‘Something’s Got To Give And It’s Likely To Be Prices’
Some housing bubble news from Wall Street and Washington. “Ryland Group Inc. became the second home builder this week to lower its 2006 profit forecast, and analysts tracking the sector expect more negative pre-announcements as the housing market cools. The Calabasas, Calif., company late Wednesday reported that second-quarter home sales are running 35% lower than last year’s.”
“This is the second time Ryland has reduced its profit outlook for 2006. ‘We do not expect Ryland to be alone in announcing sharp declines in orders and [we] expect more preannouncements in the coming weeks,’ wrote analyst Daniel Oppenheim. ‘It appears to us that Ryland’s business strategy of holding the line on pricing at the expense of volume in order to protect margins is leading to [worse-than-expected order declines] in today’s more competitive environment,’ said (analyst) Carl Reichardt.”
“Analyst Gregory Gieber noted Ryland is the first builder to guide to a year-over-year decline in per-share earnings for 2006. The company’s second-quarter earnings estimate is less than what its backlog of homes awaiting construction would indicate, ’suggesting that Ryland has seen a surge in cancellations,’ said Gieber.”
“Three of the scariest words in economics used to be ‘inverted yield curve.’ The inversion early Wednesday was different than the inversion that occurred late last year and early this year, when the 10-year Treasury yield fell below the yield on shorter-term Treasury securities.”
“Wednesday’s inversion came as the 10-year yield fell briefly below the fed funds rate, the Fed’s short-term rate target, currently 5 percent. It was the first time that’s happened since April 2001, the last time the country was in a recession.”
“Under scrutiny for questionable accounting practices beginning in 2004, mortgage giant Fannie Mae quietly tried to turn the tables on its federal watchdog by flexing its lobbying muscle and enlisting congressional allies to fire back at investigators, according to a report.”
“In particular, the lending giant won help from Sen. Kit Bond. Twice in 2004, Bond did the company’s bidding by asking the Department of Housing and Urban Development’s inspector general to investigate the Office of Federal Housing Enterprise Oversight, the HUD agency that was investigating Fannie Mae at the time.”
“The revelations about Bond’s involvement in the issue were tucked into a 340-page report Fannie Mae’s federal regulator released Tuesday before announcing that the lending giant would pay $400 million in fines.”
“‘I think the company at the highest levels thought that the HUD Inspector General’s report would discredit or show the lack of objectivity in the OFHEO report in September or at least the preliminary report,’ Duane Duncan, Fannie Mae’s top lobbyist, told investigators, the report said.”
“OFHEO investigators found on Fannie Mae computers a draft that was nearly identical to the Bond letter but was dated two weeks before the actual letter was sent, according to the report. Duncan confirmed in testimony that Bond’s letter was sent at Fannie Mae’s request.”
“Washington Mutual will lay off about 550 workers this summer at its regional operations center in Baymeadows. The local layoffs weren’t the only ones announced Tuesday. ‘We also announced 850 additional jobs [will be cut] for the same unit for a facility north of Seattle,’ Nova Barnett said.”
From the Associated Press. “The median price of homes sold in April rose 4.2 percent from April 2005. That represented the smallest year-over-year price gain since September 2001. Sales of condominiums fell 2.7 percent to an annual rate of 839,000 units.”
“The sales price for condominiums fell by 0.2 percent, the first year-over-year price drop since the spring of 1995.”
“For April, the total number of unsold homes hit a new record of 3.38 million units. ‘Inventory levels are simply out of sight,’ said Joel Naroff, chief economist at a private consulting firm. ‘Something has got to give and that is likely to be prices.’”
Every bit of news out of the major Wall Street home builders seems to be of the downward-revision sort. It seems a bit surprising that the stock prices of these companies are so resilient to bad news, but I would guess that it will eventually be reflected in a reversion to (lower) fundamental value.
The stocks were never really high flyers independent of the underlying assets. They won’t fall until the asset falls.
For the record, Raines is a Democrat who serviced public office under Clinton before taking over Fannie Mae. Both parties are rotten to the core and are corrupt as hell.
That is the truth!
Ding!!! Give that Guru a Kewpie Doll.
Ted - I disagree…
These stocks CANNOT deliver consistant earnings, are local {market share what a joke} & dependent on financing markets.
Although the P/E at the top was near 8-9…the earning part of P/E will never NEVER NEVER never repeat!
Thus showing the valuelessness of valution comparisons of a stock P/E @ 8 { as value or not over valued while GOOG @ 65 P/E is a high P/E……
Try looking at Historical P/E for sector / company!
OH and these stocks quardrupled over 3 years due to assets?
HARDLY!
AS I said before the Home builders were over sold and Interest rates are due for a reversal bounce OR more also!
After these fellows test their neckline breaks, the P/E’s will be granted an expansion of the exponential order ……Due to lack of positive earnings….like the airlines…..that for some unknown reason still trade without ever making any money!
The question is: Why hasn’t Raines been investigated and prosecuted? This administration continues to duck, weave, hide and make excuses for anything that might reveal them for the charlatans and thieves that they are.
IMO, the GSE’s and Fannie in particular, have become cash cows for whoever is in power.
just like HUD…..”enterprise zones”…..in a reverse Robin Hood fashion our government employees see to it property is condemned, then their buddies, “benefactors” buy dirt cheap, then CONgress passes a law to assists these risk taking entreprenuers?
See the foreclosure rates…Memphis Indianapolis, Atlanta lead the list….NOT bubble towns in CA & Las Vegas, or Phoenix
http://www.realtytrac.com/news/press/pressRelease.asp?PressReleaseID=112
It’s not that hard to duck & weave when the popular news media spends more time debating (like this morning) the results of last nights American Idol.
No kidding. When more people (63 mil) are interested in voting for their favorite ‘Idol’ than voting for our country’s leader something is very, very wrong.
Unbelievable.
It is called the dumbing of America. I find very few TV shows appealing.
Try PBS, NPR and BBC, those networks/stations are the only ones left that aren’t dumbed down. Otherwise you end up hearing nothing but american idol, runaway brides, and cruiseship overboards.
