A Feeding Frenzy, Then Everything Sort Of Stopped
The Orange County Register reports from California. “OK, now I’m a bit worried. The local homebuying slump extended itself into the start of the traditional house-shopping season – and Southern Californians certainly can’t blame ‘bad winter weather’ for the sluggishness. DataQuick reported that it was the slowest-selling March in six years, but there’s also more to be nervous about: While March’s sales count is up 26 percent from February, that’s limited oomph for the unofficial opening of the prime house-hunting period. February-to-March sales have averaged a 36 percent increase since 1988.”
“March sales were off 14 percent in a year, the sixth consecutive year-over-year drop. The five previous six-month dips were tied to the two most recent housing debacles. March 2006: The longest sales drop in 11 years was an early red flag that bad stuff was about to happen. Southern California homebuying would fall on a year-over-year basis for 15 more months – including an annualized drop of 32 percent by March 2007. Intriguingly, prices would rise 5 percent in the year after March 2006, only to tumble by 24 percent in the following 12 months.”
The Associated Press. “DataQuick said Sales in a six-county region of Southern California tumbled 14.3 percent from a year earlier, while sales in the nine-county San Francisco Bay Area slid 12.9 percent. Selma Hepp, senior economist at the California Association of Realtors, pinned weaker sales on declining interest from investors and lack of affordability after huge price increases during the first half of last year sidelined potential buyers.”
“‘There’s sort of a waiting game,’ she said. ‘Prices were going up so fast, there was such a feeding frenzy until June or July. Then everything sort of stopped.’”
The Daily News. “The number of homes for sale soared 50 percent in the San Fernando Valley during March, but sales remained soft as prices crested the half-million-dollar mark. At the end of March, there were 1,520 previously owned houses and condos listed for sale, up from 1,015 a year earlier, said Southland Regional Association of Realtors.”
“‘It stands to reason that the market would slow down now that the bargains and deeply discounted prices are gone,’ association CEO Jim Link said. ‘I’m optimistic, but I truly believe we’re in a holding pattern, waiting for buyers to accept that they cannot get bargain-basement prices and for sellers to understand there is a clear limit on their asking prices.’”
The Desert Sun. “Housing affordability in California is a major concern, said economist Leslie Appleton-Young , who analyzes housing data for the California Association of Realtors. She pointed to a chart showing that 28 percent of the state market was first-time buyers. ‘This is the chart that’s the biggest issue going forward,’ Appleton-Young said. ‘We still need to have first-time home-buyers be 50 percent of the market. You need to get people on that ownership ladder.’”
“In January, the FHA loan limit in Riverside County dropped 29 percent from $500,000 to $355,350. The drop shuts out buyers who had wanted to purchase a more expensive primary home. For many first-time buyers, FHA loans are their only option.”
“But sellers and their agents who were too optimistic over the winter have had to chop their asking prices. It’s a trend across the major metro areas of California, the economist said. During a recent visit to Manhattan Beach, Appleton-Young noticed six listings with new price reductions. ‘Price adjustments have helped a lot’ to sell luxury homes sitting on the market, said Sherry Owens, an Indian Wells real estate agent.”
The Los Angeles Times. “New California foreclosure starts rose in the first quarter, although they remain at pre-bust levels. Default notices — the first step in the state’s foreclosure process — jumped 6% from the previous quarter to 19,215, research firm DataQuick said Tuesday. New foreclosure filings rose 3.5% from the first quarter of 2013.”
“DataQuick analyst John Karevoll said the rise from the fourth quarter, the lowest level since 2005, probably came from lenders working through their delinquent loan pipelines and not from more financial distress. ‘They may well be just working their way through a backlog, stacks of paper piled high on desks,’ he said.”
“The year-over-year increase was the first such rise since the last three months of 2009. However, the increase came solely from a significant surge in January, as notices of default jumped 64% from a year earlier.”
An anecdotal report from Boise: I’ve been watching the local market (specifically my neighborhood) the past past month and have noticed that anything remotely affordable is selling fast. Smaller started homes at the 3 to 3.5 times median income level are selling within weeks - or sooner. One hit the MLS on Monday and already has 2 offers. Another home a little further from me went pending after 1 day. Meanwhile the $300k+ market looks dead. Same old houses sitting on MLS - even new construction.
