An Apology Of Sorts In California
The Orange County Register reports from California. “Back when the state’s housing future was a legitimate debate, maybe two or three years ago, imagine if I had quoted some expert predicting that pricing would hit the ugliness of the mid-1990s while selling a house would be as difficult as it had been in nearly a quarter century. Folks close to the industry would scream, ‘Who is this doom-and-gloom quack?’”
“Well, in my hands I have just a projection. And the author is no less than the California Association of Realtors.”
“‘Buyers will have a wait-and-see attitude for some time,’ says CAR deputy economist Robert Kleinhenz.”
“California Association of Realtor chief economist Leslie Appleton-Young had a confession to make at the annual forecast lunch, or as she put it ‘an apology of sorts.’”
“Two years ago, amid a red-hot market, her forecast dismissed fears of a bursting California real estate bubble and called for only modest sales declines.”
“Two years later, the state’s seen a dramatic sales drop. In August 2005, the cyclical peak, sales ran at an annualized rate of 650,000 homes. By year end 2007, Appleton-Young foresees the sales rate under 300,000.”
“‘We’ve had a fundamental change in the mindset of the buyer,’ she says. ‘There is no reason (for a buyer) to act.’”
“‘This was more fun three years ago,’ Appleton-Young told the group as her forecast ended. ‘But we need to deal with reality.’”
The Union Tribune. “The 12,000 CAR delegates heard that the median price for existing single-family homes statewide will drop from an estimated $576,000 this year to $553,000 next year.”
“Still, the association said a drop in volume of 9 percent in existing single-family homes would be an improvement over this year’s projected drop of 23 percent.”
“‘It’s a moderation in the pace of decline, so from that perspective I guess it is positive, but we’re certainly getting to a relatively low level of sales,’ said Appleton-Young.”
The Daily News. “CAR President Colleen Badagliacco said tighter credit standards, affordability concerns and ‘a continued standoff between buyers and sellers’ will contribute to continued weakness in the market moving into next year.”
“James Joseph, owner of Century 21 Ambassador and Coldwell Banker Ambassador in Whittier and Century 21 Ambassador in Brea, said the predicted 4 percent drop in California’s median home price is not what he’s seeing.”
“‘Many of the homes I’m seeing now are selling for 15 to 30 percent less than before,’ he said.”
The San Francisco Chronicle. “‘2008 is going to be a rocky road,’ said Robert Kleinhenz, an economist for the trade group. He noted that the dismal sales projection ‘is one of the weakest numbers we’ve seen in a long time. It’s not clear we’re out of the woods where the credit crunch is concerned. We saw a slight impact in our August sales figures, but we’re seeing September sales with a much more dramatic impact.’”
“‘This is the weirdest downturn in the history of California,’ said GU Krueger, vice president at Irvine’s IHP Capital Partners, one of the largest U.S. investors in residential development. ‘Most previous downturns were driven by super-high interest rates or very weak economic fundamentals. This one is neither. It’s driven by prices getting ahead of incomes and by the drying up of financing that was making the run-up in pricing possible.’”
“Most economists agree a turnaround won’t come until the excess inventory of new homes is burned off, foreclosure sales peter out and prices decline to a level enticing to buyers.”
“‘It’s what happens the morning after the party is over,’ Krueger said. ‘We were overvalued, and now we’re depreciating - it will help with affordability, there’s no doubt about that.’”
The Press Democrat. “Stephen Levy, senior economist at the Center for Continuing Study of the California Economy, had a less optimistic outlook. He expects prices to drop between 10 percent and 15 percent overall and perhaps more in some markets.”
“The association forecast ‘conveys the wrong image to people about what’s going to happen in prices in their neighborhood from now on,’ Levy said. ‘It’s going to be more severe. I think that’s good. I think it’s better for us if we get through the correction faster,’ he said.”
“The problem in areas including Sonoma County is an oversupply of homes for sale. Prices have not come down enough to make homes much more affordable for many buyers, and tighter lending requirements present another hurdle.”
“‘Lenders are anticipating that property values will keep falling. So they’re adjusting their loan limits, their risk,’ said Kris Anderson, senior loan consultant for Allstate Mortgage Company in Santa Rosa.”
The Ventura County Star. “Jack Kyser, chief economist of the Los Angeles Economic Development Corp., thinks CAR’s projected median price is optimistic.”
“‘The housing market is going to remain in a mess for awhile,’ he said. ‘The housing market is definitely going through a painful recession that probably won’t go away until 2009.’”
“In September, there were 489 foreclosure filings in Ventura County, up 189 percent from 169 filings for the same month a year ago, RealtyTrac reported.”
“Robert Kleinhenz, a deputy chief economist at CAR, expects to see foreclosure activity climb to a record next year, when mortgage resets on subprime loans peak. ‘We expect in the next few months, we’re going to bear the brunt of the credit crunch,’ Kleinhenz said.”
The Mercury News. “Economist Stephen Levy said ‘we are now at the very beginning’ of a trend in which homeowners who can no longer afford the payments on their adjustable loans have to sell their homes or face foreclosure.”
“‘We’re going to have much more substantial price declines in selected markets,’ he said, ‘and that’s good because when prices fall we will find out there is an underlying demand’ for housing and new construction.”
“‘We need housing, to be attractive for jobs. And the prices simply got out of hand,’ Levy said.”
From CBS News. “In California, where developers have been racing to turn farmers’ fields into subdivisions, they’re now walking away, leaving houses partially built.”
“Those who have already moved in (are) wondering what will hit next.”
“‘I’m concerned that once the weather starts getting bad, there’s tile piled on the roof that could just fly off,’ homeowner Marius Gieske told CBS News correspondent John Blackstone.”
“Dunmore Homes had building projects in a dozen California communities from Bakersfield to Yuba City. Now it’s halted work everywhere, giving up on a fast-falling market.”
“‘We couldn’t sell a moving target,’ said John Slaughter, VP of construction and operations for Dunsmoor Homes. ‘What we wanted to do is stop.’”
“So developers are scrambling to get rid of houses they can’t sell. Many are turning to auctions. As Anderson Homes searches for the bottom, those who bought from the developer at the top feel betrayed.”
“Sherry and Percy Berquist, who paid $597,000 last year were shocked to see $335,000 set as the opening bid for an identical house to be auctioned. The developer may be able to absorb that loss. The Berquists can’t. ‘It’s gonna be very tough,’ said Sherry Berquist.”
“Across the street Amy Sturdevant paid $585,000 for a house. But now the developer has set $295,000 as the opening bid for similar houses down the street.”
“‘I feel like my parents’ grave has been robbed. This was an inheritance. I sit out here and I look at this…’ said Sturdevant.”
“Those like Sturdevant and the Berquists who bought at the peak may be the biggest victims of this housing bust said Financial Planner Patrick McGilvray.”
“‘That’s the real tragedy for the people who got in at the height of the market. They are going to tough it out,’ McGilvray said. ‘They are the ones who are going to carry the water so to speak for this debacle.’”
“If part of the reason for falling prices is overbuilding, it may not be over yet. While construction has slowed builders are still putting up new homes at a rate of more than one million this year.”
From ABC 30.com. “More than two dozen new valley homes will hit the auction block this weekend and some are not happy about it.”
