Indicative Of What’s Happening All Over California
The Union Tribune reports from California. “Despite months of discouraging reports about tightening credit, defaulting mortgages and falling home prices, the California Building Industry Association Thursday issued an upbeat housing forecast for the coming year. ‘I believe 2008 will be a year we stop the bleeding in the home building industry and we turn things around,’ said Alan Nevin, the association’s chief economist.”
“Acknowledging that most other forecasts anticipate no start of a recovery in the state’s housing market until late 2008 or early 2009, he said, ‘I am taking a contrarian view. The buyers will start coming out again. I think you will see it sooner rather than later.’”
“‘In the single-family market, we anticipate a modest improvement in sales in those markets that are highly urban.. . . In those areas, where lots are not abundant, we forecast a 10 to 15 percent increase in sales in 2008, with prices holding steady,’ he said.”
“In regions where lots are in good supply, such as Riverside, San Bernardino, the San Joaquin Valley, and the Sacramento area, ‘there will be a major change in the home building mentality,’ Nevin said.”
“‘Lots, for the most part, have declined substantially in value. They will be written down to more practical value levels.’ That means home builders will be able to build substantially smaller homes and sell them for substantially lower prices, he said.”
The Fresno Bee. “It’s no surprise that a cooling real-estate market meant fewer new homes being built in Visalia in 2007 than the record levels of two years ago.”
“But even though the number of building permits issued by the city last year for new single-family houses tumbled by more than a third from 2006, representing a 38% decrease in construction value, 2007 still stacks up as the fifth-busiest year on record for home builders.”
“‘These [housing] numbers aren’t surprising; they’re not shocking,’ said Dennis Lehman, the city’s chief building official. ‘I think it’s indicative of what’s happening all over the place.’”
“Robert Keenan, executive VP of the Home Builders Association of Tulare and Kings counties, said he’s heard some out-of-town builders who entered Visalia in 2004 and 2005 have sold their local interests or, in some instances, filed for bankruptcy for individual subdivision projects.”
“Lehman said his staff members see some of those effects in homes that are only partially built with no signs of completion.”
“‘We’ve had some builders who, for whatever reason, have stopped building,’ he said. ‘Maybe they’ve run into financing problems or their buyers have pulled out, but we’re starting to write some of those letters to ask what their intentions are.’”
“‘I suspect some of them are hurting somewhat, but there’s no reason for them to leave a bunch of half-finished work around,’ he said.”
The Daily News. “The San Fernando Valley’s residential real estate market remained frozen during November with both sales and prices retreating substantially from a year ago, a trade association said Wednesday.”
“The median price of a previously owned single-family house fell an annual 6.3 percent, or $37,500, to $557,500, said the Southland Regional Association of Realtors. It’s the lowest median in 32 months, or the start of the 2005 second quarter.”
“Sales plunged an annual 53 percent, to 355 transactions, just one more than the record low set in October. ‘I honestly think we’re in a bit of an impasse. Buyers aren’t doing anything and sellers are just sitting back waiting for something to happen,’ said Jim Link, the association’s executive VP. ‘It was not good … and we don’t expect December’s numbers to be any better.’”
“Sales have now fallen on an annual basis every month since October 2005. During November, the inventory of unsold homes reached 15 months.”
“Some potential buyers talk of holding out for price declines of 25 percent to 30 percent from the current level. ‘It’s just not going to happen here,’ Link said.”
“The Valley’s condo market took a similar hit. Sales plunged 50 percent, to 141 transactions, and the median price dipped 4.1 percent, or $16,000, from a year ago, to $384,100. In the Santa Clarita Valley, sales of single-family houses fell an annual 39.3 percent, to 111, and the median price declined 9.9 percent, to $522,500.”
“Condo sales fell 57 percent, to 38 transactions, and the median price fell 13.4 percent, to $316,000.”
“Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said this tough market will persist throughout the year.”
“‘You may have a buyer who may have good credit but can’t get a mortgage loan,’ he said. ‘And you have people frightened to death that there will be more price declines.’”
The Signal. “A total of 111 single-family homes and 38 condominiums were sold in the Santa Clarita Valley in November, the Southland Regional Association of Realtors reported Wednesday. A total of 2,341 properties were listed for sale throughout the Valley at the end of November, which is an increase of 7.2 percent from November of 2006.”
“Southland Regional Association of Realtors officials see the numbers as a a sign that local buyers recognize the opportunities that exist in the current market.”
“‘I don’t think you can time the housing market any more than you can time the stock market,’ Larry Gasinski, 2007 president of the Association’s Santa Clarita Valley Division, said in the report. ‘How do you know when any market has hit bottom and is on its way back up again?’”
“He offered advice to potential buyers, as well. ‘It’s a buyer’s market today, so why not make an offer? If you think prices will drop 10 percent over the next year, open up with an offer that is 10 percent lower than current sales comparisons. Waiting could mean the home you love will not be there, that favorable loan interest rates will be gone or that you’ll be competing with many more prospective buyers.’”
“The median price of single-family homes sold during November was $522,500. The median has been falling slowly since the record high of $643,000 was set in April of 2006.”
“After nine years of increase in the annual median price, the association believes 2007 is likely to post a decline of about 5 percent.”
“In a statement, Jim Link, CEO of the Southland Regional Association of Realtors, said: ‘The resale market in the Santa Clarita Valley appears to be finding a new equilibrium faster than other communities. Until the lending industry starts making jumbo loans higher than $417,000 the recovery will be very slow. Still, the region’s economic fundamentals are good and a growing number of buyers can recognize that there are opportunities today that didn’t exist just a short while ago.’”
“‘The market will remain stymied until more prospective buyers realize that affordable home loans are still available and that opportunities in today’s market outweigh the risks of waiting,’ Link said.”
The Herald News. “The year 2007 will be remembered by some people in Fontana as a traumatic time due to the problems facing the real estate market, including a huge rise in home foreclosures.”
“However, city leaders are optimistic in 2008 that Fontana will be insulated from the most severe repercussions of the housing woes that threaten the Inland Empire economy.”
“In fact, the city is actively promoting Fontana as a ‘city of action’ and a ‘land of opportunity.’”
“Part of the reason for Fontana’s positive outlook is the fact that many prime retail positions are still undeveloped, said Elisa Grey, the economic development manager for the city. Large sections of the city’s northern area are available for economic expansion and development.”
“Grey said Fontana’s lower land prices will continue to attract businesses moving eastward from Los Angeles and Orange counties.”
“‘Over the next few years Fontana is positioning itself to emerge as a job growth center as companies and people migrate toward the Inland Empire,’ Grey said. ‘We see this migration already happening with the location of Target Distribution Center, Home Shopping Network and Cliffstar (producer of Kirkland Juices) calling Fontana home.’”
“Fontana has now undergone a significant change in its occupation classification, according to statistics released by the city.”
“Fifty percent of Fontana’s jobs are considered white collar, while 35 percent are blue collar and 15 percent are service and farm. This is a dramatic transformation from previous generations; Fontana was known as a blue collar community from the 1950s through the 1980s, and prior to that, Fontana was a small town dominated by agriculture.”
“‘Fontana’s change is a result of the Inland Empire changing as a whole,’ Grey said. ‘Lots of professionals are moving into the inland areas.’ Consequently, the average household income in Fontana as a whole is approaching $70,000, Grey said.”