Any TV news is dumbed down. PBS, NPR, and BBC aren’t immune. They just have a soft-jazz middlebrow center-left elbow-patched faculty-lounge sensibility that makes them seem sophisticated — but they still don’t delve too deeply into the issues. That would require looking fairly at both sides, and the number of people capable of doing so in Western civilization these days is about seventeen.
Just for the record, the “Missing Attractive Women Show” on Fox, aka Greta van Sustren’s show, makes me crazy.
“Any TV news is dumbed down. PBS, NPR, and BBC aren’t immune. They just have a soft-jazz middlebrow center-left elbow-patched faculty-lounge sensibility that makes them seem sophisticated — but they still don’t delve too deeply into the issues”
At least since Bill Moyers retired.
News is a waste of time. I’d rather really learn things pertaining to history, economics, science, and etc. We watch any TV series through Netflix.
“Just for the record, the “Missing Attractive Women Show” on Fox, aka Greta van Sustren’s show, makes me crazy.”
Crazy with lust or postal? BTW, nice post!
There were 122 million votes in the 2004 election, so “American Idol” still has a ways to go.
Also, people vote numerous times.
Just like they do in North County SD….
Not 63 million people, but 63 million votes. It is not a one man one vote system. However, when Diabold runs the US system, we could see similar results.
Yikes!
No kidding. When more people (63 mil) are interested in voting for their favorite ‘Idol’ than voting for our country’s leader something is very, very wrong.
I was under the impression that over 100 million voted in the presidential election. Unless more than that voted for idol (which could be since I know very little about the show) then we did have more voters in American President than American Idol.
I do not consider the contensants in either vote to be very palatable.
It wasn’t until TODAY, around 4 years AFTER the Enron implosion that we saw Skilling/Lay convicted of a crime.
We’ll probably have to wait at least that long before Raines goes in shackles.
clouseau
It’s called Due Process.
Lingus- I do not understand why he has not been investigated and prosecuted. For once, on this topic we agree. Who’s responsibility is it to investigate this stuff?
1) He is being investigated and is still claiming no wrongdoing. He even has Senators in his pocket still supporting him (Bond).
2) Prosecution (hopefully) comes later.
Lingus and Flat and others:
It took over 5 years to prosecute and convict Skilling and Lay.
Enron BK was 12/01.
Fannie Mae hasn’t melted down (yet) and the report on bad acts just came out.
It will take 5 years or so to crawl up the food chain with plea bargains with underlings until Raines gets his commupance.
Oops bad math 4.5 years.
Raines is a democrat, press secretary for Clinton.
And the administration doesn’t decide who to prosecute. That’s the attorney general. If Bush was telling him to prosecute a democrat you’d be calling Bush corrupt.
brianb, I know you mean well… but please don’t feed The_Lingus
‘The company’s second-quarter earnings estimate is less than what its backlog of homes awaiting construction would indicate, ’suggesting that Ryland has seen a surge in cancellations,’ said Gieber.’
Either that or they plan to sell zero houses. Check out the insider selling at Countrywide.
The rats seem to be jumping off the sinking ship…
Good lord! There’s 14 pages worth of insider selling. Looks like a good short to me!
We should also note that Master Card was also recently “spun off” as an IPO and there are those that question the value of the shares. Now that int. rates are rising, defaults, late payments and N.O.D’s and foreclosures are also rising, yeah, sure! Let’s git while the gittin is good!
Thanks for posting this. Interesting coincidence, I have had my home loan through Countrywide for the last 3 years, just yesterday I got a letter from them that they were selling the loan to Citi…I called to ask a question about one aspect of this and the operator said that there were “tons” of people in the last week calling about the same issue-so totally anecdotal but wonder if Countrywide is offloading a bunch of loans to generate cash to cover some bad ones? Or to finance Mozilla’s severance….
T-bone,
CW is one of those companies that almost never keeps a loan once it originates it. Almost always it is packaged into a MBS and sold on the secondary market to investors. They do, however, maintain the servicing rights to the loans as I think they’re the largest servicer. The exception to this is the bank they own - I believe they actually hold on to the loans originated by the bank (not sure of this though). My point is your experience is just business-as-usual for them.
Actually, when I’ve done “market research” in the past year or so (calling lenders to see what kind of loans they’re trying to pitch), Countrywide said they are holding more of their loans, and not selling them off so much. They explained that’s why their rates are a bit higher. FWIW
Shouldn’t that make their rates lower??? instead of higher??
No. They know the risks that the secondary market does not seem to understand.
We aren’t wrong in questioning the unending appetite for risky MBSs. At some point (when, when, when), this is going to blow up.
Also, interesting fact is that Mozillo is also on the board of directors of Home Depot…which today had a near-riot it sounds like at the shareholders meeting due to not one director or officer showing up:
http://money.cnn.com/2006/05/25/news/companies/home_depot/index.htm
Let me get this straight. This genius has led a construction/remodeling empire the likes that few have ever seen in a time with booming construction, and one of the largest real estate bubbles in history, and has not been able to increase share holder value, or better position his company?
If a rising tide lifts all boats, this one was stuck in mud and unable to float. How do I get a job like that? 250 Million for nothing?
No wonder we are getting our collective rear ends handed to us by the chicoms.
Of course, Mr. Mozilo only co-founded Countrywide, so it is his right to diversify his portfolio through regular sales of CFC stock. Even when you add up the impressive sum that is his total compensation, I think it pales in comparison to many other, poorer performing, shorter-tenured CEO’s who are paid, but have not IMO earned, just as much if not more.
Wow! Mozilo is on fire. His mouse left click button isn’t working fast enough to get rid of all his shares. LOL. Do you think he offered his lifeboat and jacket to woman and children first?
“Three of the scariest words in economics used to be ‘inverted yield curve.’ The inversion early Wednesday was different than the inversion that occurred late last year and early this year, when the 10-year Treasury yield fell below the yield on shorter-term Treasury securities.”