“The slumping housing market has led the builder of a new Merced County subdivision to try a technique usually associated with foreclosed homes. The company is auctioning off more than a third of its available properties.”
“25 new homes in this Los Banos subdivision will be up for auction on Sunday. Low sales have led Anderson Homes to auction off 25 homes in this subdivision and another 34 in Manteca. The builder says the starting minimum bid of $215,000 for the Los Banos properties is about 40% off the retail price.”
“Some homeowners in this subdivision are worried about the impact it will have on their own property values. Maximo Aguilar Junior says he’s upset because he bought his home from the same builder two years ago for about $456,000.”
“‘Of course, we’re concerned about the price, we’re thinking it’s going to drop the price a lot,’ says Aguilar.”
“But Anderson Homes Chief Financial Officer says the auction could actually help get this subdivision back on track. ‘The auction doesn’t set the values, buyers do today so the auction will help us determine that, it will help us reduce the supply, so we feel in the long run that’s a good thing,’ says Craig Barton.”
“Michelle Ritchey and her family live just a few blocks away from the Teal Landing Neighborhood in Los Banos. But they’re hoping to trade up and cash in when many of these homes hit the auction block in San Jose this weekend.”
“‘Our home, we just had it appraised, and it was $259,900 so we said, well, these are starting off at $215,000, we could use a little less and for more room,’ says Ritchey.”
–
“The 12,000 CAR delegates heard that the median price for existing single-family homes statewide will drop from an estimated $576,000 this year to $553,000 next year.”
Every NAR member in CA should be required to tell this to all prospective buyers. They can tell the sellers if they wish.
Jas
The fact that the NAR predicted 4% in price drop for CA is important only that they are finally admitting this. The 4% is of course bogus. we all know that it will be more like 20%. But the fact that they admitted this will be the death knell for the RE industry because who, not in a mental asylum, would buy now only to see their down payment wiped out. In fact, this is already happening. houses closed just last month are losing value month by month. it’s so fast it’s insane.
don’t drag my good name into this
funny
No no, -median- price will drop 4%. I’m not endorsing that as correct, but let’s not confuse that with the “price plummet of a particular property”. They are completely different measures.
the average decrease in values over 40 years of data is 36%. the real estate cycle is 7 to 9 years with 24 to 36 months of peak and trough.
Next year they’ll be issuing an appology of sorts about how badly they underestimated the price drops to be. 4%?
I don’t think so.
And follow the apology with the now infamous “Who could of seen this coming?!”
–
Well, when 5-7% decline forecast, in volume, made a year earlier (if I recall correctly) turns into a 23% decline we can guess the actual price decline next year. As you said, admitting the decline is the best piece of information.
Jas
“‘Many of the homes I’m seeing now are selling for 15 to 30 percent less than before,’ he said.”
Caveat emptor. Buy now and catch yourself a falling knife.
15% (which I strongly suspect may be an optimistically low estimate of the likely price decline) off a $500,000 California starter home would set back the current buyer to the tune of $75,000 in net worth for the pleasure of enjoying the vaunted American dream of home ownership. 30% (more realistic IMO) would of course represent a $150,000 financial hit to the hapless buyer of a starter castle. Better to let the banks eat the loss, as banks are where the money is.
Maybe someone can explain the term “Starter home” and what is the relation between the starter home price and income? can someone fill up the numbers for this $P starter home bought by an married couple Z year old + D kids with total income of $x and $y amount down payment, taking 30 years fix mortgage at T% and R% property tax and $Q home owner insurance. Maybe if someone can answer this we will know what the starter home price should be and that will be the reference for pricing all other houses. Right now I see “Starter home” at $700,000. Thank you for taking the time.
Thank you
Havitoosh
15% (which I strongly suspect may be an optimistically low estimate of the likely price decline)
If I’m reading the article right, it sounds like he’s predicting a 10% to 15% drop (more in some markets) for next year alone. This is contrasted with the CAR forecast of a 4% drop for 2008.
I think 10% to 15% for 2008 is too optimistic, unfortunately. This thing still seems to be unwinding slowly, so 5% may be more realistic.
“‘It’s a moderation in the pace of decline, so from that perspective I guess it is positive, but we’re certainly getting to a relatively low level of sales,’ said Appleton-Young.”
That’s some spin, “moderation in the pace of decline”. Who cares how fast the pace is, the fact is it’s still declining and will continue to do so for some years.
So….you’re still bleeding, just more slowly.
“It’s just a flesh wound.”
I’d prefer to see the CAR shills hung, drawn and quartered, then buried in the four corners of the earth. But besides that, I’m sure they’re a swell bunch of folks at parties.
Dunmore homes - LMAO!
How many other builders will do this?
Only the ones that want to cover their a$$es……which is to say all of them.
It should be spelled ‘Dun (make persistent demands on (someone), esp. for payment of a debt) more homes’.
Given how hard and quick it appears that price declines are hitting So Cal, is anyone moving up their timeframe for when it will be a good time to own a home again?
It seems that most on this blog appear to believe in a 3-5 year (or more) correction before it would make sense to own vs. rent. With the amount of forclosures that are about to hit in the next 6 mo to a year, could we be looking at a much faster correction than first anticipated?
yes
Emphatically No!
Look at any major correction from a stock market bubble collapse and for every year correction in the stock market figure three years for housing (3:1 due to lack of liquidity). This is just the beginning. It took 12 years of fiscal mismanagement to create this massive bubble, it will not come undone in 3 years.
I am still of the belief that much of California will drop 80% in value. A 30% drop then OK to purchase is not washing out the excess. A house sold for 200K in 1993 is still ridiculously overpriced if sold for $1M in 2005 and currently going for 700K .
“People who look for easy money invariable pay for the privilege of proving conclusively that it cannot be found on this earth.”
Jesse Livermore
“A 30% drop then OK to purchase is not washing out the excess.”
I concur. Further, demand will potentially dry up much further as the few remaining potential buyers with good credit come to understand from early movers what it means to ‘catch a falling knife.’ This is why it is critically important to REIC policy makers to reflate the bubble at all costs.
If I can play devil’s advocate for a moment, I think y’all might be underestimating the “nesting instinct.” I’m getting hammered by everyone in the family to buy a place (who all, coincidentally, bought on the cheap before the bubble). I’m holding out of course but it ain’t easy. The wife wants a home to call her own, to be able to redecorate the way she wants. A garden for the cats to play in would be nice, too.
Tell them you are thinking “nest egg”
A house is a money pit. Only the smart will agree. Owning is ‘nice’ but it is not worth taking a bath over.
Highly unlikely the REIC or anybody else can repeal the laws of economics. In addition, other mentalities come into play like ’selling begets selling’ which become self-fufilling.
Bottom line, house prices are too high and must come down - do the math.
That is why it may take a decade and a half to hit bottom.
You are forgetting the mass retirements looming in 10 years.
It does not mean do not buy, it just means that a buyer may be underwater for a long time.
If you need a piece of property (Not want) price and interest rates are immaterial.
If you want a house, can afford current prices and plan to live there for the next 30 years. It is also fine to buy. If you plan on leaving in 10 years or less, then count on house losses.
