A Market Where No One Wants To Buy
The Used House Salespeople report from California. “Home sales decreased 28.5 percent in February in California compared with the same period a year ago, while the median price of an existing home fell 26.2 percent, C.A.R. reported today. The median price of an existing, single-family detached home in California during February 2008 was $409,240, a 26.2 percent decrease from the revised $554,280 median for February 2007, C.A.R. reported. The February 2008 median price fell 4.8 percent compared with January’s revised $429,790 median price.”
“‘The Federal Reserve Bank’s recent action to reduce the federal funds rate will have little near-term direct effect on the housing market,’ said C.A.R. Chief Economist Leslie Appleton-Young. ‘However, Fed rate cuts should result in more favorable real estate finance rates as we move through the year.’”
“C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in February 2008 was 14.3 months, compared with 8.2 months for the same period a year ago.”
“In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 5.4 percent, or 14 out of 257 cities and communities, showed an increase in their respective median home prices from a year ago.”
The Los Angeles Business Journal. “Los Angeles Country saw a 20 percent fall in February’s median home price to $467,200, while sales in the county decreased 42 percent year over year, according to the association.”
The Union Tribune. “Home sales fell 17.9 percent in the San Diego area in February, compared with the same period a year ago, and the median home price fell 24.1 percent to $450,710, according to figures released Monday.”
The Ventura County Star. “Sales of existing single-family detached homes in Ventura County last month plunged 36.9 percent from a year ago, the California Association of Realtors reported today. The median sales price was $520,270 in February, down nearly 11.9 percent from $590,380 in January and 23.6 percent from $680,690 in February 2007.”
The County Sun. “San Bernardino County would be well-served by a proposed property-tax ordinance that aims to lure homeowners from outside the county to move here and buy foreclosed houses.”
“The ordinance, introduced by Supervisors Gary Ovitt and Brad Mizelfelt on behalf of Assessor Bill Postmus, would allow the seller of a home in another county to transfer the property tax bill on that property to a home bought in San Bernardino County.”
“If, that is, the seller is at least 55 or permanently disabled, and the value of the home purchased is not greater than the value of the home sold.”
“Ideally, under the proposed ordinance, retirees who are looking for smaller digs for their golden years - but who wouldn’t move because of the tax consequences - might buy a foreclosed property here to live in.”
“There were about 8,000 foreclosures in the county last year, so plenty of properties are available. Clearly, having a retired couple buy one of them and move in is much better than having it sit empty and untended.”
“Seven of California’s counties, including Los Angeles, Orange, San Diego and Ventura, have adopted ordinances similar to this one, as permitted under Proposition 90, which was passed by California voters two decades ago.”
The Daily Pilot. “When T. K. Brimer bought his new home in Mesa Verde this month, it had signs of trouble all around. The copper plumbing, toilet and mirror had been ripped out, and one room featured expletives spray-painted around the walls, though Brimer couldn’t tell whether that was the work of the previous owners or just a hot-tempered group of vandals.”
“Still, the destruction inside was the only negative part of the purchase, which Brimer made as housing prices in Southern California dropped to near-record lows.”
“The Mesa Verde resident wanted for years to buy a pair of homes to pass on to his grown son and daughter, but with real estate costs soaring, he held onto his checkbook. Last week, with prices plummeting across the region, he closed escrow on a family house in one of Costa Mesa’s choicest neighborhoods.”
“‘I’m in a really good position as a buyer in a market where no one wants to buy,’ said Brimer. ‘I can go out and make good deals.’ Median home prices throughout Costa Mesa were down more than 20% last month from the same month a year ago.”
“Autumn Melstrom, who had been renting a house with her husband as real estate prices surged, plans to close escrow at the end of this month on a Costa Mesa home. The property, she said, appeared on a ‘best buy’ list, and she and her husband were able to meet the offered price.”
“‘Two years ago, we were looking at homes half the size in areas we really didn’t want to live in, but we were forced to look there because it was in our price range,’ Melstrom said. ‘Now, with the market doing what it’s doing, we’re able to find exactly what we want in the area we want. I think it’s give and take, for sure.’”
“According to DataQuick, all of Costa Mesa dropped in median home prices from a year ago, while much of Newport Beach actually increased. However, Gary Legrand, the president of Surterre Properties, said that didn’t mean the average price had gone up.”
“If a particularly expensive home sold in Newport Coast, Balboa Island or one of the city’s other posh neighborhoods, he said, it skewed the median price upward for that area. ‘It’s really per neighborhood,’ Legrand said. ‘Overall, have prices come down a little bit? Absolutely, they have.’”
The Bakersfield Californian. “Two illegal parties, one in a vacant foreclosure house, were busted up by law enforcement Saturday night.”
“A neighbor of the vacant house called Bakersfield Police about 9:50 p.m. concerned by the number of young people flocking to the home. When police showed up, dozens of young people people scattered. Cops were able to nab 11 suspects, citing seven adults — ages 18 to 20 — with trespassing.”
“Officers also seized two untapped kegs of beer, DJ sound equipment, a folding table and hundreds of unused plastic cups. A broken sliding glass door appeared to be how the would-be partyers got into the home.”
The CAR/DQ table
‘According to recent polls, barely 25% of Americans favor a bailout for people in danger of foreclosure, and a mere 20% favor a foreclosure moratorium. Is the majority wrong to oppose assistance? Are politicians right to promote plans like these in spite of public opinion? Are the polls themselves wrong? Paul Leonard and Chris Thornberg debate.’
The majority is tired of be screwed by scammers and crooks, be them the banks and wallstreet or losers down the street crying about being tricked into a mortgage.
Those 25% happen to be FB’s who want themselves bailed out.
The 25% number will dwindle daily as fewer and fewer will want a bail-out. I crack up every time I hear it reported that these borrowers aren’t contacting their lenders to work it out. What makes you think they want a work out?
It will also dwindle as more and more are foreclosed upon. No one who has already lost “his” house is going to support a bailout for others.
I’m sure the poll numbers are correct. The problem is, it’s not the 25% of the hoi-polloi that the politicians are worried about –it’s the 2% Wall Street/Richistani crowd. God forbid a well heeled Lobbyist or rich campaign contributor actually *gasp* lose money (while screwing the rest of us). This will *not* do! Fire up the Treasuries-for-CDOs helicopter, boys!
And the most important question: Do all journalists feel the need to ask a series of dumb questions to avoid the obvious answer that politicians worry about their rich supporters first?
I don’t understand why our Presidential hopefuls are still pushing all this bailout crappola. The public doesn’t buy it. Do you think the pols actually believe their own BS? I mean really, there is not a single organization that is so important to the US economy that it cannot be allowed to fail. If that is so, then we all might as well just sign our futures over to whatever large companies happen to be in place today. After all, they are guaranteed to maintain their power forever.
I don’t understand why our Presidential hopefuls are still pushing all this bailout crappola. The public doesn’t buy it. Do you think the pols actually believe their own BS?
If we’re lucky, no.
I maybe wrong here, but it doesn’t seem like a huge mystery to me.
