‘Too Many Options’ In Your Housing Market?
What do you see in your housing market this weekend? Builder incentives? Homes not selling? Open house observations? Here is one some data from a reader: “OC #’s: Home sales to March 27: Prices +8.4%; Volume -25.1% Fresh DataQuick data strongly hints that March was the fifth straight month where the volume of O.C. homes sales couldn’t match the previous year’s sales pace.”
“If the $622,000 median price for the 22 business days ended March 27 holds as the final March figure, it would eclipse December’s record of $621,000. However, the 8.4% annual appreciation rate would be the lowest since November 1999.”
And from a TV station in Washington. “Across the state in the Mid-Columbia, home buyers almost have too many options. Right now there are more than 1400 homes on the market, but realtors say don’t let that number confuse you. It’s the highest number on the market ever in Tri-Cities and now home buyers have more to choose from.”
“The Tri-City Association of Realtors says the average price of a house in the Tri-Cities is $175,000. Realtors are selling about seven houses a day.”
SD Ziprealty inventory is now at 18,480 — just 800 shy of the 19,280 high level of 1995 (and maybe past it if you add in FSBOs and the huge amount of soon-to-be-completed new construction). Interesting note: Only seven homes shown with today as the listing date; is Ziprealty delaying their updates in order to avoid the perception that a bubble is bursting? (Kinda brings to mind corporations which always wait until after the closing bell to break bad news…)
Zip Realty only updates once a day. There is about a 24 hour lag between a listing appearing on the MLS and Zip.
I was in downtown San Diego this week. I couldn’t believe the number of condos being built down there. Are these showing up as listings?
I see a large expansion in the number of homes advertised in the classifieds of papers such as the coast news (covering north county san diego). Some have agent names, others don’t, but I’m seeing probably a tripling over the past few months. Lots of them are in Santa Luz. 25 words in print to try and sell a place for 1.7 mil - good luck with that!
Here’s a flipper stuck with two houses near Cottonwood, trying to rent or sell.
Verde Santa Fe New. 3br 2ba 2,200 sq ft. Granite counters, tile Lease/purchase $1,600
Verde Santa Fe New 3br 2ba 1,600 sq ft. Every upgrade. Lease/purchase $1,100
I understand these new homes sell for around $450-500K.
NOT TO ME THEY DON’T!!
do you really think they paid 450+ for these? if they did..this is absolutely nuts!
Here’s an anecdote which might put what’s REALLY going on in Orange County in perspective.
This is a TRUE story, and it happened this last Thursday.
My good friend, who is a loan processor at DiTech, heard a scream go up from a girl a few desks down.
She went over to ask what was going on.
“These freakin’ homeowners! They’re nuts! And they’re driving ME nuts!”
So my friend asks…
“What happened?”
“Well, these people in Costa Mesa bought last summer for $900,000. They were in one of those stupid loans from Countrywide. Now they want to get into a 30 year fixed…but…they’re nuts!”
“How are they nuts?”
“Because of the freakin’ value NOW. I sent out an appraiser, one of OUR appraisers- even though they wanted to use THEIR appraiser- and the value came back low.”
“Really, how low?”
“Like, $150,000 low.”
“Oh shit.”
“Yeah, so that means that to get into a fixed rate loan, they’d have to bring $150,000 in. Freakin’ stupid homeowners! I spent hours on that!”
“So, their home here has already lost $150,000? In Orange County?”
“That’s what our appraiser said.”
“Wow.”
True story.
Therefore- the median price means ABSOLUTELY NOTHING RIGHT NOW in terms of REAL VALUE.
This story blew me away.
These people here in the OC aren’t going to know what hit them.
ALL HELL BREAKS LOOSE IN SEPTEMBER.
i see a rush of panic closer to 4th of july. however, oc and wLA may be more on your timeline.
what they need is 5 or 6 more appraisers until one of them hits the number
Thats close to a 20% drop. That’s interesting. But then your hear places like Thousand Oaks and areas like that are still selling balls to the walls and prices are still appreciating.
I wouldn’t say prices are ‘appreciating’.
