Housing Boom Or Bubble?
Readers suggested a topic on housing terminology and the media. “I would like to see someone get onto the mass media for their use of real estate industry spin terms, such as ‘housing boom,’ instead of factual ones, such as ‘housing bubble,’ ‘housing mania,’ ’something-for-nothing-stampede,’ and ‘mass hysteria.’ ‘Housing boom’ implies something wonderful happened and benefited everyone who owned a house, with no suggestion of something radically amiss.”
“Since most of the bubble was fueled by across-the-board criminal fraud, and could never have happened in a sane or ethical climate, the terms invented by those involved in the scam are hardly the ones the media should be adopting. ‘Boom’ and ‘correction’ are intentionally deceptive. ‘Bubble’ and ‘crash’ are factual.”
“Despite its 100% bogus forecast record, the NAR is still being consulted by reporters for juicy quotes and exciting predictions, and its ludicrous, painstakingly contrived vocabulary is still being treated as god’s word.”
One replied, “There is certainly a tendency to describe rising asset prices as a good thing, whether stocks or houses. The ‘housing boom’ was in fact an affordable housing disaster.”
Another relates, “On that subject (good vs evil), I had a brief exchange with (a reporter) for the St Petersburg (FL) newspaper. His articles had been attacked by HBB types, but really by persons more extreme and shrill than those here. His piece that I read was in fact somewhat balanced, but persistently described falling prices as ‘bad news’ and the stability of St Pete relative to neighboring markets as ‘good news.’”
“I wrote, acknowledging some balance in his reporting, but criticizing the ‘good/bad’ usage. I said it would be better for all if home prices were in line with incomes and rents. He wrote back saying that higher sales volume and stable prices would be the best thing. Well, yeah, but stable at what level?!?! - was my thought, but I didn’t bother writing again.”
One had this, “Higher volume is better for agents and brokers and some other businesses, but it isn’t the best deal for everyone else. Selling your house (in a stable price market) means you have to move. It could be a move to a ‘better’ job opportunity but that implies that you couldn’t find a better opportunity in your area.”
“Until people can sell their houses with little loss of value (to broker, lender or transfer taxes) it is better for a typical home owner to stay put. I acknowledge it is bad for people to be so scared of the market that no one is buying, but that doesn’t mean a high level of sales is a really good thing at any price level.”
And one looked at perspective, “It was a boom, in the sense that there was a residential construction boom and thousands of units were built. There was the resulting boom in unoccupied units as well.”
“All depends on what you’re looking at. These were boom years if you worked in construction.”
The Kitsap Sun from Washington. “If you were waiting for the peak time to sell your house, it may have already passed you by for now.”
“The median home selling price in Kitsap County in May was up 7 percent from the same month a year ago, according to statistics compiled by the Northwest MLS. But Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, said that doesn’t mean your house’s value went up in value from a year ago.”
“‘My expectation is it will pretty much be on par,’ Crellin said, though in some cases the price might have even dropped a percentage point or two. Buyers, on average, may have 7 percent more to spend, but they use it on more elaborate or newer homes, he said.”
“Crellin points out that it’s not necessarily bad news, because few people sell their homes a year after buying it.”
“Nonetheless, it’s clear the market was hotter for sellers a year ago. The 2,488 active listings in May was 41.5 percent higher than the number a year ago. At the same time, there was a 12 percent drop in the number of sales and a 15.4 percent decrease in pending sales.”
“‘It’s not quite the seller’s market from a year ago. Buyers are more cautious now; days on the market have gone up, prices have gone down. They’re not jumping on the first thing they see,’ said Rich Jacobson with Windermere Real Estate in Silverdale.”
“Crellin and Jacobson agree that even though conditions are not what they were a year ago, the pendulum is still on the seller’s side. Part of that has come because the Puget Sound region has not suffered the problems other areas have. Crellin said he believes innovative lending was not as popular around here as it was in other parts of the country, meaning people here are not foreclosing at the rate their peers are elsewhere.”
“There might be hope ahead for sellers.”
“… housing terminology and the media.”
How about “housing-induced genital retraction syndrome?”
http://www.bbc.co.uk/dna/h2g2/A593354
Feh. That was on Seinfeld. They called it “shrinkage.”
Every Boom is short lived and ends in a Bust.