Bond traders are acting like headless chickens. First there was a massive runup in the long-term treasury yields on fears that Bernanke would prove to be an inflationist. Next there is a flight to quality in the wake of an international stock market slide, which brings the 10-year T-bond yield below the FF rate. The conundrum is definitely history, and what is left behind in its wake is very disconcerting.
Once in a while some chump shows up here suggesting that they are looking and considering purchasing.
My advice: Don’t even waste your time thinking about it until MoM inventory of existing homes deciles 3 months in a row. Then check the foreclosure notice trend. If it’s down too then it’s OK to look.
Expect to wait until mid 2008 or later… and thank me.
35% lower contracts, and god knows how much higher cancellation rates all equal………………………”JUST RETURNING BACK TO NORMAL PRE(fill in the blank period)
Good lord! There’s 14 pages worth of insider selling. Looks like a good short to me!
Maybe the’re just diversifying their portfolios?
Curt,
That is actually a legitimate financial planning tool that “highly compensated employees” can implement to preserve wealth and effect tax planning as well as charitable giving so it’s not necessarily………. Oh! Who am I kidding?
Didn’t Ken Lay say the same thing as he was telling his employees and mutual fund backers to “buy” as he was selling everything he owned. While all of America was watching American Idol, their ARM mortgage just went up another $100 a month.
There are lots of legitimate reasons for insiders to sell stock options.
However, stock appreciation isn’t one of them.
True, there’s lots of legitimate reasons for a insider or two to be selling. But 14 freaking pages of insider selling along with their exposure in the subprime market throws up a huge freaking red flag to me.
After the trial results today (Enron L&S) if I were remotely high up in Fannie Mae and Co. I’d be quaking in my boots.
ooohhhh… Bubba gets a new roommate!
Or perhaps Kenny get’s Lay’d.
OT but interesting. Have you checked new car prices in your area. Here in the Bay area (this weekend) some of the new car pricing is below the used car pricing. Makes me wonder what those people (HELOC’d) and needing to sell their vehicles are going to do…..damn, can’t refi and can’t sell vehicle to reduce HELOC….and somewhere someone’s holding the paper……
I thinkl that the way things would go is like this:
1. Cut discretionary spending. No more netflix, Ruby Tuesdays, or seasonal vacations.
2. Get the stuff on e-bay. Specially abandoned projects like old cars, or trains.
3. Get the yard sale going. Get rid of garbage not able to sell on e-bay.
4. Go around and loot in recycling bins for cans that can be used for some change.
5. Let the H2 get repoed, and hope that they do not come after you with the deficiency!.
6. Stop eating. Americans are fat, lots of time before malnutrition rears its ugly head.
7. Learn a second language, so that you can communicate with your fellow mikkey D’s employees. Not necessarily spanish though, see post by Mr. Cote.
Anyone here looking ahead to Christmas 2006 and thinking it will be a very bad year? Here is how I see it: Debt burdens on the middle class are at record levels, wages have been stagnant, and interest rates and energy costs are rising. The only thing that has been keeping Jane/John Doe afloat financially is cash out refinancing and HELOCs on rapidly appreciating housing… and now prices are leveling off and starting to fall. If the Christmas consumer cuts back significantly this year it will lead to a rapidly slowing economy with increasing unemployment, defaults, and foreclosures.
The Spring 2007 RE market will have very few potential buyers, inventory will remain high and builders will be selling land and cancelling entire neighborhoods that haven’t broken ground yet. New home pricing will be discounted below existing homes making sales impossible for recent purchasers or homeowners with HELOCs to sell without bringing money to the table. ARM resets will cause mass delinquency starting in spring but the forclosures will take a few months of legal wrangling and will start hitting the market in record numbers by late fall. Neighbors look on with disbelief as townhouses that once would fetch 550k are purchased for $350k. By 2008 the posters on this blog begin to start recommending REITS.
Insurance fraud.
Salinas;…I have noticed that also….I went away for awhile but it seems to be back…No Interest, Nothing Down & Nothing a Month…Free cars for everyone….
Let’s hope they send the Fannie Mae devils to prison. They can make Skilling and Lay their bitches.
OT - Here is an article that I finally found again that shows a chronology of the “collapse of the 1980s bubble”. I’ll highlight the timeline below. In the link you will find related articles included for each year on the timeline:
http://www.youdovoodoo.com/80sbubble.htm
HOME PRICES DO FALL
A Look At The Collapse Of The 1980s Real Estate Bubble Through The Eyes Of The New York Times (compiled by Grim, No. NJ blogger)
1981 - Slow after 70s slump
1982 - Real Estate buzz begins
1983 - Real Estate gains limelight
1984 - Prices begin to skyrocket
1985 - Prices rise, affordability questioned
1986 - Manic pace
1987 - Cracks appear at the top
1988 - The crash begins
1989 - The market turns
1990 - Bank failures and foreclosures
1991 - A false glimmer of hope
1992 - Reality sets back in
1993 - Hope for a bottom
1994 - Disappointing bounce
1995 - Uncertainty as the bottom is hit
Talk about deja vu. If you read the italicized blurbs of the timeline headings referenced articles, you can easily change the dates to 2000- 2006. Easily. There is even mention of mortgage industry fraud in 1986, and condo conversions reverting back to rentals. Amazing. And no one learned from that experience?
It’s a very good read.
BayQT~
so where are we, 1988 or 1989 ?
1987
No, you (and I) perhaps wish we were in 1988/89.
More likely, we are in early 1987. This will go on for a while.
Then the Chronology above is incorrect, the market “Turned” in September of 2005.
My real estate agent (when I sold my house, closed Oct. ‘05) pushed me hard to get the house ready to sell before Labor Day last Sept ‘05. I hired him in July and then spent 6 weeks fixing up the house (painting, re-doing the wood floors, getting rid of my junk, etc.). He kept telling me the market was going to turn downwards after the summer. I felt the same way and although I wasn’t able to get the house on the market till right after Labor Day it still sold quickly (in 2 weeks) for a good price. But that price was $150K less than the equivalent house (with the same street number) on the next street over that sold in May 2005. I’m not sure why we were so sure that the market was turning right at that moment but we were right. Whew.