Homes that have been dramatically reduced are selling, as are homes where the owner took a big cut off the list to sell the house.
The median price does not reflect reality, and won’t for at least 7-8 months.
Your right appreciating is a bad word and you wont see the esults of current sales for a few months. The reason I said that is I know of someone that is dragging her face to the ground trying to find something in Thousand Oaks and she says she’s still being outbid or everything is sold by the time she get’s too it. All the while not seeing a reduction in asking prices. My comments of wait a year are being me with this glassy eyed stare and a mumbling of I gotta do it now while I still can. At that point you just gotta smile and wave cause I have presented this blog and other evidence. But what can you do
Does your friend know how to use Zip Realty?
There’s 682 listings in Thousand Oaks, with 123 reductions.
Maybe she isn’t using the internet in her home search.
Is that a possibilty?
If it is, ask her if she has indoor plumbing, or electricity in her dwelling.
I can’t even imagine going shopping for a home without studying Zip Realty first.
If you introduce her to it, I bet she’ll be singing a different tune next week.
p.s…
Here’s one she should focus on…MLS #: 109569
It’s been on the market for two months and 10 days, with a reduction from $779,000 to $739,000.
Looks like a wounded duck.
Can’t fly, but might be able to walk.
I’d tell her to watch this one for another three months, and then go in with an aggressive 40% off lowball offer from the then list price.
List price in three months= $680,000.
40% off = -$272,000
New price = $408,000.
If the guy won’t go for 40% off, counter with 30% off, and hold.
Have her tell the guy to keep her number, and call her back when he gets real.
He’ll call her back.
Big ball lowball with giant brass balls.
That’s how you work a buyers market, folks.
I agree, she supposedly is using zip reality. I have also set her up with stuff that is available for clients off the MLS. So information she has plus she can call me with any research questions. But yet with all that she seems to be having problems frankly I don’t know what the problem is and don’t really care. I have a sneaking suspicion she wants me to be her listing chauffer. But my days of connecting Tweedle Dee and Tweedle Dum for sfr’s are long over especially under these conditions and in a market an hr away. Not gonna happen. But I will forward her those MLS numbers or maybe she’ll see my reply and research them herself “hint” “hint”
Send her to this blog, and this thread.
‘Friends lead friends to Ben Jones’ Blog.’
That’s what I always say.
Auction that was done awhile ago wat is that saying you can lead a orse to water bt you can’t make them drink it or something like that.
Whew I need either a edit button or refrain from typing whilst enjoying beverages. Hopefully you get the point and I don’t have to retype it.
Auction; Whew !….
If the guy won’t go for 40% off, counter with 30% off, and hold.
What a great strategy !! Maybe you should put it paperback…
Don’t kid yourself, these people are millionare home owners, not!
Can we keep the two BMWs and the boat and the jet skis and the Vacation Home and the timeshare at Disney etc. etc. This cannot end well.
Don’t kid yourself, these people are millionare home owners, not!
Can we keep the two BMWs and the boat and the jet skis and the Vacation Home and the timeshare at Disney etc. etc. This cannot end well.
Oh forgot Harley. thanks Mr. Bubbles
Just remember this, Mr. Potter: that this rabble you’re talking about, they do most of the working and paying and living and dying in this community. Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath?
Too many options? No, just one: Sit it out!
you can never have too many options…
On Saturday’s, the San Jose Merc./News has a large realestate section….Builder’s advertize from Merced to loomis and of course in the SC Valley…Anywho,
DR Horton is “Slashing” prices between 60K-80K on houseing asking between 330K & 450K….He also is advertizing 4.6% financing….
Lakemont Homes in Reno are cutting by $50K.
“Right now there are more than 1400 homes on the market, but realtors say don’t let that number confuse you.”
Add buyer confusion to the excuse list. Apparently the number of homes in inventory exceeds the processing power of the typical buyer’s brain.