Politicians require large sums of money to keep campaigns going. Most of them are quite literally banking on people whose net worth would probably be substantially tied up in this whole mortgage mess.
I’m thinking they need to look like they are doing something for the people who have a direct phone number to them or their campaign manager. I doubt the plans would get much support after the elections, especially with the pols like they are.
I’m amused by the detailed plans Hillary presents to solve current problems. The inauguration is ten months away - a lot will have changed by then and the plans may no longer apply.
With respect, I don’t think her plans really apply today as far as being a solution for this mess.
Maybe they don’t buy it now, but when unemployment numbers start to creep up people will start to beg for politicians to do something, anything to get things moving again. Quick corrections seem nice, but their effect on labor markets is particularly devastating.
Problem not solved:
It’s unfair prices, not unfair loans
By Chris Thornberg
The mortgage loan modification plans put forward by the governor and, at various times and in various forms, by the U.S. Treasury Department all failed to fix the problems in the housing markets. Why? They pretended that the problem is the structures of the mortgages used to buy houses — in other words, fix the interest rate and you fix the problem. Make the loan “fair” and everything will be fine.
Nothing could be further from the truth. The real issue in today’s housing markets is that prices currently sit at levels that are unaffordable given income levels in our state.
What’s Costa Mesa like, anyhoo…?
way overpriced like still. part of it is newport beach adjacent and worth good money. Rest is 3/2 shoebox central albeit with nice ocean breezes… beautiful persons such as myself live here tho, you can’t really put a price on that…
lol. Isn’t Costa Mesa th home of South Coast Plaza? Possibly the most obnoxious consumertorium in the U.S.?
you betcha. it plays to the Newport Beach crowd and the wanna-bes….
txchick: what happened to your friend who was going to make the offer on the Corona property?
She’s a teacher and got a layoff notice. Ironic.
Yes ironic. That layoff saved her from catching a falling knife and getting foreclosed.
Foreclosed? No. Her daddy was going to pay cash.
Foreclosed? No. Her daddy was going to pay cash.
Where can I get parents who will buy me houses?? (Darn it!!)
My daddy also offered to pay cash for a house in Florida but I know better. I am not touching any of that overpriced crap. Ill take my $50k house in NW Pennsylvania, thank you. Florida isn’t worth the ripoff prices.
Just have to earn money the old fashioned way. Win the genetic lottery.
Grin -genetic lottery!
Me and you mister! And a case of Cow!
Leigh
P.S. Hubby too!
OOps, I think I got the wrong parents from the hospital nursery… oh nurse, nurse?
Man you guys have got to read The Millionaire Next Door. There is a section in it where this egghead economist explains why people who are given things like a house don’t succeed. By taking away the possibility of drowning it also takes away the impetus to paddle like hell.
If you can’t put your foot on the brakes of life to save up 20 percent down for a home then YOU CAN’T AFFORD TO BUY A HOME. It doesn’t matter if someone else paid for it or not. You will invariably feel the need to decorate the home as nice as the neighbors, buy cars to sit in front of the crap filled garage that are as nice as the neighbors, of course you will have to pay taxes, insurance, and upkeep which in my case are like half of my monthly mortgage payment.
This is why most millionaires live in working class neighborhoods, drive American made used vehicles, and learned a long time ago that in order to succeed they would need to 1 pay down debt aggressively, and 2 not keep up with the Joneses.
Hello Linux Kernel,
I believe that book was written by Kyosaki? If so, do some research on that guy. He is not to be trusted.
The millionaire next door is written by Thomas J. Stanley and William D. Danko.
If only there was some sorta search engine that you could enter the name of a book in it and it would return details about the book. Dam, and I thought the internet had everything…
Costa Mesa/Irvine/Newport Beach: think West Coast version of the enclave known as Stepford. We locals refer to it as living behind the Orange Curtain. To be fair, there are some pockets of authentic life form.
The Orange Curtain lost a lot of it’s meaning when communism petered out, a generation ago…
Previously, it was a hotbed of John Bircher-ism
My favorite was Fashion Island in Newport Beach. The college kids called it “Fascist Island.” A great place to buy a pair of $600 shoes and matching $3000 bag.
Y.I.K.E.S.
Holy cow!
Leigh
Wife and I actually parked an RV a couple nights and slept at Fashion Island after going to the movie theater. Admittedly it was a nice looking RV (BlueBird Wonderlodge - looks like a tour bus), but was surprised to get away with it.
Congrats!
It’s fun to have fun - thank heavens for the wheels
“lol. Isn’t Costa Mesa th home of South Coast Plaza? Possibly the most obnoxious consumertorium in the U.S.?”
U can go from spitzy SC Plaza to tijuana el norte, AKA Santa Ana, in 10 minites drive. I call it seeing CA in all it’s diversity.
Drive, hell. Ten minutes walk.
“Isn’t Costa Mesa th home of South Coast Plaza?”
Costa Mesa is also where you will find BackToTheBank, formerly known as Home_a_Loan. BackToTheBank lives in westside Costa Mesa, which is known as “The Part Of Costa Mesa Where All The Illegals Live”.
Here in westside CM, houses have a habit of going back to the bank.
Why is it that folks on this board are always automatically negative on just about any California city? I don’t personally live in Costa Mesa but I happen to like the area (especially the huge swap meet at the end of the 55). And it’s one of the few beach cities that genuinely nice people, especially compared with the rest of the plastic OC population.
Why is it that folks on this board are always automatically negative on just about any California city?
Yeah, why is that?? It’s really much easier to dis the entire state rather than pick out individual cities.
“Why is it that folks on this board are always automatically negative on just about any California city? ”
I plead guilty to being one of those who actually enjoys trashing LA county and the IE in particular. There are certain aspects which invite biting attacts in these counties, in no particular order i will provide the negatives: illegal immigrant overrun, plenty of gang-bangin activities, every fwy sign repeatedly spray painted with graffitti, insane traffic tieups, LA capital of every type of fraud including RE mort fraud, half- million fraud homes sales in LA gang- controlled illegal-alien safe haven stews such as maywood, bell,vernon,lennox, compton,pacoima, ect. Large areas of IE simply ripped apart & bulldozed to put up square mile expanses of cheaply-built 4-3 crappy cookie-cutter mcstuccos, ect,.
This just a short list. here another little- known fact: the famed SCAL beaches are 95 % inaccessible to all but the locals.
Another side note: LA is one of the dullest blandest, unscenic cities in america, unless u are one of the .001 of the LA population who has actually set foot on a Malibu beach.
That’s a nice big brush you’re using there Peter. Doesn’t sound anything like where most of us live though.
I think it’s because we’re so accustomed to fighting against the “everybody wants to live here” crowd. Pointing out the drawbacks of a particular state/city/neighborhood hepls to shut those people down.
I seriously doubt that “everyone” wants to live here. But for those of us who have found our little slice of heaven, it’s pretty funny to read about how everyone thinks we live in a cesspool.
“And it’s one of the few beach cities that genuinely nice people, especially compared with the rest of the plastic OC population.”