Actually houses are probably still selling OK in Saratoga since there was little if no speculators and very little inventory but I’m sure it takes much longer and I wouldn’t be surprised if prices have gone some more.
Anyway my point is that we could “feel” the turning of the market somehow…there must have been signs other than of course the truly ridiculous prices these 50 yr old tract ranch houses were going for.
And there are some honest agents — the story I heard from mine was consistently that the market was turning and I’d better sell asap. He even used the word “tanking” back in Oct. ‘05. Of course I don’t know what he told potential buyers but an agent’s fiduciary responsibility is to the seller.
Saratoga;….Saratoga is doing just fine….The schools are a strong draw for many imigrants that place high value on education…Its also vey pleasent tucked up there next to the mountains as you know…
scdave — Do you mean Saratoga is “different”?
Looks more like 1988 to me. The top was definitely last August and those watching closely could see the many cracks at the top during that time. In May 2006 we can see all of the RE “experts” on the run: lying through their teeth and playing cya and a general consensus that the market has turned and is headed down. By late this year, the crash will be in full effect (inventory already crashing but pundints unable to figure out what it means.) Information moves a lot faster now than in the 1980’s and this massive liquidity bubble will ensure a much quicker resolution to this than in a “normal” RE boom/bust cycle. JMHO.
It is possible that with information more readily available on the internet that the business cycles will become shorter in length. People will find out a lot quicker this time around that real estate is a horrible investment currently.
That is if the media starts reporting the hard facts, and not what the NAR and realtors are telling them.
I am ready to buy and start a family, right now. I have talked my wife into giving me 2 more years before we look into buying. So I hope that either A. the market is about 30-40% less or B. that the market is so obviously stilll tanking that it would be foolish to buy.
If it looks exactly the same though I will be worried.
You just described the exact same scenario I’m in. I recently convinced my wife that we should extend our current rental house lease by at least 18 months. Luckily she bought and likes the houser we’re in. I will also be concerned if we’re in the same situation 2 years from now. I doubt it though. There is too much momentum building towards a decline in housing prices.
I have been watching the market for a while now, and everyone keeps telling me to buy. We are going to wait though and prove everyone wrong.
I definetly cannot complain, but I wish I was in this situation 5 years ago. I could have bought exactly what I wanted for around 300K, now it costs 800K.
Luckliy we are renting from my parents, so rent is cheap. It is just tough to get the landlords to fix things that need to be fixed
California History as it unfolded. thanks to a poster on this board some time last year. we are still here
————————————————————————–
State’s Home Sales Drop 14% Median Price Tops
$200,000 for First Time
Crouch, Gregory; Los Angeles Times; May 25, 1989;
pg. IV1
———————————–
It extended for more than a year
————————————————————-
Realtors Hear Gloomy Price, Sales Forecasts
Myers, David W; Los Angeles Times; Oct 7, 1990;
pg. K1
————————-
1985-1986: Housing is booming, inventory is low.
Housing Starts Surge 14.9% During January, Best
Gain in 20 Months
Los Angeles Times (pre-1997 Fulltext); Feb 20,
1985; pg. 1
Inventory of Housing Dips in Southland Unsold New
Homes Declined by 3.2% from End of l984
DAVID M. KINCHEN; Los Angeles Times (pre-1997
Fulltext); Mar 16, 1986; pg. 1
Housing Sales Boom Keeps Inventories Slim
DICK TURPIN; Los Angeles Times (pre-1997
Fulltext); Aug 24, 1986; pg. 1
1987: Housing still booming, prices increasing,
inventories low.
High-End Home Sales Push Up Median Price
Dick Turpin; Los Angeles Times (pre-1997
Fulltext); Mar 15, 1987; pg. 1
Inventory of Unsold Homes Sets New Low
Los Angeles Times (pre-1997 Fulltext); Mar 15,
1987; pg. 1
Fewer Homes, High Prices as Mortgage Rates Climb
TOM FURLONG; Los Angeles Times (pre-1997
Fulltext); Sep 10, 1987; pg. 1
Fixed-Mortgage Interest Rates Surge Woes Mount for
Home Buyers, Brokers
TOM FURLONG; Los Angeles Times (pre-1997
Fulltext); Sep 10, 1987; pg. 1
Unsold Homes Inventory Drops for Third Time
DAVID M. KINCHEN; Los Angeles Times (pre-1997
Fulltext); Sep 13, 1987; pg.1
1988: People start to question the boom. Realtors
assure us the boom will continue. Houses aren’t like
stocks afterall.
‘88 Outlook Bright for U. S. Real Estate
Dick Turpin; Los Angeles Times (pre-1997
Fulltext); Jan 10, 1988; pg. 1
County’s Median Resale Price of Homes Reaches
$179,999, Costliest in California
JOHN O’DELL; Los Angeles Times (pre-1997
Fulltext); Mar 23, 1988; pg. 5
Unlike Stocks, Home Prices Rarely Collapse
JAMES FLANIGAN; Los Angeles Times (pre-1997
Fulltext); Aug 28, 1988; pg. 1
Southland Inventory of Unsold New Homes Lowest in
Decade
DAVID M. KINCHEN; Los Angeles Times (pre-1997
Fulltext); Sep 11, 1988; pg. 10
J. M. Peters Reports Skyrocketing Sales for Second
Quarter
MICHAEL FLAGG; Los Angeles Times (pre-1997
Fulltext); Sep 14, 1988; pg. 5
Limit Issue Driving Up Home Prices
Dick Turpin; Los Angeles Times (pre-1997
Fulltext); Sep 18, 1988; pg. 1
Hot Housing Sales Belie Doom Forecast
Ryon, Ruth; Los Angeles Times; Sep 25, 1988; Vol.
107, Iss. 297; 8; pg. 1
1989: Prices are very expensive; affordability an
issue. Sales slow and prices drop. Mention of risky
loan types.