Makes sense to me.
test
I found this to be interesting
By Robert Prechter, Steve Hochberg and Pete Kendall
April 4, 2006
Whatever You Do, Don’t say D-O-W-N
February was another bad month for the housing industry, as sales of new homes plunged 10.5%, the biggest drop in nearly nine years, while prices fell and the number of homes on the market hit a record high. This has to be the real estate toboggan slide we’ve been expecting. In concert with the turn, the government is setting its sights on lenders. “Brokers who arrange home loans at high interest rates [are] drawing scrutiny from law enforcement authorities,” and federal regulators are cracking down on the Federal Home Loan Banks in a way that threatens to shrink a subsidy long enjoyed by thousands of lenders.” New rules proposed by the Federal Housing Finance Board would require the banks to retain more of their earnings as capital to build up a bigger cushion against potential losses. These news items mark a tidal shift away from the feverish “sub-prime” lending climate that EWFF profiled in the July and September issues. As Barron’s notes, “Teaser rates have expired. With house prices no longer soaring, [mortgage borrowers] can’t easily cash out or refi.” Keep this quote from our July issue in mind: “This time there is no mistaking who the Enrons of the bust phase will be. They will be the firms now peddling adjustable-rate, no-interest/nothing-down and assorted other types of ‘sub-prime’ mortgages.”
And still there is virtually no fear about home values. A recent national survey of homeowners by the L.A. Times shows “widespread faith in the real estate market.” A question about expectations for house prices asked only about the predicted amount of future rises and did not even include a category that allowed for expressing an opinion about any decline. The worst possible scenario, that prices would “stay the same” over the next 3 years, was selected by just 5% of homeowners. That total was less than the 6% who said they expect to see a rise of “31% or more.” No matter how much talk of a bubble there may be, homeowners continue to demonstrate that they have no clue about the ramifications of one. Included in the survey were respondents with adjustable-rate mortgages, a quarter of whom said they “aren’t sure they’ll be able to make their monthly payments if interest rates go up.” Even among the financially strapped, the very concept of falling real estate prices is not a consideration. And, as the latest housing figures attest, this is in an environment in which prices actually are falling! The denial runs so deep, it’s not even denial anymore. It’s some kind of epic disconnect between the reality of a newly-falling housing market and an unwritten social contract that says home prices do not fall. Whatever this delusion is called, it cannot last much longer.
“Even among the financially strapped, the very concept of falling real estate prices is not a consideration. And, as the latest housing figures attest, this is in an environment in which prices actually are falling! The denial runs so deep, it’s not even denial anymore. It’s some kind of epic disconnect between the reality of a newly-falling housing market and an unwritten social contract that says home prices do not fall. Whatever this delusion is called, it cannot last much longer. ”
The unpoken social contract speaks volumes to me. Every time I bring the subject of over valued housing up with friends I usually get these blank stares even as these inventories are ballooning and prices are actually falling. It’s the strangest thing I have ever seen.
Yeah it is strange and brings a strange aura to the room. I don’t know if it’s sudden realization that they are screwed or just a bizzare moment of focus to further entrench the mantra that real estate can only go up.
Whatever we do, don’t say buy.
Last night I caught most of a UCSD (Univ Cal San Diego) TV program- Christopher Thornburg’s (UCLA Anderson School of Econ) Feb 16 06 talk on RE prices. We’ve seen the printed reports widely discussed. What does not come across in print is the tone, jokes, body language. This guy is very entertaining, handsome, personable, young, intelligent. He spoke for an hour. Showed a lot of graphs and tables. He stressed over and over, we are in a BUBBLE of unprecedented proportions. He did not predict a pop but instead says we just do not know what will happen. Definitely do not expect any appreciation for many years.
Brad; Any pod cast access to this presentation ???
Ben, maybe you could find it….
i live in sonoma county,last month we had a 9 year high in inventory,and a 5 year low in sales….todays paper had 4 pages of ads for new homes,tract homes from 600k to 1.6m. no incentives offered,looks like 1,000 or so new homes total.our population is flat,and wages declining for 5 years,underwriting is a lot tougher than it was in december when 7% of our population could afford the median home…..it should get interesting by the end of july here.