The ‘plastic’ people are in Newport Beach, corona del mar, Balboa island,the gilded areas around Fashion island. Not much plastic folk in CM. If want even more middle class humble folks just head directly west to huntington beach, which is mostly middle class with some lower white trashy surf punks hovering around the Huntington beach pier. Beaches are far more accessible in HB if U don’t mind paying the $6.00 state beach parking fee.
Corona del mar is small in size but must have one of the highest per capita incomes in OC. Some really nice brentwood type estates in that area plus the beach is right at the doorstep.
I’ve said at least once, maybe a few too many times….Cali SUCKS… DO NOT MOVE HERE ….and I’ve only lived in the Bay Area (Santa Clara/San Jose/San Mateo Coast; So Cal (San Clemente/Oceanside/Vista and San Diego) and Truckee, Sac and Alturas/Likely (yeah it helps to be white there, especially if you break down).
I agree, I wouldn’t live in the Bay Area either. It’s a real cesspool.
“What’s Costa Mesa like, anyhoo…? ”
CM is a busy beehive of commercial activity, commercial parks, corp offices, retail, and more commercial offices. Further south, past 405/55/73 commercial triangle and down the 55 fwy it becomes a beehive of retail, small industrial firms, motels, malls, apts, with the epicenter being where the 55 ends and u merge into newport beach.
CM has quite a diversified housing mix: it it in fact the ‘affordable’ Multi-unit section of the South OC til U get way down to Aliso Viejo-laguna hills area. Affordable is relative here because an ‘affordable’ condo /townhouse would still be around $500,000. CM has good weather, decent parks, and the beach is fairly close but U have to fight constant swarming traffic along newport blvd/PCH to get to the Newport/balboa pennisula beaches which are not as easily accessible as those in adjacent huntington beach, mainly due to parking.
Best way to get to the beaches in CM and most of the South OC is by cycling. South OC does have decent bicycle lanes, and U can ride the beachside bike path from sunset beach all way to western edge of newport beach with out getting on a paved road-a distance of 25+ miles.
CM gets decent ratings on its SFH neighborhoods from this normally hard-bitten cynical poster who has been to every hood in every area in six Scal counties, with 95% of them being either plain janes or third world dumps.
Most of it’s a low-grade quasi-slum, including what this article calls the “prestigious” Mesa Verde. The only relatively nice parts are on the Newport Beach side of Newport Blvd.
My folks moved to Costa Mesa in 71 (Mesa Verde). I lived there almost twenty years and I found it to be a great area to grow up in.
However, I have now been enlighten to the fact I was, in reality, living in a “quasi-slum”.
It’s the place where rich Newport Beach parents buy houses for their burnout trustafarian offspring.
“as housing prices in Southern California dropped to near-record lows.”
Crickey, what is wrong with these people? Priced tripled! TRI-PLED! Even if we’re off 25% from the peak already, which we are in some places, not yet in others, a simple reversion to the mean would require that prices fall ANOTHER 30%+ from where we are now. And even that assumes no overcorrection at all on the way down - how often does that happen?
This reporter should be taken out and shot.
And even this doesn’t touch the pure, simple illogic of the statement - prices were at “record lows” 100 years ago, or 200, or when the settlers bought Manhattan for beads. Grrrr….
Yep. Whoever wrote record lows there is flat out mathematically retarded. Record low prices were set back in the 1800s.
Now, if they analyzed a metric, like income/price or rent/price, then they could let us know if we’re at ‘record lows’ yet. And they’d be unpleasantly suprised to see we’re still on the downslope from ridiculous highs.
We MAY set some record lows this time, but that’ll be a few years from now.
I’m going to give them the benefit of the doubt and assume they confused record price drops with record price lows.
“Still, the destruction inside was the only negative part of the purchase, which Brimer made as housing prices in Southern California dropped to near-RECORD lows.”
“You keep using that word. I do not think it means what you think it means” Inigo Montoya, Princess Bride
“ANOTHER 30%+”
Are you taking into consideration (1) inflation/devaluation of $US; (2) policy asymmetry (laissez faire on the way up, real estate price plunge protection through massive intervention on the way down)?
Did you see House No. 1 on the Forbes “Mllion Dollar Foreclosure” slide show? A $3M place in Rancho Santa Fe.
On #1, indeed I am Professor - another 30% would still put us at 57.5% above baseline prices, which is more than enough to account for normal appreciation over the period, assuming we do not enter real hyper-inflation/rioting-in-the-streets space. (300 x 0.75 = 225. That’s 25% depreciation from the peak up to today (in our example). 225 x 0.7 = 157.5. That’s another 30% tomorrow, though again, this assumes we don’t overcorrect, which would be unusual among similar economic events (to the extent there are any). Also, here in SoCal, it was actually more than tripled.)
On #2, this is harder to account for, as I am unfamiliar with the powers of the powers that be in this regard. Thus far, their efforts to intervene have shown both little success and little likelihood of success in materially stopping the correction. In fact, while they seem to be causing substantial short term inflation in other commodities, as well as turbulence in the bond and stock markets, it is difficult to fathom that this is having much of a positive effect on either housing prices or fundamental economic factors - wages are not increasing at anything close to commodity rates, and public confidence is faltering not only on housing issues, but inflation itself, and the fundamental soundness of the service economy.
No, it seems to me that at least so far, what they’ve done feels like applying a band aid to an amputation, and then telling the patient they should be feeling better any day now. You listen with incredulity but pause first in your confusion before screaming in anguish and disbelief.
This is crazy. The upscale/beach areas haven’t been hit yet - just a few condo flippers getting the JT. I am still seeing “sales freeze” conditions in my area, not falling prices, since nothing much is moving. Near-record lows my 4$$. Call me when a house in Compton is back down to $50K and a house near the coast is below $500K.
Call me when a house in Compton is back down to $50K and a house near the coast is below $500K.
You’ll get that call in about 2012.
Its happening. The desperation is there. Wait for this summer. Employees are voting with their feet and the #1 time to do that is during the school break. Between now and the end of June… Relax.
Got Popcorn?
Neil
So true, Neil. I know we have talked about this before, but it is worth reiterating. Prices will be rock bottom by 2012, if not a year earlier.
Case in point. I live in Rancho Santa Margarita. There is no way in h#11 that homes are worth 350-450K. While this is a very nice hood, the homes are mostly tract and there is no space between them. Also, with HOAs, insurance, and taxes, there is no way people are making enough to sustain this. Even a generous 100K/yr for a 1 or 2-spouse income would still put us at 300K, maybe 400K w/ a large down. However, who would want to tie up all that money on a falling knife?
Got lower prices?
Jetson boy should move back to Tennessee. I doubt prices will bottom out in 2012, too early.
I was checking Bristol, TN prices again and nice houses start around $100k. $200k gets multiacreage and an upper middle class house
in Bristol you can cross into Va and pay less sales tax
I have inlaws in Bristol, so I know that the weather is milder than in Pennsylvania. You’ll have to buy long underwear if you (a Floridian) move to the major storm belt. The higher elevations are colder, too, in the hilly regions. If the sun doesn’t shine into your side of the valley, it’ll be frosty a lot longer then you’ll wish for.