Up here in Northern California
we had Booms and Busts since 1849. The end
results from a couple of Tech Booms are not
pretty.
For every Boom you will find fraud
behind it. No doubt about that. Currently we
saw the subprime market implode. I am still
waiting for the fake bids created by realtors
to hit the front pages. I really want some heads
to roll over this.
In SF Bay Area have sales volumn dropping double digit,
increases in inventory both visiable and invisiable(forclosure)
and realtors are still telling the media and buyers that multiple offers are common. That fact really screams of fraud. The whole
process if rigged! We need to get the buy/sell process purged badly.
Some readers here walked away from multiple bidding, but I bet many got caught hook line and sinker! And the Realtors just repeat the cycle over the past 8-9 years now. Appreciation of homes around here has gone 350-450%… thats just unreal. It will take a
real bust of 50% or more just to get back to fundementals. That would be good news for many!
“…realtors are still telling the media and buyers that multiple offers are common.”
Of course multiple bids are still common. It is a buyer’s market, ya know…
There are multiple bids on all the properties, unfortunately most bids are 60% discount to list. LOL
I guess whether that is unfortunate depends on whether one is the bidder or the bidden.
Once bidden, twice shy?
Sorry
More bids than sales volume! Know what I mean?
You go to a open house and get told .. there are 8 bids?
Sales for the zip last month was only 20 vs 30 the prior
yet inventory is nearly 3x that amount.
Got a call from a realtwhore after an Open House, that the property had two bids coming in that night, and she wanted to know if I was putting in a bid.
A week later, the house is not in Attorney Review (i.e., there were no offers coming in).
Such in-your-face lies would make David Liareah proud.
“And the Realtors just repeat the cycle over the past 8-9 years now.”
Next time I don’t think the Realtors will be able to get much traction. I expect the efficiencies of web-based sales and purchases to drive a stake through the heart of the NAR.
in most of Europe the realtors have nothing to fear. The last housing bust is one generation ago (around 1980). The current boom is so big that by the time another one starts (maybe in 2040 or so), there is a new totally ignorant generation ready to be sucked into it. Unless next time things ARE different, but don’t count on it.
“Unless next time things ARE different, but don’t count on it.”
Things really will be different next time. Al Gore only invented the internet back in the 1990s, you know…
Nobody invented the Internet. It was an upgrade of an older network called the Arpanet, funded by legislation sponsored by Al Gore, among others.
Are you stupid enough to believe that anyone invented the Internet, or just stupid enough to believe that anyone would take seriously your insinuation that Gore, of all people, claimed to have invented it?
“I…took the initiative in creating the Internet.”
No, Gore didn’t claim to have invented the Internet. But even for him to say he “took the initiative in creating the Internet” was a stretch, too. What he did was to co-sponsor a big omnibus bill that included funding for the Arpanet, whose potential to become the Internet certainly wasn’t recognized by Gore at the time. He didn’t consciously “take the initiative in creating the Internet” any more than Queen Isabella “took the initiative in inventing the light bulb” by sponsoring Columbus’ voyage, which in turn led to the discovery of New Jersey, in which lovely place Edison did his inventing.
Just a lil’ resume padding. Everybody does it, politicians more than most.
Watching a report on Channel 9 KCAL in Southern Cal last night I was howling, and my wife looked a little concerned at my glee. It was a report about Orange County where housing sales are plumeting, and they of course brought on a housing expert….a 21st Century RA lady. Her advice was that there is still a strong market, if you know how to sell, and the only way you will know how to sell if by getting a good agent. I found that self serving, incorrect, and just down right hilarious! All I can say to the agents is to learn to love ramen, it comes in 4 flavors!
Oddly the report put out by KCAL 9 was again omitted on their web site…cowards…that is twice now.
Until there is reporting on housing like stocks, if they wanted to be treated like a commodity, there will be no accurate numbers. However, it is a freaking HOME not a stock, until people realize that, I doubt anything will change. Unless there is oil or gold under that house, it is not going to make money out of wood and dirt.
Even if there is oil or gold under there, many (most?) (urban?) deeds do not give the owner to minerals recovered below a certain level. At least, that’s my understanding. I’d love to find I was in error.