Housing Prices in State Climb 3% in February
Furlong, Tom; Los Angeles Times; Mar 29, 1989;
Vol. 108, Iss. 116; 4; pg. 1
Stock of Unsold Homes Drops Dramatically
DAVID M. KINCHEN; Los Angeles Times (pre-1997
Fulltext); Apr 2, 1989; pg. 9
How First-Time Buyers CAn Get Their Piece of the
Dream
Myers, David W; Los Angeles Times; May 21, 1989;
pg. VIII1
State’s Home Sales Drop 14% Median Price Tops
$200,000 for First Time
Crouch, Gregory; Los Angeles Times; May 25, 1989;
pg. IV1
Sales of Existing Homes in State Fall During May
Furlong, Tom; Los Angeles Times; Jun 23, 1989;
Vol. 108, Iss. 202; 4; pg. 1
Orange County Home Sales Drop by 22% in May
TOM FURLONG; Los Angeles Times (pre-1997
Fulltext); Jun 23, 1989; pg. 1
Realtors Tackle New Topic: How to Handle Slow
Housing Market
Myers, David W; Los Angeles Times; Oct 1, 1989;
pg. VIII1
Prices Drop, Sales Slow in State’s Housing Market
TOM FURLONG; Los Angeles Times (pre-1997
Fulltext); Nov 29, 1989; pg. 1
Housing Affordability Rises Outside L.A., Orange
County
Kristof, Kathy M.; Los Angeles Times; Dec 06,
1989; Vol. 109, Iss. 3; D; pg. 1
Survey Cites Four California Banks With Possibly
Risky Realty Loans
JAMES BATES; Los Angeles Times (pre-1997
Fulltext); Dec 30, 1989; pg. 1
1990: Prices take a serious plunge. One article claims
that housing booms are a bad thing and we should hope
prices stay low. Increasing mortgage rates are blamed
for the bust. The word “recession” is mentioned. Gloom
and doom.
Home Sales in Southland Plunge in ‘89
Samuels, Alisa; Los Angeles Times; Feb 8, 1990;
pg. D2
The Number of Homes for Sale Sets a Record Real
Estate: San Diego becomes buyer’s market, with 4,000
existing homes listed in January.
GREG JOHNSON; Los Angeles Times (pre-1997
Fulltext); Feb 13, 1990; pg. 2.A
Pray That the Housing Boom Stays Dead
Jones, Robert A; Los Angeles Times; Apr 24, 1990;
pg. A3
Climbing Mortgage Rates Hurt Existing Home Sales
Samuels, Alisa; Los Angeles Times; Apr 26, 1990;
Vol. 109, Iss. 144; D; pg. 3
California Is Nearing the Edge of Recession, UCLA
Forecast Warns
Anderson, Harry; Los Angeles Times; Jun 29, 1990;
Vol. 109, Iss. 208; D; pg. 1
California Real Estate Market Continues to Cool
TOM FURLONG; Los Angeles Times (pre-1997
Fulltext); Jul 26, 1990; pg. 1
Home Sales in July at Slowest Pace in 4 1/2 Years
Furlong, Tom; Los Angeles Times; Aug 28, 1990;
Vol. 109, Iss. 268; D; pg. 2
Realtors Hear Gloomy Price, Sales Forecasts
Myers, David W; Los Angeles Times; Oct 7, 1990;
pg. K1
O.C. Home Resales, Prices Fall Sharply Housing:
Realtors group attributes slump in county and state
figures to fears of recession.
MICHAEL FLAGG; Los Angeles Times (pre-1997
Fulltext); Oct 26, 1990; pg. 5
Housing Slump in California Seen Worsening
TOM FURLONG; Los Angeles Times (pre-1997
Fulltext); Nov 21, 1990; pg. 1
1991: A “dead cat bounce”? Some folks wondering if the
bust has bottomed out or not. Sales are abysmal (e.g.,
-42%). Other parts of the country showing some signs
of recovery.
Back to Basics
Inman, Bradley; Los Angeles Times; Jan 20, 1991;
pg. K1
Re-Assessing When Home Prices Fall
Boyer, Jeanne; Los Angeles Times; Feb 3, 1991; pg.
K1
California Still Among Lagging Areas, Fed Says
JAMES RISEN; Los Angeles Times (pre-1997
Fulltext); May 2, 1991; pg. 1
Reading Signs–Is Market at Bottom?
Inman, Bradley; Los Angeles Times; Sep 8, 1991;
pg. K1
County’s New-Home Sales Plunge 42% for Quarter *
Real estate: New figures indicate the market is
sputtering again after a brief recovery. The inventory
of unsold houses rose by 15%.
GREGORY CROUCH; Los Angeles Times (pre-1997
Fulltext); Oct 4, 1991; pg. 5
Home Sales Decline in California
Los Angeles Times; Nov 26, 1991; pg. D1
Home Sales Decline in California Housing: The drop
in mortgage rates fails to spur sales in the state,
but sales of existing homes across the country edge up
in October.
Los Angeles Times (pre-1997 Fulltext); Nov 26,
1991; pg. 1
1992: No one is buying; housing is an investment that
no one will touch. Desperate political efforts being
made to encourage house buying. Rock bottom prices and
lower mortgage rates encourage some purchasing. The
year ends with some buying. Another “dead cat bounce”?
It’s not clear.
Move-Up Home Buyers Pretty Much Left Out Real
estate: While Bush’s plan may boost first-time
purchases, it does little to dispel caution in the
other key housing sector.
JUBE SHIVER Jr.; Los Angeles Times (pre-1997
Fulltext); Jan 30, 1992; pg. 4
Home Sales in State Fell 6.2% in 1991
Shiver, Jube, Jr.; Los Angeles Times; Feb 12,
1992; D; pg. 1
Spring Thaw Real estate: The local housing market
is showing signs of recovery. More realistic selling
prices and reasonable interest rates have helped to
spur sales.
PATRICIA WARD BIEDERMAN; Los Angeles Times
(pre-1997 Fulltext); Mar 26, 1992; pg. 1
Housing Starts Increase 6.4% to 2-Year High *
Economy: A strong surge in apartment building leads
the way, providing economists with more evidence of a
sustained recovery.