IMHO the problem is the modern perception that houses are “assets” and not “liabilities”. This perception was enhanced by the Federal Reserve referring to houses as “Assets” starting in 1994 and continuing to the present.
Would your SO think differently if her perception was buying a “liability”?
“If I can play devil’s advocate for a moment, I think y’all might be underestimating the “nesting instinct.” I’m getting hammered by everyone in the family to buy a place (who all, coincidentally, bought on the cheap before the bubble). I’m holding out of course but it ain’t easy. The wife wants a home to call her own, to be able to redecorate the way she wants. A garden for the cats to play in would be nice, too. ”
Ahh yes, the “nesting instinct.” Sounds warm and fuzzy.
That is until one turns white and soil his/her shorts upon realizing they’re megabucks in the hole because “instinct” turned out to be nothing more than an impatient, lazy ass impulse purchase–instead of a prudent, patient thought-through decision. Oh wait! My Bad! A garden for the kitties is worth a couple hundred grand in the hole!
Sarcasm off.
DOC
“Nesting instinct” doesn’t save FB’s from foreclosure.
I have a friend who just “extracted equity” from their home to pay for another one! The shear number of coworkers whom have an unsustainable number of flips will bring this market down on its own.
At that point we’ll have a 1990’s style drop in price.
Its not even close to time to buy. 2008 is a warm up act. We will see the big price drops in 2009.
Got popcorn?
Neil
i’d venture to say that the majority of the sales still occurring can by otherwise sane individuals can be attributed to the nesting instinct. it’s the only thing the nar still has going for it. this nesting bubble will likely resonate in 5 years as a divorce bubble as prices continue to plummet and warm and fuzzy nesters realize they’ve become cold and bloodied knife catchers.
I hear you Dr. Strangelove!
I know a friend or three in the same position. Spouses with “nesting instincts” and questions as to their manhood if they cannot bag a large house for the Mrs. Pains me to hear it!!
Similar situation here. I finally convinced my wife that the bubble will pop sometime. It’s just taking a while for the pop to work its way up to the Vancouver, BC area. The 2010 Olympics and the Hong Kong money throw a little curve here, but I see sales are down in Portland, Oregon and Pierce and Snohomish counties in Washington. Just waiting for the 30-50% price drops I’ve seen in the San Diego blogs…
It all depends on the guy giving you a loan.
Even a local mom & pop credit union might have second thoughts about even offering an 80% LTV in 2008 when prices have already taken a 20% haircut.
If they can’t offload the paper onto the markets, it will turn into an accelerating death spiral.
Who in their right mind is going to give you a loan if they think you will be underwater in a year.
Loans should be given on the basis of being paid back. If the loanee has the means to pay it back what does the loaner care if the asset falls in value?
Because when homeowners see 20% drop, many walk away. People freak out when “prices almost go up” turns out to not be true. End of the world as they know it.
Also, mortgage interest rates are what they are because it is a secured loan, i.e., there is seizable collateral in case of default. But if prices drop too far, the loan is no longer secured, hence the risk is mispriced.
One argument against that 80% drop is the meteoric descent of US $. With that, Americans may start looking at real estate as a hedge against inflation and Foreigners may see $ price tags and think they are in Big-Lots or Wal-Mart. In the final analysis, real estate is the only accessible non-fiat money, though bubbly & illiquid at times, to the common man. And I am not even mentioning 2011 onwards when Federal budget/deficits and hence $ must go to hell in a handbasket due to entitlement big bang {due to babyboomers }
“One argument against that 80% drop is the meteoric descent of US $.”
The decline of the US $ is as bad as you say, but your conclusion is wrong. The inflation on Energy and Food is going to be so bad that it will actually cause the available funds for housing per month to go down.
I have heard the argument for foreigners coming in and buying up all our propertirs on the cheap, maybe it will happen. So far every time houseing forms it’s bubble this has not happened during any down swing.
Re: foreigners buying cheap real estate after a bubble burst, did this occur in Japan in the 1990s? If it did, it wasn’t in enough numbers to prop up their market.
What baseline year should we use for an acceptable price?
2000 seems to be when the insanity started. Do you think it could “overcorrect” even undershooting the 2000 prices?
80% drop ho ha I’ll buy you a beer and we can toast to that if it happens. I’m guessing its 30-40% but thats based on the last correction in the 1990’s not any real analysis. 80% the FED would be sh#$ting gold bricks by then if they have any Gold left that is.
I think that’s possible. Cycles seem to take their course somewhat faster these days. Of course, I’d like to see it happen faster, so it could be wishful thinking on my part. Much as we point to the length of Japan’s downward cycle, I don’t think this one will take as long.
Agreed, but the capitulation selling has to occur before the stabalization can begin.
I’m finally seeing a servicers reduce prices in Sacramento. It’s not enough yet but it’s a start. What they haven’t come to grips with is how much we have overbuilt.
Sacramento county 2000 vs 2006
Pop. 1,223,499 - 1,374,724
Median house price 143,851 - 387,000
SFR housing units 474,814 - 542,527
So if I egregiously take the average between
median household size (2.7) and median family size (3.30) and WAG it, the typical house in Sacramento is occupied by 3 people. That means we needed 48,108 new units (MFR & SFR) and we built 67,713. So whoever can sell fastest wins and there will be 20k extra chairs left over.
And this is just Sac county, add in Placer, El Dorado, and Yolo counties and you have a whole world of hurt. This is almost rust-belt worthy hurt too.
Great numbers! Funny how the figure you came up with is close to the current inventory of homes for sale in MLS for the Sacramento MSA.
Most of the delay is caused by paper work… so homes hitting forclosure now probably won’t be on the chopping block until 9 months or more later.
Yes…They do take a long time and you never know during that time if someone is going to bid more than you so, it could be a complete “waste” of your time….If I were inclined to buy right now I would be looking for the auctions through at least a medium size builder…Quality control is likely to be better than a small builder and medium to large builders are unemotional about the auction…Its a business decision…
As long as there are still bad 3,5,7 year ARMs on the market there will still be foreclosures and the market will not turn around. The housing market is like a tractor trailor and it is likely it won’t be until a few year AFTER all of the bad loans are out of the system that it will turn around. It went crazy on the upside for the same reasons.
In other words if the peak was in November 2005 or whenever we agreed it was the bad 7 years ARMS given at that time won’t wash out of the system until 2012. There were MANY MANY bad loans given in that time frame and they are still continuing. It is likely that the marker will bottom out for a long period of time so if you buy a house as a home you can buy it in the earlier portions of the bottoming cycle. If you buy as a rollercoaster investment you better wait until 2015.
In other words if the peak was in November 2005 or whenever we agreed it was ….
Tomorrow will mark 2 years since we sold and started renting. Time goes by so fast, enjoy it.
How funny. It’s my 2 yr anniversary too give or take a week.
Prices in SoCal are going to stick all the way down.
Like when you eat too much cheese?
LOL
as if there’s such a thing as “too much” cheese.
I’m hoping to start making low ball offers to banks in about 9 months. Too soon you think? I was planning on waiting at least 18 but, like the rest of you, I’m hoping this speeds up a bit.