Rent asking prices are still up in the area and availability is thin - I’m curious how this is going to play out.
What does it matter?
Rent for a fraction of the cost of buying.
“…curious how this is going to play out.”
Those of us who watched the first leg down of housing bubble collapse can help you. When California’s market went south in the 2007-08 panic, outposts like Idaho saw the disappearance of the California equity locusts who had pumped up prices in the likes of Boise.
Unless this time is different, you can expect something similar to happen soon.
This time is slightly different. The overpriced new homes which Californians like aren’t moving too fast. Also during the last bubble, rents collapsed as home prices increased. This time rent prices and housing prices (at the entry level) are going up - I’m curious how that specific segment will play out. I am already seeing some higher priced rentals sitting on the market for a while - landlords may discover a typical Boise family doesn’t care to or can’t afford to rent a 3/2 1500 sq ft house for $1300 a month.
What will Section 8 pay to rent that house?
“landlords may discover a typical Boise family doesn’t care to or can’t afford to rent a 3/2 1500 sq ft house for $1300 a month.”
But they would buy it for $2600/month right?
The same is happening in my neighborhoods. The low end is going faster than the middle or high end. Maybe because the investors are gone and Joe Six Pack can no longer take out a teaser loan now and refinance later.
Pick your poison…. Theyre all 200-300% overpriced, low mid or high.
Housing Analyst im waiting for my $55 sq ft house you were going to build for me lol.
I too would be scared $hitless if I were on the hook for a bunch a depreciating shacks at a grossly inflated price in a collapsing demand environment.
If you weren’t scared, there’d be something very wrong with you.
My rental homes are getting me on average 18-22% annual returns:} on rent.
That and a dollar will get you a cup of coffee here.
Problem is, you don’t have a dollar left.
‘My rental homes are getting me…’
That’s checked easily enough. Where, what did you pay and when and what are the rents? BTW, it probably would have been better to sell, but it’s too late now.
Takoma Park, MD(DC metro) Housing Prices Sink 6% YoY
http://www.movoto.com/takoma-park-md/market-trends/
“In January, the FHA loan limit in Riverside County dropped 29 percent from $500,000 to $355,350. The drop shuts out buyers who had wanted to purchase a more expensive primary home. For many first-time buyers, FHA loans are their only option.”
Especially in Riverside county, not waiting for the FHA limits to drop prices is a fools game. Queenie can come on here and pimp a strategy for being a slumlord from several years ago (lies anyway), but anyone wanting to buy a house to live in, in a halfway decent area, which is just where this limit hits them, is nutso to buy there now.
The panic and pain has already set it. The best barometer going is our lying realtors and underwater debtors
I’m giddy like a schoolgirl to see this autumn, and also this Fall. The long hot summer in PHX is just kicking in, just in time for the inventory explosion happening. No hedge funds or all cash Canadians or Chinese in sight. If current rate of decline continues that is 15+% price decline by election time baby.
“No hedge funds or all cash Canadians or Chinese in sight.”
With the smart money gone and the dumb money broke, who is left to buy?
With the price of everything increasing, who can afford to buy a starter home in SoCal? I remember looking at condos in Yorba Linda around 2008. $400k for a converted apt!!!
With collapsing demand at that price, who cares?
My cuz paid almost $1 mil for an SFR up there last year, and that was a short sale, at several $100K below the principle owed on the note.
My condolences to his wife and kids.
Wife yes, kids no, cats yes.
The cats are a lot less expensive than kids, and they also have two incomes plus a nearby condo to sell which they owned free-and-clear which should help lighten the financial burden of ownership.
Bought in 2013? Hopefully no plans for children.
Way past that…thinking ahead to a happy, comfortable retirement.
The cats are a lot less expensive than kids, and they also have two incomes plus a nearby condo to sell which they owned free-and-clear which should help lighten the financial burden of ownership.
The cats have two incomes and a condo, they must be fat cats.
So what does $1 mil get you now??? Not much I suppose.
I’ll guess.
2200 sq ft of house, about 6,000 sq ft of land and a house that needs some remodeling?