IAT
I think that guy in SD who stole the tank and ran around town had a wannabe gold mine tunnel in his back yard. Now, I wouldn’t use Mr. Meth head tank driver as a good litmus test on the legal grounds of drilling in your own back yard…but who knows I don’t.
“…and the only way you will know how to sell if by getting a good agent…”
I saw that report, what you are saying is misleading the agent didn’t say what you represented. The reporter interjected that. Actually she was going out of her way not to spew NAR talking points. You just heard what you wanted to hear. her assesment if you had listened was very honest and forthright.
Ahhhh….glad you could stop by while taking a break from your open house.
Too bad KCAL 9 wont post that report like the one they also wouldn’t post 2 weeks back about it being a great time to buy.
If she was being truthful she would tell them as the numbers say we are in a free fall in the county and the median income and the condition can not and will not support the median prices. But she couldn’t as she can’t, as it would be cutting her own proverbial economic wrist off, too bad they went to a RA rather than an economist…and you think I am bias? HA!
MRIS + Open House= Bwwwwaaaaaahhhhhhaaaa - Not in this lifetime buddy. As a matter of fact you’d probably get more money for a picture of that in some circles than a Paris Hilton in jail photo.
No one said anything about bias, I mentioned accuracy you blatently misrepresented the piece. That was all my comment was in referral too.
Open House… Bwwwwaaahhahhaaaa. Geez are you kidding me? That wouldn’t happen if I was using your presence and time.
That was a good one I need a refill…
Bwwwwaahhhhhhaaaaa Open House… Sheesh. Not even Dude.
Yeah, I definitely didn’t hit a nerve there. ::rolls eyes::
Quick search on your name….interesting.
“For 10% per deal I might actually consider selling houses again for a living”
“If that’s your scenario definitely use an agent”
“First off if your not a realtor, lawyer or someone who does contract negotiation for a living and this is your first time buying a home I would really suggest you find a realtor you can work with.”
Interesting….still laughing? Good luck!
Bwwwaahhhhhaaa What’s your point? I remember all those postings. I stand by them all in their context. Actually I stand by anything I post here. So again your point is…?
Patricio,
Take the “s” off “roll”, and delete “eyes” for
Type this without the quotes: “:roll:”
BayQT~
Oops! type this without the quotes and the commas
“:,roll,:”
BayQT~
The media is bought and paid for by their advertisers. Realtors spend a lot of money in every newspaper, so the articles are always written to appeal to them. The people quoted in the newspaper are carefully selected as to not piss off the advertisers.
Anyone that has worked for a large newspaper already knows this.
Joe momma, your sooooooo right. Our local paper panders to the Realtors. The paper relies heavily on the Realtor’s adverstising dollar. They have a huge Friday insert full of houses for sale. The paper is always painting a rosey housing picture. They never mention the HUGE inventory and number of UNSOLD new houses. The $500,000 plus range is in BIG, BIG, Trouble. But no mention of that. It’s criminal how they pander to the real estate industry. There is a MAJOR, MAJOR story to be told about the NAR and their pack of lies.
Compare the 2 most expensive items most of us buy…
Cars and Houses:
Car dealers long ago, learned how to pencil whip people, when it came time to beat them up on the trade-in, or certainly when push came to shove, in matters of finance.
The car dealers just moved up a notch and became involved in real estate…
Same shenanigans, albeit on a immense scale.
anyone ever had car purchase remorse?
Don’t forget you or your Kids weddings! Ever had buyers remorse there?
An expensive wedding is the biggest waste of money. Couples spend months to years planning a one day event that the majority of the guest were hoping they won’t be invited to. I’ve never been to a big wedding that I didn’t think was totally boring and could’nt wait for it to be over with. More than 50% of these couples end up in divorce. If they would have put in a fraction of the time and money into planning their future versus their silly, over rate d wedding day, they mostly likely would still be married.
I have a subscription to Money Mag and your posts reminded me of this story. Sad. When I think of $30,000, I think of what that money could be turned into 30 years from now.
Why does a wedding have to cost $30K to be memorable? What happens if the biggest thing it is memorable for is the cost?
http://money.cnn.com/2005/04/27/pf/blowout_0505/index.htm
The NAR has got nothing over the former Nazi minister of Propoganda Joseph Gobbels.
Tell the people lies long enough, and they will believe it to be the truth.