JUBE SHIVER Jr.; Los Angeles Times (pre-1997
Fulltext); Apr 18, 1992; pg. 1
June Home Sales 3.5% over May but Trail 1991
Figure
Los Angeles Times; Aug 2, 1992; pg. K1
August Housing Starts Rebound 10.4%, U.S. Says
Marshall, Matt; Los Angeles Times; Sep 23, 1992;
D; pg. 1
California Home Sales Surge
Myers, David W; Los Angeles Times; Nov 25, 1992;
pg. D1
Sales of Existing Homes in California Rise Again
Myers, David W; Los Angeles Times; Dec 24, 1992;
pg. D1
1993: It’s definitely a buyer’s market. Some people
are saddened by the fact that current prices are 50%
of what they were in the 1980’s. The housing bust in
Southern California is clearly negatively impacting
the California economy and the national economy at
large. Sellers are desperate to sell (and some people
taking extreme measures like putting huge “for sale”
signs on their lawns for passing planes to see). Folks
who waited out the boom to buy at the bottom are being
handsomely rewarded for their patience. Proof-positive
of the contrarian investing style — be greedy when
everyone is fearful and fearful when everyone is
greedy. The “slump” may be ending.
Long Southland Housing Slump Finally Ending?
DAVID W. MYERS; Los Angeles Times (pre-1997
Fulltext); Feb 10, 1993; pg. 1
Housing Market Warming Up After 3-Year Slump Real
estate: Optimism returns to Southland with rising
sales. Number of homes on market is down.
DAVID W. MYERS; Los Angeles Times (pre-1997
Fulltext); Feb 10, 1993; pg. 1
A sad Westside story: Home prices have declined up
to 50% since late 1980s
Myers, David W; Los Angeles Times; May 28, 1993;
D; pg. 1
Couple Put Up a Big Sign of the Real Estate Slump
Housing: They write `For Sale’ in huge letters on
their lawn, hoping to attract attention from
passengers in planes and jets on flight path to LAX.
DICK WAGNER; Los Angeles Times (pre-1997; Apr 29,
1993; pg. 8
Home Sales in County Climb by 3% Real estate: The
market bucks the downward trend of neighboring areas.
But analysts say don’t be too optimistic.
STEPHANIE SIMON; Los Angeles Times (pre-1997
Fulltext); May 28, 1993; pg. 1
It’s a Buyer’s Market as Peninsula Home Prices
Tumble Real estate: Younger families are taking
another look at an area that was once beyond their
economic grasp. This could revitalize the school
district.
TED JOHNSON; Los Angeles Times (pre-1997; Jun 24,
1993; pg. 3
Home Sales Up 6.3% in State, 4.6% Nationwide Real
Estate: Analysts credit low interest rates and say
buyers are beginning to think that prices may have
bottomed out.
DAVID W. MYERS; Los Angeles Times (pre-1997
Fulltext); Jun 26, 1993; pg. 1
California’s real estate slump deepens
Miller, Greg; Los Angeles Times; Jul 27, 1993; pg.
D2
Southland home values lead U.S.–Downward
Myers, David W; Los Angeles Times; Aug 4, 1993;
pg. D1
Bottom Line: Housing Market May Be Mending Real
Estate: Despite a three-year slump, experts say prices
are stabilizing, especially for homes under $500,000.
PATRICIA WARD BIEDERMAN; Los Angeles Times
(pre-1997 Fulltext); Aug 22, 1993; pg. 1
Buyers Seek Bargains as Home Prices Keep Sliding
Real estate: La Canada Flintridge emerges as bright
spot with a nearly 21% increase in sales over same
period last year.
ANDREW LePAGE; Los Angeles Times (pre-1997
Fulltext); Sep 2, 1993; pg. 1
Sitting on the market: After the cash, owners
adjust to the region’s housing slump
Myers, David W; Los Angeles Times; Sep 20, 1993;
D; pg. 1
State’s bargain hunters boost new-home sales to
3-year high
Myers, David W; Los Angeles Times; Oct 1, 1993;
pg. D1
Home Sales Rise Sharply in State, Nation Real
estate: Size of increase surprises housing analysts.
Median price in California is down 4.3% from 1992
figure.
DAVID W. MYERS; Los Angeles Times (pre-1997
Fulltext); Oct 26, 1993; pg. 2
Jump in new-home sales spurs hopes of long-awaited
revival
Myers, David W; Los Angeles Times; Nov 3, 1993;
pg. D1
Drop in Southland Home Sales Slows in First 10
Months of ‘93
Los Angeles Times (pre-1997 Fulltext); Nov 28,
1993; pg. 4
U.S. home sales hit 14-year high
Myers, David W; Los Angeles Times; Nov 30, 1993;
pg. D1
Slump in O.C. Housing Market May Be Ending Real
estate: November figures show a major year-to-year
increase in the number of units sold. Median price
still sags.
JOHN O’DELL; Los Angeles Times (pre-1997
Fulltext); Dec 21, 1993; pg. 1
1994: Housing begins its comeback. People who had the
intelligence to wait for the bottom are buying now at
great values. Even rising mortgage rates are not
shaking the recovery.
Bright Spots Some Areas Showing Signs of Recovery
After Four-Year Slump in Home Prices
Los Angeles Times (pre-1997 Fulltext); Jan 16,
1994; pg. 1
Lenders scramble to keep housing comeback alive
Myers, David W; Los Angeles Times; Mar 30, 1994;
D; pg. 1
First-Time Buyers Who Waited Spark Housing Rebound
Real estate: After years of ice-cold sales, the city’s
Westside market is finally starting to heat up.
SCOTT SHIBUYA BROWN; Los Angeles Times (pre-1997
Fulltext); Jun 5, 1994; pg. 10
Home Sales Up 24% From Last Year
Los Angeles Times (pre-1997 Fulltext); Jun 26,
1994; pg. 6
June Home Sales Best in 5 Years Ventura County Is
Leader
Jack Searles; Los Angeles Times (pre-1997
Fulltext); Jul 26, 1994; pg. 8
Rising mortgage rates shake but don’t break state
housing industry
Lee, Patrick; Los Angeles Times; Oct 7, 1994; pg.