The loan resets are the key to the turn around. Someone had a graph of all of the resets. You better wait until everyone gets out of those crappy loans in the neighborhood around you or they will undercut your price 6 months later.
The loan resets are the key to the turn around. Someone had a graph of all of the resets. You better wait until everyone gets out of those crappy loans in the neighborhood around you or they will undercut your price 6 months later.
Yes the indelible image of the Crdeit Suisse report.
my link is broken (sorry)
It has a dip that will fool the MSM into proclaiming the bottom and then watch all hell break loose.
I made that graph my computer wallpaper. “Yeah, I’m a dork”, I say, “but take a look at this…”
The people who are going to understand the graph get it very quickly. Then they scurry away to make phone calls. Just kidding.
MrBubble
Why do I always have to be the one to post this?
http://www.smugmug.com/photos/136440158-O.png
Easy now Capo. Don’t crowd in line. Let the Sheeple and other FBs that are still out there go first. There will be plenty left. You’ve still got the Alt-As,and the 5 and 7 yr resets to go. Also the normal foreclosures due to other circumstances. Easy now big fellow.
Friend of mine put in an offer on a Freddie REO. His offer was soundly rejected even though the house is uninhabitable, certainly not in any condition to qualify for a mortgage. Its still the third inning. We have a ways to go.
–
When the price is 100 times the monthly rent of a comparable property. Rents are likely to fall by 50% from the peak. Rents did fall 39% in Silly.con Valley during 2001-03. It is all a matter of supply and demand. And supply keeps on increasing as more homes are being completed than the demand.
Jas
Ok Jas
Get a grip on yourself and your rent fantasy, rents are up a very healthy 11% this year in Silly.com My neighbor a Chineese slumlord, just rented out a 100 year old,800 sq ft, 2 bed room, 1 bath, no stove, no nothing, piece of total crap slum house at $1,600. all others were at $1,850 True after 2001 the slum house went from $2K to 1.2K….but rents are climbing again fast. In reality their rent never went above $1300 during those years. Finally the 2 million repo’s will all sit empty (unless squators come) and that will reduce SV rental supply.
Uh, thats silly, those foreclosures will be sold at prices that make them attractive as rental units so they will return to the housing pool. Also there are a number of buildings being built as condos that will likley convert to apartments when the low $400K prices don’t attract buyers for 1 bedroom 1 baths.
http://skylinesanjose.com/index.htm
Mo Money
if you know San Jose then you will know they are building $1.5 billion worth of unlimited crap every year, an unlimited supply no end in sight, so by your and Jas theory rents should have fallen already 20%…so why are they up…11% because the crap being built is not for J6p ……its for Mr & Mrs got rocks, who’s income is up 20%- 30% yoy. Put a fake add in Craigs list for j6j house and see how you will drown in responses.
My lease just came up in San Jose and my rent is exactly the same as last year. Where do you get this 11% number?
And the fact that the slumlord is Chinese is relevant, why? My slumlord is an old white guy. He wears dirty clothes, mutters a lot. Fixes the plumbing, washing machines, etc., himself. I’ll bet that Chinese-American landlord is the same.
Urban Monk read the Mercury News
Bay Area renters lament high prices amid mortgage industry crisis
09/16/2007 - SAN FRANCISCO—The cost of renting an apartment in the San Francisco Bay Area has surged in the past year—thanks in part to turmoil in the mortgage industry, according to new data from regional
Chilidoggg - the Chineese slumlord next door has over 400+ units, he does not do or fix jack, I have only seen him once in 10+ years and he drives a big fat 500MB…since your landlord fixes stuff…its impossible he is slumlord.
Get a grip on yourself…purchase or STFU,
Good luck with those numbers.
Pardon.
To CArealist.
At the end of the recession, maybe. With so much inventory coming on line, there is no need to rush.
No. Still going to take a long time. Sit back and enjoy the ride, dear bitter-renters!
If we can get the house we want for 2.5-3x our gross income and be on what appears to be the mean trend line for home values, and not fund somebody’s retirement with a massive gift (ie they can have reasonable appreciation) then I’d probably buy.
Another way of putting it - if today’s $1.5MM houses become tomorrow’s $750k houses (and so forth across the market) I think we’d consider it….so long as that same house was selling for $600ish around 2000.
How long does a foreclosure stay on your credit report? Seven years? The first wave of foreclosures started in 2007, so those people will not be in the market to buy a house again until 2014. That seems like a good time to buy. Or just let the market decide for you - one year of year over year price increases sounds good, too.
Even if prices fall sharply and then stay flat for years, you’re better off buying at the tail end of the flat period, because inflation is still pushing down the real price, and also because renting will still almost certainly be cheaper than owning.
–
“Dunmore Homes had building projects in a dozen California communities from Bakersfield to Yuba City. Now it’s halted work everywhere, giving up on a fast-falling market.”
“‘We couldn’t sell a moving target,’ said John Slaughter, VP of construction and operations for Dunsmoor Homes. ‘What we wanted to do is stop.’”
Real “state,” or reality” is setting in the real estate business.
Jas
Jas,
haven’t seen any new articles by you at financial sense lately. Planning one soon?
–
Yes.
Jas
Yeah Jas, what’s happenin?
–
“‘I feel like my parents’ grave has been robbed. This was an inheritance. I sit out here and I look at this…’ said Sturdevant.”
What is going to be robbed is your stupidity, Miss Sturdevant.
Jas
No way! She’s hanging on to that!
But Sturdevant bought the house at what she thought was a fair price, if there was no price reduction on the horizon she’d be sleeping like a baby. Obviously she bought the RE mantra “property only goes up”!
her parents grave has been robbed? are you f-in kidding me? she has a free house to live in that her dead parents bought her, and she is upset because she might have to live in it 5-7 years before she can ‘flip’ it for a sweet profit?
Latest update on the house I rent in Palmcaster. I zillowed it today and the zestimate is now sitting a hefty 29% below peak. Now considering that we’re talking Zillow here I’m gonna guess we’re really talking 58% down as true current value.
Oh, as asbestos to the flamers, I know Palmcaster is the armpit of the world, and my FB landlord will be running off with my deposit, and all that jazz. No need to rub it in.
Screw the deposit. You more than made up for it in what you saved by renting.
–
Is your estimate of the price more than 100 times the monthly rent you are paying?
Jas
This is a $64/Sqft Temecula Home. Cheapest in SoCal I am aware of for a 2005 built home.
http://homes.realtor.com/search/listingdetail.aspx?ctid=3509&ml=3&mxp=22...
$221,900
4 Bed, 4 Bath
3,468 Sq. Ft.
0.23 Acres
MLS ID# T07146262
2005: Paid $552,500
Bank selling for: $221,900
RE: 4 Bed, 4 Bath
3,468 Sq. Ft.
0.23 Acres
Even @ 50% off, the property tax man is still comin’.
When the bottom hits in a few years this place will go for $55,000.
http://homes.realtor.com/prop/1090128798
Look at the pictures! They stripped absolutely everything out of this house. No wonder it’s going for so cheap.
yeah they took the toilet but they left the tp
They even took the vanity cabinets…..wow.
Image #3 - they took the wood for the stairway, and the plate cover for thelight switch.