“‘In the single-family market, we anticipate a modest improvement in sales in those markets that are highly urban.. . . In those areas, where lots are not abundant, we forecast a 10 to 15 percent increase in sales in 2008, with prices holding steady,’ he said.”
CLICK!
And I’m sure he researched it.
Sounded more to me like he was throwing out his very wishful opinion.
Could be the builders are looking at lower priced lands and building smaller more affordable (ok less over priced) housing.
They normally undercut the market that way.
But what of all the vacant never-lived-in McMansions they still have on their inventories? Hard to make that elephant under the rug disappear, IMO…
May be they can modify each McMansion to several condo conversions.
To modify those existinghomes into condos would wreck havoc with their precious communities. They’d have to overhaul the HOAs.
“Sounded more to me like he was throwing out his very wishful opinion”
As it did to me. Sorry Bear. Obviously I did not make my sarcasm clear enough.
It was totally clear. I was just piling on.
Sure there will be a modest upswing - Marshall and Field has more auctions planned for LA and SF areas in Feb of this year.
Experts are divided on whether 2008 is the year of the bottom in California. I don’t suppose there is any mystery about which experts I side with, though 2010 sounds a bit early, given the slow pace of the correction and the large number of elephants that remain hidden under the living room rug.
California builders say housing slump will turn around this year
James Temple, Chronicle Staff Writer
Thursday, January 3, 2008
A building industry trade group predicted the state’s housing production slump will bottom out this year, a report met with heavy skepticism by several economists.
In a forecast released Thursday, the California Building Industry Association said developers will secure permits for 128,400 single-family and multifamily units this year, up from an estimated 116,250 in 2007. The 10 percent gain would stand in sharp contrast to the 29 and 21 percent drops in housing permits in 2007 and 2006, respectively.
“We believe that California has weathered the subprime storm of 2007, the market has almost corrected and that 2008 represents an opportunity to move forward,” said Alan Nevin, the Sacramento association’s chief economist, on a conference call.
In the Bay Area, permits for 10,000 single-family units will be issued in 2008, up from about 9,000 last year, the group forecast. The increase should begin in the second half of the year, influenced by population growth, declining interest rates and a strengthening national economy, Nevin said.
Several observers strenuously disputed the conclusions.
“We have enormous inventory that is sitting out there,” said Christopher Thornberg, an economist with Beacon Economics. “Until that inventory is burned off, there’s not much reason to build in the state.”
Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange, said the number of new homes on the market will remain the same or increase this year as foreclosure and default levels climb. He predicts housing production will fall 8.8 percent to 102,000 units as resale home prices drop by 8 to 9 percent.
“I will not be surprised to see that this cycle will bottom sometime in 2009 or early 2010,” said Adibi, citing past patterns.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/01/03/BUFKU8ULC.DTL
My brother in Modesto says that forclosures are popping up all over the place. My dad was a builder/general contracter for like 50 years and has said repeatedly that they were WAY overbuilding in that area.
I guess for a while a lot of the new stuff was going to people who were commuting to the bay area - like over an hour away *without* traffic.
The area by itself is mainly agricultural so I wonder what will happen if RE closer in becomes more affordable for those that still have a decent income - like from tech jobs in the S. Valley.
Who the hell would want to commute from Modesto if you have any other choice?
That will leave a buttload of empty tract houses and a lot of agricultural workers as the only potential buyers.
Can you say nose dive in prices?
–
Yes, with a hole in the roof and the floor.
Jas
Lived in Modesto until recently and got out while the getting was good.
The commute into the Bay Area is a nightmare from there. First you have to deal with Tracy which is a bottleneck, then you have to go over the Altamonte, which last year was the fastest growing road for traffic in the US. Add the pleasure of the 680 and 880 interchange and you might as well stay home. Coming back is just as fun once you hit Danville and not many choices other than straight thru adds up to a good 1.5-2 hrs commute in crappy traffic.
Add the high price of gas and you are a winner all round.
I heard Modesto now has a McDonalds, so they growing.
If you are traveling on I-5 south and want to avoid the whole I-205 and Altamont, take the 11th Avenue/Grant Line Road exit (the exit is just past the I-205 exit). Stay on Grant Line Road, drive through Tracy, and take the old Altamont Pass Road. This will eventually drop you right next to I-580 at the bottom of the Altamont Hill. If you are heading east on I-580 to I-5 North take the Greenville Rd exit off I-580 to Altamont Pass Road to Grant Line Road, to 11th Avenue which will put you on I-5 North. Using this route at times is quicker than driving I-580 to I-205 to I-5, especially during the heavy commute times.
“If you are traveling on I-5 south and want to avoid the whole I-205 and Altamont, take the 11th Avenue/Grant Line Road ………..”
OK, I got all that; but what happens when you get to the Slauson cut-off?
cut off your slauson
LOL. In another 10 years, no one will get that joke.
Curt,
Use Google Maps, type Grant Line Road, Tracy, CA. Follow Grant Line Road East and West. Map will show you how to get to I-5 and I-580.
Hope this helps.
Who the hell would want to commute from Modesto if you have any other choice?
To paraphrase Winston Churchill, it’s “a modest town with much to be modest about”.
How about the guy who won the contest for the longest commute last year (06). From Mariposa to Palo Alto to Mariposa.He got a set of new tires and 500 gals of gas coupons. Where is the nearest wacko hospital? hehehehehehe
–
According to Radar Logic, at the end of October the four highest PPSF (price per sq ft) metros in the US are in CA and the fifth is NYC. The worst performing merto for the past two years is CA’s capital Sacramento, down more than 25%.
You have to go a long way, baby!
Jas
An interesting anecdotal observation from my casual lunch break while I sat reading HBB in a fast-food joint:
Dateline West SFV, CA 12:30pm 1/03/08
Some very loud talking guy was sitting at a table about 20ft. away berating and belittling another guy. They were both dressed for business. At first I thought the talk was motivational and I actually at first thought it was possibly regional management for the franchise pepping up the store manager, in fact I was going to go over and complain that the customers would like to eat in peace and could he take it back to the office? Then the guy mentioned delinquencies.
Well, you know me, when I hear the D word I tune in like a cat watching ping-pong. Apparently the store manager of this business was running high on delinquencies, it was cutting into his bonus check, and he was complaining to his manager.
Well, the manager wasn’t having any of that. For a second I thought he was going to fire the guy right then and there.
From the location of the conversation I’d say the business in question is either check cashing/cash advance or rim rental. I know, I know, rim rental? I laughed out loud evry time I passed that place for the first couple weeks after they put up the sign.
Methinks the californicating consumer has fallen off the cliff. I’m thinking sales numbers for all things conspicuous start to get really dismal going forward.
BTW, as of yesterday NODs for Palmdale 93552 set a new record in Dec. at 137. That’s almost 7X sales for Nov. and is an acceleration of an already hyperbolic chartline.
why does this story make me think Apple is about to get the orchard chopped down?
What’s rim rental anyways? I’m thinking car wheels?
I would guess they were used car salesman.
Gangsta fashion changes style quickly. Why buy and then be outta fashion in a few months? Hence…rim rental. Word.
Actually, rather than steal them, the kids rent them. It has been a fairly lucrative business model for a few companies.