The only way they get away with their shit is that they are the largest PAC contributor in the country.
The numbest and most obnoxious people I’ve ever met in my life wore Realtor pins.
All need to be rounded up and put in re-education camps.
Somewhat OT, but for those of you waiting to buy in LA, this article about the high density future of LA might sway you to look elsewhere (unless you enjoy living in a box with neighbors above, below and on all sides):
http://www.laweekly.com/general/features/whats-smart-about-smart-growth/16507/?page=8
There are only a few places that will be desirable around LA for the next thirty years or so. Westchester is not one of them.
The guy in the article complaining about the bad bus service should know that the buses are a large part of the problem, as they contribute to congestion on Lincoln Blvd far out of proportion to the number of people they carry. One of the many things the new urbanists don’t seem to get is that you cannot improve carrying capacity of a street by adding buses. To reduce congestion, you must either add *new* capacity, or reduce density.
Jeeze, now I’m sounding like Robert Cote. Bad landlord, back to work!
Why not? Capacity, yes. Usage, not necessarily. These are not the same. Not meaning to argue, but just trying to figure out why vehicles that could carry more people per unit of space don’t increase capacity.
IAT
Because of the collateral impact on traffic flow. If you run a bus on a city street, it reduces the average speed of the rightmost lane by at least 25%, and up to 75% if there are no turnouts at pickup stations. Without clean turnouts, the entire right lane stops every time the bus does. Even with turnouts, the disruption to traffic of buses pulling in and out slows down the right lane dramatically.
But buses are fairly efficient when operated on controlled-access busways, or on long runs in “diamond” lanes. Of course building special roads for buses is a pretty inefficient use of highway money, but at least the buses have a chance in that environment.
Probably the worst case example (as usual) is here in Santa Monica, where the city dedicated the rightmost lane of several streets in the downtown area for buses only. Where traffic used to flow fairly smoothly, it now backs up for many blocks on busy days and gridlocks intersections over a large area. The ciy has had to deploy several traffic officers per intersection to wave vehicles around in order to prevent total gridlock and traffic meltdown, and it still takes up to 15 minutes to go four blocks at times, buses included.
A true housing boom is caused by a significant increase in new household formation, or secondarily, wealth. Typical of these from a macro perspective have been the end of wars, high levels of immigration, and above-trend growth in income.
The 50+ years of favorable conditions following World War II have now resulted in a speculative mania and the thrown-together condo/McMansion/driveway-with-attached-house-and-no-side-yard atrocities of the last 5 years. This mostly-junk housing stock will be remembered the way American cars of the late 70s are, but unfortunately won’t be as temporary on the landscape.
Off topic (sorry) but if any San Diegans want to talk housing there is a Ron Paul meet up at the park at the end of Lamont street in PB today. I imagine there will be a few housing realists wandering about.
You should ask RP what he thinks about the bail-out proposals, and let us know.
I would bet money that RP would scoff and blast it…unless he was killed already and alien technology allowed the Repubs to make a clone to believe their party line…outside of that happening he would take the proposal and use it like toilet paper.
Unfortunately, the nasty recycled stuff legislative proposals are written on has about as much absorptive capacity as the proposed bailouts have the capacity to absorb the flood of distressed mortgages coming their way.
i’d go but the traffic on the weekends from carlsbad to pacific beach is about 3 hours roundtrip.
Prices in the side view mirror may appear larger than they really are…
“If you were waiting for the peak time to sell your house, it may have already passed you by for now.”
The inventory that is piling up tells the real story. Many of the homes that are on the market are entirely speculative and may never be owned by anyone. Large homes with huge carrying costs far away from modest urban centers on already clogged roads are the rule. As demographics and energy use patterns are changing much of this inventory is likely to be either abandoned or adapted before actually being useful. This shows that what happened was not a boom at all, but a huge fraud blowout. Homes that people need were bid up beyond reason, and homes that no one needs were a key part of the whole game. One of the biggest reasons that money flooded into housing was the desire for solid investments that would not just blow away like dot coms. Given the extend of liability some investors may wish they had sunk money into something that would blow away instead of an asset that will fester and require endless attention and repair.
“huge fraud blowout.”
i iike the way that sounds.