Also, it’s in Temecula, where perfectly INTACT houses probably aren’t worth over $200k based on fundamentals. Give it a few years and this house wouldn’t be worth even $100k in its current state.
Well to be hones there were more winners than losers in the bubble. Everyone made money until the bagholder bought it.
Almost all home owners are bag holders!
In some states like Wisconsin and Illinois, property taxes are based on assessed value. Are there better government services for the tax dollars? Even in states like California with prop 13, property taxes are allowed increases. All because of bogus real estate prices.
Okay, I’m starting to not feel like a contrarian and it’s pissing me off.
Just say “No recovery until 2012″ and you’ll still be a contrarian.
No, this is just like the builder CEO’s in October 2006. They all threw in the towel, so to speak. Then by January they were proclaiming the worst was over and get ready for spring. It is neccesary to do this to position oneself for the next move.
Don’t worry, I’m still on board. It’s just the boat is starting to get a little crowded. As you know Ben, I’m into the fundamentals, and until we get back in-line fundamentally, I’m not going anywhere.
Oh I am sure that the PTB will continue to do enough to keep you in the contrarian camp ex-nav. Plus, you could always find some kool aid drinker who hasn’t got the clue if you need a good laugh.
“But Anderson Homes Chief Financial Officer says the auction could actually help get this subdivision back on track. ‘The auction doesn’t set the values, buyers do today so the auction will help us determine that, it will help us reduce the supply, so we feel in the long run that’s a good thing,’ says Craig Barton.”
- Sounds like the builder is gonna through the FB under the bus.
‘In the long run….’
That quote is the equivalent of a doctor telling you “this will only hurt a little bit”.
Doctor Allenby: This won’t hurt a bit.
[Sticks Chance with a needle]
Chance the Gardener: It did hurt.
“‘I’m concerned that once the weather starts getting bad, there’s tile piled on the roof that could just fly off,’ homeowner Marius Gieske told CBS News correspondent John Blackstone.”
The dude’s not exaggerating. I’ve seen it happen. All it takes is a good Santa Ana.
All it takes is a good Santa Ana..
Santa Ana winds in NoCal?
I’m speaking from my So Cal experience. Tell me how they get blown in No Cal.
This questions is begging for a tawdry answer, but I won’t be the one to do it.
I can’t resist.
Just like in WeHo!!!!!!!
Oh yeah, I remember the mobile my sister used to live in. They had tires on the roof to keep it from blowing away.
“Oh yeah, I remember the mobile my sister used to live in. They had tires on the roof to keep it from blowing away.”
Tornado desruction of mobile home parks is a myth.
Actually it’s just a freakishly coincidental destructive event where everyone in the mobile park accidently turns on their ceiling fans at the exact same time.
DOC
“‘We’ve had a fundamental change in the mindset of the buyer,’ she says. ‘There is no reason (for a buyer) to act.’” Leslie Appleton-Young
This woman is no Mother Theresa… she knows what shes doing. She wants this bottom to hit FAST so they can go back to the good-ol-days.
Can’t go wrong with honest statements that serve one’s self interest…
“‘I feel like my parents’ grave has been robbed. This was an inheritance. I sit out here and I look at this…’ said Sturdevant.”
Once again, this shows the balance of sales activity over the past few years was using OPM…no one had their own skin in the game.
On a side note, here in Humboldt county, CA (Eureka), an economics professor from HSU was interviewed by the Eureka Reporter newspaper about the housing market: he said prices could drop 40% over the next few years. This professor has been on the bubble bandwagon for some time, and even has a link to this blog on his economics homepage.
However, the Humboldt Association of Realtors immediately fired back, taking out a full page ad in the various newspapers encouraging people to buy. As they said, prices are down only 5% (which is true around here), and although prices in Redding or Sacramento may drop 50%, it can’t happen in Humboldt because we are different, there is no buildable land, etc.
I wrote an opinion letter to the editor today, but they probably won’t publish it since it goes against their strong advertising base of realtors. I can guarantee you, though, that there will be a number of home purchases here over the next several weeks as a direct result of the Realtor’s advertising blitz. People here are that stupid.
And you are moving into your prime selling season right Anthony ?? 30 mile per hour winds with horizontal rain ??
“Once again, this shows the balance of sales activity over the past few years was using OPM…no one had their own skin in the game.”
She put down 250K of her own money.
Fat chance. Don’t count on a blitz of home buying despite the Realtors best advertising spin. All the choice buyers are long gone having bought years ago. All is that is left is the bottom rung of potential buyers who have no savings and will not qualify for a loan under tightened rules. And then there are all those buyers from mid 2006 to mid 2007 who got the worst loans written in history given their poor credit. Humbolt is in for 50% losses just like anywhere else unless Weed suddenly becomes legal.(Humbolt is Marijuana growers paradise)
Humbolt is in for 50% losses just like anywhere else unless Weed suddenly becomes legal.(Humbolt is Marijuana growers paradise) .
If weed becomes legal then we could definitely see 70% to 80% drop. The artificially high price of “the main agricultural product” here is what keeps the local econommy propped.
The newspaper interview also asked the Humboldt Realtors why rental prices are some 70% lower than equivalent housing prices in Eureka. The Realtors, true to form, responded saying that demand for rentals is huge (this is true) and that rental prices would go up 70% in the next couple of years and would catch up to home prices, which won’t fall.
The pot here must be good, the realtors are obviously smoking. But, like I said, I can guarantee you that this feel good advertising blitz will generate a few sales. People really think that this place will escape what is happening elsewhere in California.
“Across the street Amy Sturdevant paid $585,000 for a house. But now the developer has set $295,000 as the opening bid for similar houses down the street.”
“‘I feel like my parents’ grave has been robbed. This was an inheritance. I sit out here and I look at this…’ said Sturdevant.”
Darn, honey… I guess they forgot to stamp your house. You know: The stamp that says “Past performance is no guarantee of future results?”
To really put this gal’s purchase in perspective, my father-in-law sold a nearly new 2000 sq.ft. house in Los Banos for 289K in 2004.
Sold in 8 hours at the crazy height of the bubble. And folks, this is Los Banos for crying out loud! They raise kids, ducks and hell there, not much else.
So you spent your inheritance on an expensive “dream” home that lost value, shouldn’t you still be happy you have a place to live that you didn’t pay for ?
I’ll bet they still have a sizable mortgage around their neck.
What will she do when no one offers a bid at $295,000 ???
This auction hasn’t even happened yet.
All of these FB’s act as if the big, bad builder is doing this to them. Don’t you think the builder wants to sell for as much $ as possible Amy? Don’t you think they would if they could?
No Amy, this is the market speaking loud and clear. The builder has can either (a) sell at market price or (b) go bankrupt and let the bank sell at market price a year from now. Would you be any better off with option B, Amy?
Excellent point! The builders are NOT in it to drop the prices on the goods they are selling. They only do so because they HAVE to do so.
Dear Amy would find that the builders’ situation is not much different than if one of her neighbours, due to death/divorce/transfer also had to sell.
“James Joseph, owner of Century 21 Ambassador and Coldwell Banker Ambassador in Whittier and Century 21 Ambassador in Brea, said the predicted 4 percent drop in California’s median home price is not what he’s seeing.”