No, more like a nice 2200 sq ft McMansion in a nice neighborhood with guest rooms upstairs and a large backyard with a patio for entertaining. Remember, this was a short sale, so they paid maybe 33% under what the last buyers paid.
This is my cousin who one day drove up in what looked to be a nice new Lexus. Turns out that was more-or-less of a short sale, too, as the previous buyers had defaulted on their note, and the car was priced below the comps. This guy definitely has a head on his shoulders when it comes to buying nice stuff at fire sale prices!
Possible fly in the ointment: I don’t think they managed to sell the condo yet, which was planned for this spring…
Just checked up on Lil’ Sis tonight. She never managed to sell yet to the single mom drug dealer Section 8 fraud artist who occupies her accidental rental home along with four lovely children by various fathers.
It’s all good, though, as Quadra Mom faithfully comes up with cashola to make good on the monthly. Lil’ Sis has a don’t ask / don’t tell policy with respect to the source of her stay-at-home mom tenant’s rent payments.
It is doing them such a favor to be priced too high. Maybe it will convince them to leave.
The pain has gotta get to the point where change makes more sense.
N. Bethesa, MD(DC Metro) Housing Prices Crater 36%; Inventory Skyrockets 100%
http://www.movoto.com/north-bethesda-md/market-trends/
The median LIST price drop is due to the market skewing toward condos instead opf SFH, but $/sq ft for all types is still dropping. Really, that’s not surprising. People are still high off of last year’s bubblet and are listing too high.
Good point. Let me be more accurate.
N. Bethesa, MD(DC Metro) Single Family Housing Prices Crater 49%; Condos Crumble 36%
“Default notices — the first step in the state’s foreclosure process — jumped 6% from the previous quarter to 19,215, research firm DataQuick said Tuesday. New foreclosure filings rose 3.5% from the first quarter of 2013.”
Well, duh, prices go up and the default notices also go up. And this is a surprise?
Why should the lender assume responsibility for property when prices are low? That’s when it’s better to allow somebody else to accept responsibility. No, the lender should take back the property when prices are high so he can sell it off and gain back some money.
Better to keep the property in limbo until prices recover, maybe by using such means as allowing the homebuyer to believe he is the homeowner.
““The year-over-year increase was the first such rise since the last three months of 2009. However, the increase came solely from a significant surge in January, as notices of default jumped 64% from a year earlier.””
Broken record here:
January 2013 was artificially depressed due to the start of the “Homeowner Bill of Rights”. February and March were both down year on year.
Direct your attention to the 4.4 MILLION excess, empty and defaulted houses in CA.
‘January 2013 was artificially depressed due to the start of the “Homeowner Bill of Rights”
https://www.youtube.com/watch?v=8lXdyD2Yzls
LOLZ^
Rental Watch:
http://www.costelloentertainments.co.uk/AdminImages/gallery/12/contortionist_tomas2-gall.jpg
That’s a touchdown right there.
Boy, I’m really being put in my place. I should be ashamed for pointing out nuance in the data that is lost on the MSM and people looking for bad trends.
You need to study the data and methodology first. Be more data driven.
“You need to study the data and methodology first. Be more data driven.”
LOL.
My MS is in what would widely be considered financial engineering (I know for a fact that others from my program were directly involved in the creation of some of the crazy RMBS products and CDO shennanigans during the bubble)…if nothing else, I understand numbers and data, and am substantially driven by the data.
Which is why I keep looking for your source for the 4.4MM homes…and you can’t provide it.
You don’t even need to send me a link, just the entity responsible for the estimate.
You do some engineering for sure. None of it is recognized by anyone. Stick with the data instead of drawing conclusions based on what your calling engineering.
Hint: You’re no more an engineer than you are a developer or contractor.
Still looking for your data source. Just the source. No link needed.
The real irony here is Housing Analyst represents himself as an analyst. Keep renting HA, that is where you excel!
It’s been given over and over again. You just don’t like the source.
It’s been a while since my response. I’ll bet he’s searching for some number in some article somewhere that he can somehow twist into his 4.4MM.
It shouldn’t be so hard to cite a source for a number that he so regularly posts.
What is the source?
You are posting two sentences to evade an answer that should take a few words.
Why the evasion?