There is a place in Dallas that rents wheels. I mean wheels, not cars.
Here in Balti-morgue, renting rims for the ghetto-ride is par for the course. Plenty of thousand-dollar millionaires here, and for some reason being “gansta” is all the rage.
“‘Over the next few years Fontana is positioning itself to emerge as a job growth center”
Sorry, that dog don’t hunt. Unless those jobs include Country Music/Strip Club Billboard makers, Railroad Tie Recyclers and Illegal Immigrant Job Counselors.
Now I know where the name “Fontucky” came from.
Crack Cocaine does very well in Fontana and must explain why the family income is 70k.
Fontana will never shake their reputation, nor will they be able to stop the wind which just makes it a miserable place to live.
exactly! it suffers from undesirable geography that will NEVER CHANGE…
Yeah, Ice Cube really stuck the fork in Fontucky when he celebrated Cucamonga as “the city, away from the city.”
“‘I don’t think you can time the housing market any more than you can time the stock market,’ Larry Gasinski, 2007 president of the Association’s Santa Clarita Valley Division, said in the report. ‘How do you know when any market has hit bottom and is on its way back up again?’”
Alright, I’ll be the first to call BS on this clown because I’m sick of REIC types saying this. First of all, securities, as an asset class, have liquidity (and volatility) several orders of magnitude that of real estate. You can get in and out in a day. Secondly, securities markets are full of hedge funds and other large players that move billions daily and shift the market. I would never try to time a stock or bond purchase or sale. I buy on fundamentals and hold. Finally, nobody has to invest in stocks. They can invest in bonds or CDs or whatever. Or stuff it in a mattress.
But we all have to live somewhere, and we can buy or rent. I can time the market pretty easily: when it makes more sense financially to buy than rent for the median income earner, we’re at or near the bottom. When home prices have returned to historically sound multiples of regional incomes, we’re at or near the bottom. When the foreclosures have been worked out of the system, the flippers are all BK, and people buy homes to actually live in with loans they can pay back, we’re at or near the bottom.
Finally, even if I don’t time the bottom perfectly, real estate historically appreciates at inflation plus a few bips. If I miss that first year of recovery, it ain’t gonna kill me, Larry. I’ll give up that 3-5% appreciation and jump in in year 2. And if rates go up, then prices will fall even further, which doesn’t bother me.
Sorry for the long rant. Just tired of hearing this rhetoric when the real estate market, of all the markets out there, is actually one of the most predictable.
Gasinski reminds people to not try to time the market and if a house is needed, to go ahead and buy it.
“There are incredible opportunities out there now, a wide selection and attractive financing available if you have what used to be the traditional requirements — a good credit history, documentation and a reasonable down payment.”
This is from the same paper the previous month. If he keeps saying the same thing month after month, he will be right, it just might take a few years.
If you but now, you will not just lose 1, or 2, or 3, or 4 hundred thousand, you wll end up paying interest on that amount for the next 30 years. Any Guillotine blade catcher who says he won`t mind losing a few bucks to get into his dream house with his dream girl, had better think about that.
wll should be will
and “but” should be “buy” - nemmind, we no what u mean!
Yeah - sage advice from ol’ Larry — essentially he’s saying “You really can’t gauge what the market’s going to do - so you might as well buy.”
What bugs me is that he can’t possibly truly believe this. He’s obviously parroting NAR talking points, rather than telling us what he really thinks.
Hey Larry - why do they keep inventory statistics? You think a ton of inventory is really going to disappear in tightening credit markets? I’d love to see someone ask him that directly and see if he could answer without his nose growing like Pinnochio’s.
Tru dat! I will buy when we are back in historical norms and it makes sense again. I’m tired of all this talk about fairies and magic dust falling on roofs. Those suckers got dupped by the latest Wall Street securitization scam and/or were attempting to ride on the coat-tails of Wall Street gamers, or working their own micro-level scam on the side. Nothing more. Nothing less. Just a whole bunch of uncollectable debt to work its way through the markets. Rather than dreaming of the return of the illusion, why not go back to school and try to get an education. The curtain has been opened and we know what is inside. Your innocence is forever gone, but try to keep your dignity, it’s all you have left.
…but try to keep your dignity, it’s all you have left.
Ouch.
You HAVE to time markets if you are going to play at all, especially housing. (It’s really hard to dollar cost average into your house.) You can either just blindly do it you you can research it a bit. Life events drive some of the timing, your personal decisions drive the rest.
I’ve learned the hard way that you can research the markets for clues or you can enter the market blindly. I don’t recommend the blind approach.
Of course you can get pretty close to timing the bottom. Once houses become AFFORDABLE again using a standard 30 year loan, then you know the bottom is someplace close.
And just because the bottom is here, it does NOT mean that prices will all of a sudden come right back up again. Looking at historical data, it is pretty obvious that once the bottom is reached, housing STAYS around the bottom for a while.
Which is another indication of where the bottom is: when prices are no longer going DOWN, but are stagnant.
And to repeat, we will NEVER see home prices reach 10X income in our lifetime. Sure they will go up again, but 2005 levels (not inflation adjusted) will not be seen for decades.
When no one even wants to consider buying homes as investments as was the case in California in early 90s.
That will be the bottom! Its happened before it will happen
again. I totally agree we wont be seeing 2005 prices in California for decades to come… and before that even happens many employers would rather move all jobs to cheaper states than risk undercutting their own flexibility to compete in the new Global Economy of the future.
Who will pay these prices… certainly will not be your employer!
I only disagree about home prices. They track inflation. They never beat it over the long run.
Its only like making smart investment choices about companies if you anticipate a good location.
Shiller had that nice pretty graph that shows price to income holding constant for 100+ years with blips like the great depression and WW2.
Housing is in its slow moving blip upwards and inevitable blip downwards.
The only way yhe prices work out good for the FB is if there is massive wave inflation by the Treasury printing actual money.
I made a comment but it got eaten…
Basically agree with your post except housing tracks inflation in the long run. If you look at those Schiller graphs from 1890 onward; housing tracks inflation. There was a shift after WW2 probably due to changes in tax laws that caused a price increase.
However, it stablized at an affordable level and remains flat. Housing eventually tracks incomes just like rent. Rent is just more liquid than housing.
It never really beats inflation. Not in the long haul.
Unlike investing in stocks, where you can research new technologies and products or companies, there really isn’t much of a differentiation.
You could argue that we are running out of space. That is clearly not true but that would be the only arguement.
The only thing that would bail out the FB (and banks) would be massive wage inflation by printing physical money (Treasury). That would also crush any old people near retirement without assets.
Dang double comments!!!
What people SPEND on housing tracks nominal GDP.
The house you own depreciates. You can maintain or add value to your house through constant, ongoing, significant labor and capital inputs.
The only thing that would bail out the FB (and banks) would be massive wage inflation by printing physical money (Treasury). That would also crush any old people near retirement without assets.
Of course a collapse of the bond market largly funded by retirement funds will also crush those near retirement with assets since their retirement fund will bankrupt and their home value will tank.
There will not be any wage inflation however on account of offshore wage pressures. It is different this time in a really ugly sort of way.
deflation of asset prices seems inevitable
Agree with SFer and all the others. The option to be a tenant has remained the rational choice for years now, and will remain so until prices come way, way down.