Barron’s has article today called, “Bubble? What Bubble?” It is page L10 (mutual funds section) Written by Christopher C Williams, interview with ALpine Woods’ Samuel Lieber. I don’t have the link, I but it at newstand…
Any publicity is good publicity. As long as people are talking about it visibility will continue to increase.
I see a boatload of overpriced open houses, tons of trucks with ‘for sale’ sign posts hanging out the back. I see that we’ve run out of idiots. Chandler, Arizona.
The Phoenix Ziprealty is at 41,313 today, up over 1000 listings over the last few days. Any word of falling prices?
41,313. let me swim in this for just a minute.
50,000 by may 27th at 2:35 pm california time.
In Orlando the “Bored of Realtors” always speaks of growth in the Metropolitan Orlando Market, (6 counties)but when it comes to how many listings there are they only refer to the primary 2 counties. They state that they have 12,000 listings when it is well over 30,000 at the moment. And add another 30,000 FSBO’s, 800 numbers, for rents that are also for sale, builders specs etc. That will leave you with an inventory of about 3 years. That is if someone would just buy the first one.
Some markets may just simmer for a while, but Arizona is seriously overbuilt right now. There is no getting around all these empty, new houses.
My wife and I will be moving into a rental house next week in the Phoenix area. We signed a one year lease to fight the urge to buy at the first sign of a decline in price. We will have a front row seat to the Bubble fireworks.
Things are selling pretty quickly in Fremont. I’ve been tracking numbers Since Feb 5th and last week was the first time that there was something under 500k.
I treat that as a good sign.
Never underestimate the ignorance of the average American consumer. Buy purchasing stupidly, they have single-handedly kept this country’s (and the world’s) economy going, god bless ‘em. These folks have no earthy idea about finance. They don’t understand asset valuation. They only know one thing: “Can I afford the monthly payment?” They will keep buying homes, cars, boats, Harleys and other crap until something or someone comes along and forcefully removes what little credit and liquidity they have left. In summary…be patient.
Well said! Stupidity doesn’t fall far from the mortgage tree.
You must be talking about SFR, about 70 results pop up in creaigslist for fremont
http://www.craigslist.org/cgi-bin/search?areaID=1&subAreaID=0&query=fremont+&catAbbreviation=rfs&minAsk=min&maxAsk=500000
A house just came on the market in my neighborhood. It is about 2 years old. It was a spec house that took the builder forever to sell. It sits about 50 feet from a train track (a spur line that is not too busy, but is loud and causes a lot of vibration). This house sold for $860K in June of ‘04 (over-priced then). It is now listed for $1.3 million. The Zillow value is about $927K. They are using an out of town realtor.
“The denial runs so deep, it’s not even denial anymore. It’s some kind of epic disconnect between the reality of a newly-falling housing market and an unwritten social contract that says home prices do not fall.”
This quote is so well written and so tru, I had to copy it to highlight it. Wow.
What’s amazing is the tenor of the news just on this blog has changed so dramatically in just a month or so. From maybe…to wow, this is really happening tone to our postings.
Simmsays…
http://www.AmericanInventorSpot.com
AmericanInventorSpot.com
The great condo dump began this week in little Bellingham WA. Here’s the inventory numbers for one of the zip codes:
April 6: 146
April 7: 165
April 8: 239
Can’t wait to see where this one’s going!
Single family in 32578 (Niceville, FL) is up to 285 listings. It had been in the 220s not so long ago. Asking prices are up slightly in ‘06 and sales prices are flat to up 1-2% even while numbers of sales is very low.
There seem to be a lot of unmotivated sellers on the market right now. They’re comfortable with their pre-boom mortgages and don’t really have to sell but fighred if they could get their price, it might be worth it. Not many people flipped SFH here in 04-early 05 when all the speculators were driving prices sky high at the beach.
I don’t think we’ll see asking prices going down until military transfer season gets into full swing, when you’ll get sellers who actually do have to sell put properties on the market.
Henderson, NV
“Anthem”
Visiting friends way up toward the top of the hill. Saw house 4sale (by Realtor). House on bluff with magnificent city view. 1 1/2 yrs old, never lived in, 200k upgrades. Took brochure. List price 850k. This house would have been 1 1/4 million last year.