You know exactly where to find it. You just don’t like the source.
WHAT IS YOUR DATA SOURCE!?!?!?
You are putting in an awful lot of energy defending a number without sharing a supposedly very strong source.
I’ve been looking for your source by scanning the old blog posts, and frankly, I can’t find it through LOTS of old posts.
Put me in my place, show me how much I don’t know, post your source.
You love to try to make me look foolish. Sharing data that is HUGELY different than all the data I post seems like a slam dunk to make me look like an idiot. Why won’t you do it?
I know you understand how to post links, you do it every day, but I’m not even asking for a link…just the name…the source of the data.
It is completely illogical for you to NOT share this data source to make me look stupid.
JUST DO IT!
What are you afraid of? Why won’t you prove me the fool?
I’m sticking my chin right in front of your face and spitting on you, why won’t you punch me?
I dare you. I double-dog dare you.
Energy? You’re multi-paragraph posts full of tripe?
Versus;
My effortless sentence of truth?
Alot of energy? Who?
It’s not going to save you from your losses.
You sir, are a coward and a liar.
I’d be lashing out too if I were looking down the barrel at your losses.
Distract, deflect, change the subject.
Whatever you do, don’t expose yourself as a liar by admitting that you don’t have a source.
You just don’t like the source. I wouldn’t like it either if I were doubled down on depreciating assets in a collapsing demand environment.
I don’t know your f’ing source. That’s why I’ve been asking you.
Clearly you don’t have one. Which makes perfect sense, since your numbers are completely nonsensical.
Sure you do. This is just your way of avoiding it. Youre not interested in data. You’re trying to save yourself but I think you already know its far too late for that now.
Well, if I already know the source (which I don’t), can you at least cite the source for everyone else so:
1. They will know the source;
2. They’ll see that I’m not worth listening to; and
3. That you are very smart and knowledgeable.
You get to spread the truth, make me look bad, and make yourself look good. It’s a no lose situation for you.
Otherwise, people will probably think the opposite, that you are the liar and I know what I’m talking about.
It seems like you wouldn’t like that.
Or, are you simply adhering to the old saying:
“Better to remain silent and be thought a fool than to speak and to remove all doubt.”
Sure you know the source but it doesn’t fit into your hopeless narrative.
Well, there you have it folks.
No data source.
4.4 million “empty, excess, defaulted” houses in California is a flat-out lie.
Plain and simple.
There is no other explanation for HA’s unwillingness to provide a source for the data.
None.
It’s a reality that you just can’t bring yourself to admit. That’s your problem, not ours.
I’m still waiting to hear about your contortions on the deadbeats bill of rights thing. I’m really glad you are here RW. Flip flopping, grasping at every flimsy cheerleader article. You should have sold when you could. Now prepare to have your bones unmercifully picked.
It’s pretty simple From December 2012 to January 2013, there was a HUGE decline in NODs filed. This was due to banks changing how they were processing foreclosures.
In February 2013 and March 2013, there was a big spike upward in NODs filed.
This altered the basis on which year-on-year comparisons were measured.
So, January 2014 was measured against January 2013–the big spike up had much more to do with the start of the Homeowner’s Bill of Rights than there being a big change in the state.
What is the data evidencing this?
1. The Jan-2013 to Jan-2014 NOD filings showed a big spike of 50-60% UPWARD. However, the Q1 2013 to Q1 2014 only showed a 10% increase. The ONLY explanation for this is that February 2014 and March 2014 were BOTH down year on year, which is also shown on the data.
Property Radar tracks this monthly (only back a year though), but their NODs March 2013 to March 2014 are DOWN 24% year on year.
http://www.propertyradar.com/trends/california
Here is their report for December 2013, where you can see the decline from December 2012 to January 2013, and then the spike back up in February and March:
http://www.propertyradar.com/reports/real-property-report-california-december-2013
See the green line in the last graph on the page.
2. Some would say that the Homeowner Bill of Rights STOPPED the distress from being processed. However, the data from LPS doesn’t show this. The most recent data from their “First Look” indicates a non-current loan rate in CA of 4.7% in March 2014. This is DOWN from March 2013, where the non-current loan rate was 7.0%
http://www.lpsvcs.com/LPSCorporateInformation/NewsRoom/Pages/20140422.aspx
(see second to last chart showing the steady decline in CA of non-current loans)
See HA, it’s EASY to post sources, you can do it too!