“‘Many of the homes I’m seeing now are selling for 15 to 30 percent less than before,’ he said.”
Hey James, Commissions must be drying up start telling sellers prices are crashing and better sell now before they drop further.
We could of avoided this disaster if the NAR the REIC acted responsibly by telling the public that prices were to high and unaffordable 3 -5 years ago
‘Most previous downturns were driven by super-high interest rates or very weak economic fundamentals. This one is neither. It’s driven by prices getting ahead of incomes and by the drying up of financing that was making the run-up in pricing possible.’”
BINGO!
Now lets get on with this massive pricing adjustment.
Today market tanked because of talk of inflation. If we do have inflation aren’t interest rates likey to go up leading to a DEPRESSION.
No, this is tanking because they pushed prices all the way to the ceiling and then past it.
At the top of the frenzy, you had FIRST payment defaults because the realtors and brokers pushed the last few FB’ers (walking brain donors) through the front door while they ran off with the comissions through the back door.
Inflation will have everything to do with pushing prices down on homes to the theoretical bottom and then past that point.
Rising bills for gas, food, heat, water, health care, etc. etc. will keep everyone out of the market.
“Those like Sturdevant and the Berquists who bought at the peak may be the biggest victims of this housing bust said Financial Planner Patrick McGilvray.”
They are not victims. They are the idiots that kept bidding up prices expecting them to go higher and higher. The victims are the people who have to listen to these idiots whine.
Was that too harsh? I apologize.
No….not at all.
The value of homes are much like cars, once purchased they decrease.
To answer one question on resets, the chart I saw had Nov.& the first of 08″ as the high points
Dating a 1,600 year old is awkward…
It’s the Ultimate May to December romance
And I always have to go to her place.
C’est la tree
I’d like to date a 16.00 year old again.
16 will get you 20, but not in the Philippines
Groucho: I’ll give you ten years at Leavenworth or eleven years at Twelveworth.
Chico: I’ll take five and ten at Woolworth’s.
‘Folks close to the industry would scream, “Who is this doom-and-gloom quack?”
Or who is this poorly educated outsider? Or over-educated professor?‘
Definitely over-educated
“…And remember, the Realtors are willing to admit it will be the worst pricing scenario in 15 years and the slowest selling in 23 years.
Can you imagine what a doom-and-gloom quack professor is predicting?”
Buy houses they have made all their going to, prices will never get better?
“You know what is wrong with a lot more confidence than what is right.” Nassim Nicholas Taleb
Victims? lol!
Suckers more like it. Now the faster they default and are removed by the sherriff the quicker that real buyers with real oney can buy a house at an acceptable price.
Just heard a radio ad in San Diego saying that Lennar (sp?) Homes will guarantee sale price. That is to say, if the price drops in the future, you get the difference back.
Sales must be pretty slow lately to have to push this one.
How can they afford to offer this put option? Is the taxpayer paying for it in some way behind the scenes?
Found it on the web: http://www.lennar.com/California/SanDiego
from the fine print I understand it to mean that the guarantee is limited to homes that Lennar sells during the promotion.
So if the last home sold goes for 5% less than the first. The first guy gets to pay the same amount as the last Knife Catcher who closed before Nov 22.
Oh and they also keep the right to reneg on the offer. How nice of them.
A more nasty scenario: They offer the guarantee, but they are not an insurance company, and when they go belly up, so does the guarantee.
I would not take the offer unless the guarantee is provided by an insurance company or some other outside vendor with a more promising future than a homebuilder during the worst-ever U.S. housing downturn.
seeing as their bonds were reduced to junk by Moodys today, this is probably a more likely scenario.
The ad just guarantees that THEY won’t sell it at a lower price. That’s no guarantee that it won’t go down after they unload ‘em all.
Looks like there’s a fine note as usual. It expires on Nov 22, 2007. http://www.lennar.com/promotions/saw.aspx?pid=4802&CityID=SDO&SourceID=MKT
“* Lennar will provide a Guaranteed Purchase Price at the time of signing a purchase agreement which is the base price of the home less any cash discounts or incentives. Guaranteed Pricing reduction is valid for homes sold after the purchase agreement date and expires at Closing and must be utilized before November 22, 2007.”
That has to be the most meaningless “guarantee” I’ve seen. If we just *Happen* to lower the price in the three days this guarantee*(with an asterick no less) you’ll get the lower price.
There’s a fine note to it. The promotion ends on Nov 22, 2007. http://www.lennar.com/promotions/saw.aspx?pid=4802&CityID=SDO&SourceID=MKT
* Lennar will provide a Guaranteed Purchase Price at the time of signing a purchase agreement which is the base price of the home less any cash discounts or incentives. Guaranteed Pricing reduction is valid for homes sold after the purchase agreement date and expires at Closing and must be utilized before November 22, 2007.
Guaranteed Pricing reduction is valid for homes sold after the purchase agreement date and expires at Closing and must be utilized before November 22, 2007. **
Its guaranteed only for 6 weeks ..LOL !! what a piece of crap
So we can expect lower prices on November 23, 2007.
I just read the fine print. The price guarantee begins at signing purchase agreement and EXPIRES AT CLOSING. Obviously when the house is paid for by the bank you’re on your own. More marketing crap.
Note: The guaranteed price is the price minus the cost of upgrades and incentives.
Plus, the promotion closes on Thanksgiving Day (Nov 22), as if people would be negotiating closings on that day
What happens when Lennar goes BK, or
“Still, the association said a drop in volume of 9 percent in existing single-family homes would be an improvement over this year’s projected drop of 23 percent.”
“‘It’s a moderation in the pace of decline, so from that perspective I guess it is positive, but we’re certainly getting to a relatively low level of sales,’ said Appleton-Young.”
“This year sucks, but on the bright side next year will only be 9% worse!! Yay!”
“Economist Stephen Levy said ‘we are now at the very beginning’ of a trend in which homeowners who can no longer afford the payments on their adjustable loans have to sell their homes or face foreclosure.”
“‘We’re going to have much more substantial price declines in selected markets,’ he said, ‘and that’s good because when prices fall we will find out there is an underlying demand’ for housing and new construction.”
“‘We need housing, to be attractive for jobs. And the prices simply got out of hand,’ Levy said.”
We are at the beginning of a trend towards more affordable housing, which will be attractive for future job growth and beneficial to the home construction industry.
Logical conclusion: FALLING HOME PRICES ARE GOOD FOR THE CALIFORNIA ECONOMY!
who wants to bet that when California house prices fall 50%, city & government workers are going to scream for 50% higher pay to cover their equity loses
and I say stupid tax payers will foot the bill.
The unions won’t get those concessions. Its typically a 3%-5% COLA a year.
Their real wages, relative to house prices, will have risen by 50%. Arguably we as taxpayers should be demanding that they accept pay cuts, not raises.