Michigan has the Great Lakes that moderate the evil storms - Ohio-Penn frequently get a lot more nasty storms than we do (on the east side of state), they share their bad fortune with the east coast states.
We don’t really have to wait for the rock bottom, though, because we all have to pay rent in the meanwhile. We just have to do the rent vs. buy calculation, then buy something when:
A) Buying makes sense
and
B) The price drops are smaller than the rent payment
By the time that happens, we will be 90% of the way to the bottom and a few months from the absolute bottom anyway.
Pardon me for disagreeing. I think we’ll undershoot in many areas 20% below price/rent. For some areas, this will be a first.
Either that… or rent is going to deflate even more than I am currently predicting!
Its getting scary… For people in the know. By Late this year, the sheeple will panic.
But that isn’t yet the time to buy…
Got Popcorn?
Neil
dont EVER call me about any house in Compton. Ever !
Hee. My former boss ended up, in retrospect, getting mad at the CEO of our company and leaving at just the right time. Sold the house in California for $850K and moved with family to Pittsburgh, where they bought a nice old Victorian for $350K. They were very very happy to get away from California real estate prices.
call yer former boss & tell him Bye Fl wants to rent a room for awhile while he gets up his grubstake for his own PA dreamhome.
“A neighbor of the vacant house called Bakersfield Police about 9:50 p.m. concerned by the number of young people flocking to the home. When police showed up, dozens of young people people scattered. Cops were able to nab 11 suspects, citing seven adults — ages 18 to 20 — with trespassing.”
“Officers also seized two untapped kegs of beer, DJ sound equipment, a folding table and hundreds of unused plastic cups. A broken sliding glass door appeared to be how the would-be partyers got into the home.”
2 untapped kegs deserve a better ending, than this…
That’s the worst part of the story.
Meanwhile, back at precinct headquarters…
Hope they have someone competent enough to beat-match with those decks….
…somewhere, a DJ is crying.
NYcityDJ:
Why don’t you go apply over there?
Yeah - like nyCdj would move to Cali…er…not!
Dang BigV - ya forgot to say sarcasm off!
Officers also seized two untapped kegs of beer, DJ sound equipment, a folding table and hundreds of unused plastic cups.
Hmmm. What would officers do with evidence of two untapped kegs of beer, DJ sound equipment, a folding table and hundreds of unused plastic cups.
I vote that they would toast the 26% median price declines.
“Officers also seized two untapped kegs of beer,”
I heard from an inside source that there were actually three kegs of untapped beer!
lol
Reminds me of an old John Wayne movie… Apache Junction…
They seize a couple of barrels of illegal whiskey going meant for sale to the Apache. John Wayne orders the whiskey destroyed and storms out. The Seargent takes off his hat, picks up a tin cup and points for his men to each take a cup; then the Irish Searget declares to his squad “we have a man’s job ahead of us” as they fill up the tins…
Got Popcorn?
Neil
The operative word is ‘were’. And they do not mention a word about the boxes of jelly donuts either. The evidence disappeared.
turning an unrented home into a party spot could be a good way to meet the mortgage!
http://www.youtube.com/watch?v=s2eRkB3FeJE
You’re one happy person!
Leigh
The San Diego Tribune failed to print the normal table with condos sales, housing sales, condo prices, housing prices. I think the YoY total drop on condos is 30% or more if I am reading the numbers right from DQnews. CRAYAYAYZY!! Prices down 24.1% in one year? Are we at 30%+ total for all categories and 35%+ for condos? That’s not even inflation adjusted OR size adjusted….Hip-Hop Horray…Ho…Hay…Ho!
What does that 24.1% number mean? Is it the YOY decline in all used homes (condos & SFRs combined)? Or all homes (including new)? Whatever it means, it is a huge number.
I looked at DQ News, too, and was surprised to see my Zip code (in San Diego County) is up over same month 2007. Then I looked at the number of sales the median was based on. Absurd.
Dearth of sales => unreliability of the median as an estimate for the change in value of the underlying housing stock.
“San Bernardino County would be well-served by a proposed property-tax ordinance that aims to lure homeowners from outside the county to move here and buy foreclosed houses.”
Homeowners would be well-served to avoid the Inland Empire…
That would remove a major potential tax consequence for someone wanting to relocate within the state. However, would any sane person want to retire to any part of San Bernardino County outside of possibly the San Bernardino Mountains?
Yet another automatic slam on a Calif city. Not all of San Berdoo is a wasteland (although I concede that most eastern parts are quite scary). I direct your attention yet again to Chino Hills (not Chino): 6th highest median income in the nation (U.S. Census), 21st safest city in the country (FBI), 8th best place to live with population under 100k (Money Magazine), yadda yadda. Of course we do have our share of FB’s but I say good riddance to them.
Ok,
Sorry, you can keep that extreme heat in the summer. BTW, what was it yersterday, 90? Yeah, no global warming. Should hit 125 by August. You can keep all the those pretty stats.
Got pool?
Is this in death valley? That heat can kill…
Living in pockets of decency, surrounded by indecency, is a Faustian bargain, especially when the heat is on…
Ok, so what in your opinion is an area that is not “surrounded by indecency?”
Chino Hills
The smog in Chino (graded) HIlls is a big plus.
“Yet another automatic slam on a Calif city. Not all of San Berdoo is a wasteland”
No but San berdoo county is easily the poorest of all the six SCal counties just ahead of LA county. Maybe 5 percent of SB E.G. chino hills ,parts of RC maybe ok but there are hell holes in San berdoo which are industrial gritty toxic polluted industrial/big-rig operations zones sited along the 10 fwy in south fontana, rialto, colton, and inner san berdoo metro. This is a gigantic industrial toxic heavily truck- trafficked polluted swath of SB straddling the 10 fwy from RC out to redlands. Very lax environmental controls in SB as well as lax rules on HB’ers.
inner Sberdoo county is becoming an environmental nightmare toxic zone which will have devastating consequences later on when the developers are reigned in and the state starts discovering their mess.
Hmm I don’t think that home prices have ever collapsed this fast before.
Its actually going down faster than it went up. I’m seeing properties in Irvine less than 2004 prices. Still ridiculously high but our bubble really got insane in 2004. Whats interesting is we still have a big runnup between 2002-2003 so soon it looks like anyone that bought after 2003 will be underwater. At the rate this is going 2000 prices by 2009 looks quite possible. And a big undershoot on the downside.
60-75% drops in home prices in CA are quite possible. Also in Irvine we have about 900 homes for sale with 300 in some state of foreclosure.
So by the end of the year its a sure bet that half the homes for sale will be foreclosures.
That unfortunately isn’t the case for 90% of America. If that 10% keeps dropping in prices, it could be cheaper to relocate to formerly bubble areas than elsewhere!