You know, posting links to loan servicers, who are actually handling the shadow inventory, doesn’t show much insight. Property radar is a REIC hack outfit. If they put out stuff that UHS don’t like, they go out of business. Why do you think Chris Thornberg turned into a rat? You never answered my questions about the Reuters report on the regulator of the GSE’s saying they have 700% shadow inventory. What about Dataquick saying the median origination age of foreclosures in California is 2006?
You just don’t get it. It’s not current foreclosures so much. It’s that millions of foreclosures from way back are just sitting there. It’s foaming the runway for the banks, and you’re the foam. Now house prices are headed down, again. What’s going to happen to all these underwater borrowers? What’s going to happen to the people who stood in line at open houses the past couple years? Joshua tree, that’s what.
Stick with the fundamentals;
-Resale housing prices 300% higher than long term trend
-Excess empty housing inventory of 25 MILLION houses
-Housing demand collapsing to 20 year lows
I know you can do it if you try.
Where’s the Reuter’s report? I’d be happy to look at it. I suspect they are talking about NATIONAL numbers, which includes judicial states like FL, NY, NJ, and it is NOT specific to CA.
And the Dataquick information. I’d be happy to look at that too. Candidly, I’d be more worried if the median age was older. There is lots of data (including from LPS) that shows a MUCH higher rate of default for homes that are underwater than homes that are above water.
This is logical…if you are above water than start missing payments, you simply sell the house, you don’t go into foreclosure.
It doesn’t take much math to conclude that the homes most likely to be underwater are those that were purchased in 2005-2007 (during the height of the bubble)…making the median age of these most highly at risk, underwater loans, probably somewhere in 2006. No shocker there.
In fact, if you look at Fannie’s Q4 2013 credit supplement (Page 9), you see that MOST of their credit losses for years 2009-2013 are from loans originated in 2005, 2006, and 2007 (about 70-80% of credit losses for each year come from these three years combined). So, the median origination age of the distress is consistent with other data sources.
The question is “What did states do with those defaulting loans?”
If the state was judicial, they most likely swept them under the rug, making their non-current loan rate stay quite high as reported by LPS.
If the state was non-judicial, they generally have been working through the foreclosure process over the past 5-6 years, and are largely through it (again, as corroborated and consistent with LPS).
States with the longest time to foreclose as reported by RealtyTrac?
Judicial states (NJ at 1,103 days, NY at 986, FL at 935). Again, consistent with my view and no surprise.
Have you looked at the LPS state-by-state data? I’ve been following these trends for several years now, and that is exactly what the data shows. Additionally, there are plenty of articles about the same thing (judicial states with a backlog, non-judicial states without a backlog).
————————
“millions of foreclosures from way back are just sitting there.”
Do you think this is specific to CA? If so, what is the source of your information? If you say these are national numbers, then you will get NO debate from me. And in fact, I’ve commonly commented on how badly other states have been dealing with distress.
However, where is the source of the data tying massive shadow inventory to CA?
I get it, discredit my sources with data that doesn’t fit your world view. Fine.
You don’t want to believe LPS with their non-current loan rate at 4.7% in CA.
Fine.
You don’t want to believe Foreclosure Radar with their 41,000 REO in CA (not millions of homes).
Fine.
You don’t want to believe Fannie’s Quarterly Credit Supplement showing 4,931 REO inventory from CA as of 12/31/13, and serious delinquencies in CA at 0.98%.
Fine.
You don’t want to believe the vacancy rates published by the Census showing CA’s vacancy rates being near the pre-crisis lows (or below in the case of rental vacancy rates).
Fine.
You don’t want to believe the macro data that shows CA having fewer housing units per population than all states except perhaps Utah (and Utah may have slipped to #2 by now).
Fine.
You don’t want to listen to RealtyTrac, who notes a substantial portion of the homes that have been foreclosed and are REO are still occupied in CA (supporting the low vacancy data).
Fine.
You don’t want to believe CoreLogic’s data, that shows CA’s foreclosure rate at 0.7%, and their serious delinquency at 2.6%, which corroborates the LPS data.