“…Although one would expect experts to be good forecasters, they are not particularly good at it. ….”
from Chap 5 of “Analytic Culture in the U.S. Intelligence Community”
Integrating Methodologists into Teams of Experts
Central Intelligence Agency
Center for the Study of Intelligence
http://tinyurl.com/3aztf6
New award for FB
Used 3 million to buy 21 condos in Cape Coral
http://money.cnn.com/news/newsfeeds/articles/apwire/b119b7cbf3fc622726a36eb9fa4599ae.htm
“When clients decide to wait out the storm, advisers report using a variety of strategies to minimize investment losses and, when possible, reduce their clients’ stress. For starters, says McConnell, advisers should determine the terms and rates of a client’s outstanding mortgages.”
Wow. Innovative ideas there. I never would have thought of that. I wonder how much this investment advice costs.
“….He came to me with about $3 million” about four years ago, Charleton says. The client subsequently invested in 21 individual million-dollar condominiums in Cape Coral, Fla., planning to resell them……’
Bought $21 million of Florida condos with $3 million down? He can not afford to wait out anything. He is toast as the ‘gators eat him alive. His debt service is $1,260,000/year, plus taxes, ins, HOA…..? What price could he rent the condos? $3,000/mon? $63,000/year? A little sunscreen won’t keep him from that burn rate!!
I love that they call him an “investor” even though not one of his investment properties appears to have ever had positive cash flow. Stupid is as stupid does.
Joshua trees seem painful enough, but imagine having a Giant Sequoia fall on your house?
My victims will tell you they’d take a Sequoia on the house anyday over my JT treatment. A house is fairly easy to rebuild, but the colon is a different matter altogether.
A Giant Sequoia fell on a suv, that was parked on the road, a few years ago…
The 3 guys that had previously been in it, weren’t in it, luckily.
Taking pictures a few hundred feet away.
They said it sounded like a jet engine, falling.
They had to use the jaws of life to retrieve wallets out of the 1 foot tall Jeep Cherokee, that remained.
What are the odds of 2 of the dumbest sounding named towns in California, being prominent news real estate-wise, for a quite a few weeks now?
“25 new homes in this Los Banos subdivision will be up for auction on Sunday. Low sales have led Anderson Homes to auction off 25 homes in this subdivision and another 34 in Manteca. The builder says the starting minimum bid of $215,000 for the Los Banos properties is about 40% off the retail price.”
“Back when the state’s housing future was a legitimate debate, maybe two or three years ago, imagine if I had quoted some expert predicting that pricing would hit the ugliness of the mid-1990s while selling a house would be as difficult as it had been in nearly a quarter century. Folks close to the industry would scream, ‘Who is this doom-and-gloom quack?…”
1999 - Irrational Exuberance
2002 - Atlantic Monthly - If it doesn’t burst is it a bubble?
2002 - Business Week - Is it a bubble if it doesn’t pop
2002 - Market Watch - Throwing more darts at the housing bubble
2002 - “People say, Alan Greenspan Doesn’t think there’s a housing Bubble,” says Shiller. “Well, he said there was no stock market Bubble, too.”
2001 - Aug 21, Housing Bubble ready to burst
Housing bubble is ready to burst. … The current Housing boom is set to end next year as The slowdown in world economies takes it toll on The property.
2001 - Atlanta Journal - According to Kass, who said he has shorted a clutch of leading home builders, the housing bubble is likely to burst due to the combination of brisk…
There were myriad stories that were from reliable sources that indicated and showed this calamity.
It was disgusting to see the economic reports from journals about the development of the housing bubble back in the mid 90s and realize the government wished the bubble to continue.
And my favorite quote: Bloomberg May 20, 2000
“Some regions of the U.S. housing market show signs of unsustainable price speculation and “froth” from rapid sales, Federal Reserve Chairman Alan Greenspan said. The surge may ease as homes become less affordable, he said.
“It’s pretty clear that it’s an unsustainable underlying pattern,” Greenspan said in response to a question after a speech on energy to the Economic Club of New York. “People are reaching to be able to pay the prices to be able to move into a home.”
“There are a few things that suggest, at a minimum, there’s a little froth in this market,” Greenspan said. While “we don’t perceive that there is a national bubble,” he said that “it’s hard not to see that there are a lot of local bubbles.” ….
http://tinyurl.com/2puot3
Wow. Good work, Hoz. I’ve never seen those articles all in one place before. The first one I recall was Fortune in September 2002.
That quote was from much later than 2000. The Bloomberg article you linked says 2005, which sounds about right.
Big News out of Idaho: Corey Barton (biggest homebuilder in the area) cuts home prices by up to $70,000 for weekend deal
http://www.idahostatesman.com/eyepiece/story/181487.html
This is big as we haven’t seen builders cut prices this drastically yet. I think they are afraid as we are headed into winter and their is alot of new home inventory all around Boise- and they keep building!
Used to live in Boise - sold in April ‘05 - 6-12 months too soon! I’ve been watching inventory continue to skyrocket there and talk to friends who tell me how bad the market has gotten. But through this whole boom/bust, Barton seemed to have his head screwed on pretty straight for a builder. Didn’t spew the kool-aid nearly as bad as most everyone else. Good for him in reducing prices like that - I hope he is successful with it.
“..The victims are the people who have to listen to these idiots whine”
How about hearing them boast 1-2-3 years ago? Alot less chatter out there now. lol!!!
Alot of shaken & baken
“Those who have already moved in (are) wondering what will hit next.”
What’s next? Just check out Palmdale and Lancaster in the late 50’s to early 60’s for a preview!
“‘I’m concerned that once the weather starts getting bad, there’s tile piled on the roof that could just fly off,’ Yeah, they’ll be flying off the roof all right, right into the back of someone’s pickup in the dead of night.
The OC Register story was actually on the front page of the paper, above the fold with a pretty big headline. That should help all of those folks who don’t quite make it to the business section to understand the situation.
Seems like we’re past the denial and anger stages, and now into the bargaining stage.
The craziest thing of all about newspapers, is the demographics of who still reads them…
Know many young people that like to get their hands dirty?
Why read the physical paper when you can get it online for free, in a much more user-friendly format?
Old people still buy newspapers, just as they still have land-line phones, “because they’ve always done it that way.”
I recently saw an apartment listing in which the landlord referred to a garage door opener as a “genie,” a term I vaguely recall from my childhood in the 1970s when such things were still somewhat novel.
Gee, it looks like OC Register sales numbers/prices are no longer up at the web site either. Not so’s there easy to find at least… hmmm.
And it looks like the killed the comments section. Too “negative” I guess.
That means we swung around and are back at Denial again.
Oh no…
We’re in fear.
They’re afraid of what will be posted.
Fear is a mixture of denial and desperation. The FB’s know things aren’t right, and will act as if everything is ok, but they “lash out” in fright.
Got popcorn?
Neil
I guess all those bulls are getting a bit testy these days. When I last checked Lansner’s blog some touron named jimmy was spreading the kool aid with wild abandon. He and the others can join Gary Watts in hiding. Anal cavities.
Just got my yearly social security statement and I haven’t worked in a few years, but…
Last year’s @ age 62, was gonna get me $1230 clams
This year’s @ age 62 is gonna get me $1060 clams
Is it a little less clammy in here?
Can someone explain the term “Starter home” and what is the relation between the starter home price and income? can someone fill up the numbers for this $P starter home bought by an married couple Z year old + D kids with total income of $x and $y amount down payment, taking 30 years fix mortgage at T% and R% property tax and $Q home owner insurance. Maybe if someone can answer this we will know what the starter home price should be and that will be the reference for pricing all other houses. Right now I see “Starter home” at $700,000. Thank you for taking the time.