When I moved to LA in 1995 I didn’t understand why the rest of the country thought it was so expensive there. Houses were selling for low $200k’s in most of the city, maybe $300k by the beach. Rents were pretty low too, with move-in incentives plastered all over the place. In hindsight, that was probably the closest that LA has been to “average” American pricing for a long time. I expect we’ll see it again in 3-4 years, as LA always seems to bust harder than everywhere else, even if it takes a while to reach bottom.
“The median price of an existing, single-family detached home in California during February 2008 was $409,240, a 26.2 percent decrease from the revised $554,280 median for February 2007, C.A.R. reported. The February 2008 median price fell 4.8 percent compared with January’s revised $429,790 median price.”
Clearly that means the bottom is IN! W00t BOYZ we’ve arrived time to buys us some stocks and real estate call your brokers realtors now! Woohoo!
The median price of an existing, single-family detached home in California during February 2008 was $409,240, a 26.2 percent decrease from the revised $554,280 median for February 2007, C.A.R. reported.
—————————————————————————-
My memory isn’t that good but didn’t Leslie Appleton-Young once smugly challenge that prices could never go down by double digits in California?
“It’s God’s country, what can I say,” Leslie Appleton-Young, chief economist for the California Association of Realtors, told an audience of agents Tuesday in Terra Linda. “When is the 30 percent decline in Marin County’s market going to happen? Not in my lifetime.”
She should be on life support about now. Do we get quotes from the grave next year?
Okay, ENOUGH!
When will people finally wake the freak up and call these dingbats on their statements?
For the love of all that is honorable and beautiful, people, puhlease.
Reporters, FBs, REIC, politicians. It is enough to make me sick.
What the h3ll happened to quality research backed up with facts, good analysis, and probable predictions in this country?
Oh yeah, that’s right. It disappeared with the public school system and entitlement attitude.
Fat, dumb, and happy. Welcome to ‘MerKah in the 31st century!
We sometimes pay a tremendous price for the inability or unwillingness of too many to think critically. Even if that weren’t the case, how many mainstream media outlets still do even a token amount of investigative journalism? Transcribing of press releases or mindlessly printing quotes verbatim without any attempt at context is not journalism. It is, however, both lazy and cheap.
The media (not all, but most of the main stream media) was a willing enabler of the types of actions and practices that brought us the housing bubble and is only grudgingly covering the bust that followed.
To be fair, I don’t think Marin County has dropped 30% yet. But it will.
–
The median resale SFH price is down 31.5% from the peak price in Apr-07.
If you look at the price per sq ft (PPSF) for areas for which I have data it is down 25%+ from the peak. Over all, it is safe to say than prices are down 25% from the peak, while in various areas the decline ranges from 10-60%.
At the peak, the total value of the CA RRE was $5-6Tr. Therefore, we are looking at loss of “wealth” around $1.25-1.50Tr. How much will this cramp the life-style of many and how much reduction in spending will this alone will cause? Add job losses and my estimate is GDP decline of 2.5-5%, YoY, by mid-year for CA. That is serious recession, folks.
Jas
How much will this cramp the life-style of many and how much reduction in spending will this alone will cause? Add job losses and my estimate is GDP decline of 2.5-5%, YoY, by mid-year for CA. That is serious recession, folks.
Yes. Very serious. Ad to that many are tired of tyring to keep up with the Joneses and will flee the state ASAP.
But its not just CA. Its every bubble market that is crashing: FL, DC, Las Vegas, Phoenix… This isn’t a one state event.
Maybe people will actually learn to cook and eat right… naaaa…
I work with people from seven states. All of them are whining about not being able to HELOC for this or that… We as a global economy are heading into a serious recession.
Got Popcorn?
Neil
Neil, ya got that right.
Was talking to an accountant friend last week at our son’s LL game. This guy, if he is not making 100K is close. Has to be. Anyway, we are talking economy and housing, etc. and what does he mention? He is hooing that the rate cut last week means he can refi his 2nd mortgage.
WOW!
I just about peed myself! This guy seems pretty solid. However, I realized that it is like a doctor who tries to treat himself or the lawyer who defends himself. Sometimes people are too close to their own situations to make good judgments.
Think of that an accountant with a second mortgage. For what? Then again his wife was sharing w/me about 3 weeks ago how they had vet bills of 7K for their son’s cat. I didn’t have the cajones to tell them to let the cat pass away and tell the vet to eat rocks. Sorry, I love animals, but only a human would get 7K of medical treatment. Not the family pet.
Sorry TX.
He is hooing that the rate cut last week means he can refi his 2nd mortgage.
What’s sad is some of the more ’sensible types’ who were caught up in the mania also took out HELOC’s. Now, they’ve been paying them back. But with recent rate cuts, they’re back to extracting that equity! (How?!? What! Where?) Yea… it left me pretty numb too.
Got Popcorn?
Neil
Here’s a sensible reason.
have a conforming mortgage of $417k, and a 2nd of $50k or so.
BTW, a sensible reason to get an Alt-a stated income, is for when you buy first then sell. That’s been an upgrade strategy in silicon valley; if you sell first then you’ll have to rent for a while, meaning moving twice. plus you have to sell while living in the place, hassle. And there’s no guarantee of finding a place, so you could be living in limbo for a while. A selling contigency? hahaha, the seller would simply choose among the other offers. Buy first then sell was not a problem since the sell would be easy. But, you have to qualify for the new home, so, a stated income would let you qualify for both.
Another reason, mortgage lenders do not count stock option income. If you receive stock option income, as many do, then you can use a stated income mortgage to qualify with your true income.
Anyhow, these are some reasons why Alt-a may not be the problem that subprime is; there’s lots of folks who got alt-a not to buy too much house, but to get a house they could afford. Certainly some qualifed for too much, but we can’t make blanket statements.
“only a human would get 7K of medical treatment. Not the family pet.”
Sorry, Dan, but this made me smile. 7k for vet bills for cancer care or a chronic illness is pretty low by Manhattan standards.
Something you feel should be spent only on “humans”. Really.
So tell me, how much do you blow on your car or cars. An army of New Yorkers wouldn’t waste a nickle buying a car…and I’m one of them. If I have to, I rent one or use a zipcar. Not only the parking hassle, or laying out serious cash for a garage spot, but insurance, gas, maintenance? Now there’s some serious knifecatching…kind of like an FB.
Sorry Spike, both cars paid off. Insurance is $500/yr for both. 2 excellent drivers w/AAA. Gas, I spend $150/month for both. I work 7 miles from home. Sorry, cars aren’t the cost they used to be for my family.
Sorry, Dan, but this made me smile. 7k for vet bills for cancer care or a chronic illness is pretty low by Manhattan standards.
Something you feel should be spent only on “humans”. Really.
Heh. Then Manhattanites spend way too much on their pets.
I don’t mind people who love animals or would rather have them than human kiddos. I get it.
However, I do make a very old fashioned distinction between animals and the human race. OCDan is right - unfortunately the cat probably should have been put down ages ago.
Ironically, I’ve wondered sometimes if I feel more responsiblity to pets than some “animal lovers” because I recongize that they are *not* human and therefore their optimal situation might not be with me.