I’ve been contemplating the winter vacation rental rates in CA beach communities and noticing they are comparable to full-time rental rates. I wonder why. Maybe summer resident-owners are happy just to get some pittance for the off-season months. And I’m delighted to pay them.
The winning quotes keep coming…
“‘I don’t think you can time the housing market any more than you can time the stock market,’ Larry Gasinski, 2007 president of the Association’s Santa Clarita Valley Division, said in the report. ‘How do you know when any market has hit bottom and is on its way back up again?’”
Answer - Sure I can pick the bottom…when morons like you have left the industry because most of your dues paying subscribers have started flipping burgers at McD’s while mumbling ‘you can’t lose in real estate…you can’t lose in real estate’.
“‘The market will remain stymied until more prospective buyers realize that affordable home loans are still available and that opportunities in today’s market outweigh the risks of waiting,’ Link said.”
Answer - False. When Sellers realize their overpriced boxes are not worth what they’re waiting to get…and they see some of their breatheren have complmeted BK filings after exhausting their entire life savings and crushing their financial futures…and they price their houses accordingly. THAT is when the market won’t be stymied.
“Some potential buyers talk of holding out for price declines of 25 percent to 30 percent from the current level. ‘It’s just not going to happen here,’ Link said.”
Answer: You’re possible right here for the first time Skippy…might be 40% or more.
Ahhh…I feel better. I love having this board to vent on once in a while. Best to all Ben’s Peeps.
Well said, SCR!
Hey fellow longtime HBBer’s, can you spot the pattern? Beginning ‘06 and ‘07 we got the flood of idiotic optimism that it seems that we’re now going to have to endure it again. Blah-de-frickin’-dah…
i just dig the comments about not being able to time the market. it’s the same argument that waste-of-space realtor was arguing with Peter Schiff. Hey, maybe no one can actually perfectly time the bottom, but what we do know is that we can’t be near it until we get fundamentally healthy affordability factors. This fact becomes even more sound when faced with todays credit markets, which will be even tighter deeper into ‘08. The only reason folks bought homes they couldn’t afford is because, well, they could. Now they can’t. Insanity lending created this mess, now puckerbutt lending will insure its death.
Ex, I’m with you. I know that my income is slightly less than the average for OC, but come on, not by that much. These clowns have a long way to go if they think that a family with an income of 65-90K can legitimately buy a 450K or more home, condo, etc.
It just ticks me off that these people are more concerned about prices rising at exponential rates than the financial health of the J6P. These REIC clowns don’t understand that these prices are unsustainable. People who even make a nice 100K cannot really afford anything more than 400K and that is with bare thread living near the beach areas.
459K in Rancho Santa Margarita. Who are these blowhards kidding? Unless you make serious OT at a gobbermint job or you are in tech/engineering, you are going to have a tough time of it. Sales are going to die this year, so all those so-called ebayers and stay at home salespeople are going to get pinched.
Just a little truth, please!
I am a senior software engineer and cannot close to afford a $459K place. That is just nuts on less than $160K /yr!
We make over $100K/yr and also would not commit to more than a $300K mortgage (MAX!!!).
These bull shills are deluding themselves.
My husband and I make over a 100k and the most that I would commit to in terms of a mortgage would be 150k and that would be after I paid off two vehicles that we currently have small balances on. Last time I got burned on a house was in Lawton Oklahoma in 1987 when I was young and dumb. I have no intention of letting that happen again. If I can’t rent a place for something over what my payments are I have no business owning or buying it.
“puckerbutt lending”
you cant do that when Im at work, they boys in Service think Im a crackpot.
Yep, and they are all spouting the same NAR lines:
- Real estate is LOCAL! Our market is unique and not impacted by what you are seeing in the news.
- You can’t time the market! Be afraid! Buy now before prices shoot up again.
- It is a buyers’ market! Prices have fallen, you have great selection, great time to be a bargain hunter.
Effect: Darn near zero! Realtors have the credibility of tobacco industry scientists.
Nice one, Groundhog.
New meme: Realtors are about as credible as _________.
HBBers, fill in here and improve the day!
Realtors are about as credible as _________.
… a sixty year old gigolo.
Don’t you love how the NAR forgets to mention supply/demand?
I’m tracking quite a few areas. All major urban areas have an increase in inventory.
e.g. using ziprealty (being lazy and just taking the number given):
DC ~55,800 vs 45,000 a year ago
LA 126,000 in 2008 versus 92,000 in 2007
Don’t even look at Florida… The numbers are staggering. There need to be federally subsidized bulldozers there with the land sold off at $50 a lot.
Got popcorn?
Neil
Spot on, my friend. Start of the year inventory numbers make last year look good. Industry insiders are hate’n it hard when they wake up to what late winter/early spring will bring.
No bottom in sight. Here’s a video metaphor for 2008:
http://www.youtube.com/watch?v=_MTQ7nv3FUg
CH Smith (oftwominds.com) is calling for the bold prediction of housing and land dropping to zero value.
I thought that is completely nuts but then remembered Detroit. Also places like Newark, NJ and Camden. Houses eventually left to rot with no owners of record.
Its happening again in Detroit where homes are under 20,000$. Many homes for well less than building costs.
Those Florida homes will go back to nature faster than the city homes in the north.
So, the land will be worth less than 50$. Probably some negative value associated with taxes.
I’d think you could go in there and recover materials before you bulldoze everything.
Although the bubble was national or global, I’m willing to bet that “zero” is local. Unless there is complete social chaos, incomes will be greater than zero, rents will be greater than zero, so prices will be rationally greater than zero. The trouble with Detroit is, if you have no job there, you have no reason to stay there and freeze.
I agree, zero will be local. People will need to be near jobs. Oh wait, that implies real estate should sell at some fraction of income… shhhh….
Many homes for well less than building costs.
Florida 1926. Homes went for 10 cents on the dollar. In general, for about half of the material cost. Land? Only worth something if exceptional and then only 5 to 10 cents on the dollar of the year before. Labor? Ha!
Will areas hit that? Yep. Areas with a good additional jobs? Probably not. But they’ll drop.
NNV said:
Start of the year inventory numbers make last year look good.
Peak inventory this year will raise the hairs on *everyone’s* neck. There will be no hiding the elephant under the rug.
Got popcorn?
Neil
I’ve always wanted to move into Detroit and live like Charleton Heston in The Omega Man.
Good points guys. Thing with NJ was people fled social unrest and the value of many areas went to zero. Parts of Detroit too.
Backwoods Florida? There are houses with some shelter value but I don’t think there is any income sources or infrastructure around them. So you can buy them but they are a trap.
I was talking about localized values in this. Just thought it was a fascinating topic.
Also makes you think of all the ghost towns here in CA/NV/NM… we will probably see them again soon.
I can also feel people have the urge to get out of Cali all together… poor water resources/trouble with illegals that will intensify… perhaps Barack Obama makes things much worse.
As a born and bred Californian, I say “Amen to that.” I hope a lot of people get the heck out of California. And take your kids and neighbors with you.
For a while I was espousing a plan to pay people to leave the state, but it would be great if we didn’t have to.
Yes, everyone please leave California. There is nothing good here. You don’t want to live here. Everything is more expensive and everyone gets paid less. Especially Santa Barbara. Move along. Move along.
