the mania can’t carry on, I think credit pretty much evaporates, and all prognostications have to flow from that.
Dear media advertising manager: what happens to our ass (and retail’s, and the auto biz’s), happens to yours. Sincerely, the NAR.
I’ve been thinking a lot about this line of thinking ever since Ownit Mortgage closed shop the day after Merryl Lynch cut them off. I think a lot of investment banks, MBS sellers, etc have posted a figure on their bulletin boards for dollar volume home sales March to May 2007. If that number fails, sales in July and August will be down 70+%. Credit disappears.
I agree ft. lauderdale.
A few weeks ago, I was proposing a medallion of the Great Hammer of Thor for buyers. That should encourage divine intervention in smashing prices down to a level us mortals can handle.
Everybody look, the bubble’s over:
US home sales rise, defy forecasts
Dec 28 10:23 AM US/Eastern
US home resales increased 0.6 percent in November, industry data showed, suggesting the slumping property market is stabilizing.
The National Association of Realtors said existing-home sales amounted to a seasonally adjusted annual rate of 6.28 million units in November, well ahead of the 6.15 million figure expected on Wall Street. This followed a 0.5 percent increase in October.
The November sales level was 10.7 percent below the pace of a year ago, reflecting the tumble in the real estate market after years of spectacular growth.
David Lereah, NAR’s chief economist, said the report suggests the worst may be over for the housing slump.
“As the housing market recovers from its correction, existing-home sales should be rising gradually during 2007 — it looks like we may have reached the low point for the current cycle in September,” he said.
“We’ve entered a more sustainable period of home sales now, and we expect greater support for prices over time as inventory levels are eventually drawn down.”
The latest report showed housing inventory levels fell 1.0 percent at the end of November to 3.82 million existing homes available for sale, which represents a 7.3-month supply at the current sales pace.
The median existing-home price for all housing types was 218,000 dollars in November, which is 3.1 percent lower than November 2005 and slightly below the October median.
The report came a day after government data showed new US home sales rose 3.4 percent in November, also defying expectations for a further slide.
Guess that all means it’s safe to go out and buy now, LOL
lagirl
funny thing is many people actually believe these “experts”
that is a scary thought
So Scientific … one month of data CLEARLY defines a trend (when it’s in the desired direction).
I think the math behind this whole real estate fiasco of the past 4 years is a microcosm of the broader loss of logic that is driving us pragmatic folks crazy.
You spend years studying your a$$ off, just to come out into the real world and find out that the logic and reason used in statistics about the “most important purchase” of the average citizens lives is utter BS.
“As the housing market recovers from its correction, existing-home sales should be rising gradually during 2007 — it looks like we may have reached the low point for the current cycle in September,” he said.
I think this is the denial phase of the housing bubble. It would be incredible if the price correction is over. One way this could happen is if the FED increases the money supply even more to bail out high home prices. I don’t expect widespread big pay increases
for most Americans so that won’t do it. Watch out for inflation and a dollar crash if the FED thinks it can keep screwing around with the economy. But I don’t think the FED will try this. The FED is watching the housing market and the yeild curve at least and must know scary things could happen. The FED is keeping the money supply high and tolerating inflation above what they like in a calculation that slowing housing and consumers plus lots of money will equal soft landing. I expect the stock market agrees. Maybe they will pull it off? I expect the dollar to go down regardless however.