For instance, I’m not sure I could responsibly have a dog or a cat if I lived in Manhattan. They both need running room (you know, actual outdoors) that’s impossible to get there unless you live around Central Park. So, if Manhattanites really loved animals, why are they living with them on one of the most densily populated islands on the planet?? Very odd..
I’d spend 7k or more in a heartbeat for my dog. But that’s just me.
I was just recently babbling about this lifestyle thing to my husband. The thing is, when the US goes through recession, we don’t really starve and become homeless and die and stuff. We just have to give up a lot of the extra luxuries that we became accustomed to during the good times. For instance, when we lived in an FB-subsidized rental for only 9% of our gross income, we would regularly indulge in top-shelf wine, overpriced restaraunts, yadda yadda yadda. Now that we are paying 16% of our income in rent (just because we moved into a giant house with a view and a stable landlord), we have to make up for it by drinking $30/bottle wine, eating in more often, and cleaning up after ourselves. It’s a sacrafice, but not a hardship.
Gee, I bought a bottle of Fish Eye (wine) for $5 at the store yesterday. $30 is too rich for me.
$30/bottle wind is a hardship??
I hate paying more than $15 for a bottle and I’m at 9% of gross pay.
It goes something like this: “It ain’t a recession if you don’t lose your job”. (Or at least it used to)
?!! Drinking $30 wine is a HARDSHIP?!
(or did I just not notice a snark button somewhere?)
Cheap plonk from Oz does it for me. If I pay more than $7.99/bottle it’s too much. Save the $$ for the Laphroig Cask Strength.
Seriously, Big V. Whats up, money bags with the 30 dollar wine?
Hello, maybe her finger slipped? A little forgiveness on the typos?
We have a local band that sings a song called “$3.99 wine” because the local market has a sign bearing that reassuring legend over a certain shelf. Everybody knows where that shelf is and has read that sign many times. I’m more of a $6.99 beer consumer, myself, but I admit it doesn’t have the same ring.
The median sales price was $520,270 in February, down nearly 11.9 percent from $590,380 in January and 23.6 percent from $680,690 in February 2007.”
What Ventura County land of CFC and AMGN RE can’t go down its the next Santa Barbara.
Math is sound, include x unknown social unrest.
X (un)known prepardness.
Ya just can’t make this stuff up!
Leigh
Here’s the monthly update for the zips I track in Palmdale. It’s getting butchered. ‘Nuff said.
Ok, I’ll back that up with data.
93552 was down 33.9% YOY and 17.6% MOM (211% annualized) to $238K. Now, I realize that prices can’t actually drop 211% YOY, but I really liked the sound of that so I put it in anyway.
Price by the square ft. is down 48.9% YOY and 20% in just the last month to $135/ft.sq. Bigger houses selling for less, that’s what I like to see!
Inventory was down to 20 months, but there were only 21 sales vs. 16 from the previous month. Since sales can’t actually go below zero the nearer we get to null it’s expected we’ll get some big swings. NODs held steady at 203 for the month, only just about 10X sales, 250% increase from prior year, no problem.
93551 also dropped in the inventory figure to just 20 months from 28 previously, but only had 36 sales. Prices dropped 25.8% YOY to $308K.
The AV seems to be getting tenderized early. What happens when the real hurt comes along?
Palmdale was hammered last downturn and it will get hammered again. HUD housing 5 dollars ea.
While I applaud your enthusiasm, I believe houses will be bulldozed or burned/blown up for movies before they will sell in normal transactions for $5.
The best deal I heard of to an individual last bust was a 4+3 HUD in a newer neighborhood for $60K. I’d be more than happy with that pricing, but will be surprised if it comes very close to that.
The best deal I’ve heard of so far this time down was a 4+3 in a hood for $140K.
Dude,
———–While I applaud your enthusiasm, I believe houses will be bulldozed or burned/blown up for movies before they will sell in normal transactions for $5.————
http://video.knbc.com/player/?id=232422
Um…torch?
Leigh
The median price after these price drops are still unaffordable to the average household. Even with 5% mortgage interest rates. Median household income for LA County is ~$60K per year. Using Bankrate.com’s mortgage calculator, that household can afford a $260K mortgage. That’s not including any debt.
So, are we looking at another 35% decrease?
“The median price after these price drops are still unaffordable to the average household.”
There is that, and then there is also the issue of 20+ pct annual gains begin replaced by the prospect of falling knife injuries.
There is that, and then there is also the issue of 20+ pct annual gains begin replaced by the prospect of falling knife injuries.
Not to mention, many of the true middle class industries are toast. The ability to hire in CA for profitable wages… is gone. Hedge funds are weighing in on Hollywood to cut costs, etc..
As jobs flee, it creates a bad situation. Its not like other states won’t volunteer to accept that tax revenue…
Got Popcorn?
Neil
Yup, and with all these heinous cuts to education, we won’t be able to brag about being the intellecual leader for long.
“The median price of an existing, single-family detached home in California during February 2008 was $409,240, a 26.2 percent decrease from the revised $554,280 median for February 2007, C.A.R. reported.”
Number of CA SFRs (2000 Census figure — very conservative, as it ignores the McMansion construction boom post-2000) = 6,883,493
Drop in value per SFR (likely conservative, as the median is less than the mean) = $554,280 - $409,240 = $145,080
Conservative estimate of lost CA home equity wealth over the past year =
$145,080 * 6,883,493 = $1t (rounded to two digits).
Please find my math error before I start to worry.
$554,280 - $409,240 = $145,040 (not $145,080). So, that makes the decline about $275 million less (but would still round to $1 trillion). And that’s just in SFRs. Add in attached (condos, townhomes, etc.), duplexes, etc. and the number is even bigger. As you mentioned, that is conservative (since it ignores the go-go construction since 2000). Go ahead, start worrying.
Sorry — arithmetic precision is not my strong suit. Anyway, $40 / home is swamped out by various other guesstimation errors in that calculation. I still suspect various conservative assumptions I built in make the $1t figure reasonable.
I agree, although I think the $1t figure is actually quite a bit lower than the actual amount of equity lost for California residential real estate. And, the number is going to grow a lot larger as more foreclosures pile up and prices continue their descent.
Here’s the scary part of that 1T, PB. 1 trillion * 1.1% (app. tax rate) and you get 11 billion in lost taxes. Of course, an approximation, but you guys get the point.
Now take that 11 billion and divide by 75K for a nice cushy gooberming job. That equlas 146,667 jobs. Ouch! I know all that money isn’t salaried, but you out of staters get the idea.
Clownifornia is so toast. Add in the 14 billion bucks Ahhhhhhhhhnold is short on the budget and you might as well put a FSBO sign on the CA-AZ border w/that sign facing you as you enter the state from AZ.
You forgot to include the 145,667 houses that would go into foreclosure as these government employees loose their cushy jobs along with another 20-30k lost in companies that support these people.
This leads to more lost taxes and another round of cuts ..