Here’s how you figure it: you sneak across the border with your pregnant wife and 1 year old baby. The next day you go to Bank of America and tell them you own a landscaping business and you mow every lawn south of Ventura County, net $6 million. BofA gives you $500k loan with teaser payment of 400 month. You find your slice of paradise in Pico Rivera, the realtor in the car with the spinning rims sets you up. You find 8 other guys same boat as you to move in with you and pay rent to help cover the $400 payment, you find 23 cars, you settle down.
“‘This was more fun three years ago,’ Appleton-Young told the group as her forecast ended. ‘But we need to deal with reality.’”
What a completely shallow, moronic ditz.
So let’s see…
Three years ago–Bad Lending was fun?
Three years ago–Speculation fueled by greed was fun?
Three years ago–Fraudulant appraisal was fun?
Three years ago–RE commissions from purchases that never should have been approved was fun?
“Dealing with reality” is clearly beyond the mental capacity of this woman. Dealing with reality on even an elemental level would cause her so much embarrassment at how stupid and shallow she is–she’d probably kill herself…but oh wait, she’d have to have a conscience too…
Rant off…
DOC
Hollywood, with all their whizzbang computer graphics, is no longer an end user for partially built communities to use for props, like the ones they used in palmcaster, in the early 90’s…
“In California, where developers have been racing to turn farmers’ fields into subdivisions, they’re now walking away, leaving houses partially built.”
“Back when the state’s housing future was a legitimate debate, maybe two or three years ago, imagine if I had quoted some expert predicting that pricing would hit the ugliness of the mid-1990s while selling a house would be as difficult as it had been in nearly a quarter century. Folks close to the industry would scream, ‘Who is this doom-and-gloom quack?’”
First off we’d have to imagine that you actually wore a firmly attached set of testicles that would actually allow you to deviate from the standard line touted by the organization you represent. An organization that has never had any qualms about cooking the stats & numbers to ensure the RE Ponzi scheme went on uninterrupted.
In other words; you’re a quack regardless of what you say.
“‘I feel like my parents’ grave has been robbed. This was an inheritance. I sit out here and I look at this…’ said Sturdevant.”
Enough with the histrionics, Ms Sturdevant, nobody forced you to squander your inheritance on an overpriced house.
Exactly. Ms Sturdevant opted to join the Suckers Rally freely and voluntarily. Sorry babe, no bailouts or even sympathy for you.
Furthermore, what has she lost? She paid for a house, and she still has that house. Do I whine that LCD high definition TVs now sell for less than I paid a year ago? Of course not, that’s infantile behavior and a willful refusal to understand basic market mechanisms that even a child recognizes.
On upcoming tumble:
I don’t think it will take a long time. There is some debate upstream about whether the crash is going to take a while, or if it’s going to happen quickly.
First of all, we can all agree the RE market is going to crash. I agree with the person who predicted “80%” drop. That seems to be a fair assessment.
Now, the question is, how quickly will they drop?
Here’s why I believe it’s going to crash quickly.
1. There are currently 5 million homes on the market. There will be another 2 million added to the inventory. Home sales are down drastically. This is a crisis which will spread quickly. Sellers are going to realize: slash the price of your house, or lose it.
I would say by next March, house prices will be down by 50%.
I believe the USD currency situation muddies all predictions.
“‘I feel like my parents’ grave has been robbed. This was an inheritance. I sit out here and I look at this…’ said Sturdevant.”
You know that your child is an idiot when you look down from heaven and say, “Damn, the cat would have been a more prudent investor.”
Update from your chief………………
Bush: U.S. housing weakness not nationwide
WASHINGTON, Oct 11 (Reuters) - President George W. Bush on Thursday said weakness in U.S. housing markets was regional, not national, and that the solution to the problem was not more regulation but to help people refinance their mortgages.
http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-10-11T214352Z_01_N11270790_RTRIDST_0_BUSH-ECONOMY-UPDATE-2.XML
Is he smart or what?
I vote “what.”
Should vote “what?”. You can add exclamation mark, but don’t drop the question mark.
He also said Iraq had WMD’s, that he was going to help the Katrina victims, that the US doesn’t torture and that we’re all safer than ever. I find Ahmadinajad more credible.
Amazingly, I half agree with something Bush said! He is of course correct that the bubble was regional (though it affected far more regions than past bubbles did) and so is the ensuing correction.
But the solution is neither more regulation nor helping deadbeats to refinance. The correct solution is to let the market forces repair the excesses.
“This is a $64/Sqft Temecula Home. Cheapest in SoCal I am aware of for a 2005 built home.”
There wil be bargains galore in places like Temecula, Lake Elsinore,murieta,canyon lake,Wildimore, Menifee,Corona,Hemet and all the rest of SW Riverside county. Am not all at surprized at that price of 64 per sq ft for a bank REO. They really overbuilt new tracts and homes like crazy out in SW riverside cty-probably more new homes put up here than in any other area of SCAL. The builders just went berserk with putting up new tracts all along the 15 fwy from Corona south and spreading east. Reason-lots of cheap relatively flat or gently rolling dry worthless scrubgrass acreage and few environmental restrictions/red tape for developers out in the SW riverside cty, which may as well be included as part of the famous crashing IE.
You know that your child is an idiot when you look down from heaven and say, “Damn, the cat would have been a more prudent investor.”
From the original “That Darn Cat” - a scene where the neighbor is ranting and raving to the girl about standing for hours in the rain to shoot a duck and the cat comes and steals it. The girl goes on about the cat being a hunter too and not being stupid enough to stand in the rain all day.
Here, the cat wouldn’t be stupid enough to buy a falling knife.
“‘Lenders are anticipating that property values will keep falling. So they’re adjusting their loan limits, their risk,’ said Kris Anderson, senior loan consultant for Allstate Mortgage Company in Santa Rosa.”
Here’s an idea mr senior loan consultant. Try giving loans to people that put down a significant payment and base the amount on what their salary can afford over the long term. Basing loans on the anticipated short-term asset value is what got us into this mess in the first place.
http://www.nytimes.com/2007/10/12/business/12mortgage.html?ex=1349841600&en=f660eb648f2269fe&ei=5088&partner=rssnyt&emc=rss
This is great, we need more of these…
What’s next?. Losing gamblers (or is it gambling losers) picketing casinos ?.
A good time to buy is when;
1- The median price = 2.5 to 3 times median income
2- The prices of what a house will rent for is 1/100th of its sales value.
3- The tremendous backlog of inventory is at pre bubble levels, in most markets 2001/2002 levels.
4- Lenders are using sane lending practices.
When will this happen? Anytime in the next 2 to 10 years.
I feel like prices will go below what they would have normally appreciated to, i.e 3% per year, compounded.
There will be buying opportunities for investors and homebuyers. JUST WAIT!!! I see no market where “it’s time to buy”….It’s time to WAIT!!
Go about your business and use the market gyrations and the irrational crap from NAR for entertainment. Do not buy RE!!
Unless it is a 3/2 on a half acre for $100. Then, still be suspicious!