Fine.
You don’t want to believe Freddie Mac’s Q4 2013 Credit Supplement that shows CA’s serious delinquency rate at 1.3%, WAY below FL and NJ which are above 6%.
Fine.
You don’t want to believe the NY Fed’s data that shows CA’s 90+ delinquency at below 3% (and below the national average), or that CA has among the FEWEST number of loans going from current to 30+ days delinquent in the country.
Fine.
That’s all fine. You can make up whatever excuse you want about why all of these data sources that corroborate my view that CA as a non-judicial state has worked through their distress much faster than judicial states, but I have yet to see a data source that shows a substantial amount of shadow inventory remaining in CA as compared to other states.
Where is the contrary data with respect to CA?
That is why I’m trying to get the source from HA for his 4.4MM number.
From a national standpoint, I get it. There is lots of shadow inventory, but that shadow inventory is concentrated to a greater and greater extent in places like FL, NY, NJ and IL. Much less of the shadow inventory is in CA, AZ, and CO.
And I’ll ask again with respect to Shadow Inventory in CA…WHERE IS THE CONTRARY DATA?
You want to discredit Property Radar? Fine.
RealtyTrac (the source of the 57% data) says the same thing.
The article you posted above says that same thing:
“The year-over-year increase was the first such rise since the last three months of 2009. However, the increase came solely from a significant surge in January, as notices of default jumped 64% from a year earlier.”
Regardless of which data source you think is most credible, Property Radar, RealtyTrac and the article above are all consistent…January 2013 to January 2014 was an outlier month for the quarter. I see the reason being the start of the HBOR making the 1/13 number artificially low, which is consistent with the other two monthly year on year comparisons for the quarter being different. You may see it as CA getting much worse, which is inconsistent with the Feb and Mar y-o-y comparisons looking more favorable.
‘Where’s the Reuter’s report?’
I’ve only posted it a dozen times.
If I was one of your “investors”, I’d be worried about you. I’d think you are fooling yourself or trying to fool me. I wouldn’t give you ten cents of my money.
Is the Reuter’s report about national data?
‘January 2013 to January 2014 was an outlier month for the quarter. I see the reason being the start of the HBOR making the 1/13 number artificially low, which is consistent with the other two monthly year on year comparisons for the quarter being different. You may see it as CA getting much worse, which is inconsistent with the Feb and Mar y-o-y comparisons looking more favorable’
See, this is the bull shit that I would slam the door on a salesman on. Do you have any experience in encyclopedias?
Found it:
http://www.reuters.com/article/2013/05/31/us-usa-housing-idUSBRE94T10V20130531
Yes, this report is from national data from May 2013.
It says that 1.7 million borrowers backed by GSEs were delinquent several payments.
This is about 3.4% of all loans (and a higher percentage of just GSE loans).
This is consistent with the NY Fed’s Household Credit report:
http://www.newyorkfed.org/householdcredit/2013-q4/data/pdf/HHDC_2013Q4.pdf
Page 22, that shows 90+ days delinquent at about 5% of all loans nationally in early 2013, which implies that GSE loans represent 70% of all loans, which isn’t a crazy number.
At that time, CA’s percentage of such loans was also at about 5%, but on a much steeper trajectory downward.
Now nationally, CA is at under 3%, and everyone else is still a bit higher at about 4%.
Sorry you think I’m trying to fool you–I try to share all the data I have that supports my perspective, so you can at least see the third party sources (and I’m not quoting numbers without sources).
Generally speaking, in CA, I think we are facing a “last concert ticket” problem, in that prices are artificially high due in large part to severe lack of supply. If supply picks up a fair bit, I expect that even in a strong economy with low interest rates, CA home prices will come back down somewhat. However, with CEQA, I’m not holding my breath for the supply to come on board quickly.
In part for this reason, we are in the process of exiting housing. No need to take that risk unnecessarily (of being around when more tickets are printed).
Did you even look at the graph from the Property Radar Report from December ‘13?
December 2012 had NODs at about 12,000
January 2013 had NODs at just under 5,000
February 2013 had NODs at about 7,500
March 2013 had NODs at about 8,000
April 2013 had NODs at about 10,500
Doesn’t this look like there was something that must have changed from December ‘12 to January ‘13?