It takes a while to bottom out so your probably talking about more like 30 billion in lost taxes along with about 300,000 jobs at least. Ohh and thats not including all the people losing there homes and not buying anything and leaving the state etc.
guys, you are estimating the 1t like it wasn’t all paper wealth to at least SOME of the Californians living in houses. I think you have to factor in at least a 50% portion of the 6M houses that had owners who did not HELOC. For them, equity rose on paper, but it fell on paper too. So even thought .5T is bad it’s only half as bad as you are estimating.
The tax computation is not right, due to prop 13. Houses bought pre-04 or 05 are not taxed at the current value, as they are taxed at the purchase price plus 2% per year. E.g. a house bought in 99 may have a basis of half the current value. So the value reduction only reduces the assessment of recently purchased houses, while the ones purchased pre-peak continue to go up 2% per year.
“Autumn Melstrom, who had been renting a house with her husband as real estate prices surged, plans to close escrow at the end of this month on a Costa Mesa home. The property, she said, appeared on a ‘best buy’ list, and she and her husband were able to meet the offered price.”
___________________________________________________________
Well, if it appeared on a ‘best buy’ list, it must be a sweet deal. Plus, to top it off, they had the good fortune to meet the offered (aka list) price. If her name is any indication, she will get caught in a maelstrom come this fall.
OT–
Between the cities Santa Barbara and Goleta lies the unincorporated area of “Noleta” — which name means that the area’s residents have persistently voted “no” to Goleta annexation. Noleta is dominated by modest tract homes built during the 1950s and 1960s. The bric-a-brac architectural ornamentation there resembles that of the Anaheim and Garden Grove areas around Disneyland — an area that was developed during the same era, of course.
This week at the Santa Barbara Housing Bubble Blog: a tale of a typical Noleta house, located on Cinderella Lane. The house was last purchased in 2005 by an unmarried Hispanic woman without down payment. (Her two mortgages were, unsurprisingly, tossed into a pass-through pool.)
Saint Barbara
lol, “the nether region” followed by an entry called “the blue pill.”
Been reading too many Eliot Spitzer stories?
txchick, you’re about two thirds of the way to understanding a triple entendre.
Saint Barbara
“‘I’m in a really good position as a buyer in a market where no one wants to buy,’ said Brimer. ‘I can go out and make good deals.’ Median home prices throughout Costa Mesa were down more than 20% last month from the same month a year ago.”
A lot of good folks are going to get creamed with this line of thinking…
I have a client in the process of negotiating a Riverside buy, would not heed the advice too wait 6 months…the uptick announced today did not help the logic of my argument…oh well…
I see a whole new wave of foreclosures for the IE, as well as other areas similar to it. These new buyers are setting a whole new low for comps, which in turn are pushing current homeowners to throw in the towel. Any vestige of hope will be decimated. Hearing a lot of stories of homeowners, who are current on the mortgages, thinking of walking and getting back into the market later. Makes sense when you think about it (though morally tweaked) My bro-in-law has a friend who did just that. Now that house will sit vacant for a year waiting for the bank to act. The point is any uptick in sales activity will be due to drastically slashed prices, which in turn creates a whole new wave of walk-away foreclosures…….and these foreclosures have nothing to do with subprime, which will continue in earnest.
This has only just begun.
I would not want to ever buy back into the IE. However, I will say this. For anyone wanting to buy in, give it another 2 years, AT LEAST! Thismonth’s DQ stats are downright scary for the IE and with all the resets and 125 degree temps. this summer (90 yesterday and we aren’t even in April, YET) and many are gonna walk, esp. with those hot 90 mile commutes.
By 2010, homes will be back to 100-125K for most everyone. The top enders will reach 275-300K, but no more.
OCDan has it right.
The Inland Empire has job in warehousing (at what, $14/hour?). The rest are “super-commuters”, construction, and retail. As another poster noted, if you get more than ten miles from the beach in California, why aren’t you moving to Texas for better weather?
2 years is the minimum wait…
Got Popcorn?
Neil
I know TX doesn’t want me in her state, but I have looked. Crickey. I know TX still thinks here state is overpriced, but at least 125-150K gets you a home. Here you might get a doghouse and Neil is right on about being near the beach. If you have never been to the IE just imagine the moon with extreme heat and a ton, and I mean TON, of smog/air pollution. Then factor in the Santa Ana winds.
How did I ever live there for 10 1/2 years?
Gor fresh air (cool air)?
The weather in CA is good in the northeast part by lake tahoe and the sierria mountains. I do agree the valley region(including death valley) sucks!
It’s either coastal CA or the northern part away from the valley.
It’s either coastal CA or the northern part away from the valley.
You are correct. I’d live at Mammoth lakes any day. Now paying the mortgage is a whole different story…
And yes, there are valley’s here and there more than 10 miles from the coast. But I’ve lived in quite a few states in my life; its not a bad thing to mix it up and move! If I could, I would consider DC… bummer that bubble is scaring my company’s jobs out.
Cest la vie.
Got Popcorn?
Neil
I think OC Dan isn’tlooking at this from aperspective of acceleration. This train gained significant speed and with speed, momentum. I’d give the prices he quoted until Dec. this year, not 2010.
When I moved from Orange County to Sacramento in the summer of 1998 I thought I’d die from the heat. Now I am used to it. When I have to go back east in the summer I’m prostrated by the humidity. I grew up in Detroit, and loved it. You can get used to anything, as along as you are surrounded by people who care about you. That’s why I think, Bye, that you should think long and hard about moving all alone just to get a cheap nice house. Sounds like you have a pretty great family in Florida. Any way you can get them to move with you?
“Hearing a lot of stories of homeowners, who are current on the mortgages, thinking of walking and getting back into the market later.”
Gawd that sh@t really chaps my a$$. If anyone is found to walk without there being a case of fraud AND tax records show income such that PITI
(dangit! cut off in the middle of a rant!)
And cut off again.
…such that PITI is less than (it was a less than sign that did it) 40% of gross income should be banned from buying for 15 years. Why should anyone have to compete with these a$$holes again?
(I’m not supporting lenders here. They took the risk and lost so eff ‘em as well)
/rant off (for now)
In the area of 92263-92264 the drop doesn’t seem to be that big, depending on the neighborhood within those zips.
And the indian wells neighborhood doesn’t seem to be cratering either. Waiting waiting waiting..
I have a client in the process of negotiating a Riverside buy, would not heed the advice too wait 6 months…the uptick announced today did not help the logic of my argument…oh well…
No big deal. Someone has to set the comps. Thank your client for taking one for the team!
“When T. K. Brimer bought his new home in Mesa Verde this month, it had signs of trouble all around. The copper plumbing, toilet and mirror had been ripped out, and one room featured expletives spray-painted around the walls, though Brimer couldn’t tell whether that was the work of the previous owners or just a hot-tempered group of vandals.”
Sounds like the work of methigoths, getting 2 Cents on the Dollar for their efforts…
The meth-heads are like the zombies in Shaun of the Dead, ever-present and unaware of their own decay. These empty houses are NOT good.
Dude! T.K. Brimer owns the Froghouse surfshop. I buy all my surf stuff there.