Attempting to create urgency about a decision that most people make only a few times in their lifetime is a herculean undertaking. I almost admire the indefatigable energy that it must take to keep up this drumbeat of false optimism. The patron saint of Realtors must be St. Jude, the patron saint of lost causes and a well-known exorcist. They should keep in mind that St. Jude was beaten to death with a club, and only then beheaded.
I’m planning on eventually buying a second home in San Diego. When I emailed a local RealtorTM about timing the market here’s the response I got:
Me: What would you say to people who tell me that I should wait till median prices meet the fundamentals of being closer to 3x the median income for any given area? Based on current prices it seems like there’s still a way to go.
Her: It isn’t as simple as that. Like here in Eastlake / Rolling Hills/
OtayRanch area, that would be considered an area but the median price for a home would be using homes in the multi million dollar range (The Woods at Eastlake) to the very small homes in the Eastlake Hills area (1200 Sq Ft for single family detached). Real estate is so very local. The median income
in the same area includes doctors, lawyers, business owners and blue collar hourly wage earners. In both cases that includes a very big range. Remember that when prices were rising so quickly in 2003 - 2005, buyers were buying like the rise would never stop, it did. Now prices have been falling and buyers think they will fall for ever, they won’t. And as always, when they start rising, the prices will eventually exceed where they were in
2005 when it peaked. Real estate is meant to be a long term investment and over the long term the prices continue to rise. My first home in the Bonita Highlands was purchased for 149,000. I sold for $385,600 and it reached a value of more than $700,000. today’s value is a little less than $600,000. The key is just like any investment - buy low and sell high except with real estate you
get to enjoy the tax benefit for your taxes and interest, while you
should be paying the loan down AND it provides you shelter and the enjoyment of ownership.
‘Now prices have been falling and buyers think they will fall for ever, they won’t. And as always, when they start rising, the prices will eventually exceed where they were in 2005 when it peaked.’
Typical. I have never heard anyone say prices will fall forever. (Well, maybe Jas). But to think prices are going to jump right back above 2005 levels is a failure to see that this was the largest asset bubble in the history of man. In Houston, Texas, I understand that house prices, adjusted for inflation, have never regained the levels seen during the late 70s-early 80s boom.
But they WILL exceed 2005 levels. It just may take 30 years.
Not if we finally wake up to the fact that a fiat currency system just doesn’t work.
Ah, but few even among the real doomsayers think the dollar is actually going to disappear (or even that we’re going back to the gold standard).
Most likely, home prices, after plummeting back to earth (another 30-70%), will stabilize eventually, and appreciation in line with wage inflation will resume. And then, another 50 > x > 15 years later, absent another crash, we’ll be back at today’s prices.
Devil’s advocate:
Why do you assume wages will increase in the future? Perhaps wages will decrease for an extended period of time as we head toward global equilibrium?
Possible, but there’s no reason to assume real global equilibrium either - comparative advantage between nations persists and most likely always will (there are differences in natural resources, culture, genetics, etc.), and it is unlikely the size of annual real wage loss will be so great as to entirely negate inflation. (This certainly hasn’t happened so far, though then again, perhaps we can’t trust the wage growth numbers from Uncle Sam just like we can’t trust the inflation numbers… hmmmm…)
But how many times did you hear housing always goes up?
Is it just me, or did that butt-monkey not even come close to answering the question. Nice dancing around it, though.
She mixed just enough fact with the rest of her Yun-spew to try to sound logical. But like my daddy used to say, “Mixing a teaspoon of crap with a gallon of ice cream gets you a gallon of crap.”
BTW, ex-nnv, still waiting for you to personally deliver the JT to Chino Hills. If ya even smell a whiff of eau de bovine I’ll happily bend over! Just remember to call me in the morning…
LOL. You’re a good sport. Understand that it’s nothing personal, I just really enjoy being a pain in the a$$. You could almost call it a compulsion. I know, I know….it’s hard to generalize your area. I used to play golf at Los Serranos every Monday when I lived down there, so I kow that Chino has turned for the better in some pockets, especially Chino Hills.
“Insanity lending created this mess,
“Now puckerbutt lending will insure its death.”
Words to live by.
Just replace “insure” with “ensure” and I will agree. This is too funny to become deservedly popular with a usage error uncorrected.
–
“Grey said Fontana’s lower land prices will continue to attract businesses moving eastward from Los Angeles and Orange counties.”
That explains plummeting home prices. I once had to drive thru Fontana due to an hwy detour. Building going on was incredible (it was 2005). It was hard to find a person intelligent enough to give directions to the nearest hwy entrance. Forth time was the charm.
Jas
“Grey said Fontana’s lower land prices will continue to attract businesses moving eastward from Los Angeles and Orange counties.”
When they’re moving east out of Los Angeles and Orange Counties they don’t stop in the Inland Empire, they leave the state entirely.
Fontucky, er, I mean Fontana.
PUHLEASE!
I lived in that city for 11 years. Please, that area is anywhere from section 8 style to 65K salary, tops. Okay, some make more than that, but on the whole that is about the upper limit.
Anyone who thinks this is the town of opportunity is kidding themselves. To use that nwer cliche, “It is what it is.” And to that I would add, “Nothing more.”
Or to quote Gertrude Stein (with respect to Oakland):
“There is no *there*, there.”
–
“Anyone who thinks this is the town of opportunity is kidding themselves.”
That distinction, if we are to believe the welcome sign “City of Unlimited Opportunity,” belongs to Adelanto (near “Loserville”) several miles north.
Jas
“Consequently, the average household income in Fontana as a whole is approaching $70,000, Grey said.”
I’m no expert in married couples etc. but 70k divided by two workers comes to 40k for him and 30k for her. That might get you a manufactured home.
I’m surprised some liberated HBB hasn’t beat you with a wet noodle for that one. What makes you think it couldn’t be the other way around, her making $50k and him making $20K. I know cases today where the woman has the advantage in the market place. As for me, I was lucky enough to retire before me wife passed me up. My ace in the hole is that when she retires, I’ll be back on top once more.
“ace in the hole”…”I’ll be back on top once more”.
We are all looking forward to the time when you are back on top.
Auger-inn, call your office.
That’s like work, man!
There are so many easier targets.
“‘In the single-family market, we anticipate a modest improvement in sales in those markets that are highly urban.. . . In those areas, where lots are not abundant, we forecast a 10 to 15 percent increase in sales in 2008, with prices holding steady,’ he said.”
That’s impossible! It would require at least 286psi to place a tongue that firmly against ones cheek.
“‘I honestly think we’re in a bit of an impasse. Buyers aren’t doing anything and sellers are just sitting back waiting for something to happen,’ said Jim Link, the association’s executive VP.”
I wonder what the “sellers” (really “sitters”) are waiting for? St Joseph is really busy right now and won’t be getting around to help them anytime soon. Meanwhile, the Invisible Hand has purchased a mass replicator and the clones are flying in 20lb trouts by the 747-load.
Let’s see… we are at an impasse. I’m a future buyer in a nice rental. What’s going to force me to buy… Umm… nothing.