What could that have been? Perhaps a state law that took effect in January ‘13 that altered the foreclosure process?
My goodness…you REALLY don’t see this massive dip for January ‘13? And you REALLY don’t understand how it would impact what the January ‘13 to January ‘14 year-on-year comparison shows?
Wow. Just wow.
‘Sorry you think I’m trying to fool you’
You’re not fooling me, you don’t have any of my money.
‘we are in the process of exiting housing’
Good luck!
Nice work RW. Seems a little quieter on the hyperbole now.
“I’d think you are fooling yourself or trying to fool me.”
The behavioral finance guys call this belief manipulation.
We see alot of that around here — ALOT!
‘we are in the process of exiting housing’
You and all the smart investors in China, to boot.
Asia Markets
In Chinese Property, Smart Players Are Selling
The Tycoon Li Ka-shing Unloads Projects in Shanghai, Guangzhou; Richard Li Sells in Beijing
By Esther Fung
Updated April 22, 2014 12:48 p.m. ET
SHANGHAI—For years, Chinese property has been a sure bet for savvy investors looking to ride the country’s economic surge.
Now, some of the best-known names in Chinese investing are cutting back, at least for the present.
Since September, Hong Kong tycoon Li Ka-shing, widely considered Asia’s richest man, has sold office and shopping-mall projects in the cities of Shanghai and Guangzhou. His son, businessman Richard Li, sold a prime piece of real estate, a mixed-use complex in Beijing’s Sanlitun shopping district, for US$928 million in early April.
Soho China Ltd., which develops property only in Beijing and Shanghai, sold two office projects in Shanghai in February for 5.23 billion yuan (US$837 million) in total.
The move to sell real-estate projects “is looking like a really smart call right now,” said Colin Bogar, managing director of real-estate private-equity firm MGI Pacific. Hutchison Whampoa Ltd., one of the elder Mr. Li’s main property businesses, didn’t respond to several requests for comment.
…
Again. Stick with the fundamentals-
-Resale housing prices 300% higher than long term trend
-Excess empty housing inventory of 25 MILLION houses
-Housing demand collapsing to 20 year lows
Herndon, VA Housing Prices Crater 17% YoY; Inventory Up 51%
http://www.movoto.com/herndon-va/market-trends/
N. Potomac, MD(DC metro) Housing Prices Plunge 16% YoY
http://www.movoto.com/north-potomac-md/market-trends/
Arlington, VA Housing Nose-dive 37% YoY; Inventory Balloons 29%
http://www.movoto.com/arlington-va/market-trends/
“While housing inventory has loosened since last year, it’s still below what’s considered typical in a normal market,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Many of the listings continue to be priced above what the market will bear and are not moving.”
It’s interesting that we have posters here who are in more denial than Leslie. Oh well, the market needs knife catchers.
MOM price:
San Francisco $902,540 $964,670 -6.4%
You can always count on LesterAppletonYun for at least one grand distortion per month.
Over a 75 percent decline annually!
You know all those people living in houses that are not moving? Well, the people aren’t moving either. In other words, they are wiped out of the market. They are useless to realtoRs and have no effect on house prices. They will have an effect when they die or get foreclosed on. One or the other.
‘The housing market is off to a sluggish start this spring because of tougher lending standards, the increase in housing prices that has carried over from last year, and a labor market that’s still wobbly. But perhaps the biggest hurdle is the growing burden of debt on America’s college graduates.’
“You have to have that swath of first-time buyers who will eventually be your move-up buyers,” said Dustin Hobbs, spokesman for the California Mortgage Bankers Assn. “When you take that out, it damages the whole chain.”
It is truly amazing to see the California housing market bubble all the way back to pre-2008 prices, even though the recession is still going strong here with unemployment stuck north of 8%.
Can anyone cite a historic example of such a massive runup in California housing prices while the jobs market was in the toilet?