It is a classic outfit, they vacuum the carpets twice a year whether it needs it or not. Good prices, but they always seem to be on a credit hold with the surf vendors for custom orders. Hmm…
However, I wish I could have set him straight on the stupid housing bubble. But hey, we need knife catchers to set new comps.
Ha!
http://article.nationalreview.com/?q=MzQ4YTgwYTk2YmI2YTQ1NDQ5YmI5M2Y1ZDIwOWQyMzM=
Does he not see the hypocrisy of his own statements as he talks about the market at work (sales of homes rising because prices falling) and then thanking BB for slashing the Fed funds rate? And, yeah, systemic risk is gone; that’s why the Fed had to negotiate and backstop the fire sale of Bear Stearns last weekend. What a moron.
Ha! indeed…
Kudlow is such a right wing Neanderthal that he will never see the irony of the big welfare programs helicopter Ben has tossed to Wall Street, for a cost to be later determined and foisted upon my children.
Get used to the Kudlows of life. Fer sure, the mope is on CNBC, what would you expect?
Mr. Kudlow is so far removed from the playing field, his perception of the economic world has no factual basis.
His limited education at Princeton and his role as a clerk at the Federal Reserve in NY during the decade of stagflation should have given him a better insight into economic realities, but his addictions to alcohol and cocaine seem to have rotten his brain.
Oh. My. God. Revisionist history at its best.
If this guy’s so smart that he writes an economics column, why does he have a mortgage, let alone an ARM?
–
“In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 5.4 percent, or 14 out of 257 cities and communities, showed an increase in their respective median home prices from a year ago.”
Isn’t that a gem?
They have only been reporting this for the past few months I think. I am sure that due to high volatility in prices we may see 10-20% cities with YoY gains in not too distant a future.
Separately, on CNBC-World from Oz they are reporting that Ben Bernanke’s house in DC has declined in price since he bought it two years ago. Now, that is a personal pain that Ben could relate to.
Jas
Ben bought a house 2 years ago? How much does he make anyway? Did he use a mortgage?
Partially revealed on Slate. He’s worth between one and five million or more and had been making just under $300k/year from Princeton. Oddly enough the Federal Reserve act specifically calls out the salary for Board members as $15k/year, but that has almost certainly been increased.
I think they get a bunch of stock too.
“The ordinance, introduced by Supervisors Gary Ovitt and Brad Mizelfelt on behalf of Assessor Bill Postmus, would allow the seller of a home in another county to transfer the property tax bill on that property to a home bought in .”
“If, that is, the seller is at least 55 or permanently disabled, and the value of the home purchased is not greater than the value of the home sold.”
Sorry, i just couldnt resist this one….
Would it not be sensible that anyone buying a home right now in San Bernardino County could make the case for being permantently disabled??….and therefore eligible for the tax break……
To REHobbyist, AZlender, and SFBayQT:
I forgot to get your e-dresses at the East Bay HBB party on Sunday (I already have Mole Man’s). If you want, you can e-mail me at BigVHBB@gmail.com and send me your info. That way, I can contact you directly the next time I want to throw an update party.
Thanks,
Big V
Sounds good to me, V. I’ll be sure to get my email addy to you.
BayQT~
LA County down 20%, San Diego down 24%, Ventura down 23.6% - these are some absolutely incredible drops, and substantially sharper than even my most optimistic predictions of a year or two ago. I’ve a feeling that the non-fringe parts of the Bay Area will be enjoying similar declines within 12 months! I’d love to put some money on it. Has Wall Street managed to innovate a way for us to short the Case-Shiller index yet?
Yes. There is an index called the S&P housing index, and an ETF (or mutual fund?) that shorts it. If I had learned about it before the collapse, I would have gone all in. I can’t remember the name of it, but if you can access the Fidelity site (like if your company keeps its 401k there, for instance), then you can find it.
I read the headlines, and it sounds like disaster. Yet, I look around, and good houses still sell in 3 weeks in silicon valley. Even bad houses in good locations. And the number of jobs is up 1% from last year. Not booming, but not down. I thought that the jumbo crunch might do it, but no, jumbos are still available to qualified buyers, and there seems to be no shortage of people willing to throw down $1.5m. Puzzling.
This is much worse, or much faster than I’d ever dreamed would happen. Could we have some of these price drops in the north east please?
I’d like to buy a house at half price or less. 
That is if my bank will honor the withdrawal of my down payment. 
Strange, I see “for sale” signs everywhere. Also, it’s not the number of jobs that counts, it’s the unemployment rate, which has been going up for a couple years now. SiO2, I think you’re focusing disproportionately on every bit of news that seems prohousing, and sort of trying to ignore the obvious decline. While there are more people here with money in their savings accounts, there still aren’t enough of them to buy all the overpriced houses on the market. The Valley’s middle class is going to spend every last silicon dime they have trying to hold on to their houses because they look at that lame attempt of a tech-bubble bust and think “RE never really goes down in the Bay Area”. They will be unpleasanlty surprised when they learn that the twin bubbles cannot be reblown. I think the crash here will be a short, sharp shock instead of a protracted decline.
Hi Big V, it probably depends on where you are looking. For sure, lots of for sale signs in Pleasanton, Livermore, East SJ. Not where I want to live though. Not many in Saratoga, Los Gatos, Los Altos, Cupertino.
I am certainly more optimistic than the average poster on this board. Nonetheless it is good for me to see an alternate view of the world.
I am just having a hard time reconciling what I read here with my everyday life. I went to Starbucks this morning. The line was too long so I abandoned that plan. I went to Costco last week, packed. The amount of traffic is the highest since 2000, and the roads and transit have been improved since then. Intel raised its dividend. My company is paying bonuses and raises. Not huge, but something.
The 2001 recession hit Silicon Valley harder than the rest of the country, or even the rest of California. I suspect that the 2008 recession will be the opposite. The reason is that Silicon Valley exports a lot of product, so it’s relatively cheap to non $ purchasers.
We’ll see. Earnings reports next month will be interesting.
Final note about jobs. When unemployment rate goes down, some point out that it’s because of the number of people giving up and stopping the job search. When the number of jobs goes up, some point out that the unemployment rate is what matters. So which is it?
Yes- signs of the recession… my husband and I went to Kemah on Saturday- a local Coney Island-type place in Houston, and faced unbelievable crowds waiting for hours to get in to a slew of expensive restaurants. We laughed about how it would be worse if it weren’t for the recession. But, I do believe that it’s the last hurrah for a lot of folks… not all, but many are pushing those cards to the last remaining centavo. The truer measure of people’s curtailed purchasing is reflected in local car dealership’s ads, offering 5 years of 0% interest payments. Now you know, even if they work a cut into the price of the car, that’s still hurtin’. A builder in our area is giving purchasers a BOAT if they buy one of their Italianate sea villas. I think people are spending their “stimulus incentive” right now. I sure as heck hope that banks have better sense than to loosen up HELOCs again, but that’s like hoping that sharks won’t want to eat.
There should be a mandatory law that no one can buy a US house without at least 20% down. That would put a stop to all this crap. Make it so that “buying” or “owning” a house means something again.