Now what happens when a market losses selling velocity… oh yea:
1. Either supply immediately dries up (vendors switch markets, e.g., software is a good example where destroying/storing inventory is cheap)
2. Prices drop to stimulate demand
munch munch munch…
Oh… the invisible hand has had to switch to leasing AN-124’s by the fleet. Not to mention they now have chainmail gloves and a fine selection of Joshua trees. Not that a whacking with a 20lb frozen trout wouldn’t amuse…
Got popcorn?
Neil
Neil, you always have the best comments, you crack me up.
I think they would crack me up more often if I understood them better! Who is leasing AN-124s? They can’t be fuel efficient…
My plug in here about this again….
Most of the sellers CAN’T lower prices.
Move up buyers can’t lower prices because they have to wait for the tier above to fall.
The FB can’t lower prices because they are near underwater so lower the price is a forclosure or short sale that the bank doesn’t want.
Normally it takes years for the people to give up OR the builders undercut them with cheaper new homes.
Hence the rationality of yesterday’s prediction by “buckwheat” that the required 50% price reduction would take years to achieve.
Or it happens when enough banks go under…
This will take years. But if sales slow *enough*, we can still see a 20% price drop in 2008. 2009? Bwaaa haaa haa! Oops.
Got popcorn?
Neil
Larry Gasinski’s Jan 2008 Threat to Potential Knife-Catchers:
” ‘Waiting could mean the home you love will not be there, that favorable loan interest rates will be gone or that you’ll be competing with many more prospective buyers.’ ”
Larry Gasinski’s Jan 2007 Threat to Potential Knife-Catchers:
” ‘More buyers are coming out now as they realize that the feeding frenzy is over, the selection is wider, interest rates are still near historical lows and that sellers are setting realistic prices and are open to negotiation, Gasinski said. ‘Who knows where interest rates will be in the Spring? Who knows how many other buyers will get off the fence and jump into the market in three or four months?’ ”
http://www.srar.com/Statistics/SCV_stats.php
And, how about some May 2007 spot-on analysis by old Gasinski:
” ‘Santa Clarita is a highly desirable isolated pocket that continues to draw people seeking a great lifestyle.’ ”
” ‘Today’s inventory offers choices to buyers,” Gasinski said, ‘but it is not a glut, the market is not flooded with listings. Wise buyers and sellers know the difference and understand what it means.’ ”
http://www.srar.com/members/rronline/5-15-SCVSales.php
What a freaking clown! Somebody please email these “spot-on” past predictions to the editor who continues to print this nonsense. How can any media outlet even quote this fool?
Great detective work, AnonyRuss
– Judge Smales
“You’ll get nothing and like it”
“If you think prices will drop 10 percent over the next year, open up with an offer that is 10 percent lower than current sales comparisons. “
Why stop at 10%? Pony up and offer 50% less and watch the fireworks…
and… what sales comparisons? How can you make comparisons on houses that don’t sell?
“Waiting could mean the home you love will not be there”…
What, with 15+ months inventory?
If the ‘home’ I ‘love’ has gone, then there will be dozens of ‘houses’ I ‘like’ to bid on instead.
Goes into the ‘Hurry!! Won’t last” category of ‘10 most idiotic things Realtors ™ say to get people to buy’.
…that favorable loan interest rates will be gone…
Repeat after me..”you can adjust your interest rate, but you can’t adjust the price of your house”…I’d much rather pay 10% on a 250K house than 5% on a 600K house.
Most of the time this kind of stuff doesn’t rattle my cage, but, come on, this is just the same stuff we’ve been hearing for years - change the record, guys.
I’m thinking this may be just the thing to get the market moving!
Start making offers at 40% off, and when they blanch, show them the Goldman Sachs and other papers predicting a 40% decline, and tell them they’ve got it good - in 2011, those dollars will be worth a lot less.
Ah, bollocks…. italics off
Sorry, I thought I’d checked all the italic tags.
Ben? Anyway to get an ‘edit’ button for eedjits like me?
Or maybe a Grupppekommanderr Edit Button, to delete eedjit posts like mine??
“‘I suspect some of them are hurting somewhat, but there’s no reason for them to leave a bunch of half-finished work around,’ he said.”
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA! Then why don’t you step of to the plate you blithering idiot.
NEW TOPIC
how much have RENTS fallen in your hood
that’s right fallen !!!
remember in early 06 when rents were to skyrocket ?
Rents rose significantly late 2004 through summer of 2006 (or thereabouts) — up about 30% or more.
They stayed flat from mid-2006 until just recently (perhaps because of the fires in October????) & I’m noticing they are drifting upward again.
Annoying, because (like FBs of yesteryear) most people don’t even try to negotiate better rates & I think many are paying the wishing prices, at least for now.
Question to the California folks. I’ve heard a couple of times about how illegals are “self deporting” from Arizona. Is the same thing happening in California? If it is, and if you couple it with the out-migration of Anglos, it possible that the state’s population may decline, even if it’s only for a year or two?
Has there been anything in your news about these topics? If the population does decline, then that’s even more pressure on house prices.
Just a 2008 and beyond REMINDER…
The following indiviuals/groupies ARE NOT your FRIENDS, RE Agents, an idiot in law or family member, NAR, MSM, Banks, Brokers, Lenders, Title Companies, Inspectors, Appraisors, Ect.
The good people that WORK in your local Clerk of Court, Registrar of Deeds, and the County Treasurer Offices CAN BE YOUR FRIENDS with a few of Dollars for copies, public research and a little charm.
These people, if not real busy and have the time, can SMELL a rat, Fraud or a RE Ripoff a Mile away and with along with some common sence, a well picked RE Attorney, can let you KNOW when to RUN…NOT WALK, AWAY from ANY possible tempting RE “DEALS” or shenanigans in the upcoming future.
It PAYS to know these people BEFORE becoming involved with any of the above mentioned RE Evil Doers ?
Oh!…And Ben and the folks on this blog are your friends.
Have a Good Year Folks …and BE CAREFUL OUT THERE, because the entire RE GANG is GOING to BE VERY, VERY HUNGRY
Yep, I’ve already been approached with plenty of “INSTANT EQUITY!!” type deals, er, I mean “deals.”
“Have a Good Year Folks …and BE CAREFUL OUT THERE, because the entire RE GANG is GOING to BE VERY, VERY HUNGRY”
Good because they can eat me.
Happy New Year
Driving to Palm Springs from LA I always asked myself, who the f lives out here in these nightmarish dustbowl nowheres buying all these hideous new crackerbox houses, and what the hell do they do for a living? I came up with no logical answer so figured it was an ugly crash in the making. Ah, so. Also, I never read much about if all the new residential in downtown LA that’s recently been built is cratering, anyone have any idea? I know there still plans to build a 70-story residential tower (”Park Fifth”) but I can’t imagine there’s a bank on earth that would finance that now.
I live out in Palm Desert in an older established neighborhood. What people do out here is the same as anywhere else, teachers, police, doctors, lawyers, tech folks, and lots of resort/recreation type jobs. Housing used to be a steal out here. In 2000, you could still get a great mid century house w/pool for under $200K. We ask the same about Desert Hot Springs, Banning, Beaumont, Cherry Valley and all those places heading into the city.
Oh no, I was referring to the places on the way out to the desert, not the Coachella Valley itself. I get the economic base and high quality of life–i.e. reason for housing–there. Now if someone could explain, say, Moreno Valley to me, I’m all ears!