D1
1995: Some parts of the Southland are recovering
others are not. People with “negative equity” are in
despair.
Home Sales Rise 10.5% in State, Hit 5-Year High
JAMES F. PELTZ; Los Angeles Times (pre-1997
Fulltext); Feb 9, 1995; pg. 1
Southland Home Price Rebound Fails to Appear
JESUS SANCHEZ; Los Angeles Times (pre-1997
Fulltext); May 22, 1995; pg. 1
County Home Sales Slide 20.4% in May
DAVID R. BAKER; Los Angeles Times (pre-1997
Fulltext); Jun 13, 1995; pg. 1
Home sales surge 19% in May, raising doubts of
rate cut
Mowbray, Rebecca; Los Angeles Times; Jun 30, 1995;
D; pg. 1
Study of Homeowners Finds `Negative Equity’ a
Problem Real estate: Nearly 5% owe more than homes are
worth. Impact hinders the state’s economy, experts
say.
DEBORA VRANA; Los Angeles Times (pre-1997
Fulltext); Jul 6, 1995; pg. 1
O.C. Real Estate Sales Drop Property: Preliminary
figures for July suggest the county’s housing market
is still in a slump.
DEBORA VRANA; Los Angeles Times (pre-1997
Fulltext); Aug 1, 1995; pg. 1
1996: A tentative recovery is still in the making.
State’s housing market finally in turnaround
Sanchez, Jesus; Los Angeles Times; Oct 25, 1996;
pg. D1, 1
O.C. homeowners more confident
Fulmer, Melinda; Los Angeles Times; Dec 3, 1996;
pg. D.2
Ready to fly? Region’s housing prices on rise,
moderately
Sanchez, Jesus; Los Angeles Times; Dec 29, 1996;
pg. D.1
1997: Finally, housing has recovered.
Southland Home Sales Are Unseasonably Hot Real
estate: In O.C., October sales were 46.5% higher than
last year. Median price of $208,000 was highest since
1994.
E. SCOTT RECKARD; Los Angeles Times; Nov 14, 1997;
pg. 1
Median Price for O.C. Homes Surges 10.5%
E. SCOTT RECKARD; Los Angeles Times; Dec 10, 1997;
pg. 1
After reading this I stand corrected about my 1987 guess. Based on this I would say we are in mid to late 1989.
Hey desidude, thanks for finding and posting this one. I couldn’t find it so I settled on the one that I did find.
BayQT~
any time BayQT~
for bubbleheads, any time. keep your sanity, do jump too early!
Remember the internet was in it’s infancy the last round. This will proceed quicker.
You know I had that same argument just a few months back about the internet. But I’m begining to see signs that it may not have the impact that most would think. I would think that with all the information out there at your fingertips. The market would have slid a lot farther than it has. At best I’m on the fence about the internet and it’s impact.
mrincomestream,
I think the internet won’t hurry this cycle along because the sellers have information that prove their point as well. They know what the house across the street sold for last year. They will hold on to that price because they will not want to “give away their equity.”
I don’t think this will be any faster; perhaps it will be even slower. We will have to wait either for credit standards to tighten up and/or bank foreclosures to get things going, IMHO.
Volume is the key for bankers if my inbox is any indication we won’t be seeing any credit standards tighening on the lender front for quite awhile.
So the only hope is foreclosures, natural disasters and layoffs as far as I can tell right now. Looks like it’s going to be a slow process after all. Bummer
You write as if you were watching a sunset with too many clouds on the horizon… Looks like it’ll be a lousy sunset. Bummer.
Unfortunately, this situation is not so clear-cut. You sound like the RE floozies when you speak in such certain terms. Is it possible that a downturn just might screw you over - hence the cheerleading?
Those of you who gripe about boomers causing all this nation’s ills, including the bubble, take note: it was boomers who got their fannies waxed in the 80s housing bubble. I’m a boomer and remember feeling just as bitter back then as you guys are now. For many of us it looked as though we were never going to be able to afford to buy a home. Other boomers panicked and bought at the peak. Then the bubble popped. Some of those who bought at the top lost their homes and/or went through hard times. As home prices declined, those of us who despaired of ever being able to afford homes of our own eventually got them.
Same sh*t, different decade. So take heart: you, too, will get your homes.
Thank you for that. Love the moniker by the way. Heh.
OT of this post, but still interesting. This morning we gave our landlord rent checks for the next year. $700/month. He is very grateful to have us as tenants. He got around to telling me how much the property has been going up. He figures our half of the duplex is now worth $250K. Hmmm… lets do some math here. $700×12/250K = 3.36% return on his investment before he pays the taxes or does any upkeep. I didn’t say so, but if I were him I would grab that money and run ! Of course he thinks it will continue to appreciate. He originally bought the place for $74K in 1976. It is now worth $500K, so his asset gain has been 6.5% per annum, not including adjustment for inflation. He has also got rent from it, but has had to pay taxes and do a lot of upkeep. When it goes back down to $300K, the gain will be 4.77%.
Too bad he didn’t live in SoCal our landleech bought the place for $26K in 1972 (on record). It’s now “worth” $2 million-$3million based on comps.
I hate to be a downer:
but I have seen a TON of “sold” signs up in my neighborhood/zip code while driving around lately.
Anybody else seeing this? before I would see row after row of For Sale signs and not a one sold.
The last 1 week suddenly I’m seeing row after row of For Sale signs, but also quite a few “solds”.
In fact, yesterday not far from my house I saw 3 “sold” signs in a row. I haven’t seen that in a while.
Dead cat bounce? Or just sample error. The stats from the TC didn’t look like much of a bounce was happening recently.
clouseau
I am seeing more “sale pending” signs in my area (Newton, MA) as well. My guess is the buyers are rushing to buy before interest rates go up further and the prices on most of these properties have been “substantially” reduced from their ridiculous original list prices. But they are still no bargain. We have a long, long way to go.