Hey off the subject… can anyone give me a clue on what they think is going on in Folsom, CA. Prices are not really coming down here and some people are getting what they ask on their ridiculously overpriced listing. I have asked this question before…. many, many months ago….someone mentioned it was just a matter of time but my gosh how much time does it take for it to come down$. I sometimes get this feeling that certain parts of the country will not suffer like others. We have now been waiting almost 4 years for the prices to come down. I sold my home thinking it was the peak. I am fed up with renting… and rent has not come down either… Rent is the highest I have ever seen it in Folsom. I look everyday at the listings and check prices…. many sold homes are close to asking price… there has been only a slight price decline but the home prices are still in the mid $200 sq ft. All the gloom and doom that everyone has predicted just is not so. Even when you look at other parts of the country… it is a joke people talking how they bought a home(one of the articles in this blog) and saved $50k are you kidding me… $50k off a $300K condo. Where is the doom and gloom everyone keeps talking about. I have always liked this blog but I am not seeing what some of you are seeing! I hate to sound like a B*tch but… damn it… I want DOOM & Gloom. I want to be able to buy a nice home in Folsom for $400k not a fixer for that price!!!!
“I want DOOM & Gloom”
we all want the same thing!
‘DOOM & Gloom’ = true buyers’ market
LOL, didnt find the pot of gold under the house.
Folsom, CA Real Estate Market Snapshot
updated Tuesday, May 8, 2007
Listing Type Number Median Price Price Change
from Apr
Homes for Sale (MLS) 484 $499,950 -0.0%
New Homes 35 $477,950 0.0%
Real Estate Classifieds 232 $499,999 0.0%
Foreclosures 95 $364,500 0.0%
You see a problem there? That is from last month, check it again in August.
Add this into the equation and you get a better picture as well.
The median income for a household in the city was $73,175, and the median income for a family was $82,448. Males had a median income of $60,616 versus $42,434 for females. The per capita income for the city was $30,210. About 2.6% of families and 7.3% of the population were below the poverty line, including 4.1% of those under age 18 and 4.3% of those age 65 or over.
Half million homes in that area, with those demographics are not going to hold up, especially with higher interest rates and tightening of liar loans…well lets just say they are gone.
Same here in SF Bay Area, not yet happened like in Florida or Arizona. But it has before and will again. Much bigger this time around. The med income is 80-85K which at 4x would bring med prices to 340K ( alignment), however med prices are still 2x that at $680K. So 50% decline is in the cards.
The Doom and Gloom in Ca is closer today then last year. Prices however are indeed sticky. As my post above states… you got to look at other factors… fake bids! More bidders being talked about by realtors than actual sales closed.
Ping Arwen U (so sorry for the off-topic question).
Where would you advise an out-of-state family to move for a one year trial within a half hour/45 minute commute to Rockville on 1/1? One school-age child.
Pat,
I live in Virginia and cover the Northern Virginia Bubble (http://www.novabubblefallout.blogspot.com). It’s possible some of the commenters there might be able to answer your question about commuting patterns to Rockville as well as good neighborhoods. I’ve received a few e-mails from Marylanders who wish there was a bubble website for them, so if anyone on this blog is interested in putting something up . . .
As far as local rental searches go, I like http://www.fairfaxrealty.com/search.html for its ease of use with the local MLS system here. It gives you an idea of what’s available in certain price ranges for rents (with a grain of salt, of course). Ziprealty is great, too, but they don’t have rentals.
I have a friend with a child who rents in Germantown, MD, which is a smaller community off of Route 270. It’s definitely cheaper up there, but I imagine if you’re looking at public schools, Rockville and Bethesda would be better.
http://projects.washingtonpost.com/challengeindex/
Thanks very much for the links and hints.
I find this funny. This idiot got scammed by a “beautiful woman” on “millionairematch.com” and now he’s trying to unload an overpriced white elephant in an area nobody really wants.
For $20,000, your Final Jeopardy question is, “how much money is this dude gonna lose on this loser?”
http://dallas.craigslist.org/apa/348991084.html
That’s funny. Funny like a heart attack, funny.
I find this funny. This idiot got scammed by a “beautiful woman” on “millionairematch.com” and now he’s trying to unload an overpriced white elephant in an area nobody really wants.