I live in downtown L.A. and read the downtown news religiously (though of course they spin everything heavily). A lot of these projects are being “delayed” for long periods or indefinitely, and some of the already completed but not fully sold residential buildings are quietly offering six figure discounts to get themselves filled.
This area is NOT cleaning up. A colleague of mine bought across the street (we’re 4 blocks from the office), and he paid well north of half a million, possibly three quarters or more, for a space where if he walks out his front door, he has to dodge panhandlers and watch his step to avoid the human waste on the sidewalk. I am certain he will regret this decision, but what can you do. I’ve managed to talk a couple of people out of buying, here or elsewhere, but this guy never talked to me about it before taking the plunge. (Did you ever notice that dog waste is much less vile smelling than that from humans? Now imagine a place where humans use the toilet on the sidewalk, constantly, and empty out every trash can on to the street looking for food/crack/?, etc. - that’s ALL of downtown L.A.)
That’s often my neighborhood and I live in a “decent” SF area. Nothing as bad as downtown LA, I know, but it’s definitely an unspoken problem in SF, too.
I know, I live near Downtown (Los Feliz) and every time I’m there and see one of these new adaptive reuse (or for that matter new construction) residential projects with third-wold conditions right at the front door, I wonder how this situation can continue without the nightmarish homeless/street crime problem improving. I’ve been in most major Western cities, and frankly I’ve never seen conditions like that anywhere else in the first world; I don’t think people from other parts of the country would believe it, literally ragged tents, raving lunatics, and feces all over the sidewalks. And given the incredible ineptitude and socialist (no, that’s not hyperbole) leanings of LA city government, I can’t see it getting better. Shame, because there are tons of truly beautiful old buildings there.
Want to see some nice bank/investor losses in downtown san diego? For your viewing pleasure…
702 Ash St #405
San Diego, CA 92101
Price: $290,000
Sales History
Date Price Held Return Annual
08/14/2006 $690,000 8m 10% 14%
11/17/2005 $625,000 1y 1m 42% 38%
10/14/2004 $440,013 n/a - -
702 Ash St #304
San Diego, CA 92101
Price: $294,500
Sales History
Date Price Held Return Annual
02/06/2006 $720,000 1y 3m 48% 36%
10/20/2004 $485,000 n/a - -
702 Ash St #205
San Diego, CA 92101
Price: $269,900
Sales History
Date Price Held Return Annual
12/14/2005 $625,000 1y 45% 44%
12/01/2004 $429,868 n/a - -
702 Ash St #802
San Diego, CA 92101
Price: $199,900
Sales History
Date Price Held Return Annual
03/10/2006 $405,000 1y 4m 50% 34%
10/22/2004 $270,750 n/a -
How soon can you bring these numbers to SFHs in Portland?
Only the beginning, padre. Wait until the end of May or so.
I drove by to check it out. Those are in the El Cortez. Wow is all I have to say on the price drops, more than 50% below peak. I wonder if some of those peak 2006 prices were cash back at closing deals as the sales histories showed prices continuing to climb for about a year beyond what appeared to be the peak for that area.
Prices for condos in adjacent areas seem to have fallen about 25% since the peak. Fifty percent seems high unless those units were more overinflated than other areas due to fraud or other factors or the credit tightening has led to more significant drops in the past 1-2 months.
Lots of problems with that building:
http://www.elcortez.info/
Whoa. 60% off last sale price???
This isn’t a premium downtown building. Other premium towers are having 20 to 30% cuts ($200k) on REOs. The magnitude of the losses will be astounding. Hopefully san diego will chase the market down the fastest.
San Diego is the lead dog in this race.
Condos… can drop amazingly fast.
Munch munch munch…
Got popcorn?
Neil
I can’t believe anyone would pay more than $150K for a one bedroom and $250K for a two bedroom condo in san diego. What we need to get back to is a differentiation between house and condo prices with houses at a 20 to 50% premium over condos. And yes, this sled dog is pulling a heavy load, but I see a downhill slope ahead.
I like to go to Ziprealty or other online RE listing resources and look at the current property taxes on the homes versus the asking price. So many people are 100-200K upside down it’s AMAZING.
There’s a WORLD of hurt on the horizon in Southern Cali that will only be staved-off if the government stupidly decides to intervene with SIGNIFICANT bail-outs. Fortunately for us our government couldn’t find its own azz even if it looked for it with BOTH hands, much less organize an efective rescue of financially irresponsible dunces.
“I am taking a contrarian view. The buyers will start coming out again. I think you will see it sooner rather than later.’”
Oh sure, by golly, the buyers will start coming out again, just like the crocus and lilac will come out in the spring. The PROBLEM is, there aren’t enough buyers with down payments and incomes yet, to turn this frozen corpse of a housing market and the economy around. Come to think of it, about the ONLY nice thing about this spring will be the flowers and blossoms you see, coupled with the gentle sound of real estate prices crashing. The paralyzed economy will make everything else seem rather bleak. And mass starvation among the Realtwhore herds; well, they needed thinning out anyway.
Contrarian view?? A little over 2 years into a correction for a 6+ year (and historically unprecedented) run-up and this guy is a contrarian? No, sir. It ain’t until the prevailing view is capitulation (vast majority think housing is a bad, bad idea) that you are allowed that right.
This guy gets a trout AND a JT. Although, I’ve been thinking about this whole frozen trout thing. I’d rather have a thawed out, moist, day old trout (wait that didn’t sound right). The smacking sound, the nasty fish juice flying everywhere (didn’t sound right either). Imagine the carnage.
But I digress. This guy gets a thawed trout and frozen JT.
your boy Rommney failed to counter Huckabee..
Ron Paul stayed home and read up on policy….
Obama headed to South Carolina after the upset, before getting a private jet to New Hampshire…
I logged on this eve mainly to express enthusiasm over Ron Paul’s 10% share of Iowa votes. Notice how CNN doesn’t show it on their pie chart (Huck 34, Romney 25, Tomsn 14, McCain 13). I hope RP does better than 10% in NH, but in the long run I could vote for McCain. Not Romney.
I’m voting Ron Paul and so are most of the people I know. Did you see Fox told him he isn’t invited to their debates? One of the most popular candidates and FOX is afraid he will fracture the Republican vote if he gets too much publicity.
The people are giving Ron so much money just to save us and a big news network can’t justify adding him into the debates.
I can’t stand Romney or Huckabee. Its like a fucking baptist revival at conventions and “who would Jesus vote for” shit.
I’m hopeful that RP gets some momentum
What’s better is that David Cee’s girlfriend failed to beat Obama
:-) 
LOL.
Huckabee represents the worst of conservatism - populism, which is Bible thumping combined with anti-business (comments against wall street). He is worth nothing to any real individualist and no better than the worst of Demoncraps - pure socialism combined with Tipper Gore’s tirade against rock music lyrics. I’m voting for Ron Paul in my primary, then changing my registration back to the Libertarian Party. If all we get is Huckabee against Edwards, we get more of the same as what he had the last 17 years. We have people picking socialists just on character and not caring how socialistic they are. Republicrat politicians are getting more and more indistinguishable. RP is the rare exception.
Boy, they are getting desperate now. The following is from a local Realty rag delivered today in my area. I can’t believe they are trying to spin a declining absorption rate as a positive. And as for the rest…
Indicators Forecast Positive Livermore Housing-market Outlook
by Corinne Gompf
There are signs the the real estate market may be on the upswing in the coming year, says Livermore real estate consultant Greg Lanet.