Agent showed up with client. We tagged along. Agent said owner is an Indian (the smart kind) from LA and needs to dump it.
LOL
dookie2-
If that was meant the way I think, please confine remarks like that to the kkk meeting. If I’ve misunderstood, my apologies.
As to smart, maybe it would be best to reread the 1st paragraph.
culver city condos - from about 41 units 6 weeks ago to 64 today. that’s a crack in the dam
Well, just my luck. Took me 30 minutes to put together something to post here and it doesn’t appear. So now I am tired and I will keep it short. Maybe that’s a good thing…
Visited Seal Beach yesterday to look at open houses. Might move there in a year or two.
1st house on the hill, clean but overpriced and close to PCH. DOM 60. Asking 925k I bet 25k will be shaved off by next month.
2nd house on hill, total fixer that now has “range pricing” which essentially means they will take 50k less, realtor looked desparate told me to make an offer. I laughed. Said I will be by next year to give her 100k less.
3rd home on ocean side of PCH, old bungalow reduced by 70k. Decent lot but home needed work.
In summary, already seeing many price reductions. This year should be VERY interesting.
OCKurt….We looked for there for quite some time ourselves….Went away shakeing our head every time…Came to the conclusion “Its just not worth it”…Will invest the cash, aviod the property tax and just “Rent A NICE place” when we need our beach side fix…
I don’t blame you. Stretching to buy a place is always stressful…especially when the house is 50 yrs old…
We wern’t even stretching…We just came to the conclution it did not make sence in that it was going to be a 2nd home…
Must be nice not to have to stretch to buy SoCal beach property…maybe I’ll get there one of these days…
Combination of taking some risk and being lucky…
What happened to the “Tight Supply of Land” the NAR always talk about. Did these guys lie to us hard working tax payers. Say its not so…
Im listening to Bob Brinker show today (Sunday!)
The host Terry Savage recommended to caller from Sactromento.
Dont buy today, wait a while and find a home from a defualted I/O Holder going belly up. WOW!
I’m seeing so many houses on the market in Ann Arbor MI I wouldn’t have the time to go to all the open houses, but I don’t bother trying to see *any* of them because almost all of them are even more overpriced than they were last spring. I went around last weekend and saw very little foot-traffic at 8 or so places, but didn’t feel like going today. It’s hard to want to go when the listings are new so you know they wouldn’t budge on price yet, and you don’t really feel like smiling and pretending that the listing-agent can be serious about the asking price. Maybe next week I’ll check out a couple and ask if they’re for real.
Meanwhile the new house section of the paper is listing all sorts of ‘prices slashed’, 15K off select houses, 5K in upgrades, etc. No plasma tvs or cars though; they’re sorta back to the spring game face. One will pay our mortgage for 6 months and our closing costs, but no plasma for us post-superbowl. And no more little blurbs telling the buyers they need to start showing up. I also notice that the pitch is more toward the upperend this week, showcasing the most expensive homes and not too much out there in the starter category.
Very little advertising of price reductions, but they’re happening. There’s this one sorta busy street in town that’s maybe a mile long with like 15 houses for sale on it and a whole bunch of them cute little “new price” minisigns…
cheers!
I just posted the March YOY sales trends for my area (beach cities south of LAX). The first three months of this year show some housing market weakness, but the sales data so far for April (not yet in the charts) is showing some resumption of strength. It is too early to tell if this rebound will have legs or not. I will know more by the end of April. In the meantime I will not be surprised if I see stories and real estate ads in the local beach papers trumpeting how the housing market has recovered from a first quarter slump.
I have noticed only a small handful of homes that have had listings expire and are relisted at lower prices, so reports of DOM don’t seem misleading - yet. Any price reductions are still very minor. Even average DOM has been practically flat YOY for all the beach cities, though for specific cities and for specific housing type (condo), it is quite a different story. Still lots of sauce covering up the smelly fish, IMO.
Oops, meant to sign this as “bearmaster”, sorry!