For $20,000, your Final Jeopardy question is, “how much money is this dude gonna lose on this loser?”
http://dallas.craigslist.org/apa/348991084.html
I find this funny. This idiot got scammed by a “beautiful woman” on “millionairematch.com” and now he’s trying to unload an overpriced white elephant in an area nobody really wants.
For $20,000, your Final Jeopardy question is, “how much money is this dude gonna lose on this loser?”
http://dallas.craigslist.org/apa/348991084.html
3rd times a charm.
tx: im silly with math, whats the prop. tax on $2995 PER MO
I dunno. A lot. I’ve never owned a house in this hellhole.
My oldest daughter owns a home in San Antonio that’s valued at $156k and her taxes are almost 4000 a year.
Someone else in LA waiting for the bust:
http://biz.yahoo.com/ap/070610/housing_slump_hopefuls.html?.v=2
Excuse me, but according to this Yahoo article it is a great time to buy. Why should we wait…I mean what could possibly go wrong?
http://realestate.yahoo.com/Real_estate_news/story?s=rytimes/item-4bcc1fc619fd6bf106034420ddf198de.html
Some real gems in there, Heh… =)
It is no way “buyers market”, it is more B.S. market now who are stupid enough to pay current prices for houses. Buyers market will be when prices come to their fundamentals ( at least 50% down). Whoever pays more are BS.
I’ts not a buyers’ market. It’s not a sellers’ market either, but a sheriffs’ market - foreclosures rule! Only must-sell inventory will bring the prices down for real.
“It would not shock me to have a 10 percent interest rate by the end of this negative cycle,” he said
am i the only one hoping he is correct?
I would prefer that they not increase to 10%. Many adjustable rates will adjust without a 10% rate and many people will get really tired of being poor, especially after the holidays, and will decide to sell without extra incentives. The higher rate will just ensure that many people waiting for prices to come down will still no longer be able to buy because rates went up too far. Realtors might consider the rate while consulting on selling price, but most homeowners/sellers are thinking more about what they paid or their neighbor got rather than what the buyer has to pay.
The FB’s have no choice but to sell or face foreclosure. The homebuilders and REO’s will have to cut prices and take the 10% rate into account.
MikeG, why are you falling for the NAR’s BS?? This is an affordability bust — any rise in rates will have to come out of the seller’s hide, not the buyers.
And, BTW, it’s not about what the seller wishes anymore.
To all FB’s and their wishing prices: wish in one hand and take a dump in the other and tell us which hand fills up first.
Someone put up a link to a youtube the other day that ends with the image of a McMansion half covered in sand. Was that a photoshop or something out San Berdoo way?
My wife was puzzled by that image. I had to explain to her that it showed roughly what a vacant McMansion in the SW desert might look like in 5-10 years.
Damn photoshoppers always messin’ with my mind!
Mel Gibson is out of rehab and back with:
Mad Max 4– Battle of Cucamonga!
http://www.nytimes.com/2007/06/10/business/yourmoney/10natreal.html?_r=1&pagewanted=1&ref=business&oref=slogin
Even so, the concern among many bidders at the event was that even if the properties sold for 20 or 30 percent less than their value at the peak of the market, the price might still be too high.
Wow! I can’t believe I read that in the MSM!
Gee, this is nice. Anyone here in a pension plan?
http://bloomberg.com/news/marketsmag/pensions.pdf
And one more for the road.
http://bigpicture.typepad.com/comments/2007/06/what_do_mortgag.html
Look at what I just found, man RA are a bunch of uneducated douche bags. Check out this listing, no this is not a 15 year old trying to make a point on a gaming forum, this is the guy who is going to sell your house.
“The Number One Question–How is the Real Estate Market?? The Answer Is!!! — This is a very OPPORTUNISTIC Market for both Buyers and Sellers!!!
The Federal Reserve Open Market Committee (FMOC) held firm for the 7th Consecutive meeting–keeping the Federal Funds Rate at 5.25%. The FED had steadily increased from 1 percent to 5.25 percent between June 2004 and July 2006 (17 straight increases). BUT What is Ahead??
FOR 2007!!! From the California Association of Realtors “C.A.R. Chief Economist”–The rate of home price appreciation will post a modest decline in 2007 and sales are projected to decrease by 7%-12%. This will reflect the gap between buyer and seller expectations. Interest Rates–We could see a rate cut in the early spring, but only time will tell!! ”
Let me say NOTHING is better than a RA with a caps lock and exclamation point habit!!!!!