The Livermore market had a 11.4% absorption rate in Sept. It dropped to 8.8% in Oct and again to 7.3 in Nov, and that’s happening in a season that is traditionally slow for real estate. Part of that is a result of the mortgage market, being that there’s more money available - and there are 6% mortgages out there, explains Lanet.
Blah, Blah, Blah
And the average appreciation is 9.36 percent a year. When the market comes back, the numbers will have to increase by double digits to reach that average. Investors are looking at those numbers Lanet reveals.
Which means, says Lanet, that for buyers, “it’s time to move. It’s time to do it. It’s time to buy something right now - with no hesitation. For someone in the move-up market, who wants to enter the market, who wants to start with a rental, it’s absolutely the time to do so”
Blah, Blah, Blah
For both buyers and sellers, Lanet says, “Start by getting straight information from a real estate consultant who you can trust and who puts your interests above all else. Use someone who is very confident and who has the correct data”
Absorbtion rates? Average appreciation 9.36% a year? (what - 2000 throught 2006?)
THe fact that he throws out bull—- stats like that, and then adds a statement about trust and the correct data - well, it’s just beyond belief. My guess is Mr. Lanet didn’t provide any contact information for you to ask further questions.
Shouldn’t that rate be in months, not %? What am I missing?
So that’s exactly what I thought (i.e. outstanding months of inventory) but it is clearly state in the article that this is the absorption rate. I really was gob smacked at the amount of misinformation, lies, lack of understanding, and general BS in one article. Unfortunately there are always future FBers that will read this complete drivel and be convinced ‘Now is the time to buy!’
somewhere a village is missing an idiot…
And if it IS correctly reported as % it’s getting worse, not better.
“‘We’ve had some builders who, for whatever reason, have stopped building,’ he said. ‘Maybe they’ve run into financing problems or their buyers have pulled out, but we’re starting to write some of those letters to ask what their intentions are.’”
“‘I suspect some of them are hurting somewhat, but there’s no reason for them to leave a bunch of half-finished work around,’ he said.”
From Tulare onwards, to anywhere in a 50 miles radius of Sacramento, the Inland Empire (northern territories) is a field of failed American Dreams.
If you build it, they’ll come…
“I believe 2008 will be a year we stop the bleeding in the home building industry and we turn things around,” said Alan Nevin, the association’s chief economist.
He can believe anything he wants. Whether his beliefs actually come to pass is likely to be another story.
tonight the Japanese stocks are taking it in on the chin. Sell the German market…they are “coupled”
the sleeping traders in CHINA are at fever pitch, hit the snooze button…no volume data….
the Chinese model fails as the Communist levers of price caps, lack of information, and Chang doctrine begin to take hold.
BUY OIL
BUY GOLD
BUY SOY, WHEAT, CHICKEN…
hammer the stomachs…Im not seeing enough backbone.
However, city leaders are optimistic in 2008 that Fontana will be insulated from the most severe repercussions of the housing woes
I want to know what funny stuff this dude was smoking before this fishwrap of a paper had the gall to quote him with this verbal sewage. Repeat after me: Fontucky SUCKS, Fontucky SUCKS, Fontucky SUCKS. It is smoggy. Traffic is a nightmare at best. A lot of it is unsafe. If the IE falls, so does Fontucky. I would rather live in Kentucky than in this hellhole. Kentucky has got to be much more beautiful (but never been there) than this smoghole.
I’ve been through Kentucky many times, and I never see the parts that look like Fontana.
I went to Fontana once, I saw the smog, I sat in the traffic, and I even rolled through “old historic” downtown. I was there to help a friend move. I parked on the street and went into the U-Haul dealer on the main drag to rent a truck. As soon as I got back to my car I had a guy come up to me and take one look at my car and say, “I’ll keep an eye on it for you, but I’m only here until 6″. I was like, WTF? I don’t drive a fancy car, just a Nissan, and the locals were already warning me about parking it in their lot.
Forget that place, I made my friend take me back to get my car once I arrived with the truck.
“I’ll keep an eye on it for you, but I’m only here until 6″.
—————————-
Veiled threat. What he meant was you **pay** him to watch your car. If you don’t pay him, he (and his buddies) will strip it the moment you turn your back.
Hate those sewer rats.
Nothing in Fontana equivalent to a fine Kentucky bourbon. I’d rather live next to a distillery than a meth lab.
“Despite months of discouraging reports about tightening credit, defaulting mortgages and falling home prices, the California Building Industry Association Thursday issued an upbeat housing forecast for the coming year. ‘I believe 2008 will be a year we stop the bleeding in the home building industry and we turn things around,’ said Alan Nevin, the association’s chief economist.”
Yeah keep dreaming alan. You and yun make great predictors just do the opposite.
‘I believe 2008 will be a year we stop the bleeding in the home building industry and we turn things around,’ said Alan Nevin, the association’s chief economist.”
Yep, that’s how I like my chief economists — guys who base their statements on what they “believe,” not anything as old-fashioned as, you know, data or statistics or numbers.
TX, may I borrow your trout?
– Judge Smales
“You’ll get nothing and like it.”
Consequently, the average household income in Fontana as a whole is approaching $70,000, Grey said.”
Yeah idiot and what does $70 grand afford you?
$300K atmost?
Get lost dope.
“I believe 2008 will be a year we stop the bleeding in the home building industry and we turn things around,”
Yes, you will go from wounded to dead–that’s when the bleeding stops.
“I believe 2008 will be a year we stop the bleeding in the home building industry and we turn things around,”
Oh really, WE will stop the bleeding and WE turn things around?
This man has a control issue. The real estate market is spiraling downward, and he has no control of it. All he can do is stand by, and watch the industry melt down.
Much though he’d like to think things revolve around him.
Just wait till March of 2008.
This man will be going through his own melt down.
Any comments on this
http://biz.yahoo.com/ap/080104/war_wounded_finances.html
Are they taking wounded people who have been out of the country and not paying attention to real estate and putting them in homes they can’t afford. Credit scams are big on military bases.
“The median price of a previously owned single-family house fell an annual 6.3 percent, or $37,500, to $557,500, said the Southland Regional Association of Realtors. It’s the lowest median in 32 months, or the start of the 2005 second quarter.”
(Sarcasm on). GEEZZ…now that’s a GREAT retreat!!!!! (Sarcasm off).
Give me a break….$557K for the mean? What a bargain So Cal has become. While I see some price drops on sights like ZipRealty, etc…it’s not nearly good enough to make any sense whatsoever.
If things continue at the current pace, we won’t see a reasonable price drop well into 2012-2014. Anyone really going to wait around that long to buy a home?
“‘Waiting could mean the home you love will not be there, that favorable loan interest rates will be gone or that you’ll be competing with many more prospective buyers.’”
AAAAAAHHHH! I’m sick of the low-interest-rate argument! These people just don’t get it! Interest rates are low now, meaning that people can afford a higher-priced house on a given income. When interest rates go up and people’s incomes stay the same, prices have no choice but to drop in order to keep the monthly payment the same. If you buy a house now that people can afford at a 6% interest rate, what the hell makes you think that the price will go up or stay the same when interest rates increase?