Yep they are still suckers born every minute.
Short of eugenics that will NEVER go away.
Locking in the high tax cost basis and contributing to foreclosures in the future.
Personally, I welcome churning of housing today, especially in my neighborhood, it just ensures that many more bargains in my future.
Remember, this *is* Spring. If it’s going to sell at all, it’ll be this Spring. But is this the best it gets for the coming year? If so, not good.
This is the last “rally” or dead cat bounce. Last chance to lose all your net worth and prove to the world how stupid you are.
The house down the street from me (which had been on the market since about August) sported a “Sold” sign close to two months ago. It’s still there. I smell a contingency that’s not working out.
I see quite a bit of this as well. However in my area, many of these pending sales are falling through, and within a month or two the “sold” sign is gone.
Around here the realtors are peddling the “buy before the rates go up” story.
I guy I know trying to unload a spec house tried to convince me using his realtor’s argument.
I said “Sure. Best to buy at the top of the market with almost no chance of ever refinancing at a lower rate.”
Keep an eye on how long those sold signs stay up. I see 1 sold sign out of probably a hundred in north san diego county and its been up for over 2 months. Its probably a contingency and aint gonna go through. Also, the local newspaper reports in the homes sold the same house sold, week after week. The RE scum are trying their best to keep the plate spinning and to an observer its seems like ground hog day with Bill Murray but the fact is the we’re already over the peak and heading down.
the fannie debacle is too confusing for joe sixpack to get fired up over. unlike enron where folks were sobbing in the streets of houston carrying their belongings in brown boxes and crying on nat’l tv about how their retirement accounts are now worthless, we won’t see retribution until non-performing loans increase to the point where retirement fund holdings are substantially impacted… then they’ll somehow blame OFHEO and Bernanke, and Raines will skate down to St. Thomas. our country is f’ed up man, f’ed up.
Joe DumbAss will care when his house is worth 50% less and the media blames Enron, I mean Fannie Mae.
(so where are we, 1988 or 1989 ?)
We are in 1988/1989, the sucker’s market. I expect 1990/91 to come by fall. While things are happening slowly, it is faster than the late-1980s/early 1990s, even though the economy was worse then.
When Call Girls go Bad, they become Realtors…
http://miami.craigslist.org/rfs/160075774.html
That is funny, but Craigslist is so unregulated that it has to be a joke.
Lets all contact her ! I need proof she’s “Cute”.
That ad was written by a guy.
I AM HOOKED UP HERE IN MANY WAYS, I CAN FIND ALL THE DEALS, AND ALL THE GIRLS FOR YOUR BUSINESS TRIPS HERE IN FLORIDA
______________________________________________
I guess prostitution is allowed in the NAR “code of ethics”?!??!?
The “median price” has too many variables to be very meaningful.
Why don’t they adopt a yardstick house, so we can have more meaningful price information:
3 bedroom
2 bathroom
1/4 to 1/3 acre
Costs $1.2 million in Beverly Hills, California
Costs $240,000 in Akron, Ohio
I like it, except for the 1/4 to 1/3 acre part.
How many areas in the country can you get that?
That’s even exceedingly rare in many smaller cities. Only in the very small or very suburban or very cheap ares can you get 1/3 to 1/4 acre IMO. It would skew the data too much… (by picking 1/3 to 1/4 acre you’re selecting basically only luxury homes in the big and moderate markets)
just MO
“I like it, except for the 1/4 to 1/3 acre part.
How many areas in the country can you get that?”
Most areas. After all, that only runs approx. 11,000 to 14,500 sq. ft.
Urban city lots are commonly 5,000 sq. ft., but suburban lots for decades ran to the 1/4 to 1/3 acre size. So older suburban neighborhoods (pre-1990) most anywhere except the really big urban areas (NY, LA) are pretty likely to have lots that size.
you are so right about the median or even average prices. in dc, these prices vary widely from month to month sometimes up sometime down…maybe a rolling average would work.
http://www.dcbubble.blogspot.com
The best selling home in Las Vegas are 3 bedroom houses selling between $250,000 and $299,999.
April 435 Sold out of 2266 Total Sales..Median $290,000
March 467 Sold out of 2521 Total Sales.. Median $293,127
Feb 357 Sold out of 1787 Total Sales.. Median $292,500
Jan 362 Sold out of 1778 Total Sales..Median $293,950
Apl 2005 522 Sold out of 2957 Total Sales..Median $280,000
From Greater Las vegas Association of Realtors members area I called the 3 plus 2 bread and butter, and although sales are down 700 units from 2005, there is still +10,000 median since last year..
No $#$# way you can get anything on a 1/3 acre lot in Beverly Hills for $1.2 million. Someone’s asking more than that for a 3/2 remodeled 1950s rancher in Costa bloody Mesa, after all.
How is it possible that we get this great report on new homes sales for April, yet all of the home builders are reporting huge drops in sales volume?
Obviously, they take a loss on every one but make up for it in volume.
Or not!
Reading the article about the inverted yield curve made me glad I realize a recession is a “slowing of the economy.” The author implied a recession is not a slowdown. The funny thing is, the govt doesn’t even know we’re in one until after the fact. If, as I believe, the CPI numbers are bogus, then we could even be in one now.
John Williams “Shadow Government Statistics” show that we entered a recession last year.
Here’s a very reasoned analysis that says that if you don’t count the housing bubble’s extra contribution to GDP, we’ve been in recession since 2001.
RE boosters in Seattle are adamant that this rolling wave of job cuts in the mortgage industry of the past few weeks means ABSOLUTELY nothing- it has zero impact on RE in general.
It’s a kind of religious fervor that when it comes to RE, no bad news qualifies as bad news.
Obviously at some point something will happen to change the mania mindset. Maybe an accumulation of months and months and months of nothing but bad news from every quarter?
Clouseau, you need to think like a realtor(tm) you know one of those guys or gals with ethics. Yeah, right. Just get a Cabal or RE’s together and put sold or sale pending signs on a part of your listings to create a better buy now atmosphere.It sounds slimy to me.