Aww hell, just go here and read up on these RA outlook on the market for my home town, then go find the scum bag ramen eating turds in your area.
http://realtytimes.com/rtmcrloc/California~Huntington_Beach
Look at this guys outlook, again it is all the medias fault, like all the bad news out of Iraq, in fact it is super duper great over there…outside of all the death and destruction.
Charles Manure
“I am still convinced that our market would be normal if the news media quit their negative reporting. I really don’t understand their agenda. Are they trying to create news, are they trying to slow down our economy or are they plain stupid? A couple of months ago I received a call from a major newspaper for an interview about our market conditions. She was not being objective, as a report should be. All she was trying to do was to get me to say that the market was just hopeless. Finally I asked her if she was a home owner. You guessed it, she told me she couldn’t afford a home. “I guess you’re working on getting our prices down so you can afford one, right?” I asked her!”
Priceless…just golden! =)
Charles Manure? Spelling appropriate or was that forced spelling. But what a quote blaming the media on the market. Ha! Whatch out Ben! They will tag this bubble burst on you! I’m just kidding. I cannot believe that guy for the quote. The reality is it was 4 years of 20% annual price appreciations by specuvestors in an industry that typically goes up 4% per year in value. Wages were stagnant, growing at most 2% annual during that time. So to blame the media for prices falling instead of market excesses is pure bull$hit.
“Crellin and Jacobson agree that even though conditions are not what they were a year ago, the pendulum is still on the seller’s side. … Crellin said he believes innovative lending was not as popular around here as it was in other parts of the country…”
Does Crellin actually do any research? He is a nice guy and I’ve chatted with him a few times (we are colleagues at WSU), but Crellin is entirely funded by WAR and doesn’t really do any academically credible research.
The reason we haven’t seen many foreclosures in WA is quite simple: home prices are just beginning to decline. We are just a year or two behind the curve, but yes Dr. Crellin Puget Sound buyers relied on stated income, ARM, exotic loans just like most of the country. The key word here is “affordability”.
WA. was on that Map of Misery circulated about a year ago as being in the top 10 nationally for Neg. Am and Option ARM loans.
Not surprisingly, it’s never mentioned by anyone in the media here. As if it never happened.
Olympia was also in the top 10 areas nationally for foreclosures, as of a couple months ago. Again, no mention in the media.
Hey Groundhogday. How sure are you about Mr. Crellin’s funding source?
Hello all,
I have been reading here for quite some time and finally felt the urge to post. I bought a home in Olympia WA in 1998, was 132K and sold for 149K in late 2002. I moved back to Oahu then (hense the Haole monicor for those in the know about Hawaii). Funny at the time I was making 60k and my wife was not working which is a good wage for Oly. To be honest I would have been way better off renting during that time frame but had not planned on moving. There is a saying here “don’t move an Island girl off the Island” and well it seems to be true lol. Anyway the same home sold again in 2005 for 240k (Public record search). The nice retired couple from California I sold it to seems to have made a killing on that and more power to them. I have no idea what the new owners do for a living, but I know the wages in the area do not support prices anywhere near that amount. This was a 1600 3/2 in a decent subdivision (by St. Peter’s hospital if you know Olympia) but really a starter home to be sure and a cookie cutter one at that (new when I bought it). This is not to mention the amount of trouble soft lumber prices will have on a large segment of Washington State, give it 2-3 years and everything south of Tacoma will be back down to the 150k average IMHO due to affordability. I could post about Hawaii RE, but this doesnt seem to be the right thread to do it on.
Mahalo,
Dave
On another note, I remember in 97 prequal’ing for the loan and under the older more strict rules being qualified for 170k from the bank. I remember looking at the breakdown of what that payment would be and telling them, “you know that I like to be able to feed my kids right?”. How anybody took out one of the exotic loans they needed to buy in the last few years and actually slept at night is beyond my understanding. I am not looking for a bottom in the market, I will buy again (in Oahu this time) when I can afford the payment without losing sleep (ie a fixed payment) and the house or condo has to actually fit my needs for at least the next 10 years in case I get stuck in it. After all it is just a place to keep the rain off you, not an investment