‘A group of seniors, people with disabilities, supporters, and co-sponsors; Housing Rights Committee of San Francisco, Senior and Disability Action, Eviction Free San Francisco, POOR Magazine, Gray Panthers of SF, Anti-Eviction Mapping Projet, Bill Sorro Housing Program and the Alliance of Californians for Community Empowerment (ACCE), confronted the San Francisco Association of Realtors today. The group planned to deliver a letter of demands in person, but no doubt due to the Association’s “24-hour surveillance camera” they saw us coming and posted 2 SFPD outside. A lone representative was sent outside to accept our letter. The activists remained, held a rally and press conference with testimonies from seniors and people with disabilities.’
‘The press release issued by Seniors & Disability Action stated: “Seniors and people with disabilities, hard hit by the eviction crisis, will rally in front of the San Francisco Association of Realtors on Tuesday April 22nd to call for the Association, the city’s real estate lobbying group, to not oppose proposed legislation to the Ellis Act now being proposed in Sacramento as well as putting a moratorium on evictions for seniors and people with disabilities.”
‘”The San Francisco Board of realtors has opposed legislation beneficial to tenants in the past, including any proposals that would expand rent control. San Francisco’s eviction crisis is out of control with a 178% increase in Ellis Act evictions over the last 3 years and the loss of 1000 units of rent controlled units in the last 2 years—10,000 since 1997. Seniors and people with disabilities have had enough.”
“Association of Realtors…the city’s real estate lobbying group”
Barking up the wrong tree.
‘We still need to have first-time home-buyers be 50 percent of the market. You need to get people on that ownership ladder.’
I always feel sorry for young people who get suckered into overpaying for a so-called California starter home.
It’s a ladder Whac, it is not a “home”. Jeesh, y do u have 2 b so quaint?
I’d hate to get whacked by one of those ownership ladders landing on my head!
‘The days of easy credit are gone, but homebuyers can still get mortgages with little to no money down if they know where to look. From down payment assistance grants to interest-free second mortgages and other special mortgage programs, there is a growing number of options for people who want to buy a home without a down payment.’
‘Buyers can earn as much as 120 percent to 140 percent of the median area income and still qualify for some down payment assistance programs. For instance, a buyer living in Orange County, Calif., can earn nearly $98,000 a year and qualify for a grant of up to 5 percent of the purchase price of the home, according to the requirements of one down payment assistance program available in the state.’
“This is a no-strings-attached grant,” says Scott Schang, branch manager at Broadview Mortgage in Long Beach, Calif. “Getting qualified for a mortgage (through one of the lenders participating in the program) automatically qualifies you.”
Have home sales noticeably plunged in your area?
Bulletin Sales of new single-family homes plunge 14.5% in March »
April 23, 2014, 10:00 a.m. EDT
Sales of new single-family homes plunge 14.5% in March
By Ruth Mantell
WASHINGTON (MarketWatch) — Sales of new single-family homes plunged 14.5% to a seasonally adjusted annual rate of 384,000 last month, hitting the lowest level since July, with drops in three of four U.S. regions, the government reported Wednesday. Economists polled by MarketWatch had expected a March sales pace of 450,000, compared with an originally estimated rate of 440,000 in February. On Wednesday, the U.S. Commerce Department revised February’s sales pace to 449,000. Economists caution over reading too much into a single monthly home-sales report. In March, the confidence interval for sales was plus or minus 12.9%. Home sales have been restrained over the past year by rising mortgage rates and home prices, as well as low inventory. In recent months harsh weather likely also played a role, economists say. Data details shows that the sales pace dropped in three of four U.S. regions, rising only in the Northeast. Median home prices continued to climb, hitting $290,000 in March, up 12.6% from the year-earlier period. The supply of new homes on the U.S. market rose to 6 months at the March sales pace from 5 months in February. New-home sales in March were down 13.3% from the year-earlier period.
Again with the collapsing housing demand articles.
It’s getting tough to keep up with them all. The half dozen or so links posted to this thread starter all speak to collapsing housing demand.
Why is housing demand collapsing?</i
nope bama still hiring fed workers
I’m 15 miles sw of the central soviet
nnnnnnnnnnope.
Cratering demand and cratering prices.
Enjoy.
Yes they have. I’ve also noticed a lot more “for sale” and “for rent” signs here in Tucson. Quite a few of them are right next to each other. As in, “We’ll take the money any way we can get it!”
There you are! I was a bit worried.
Slim:
I’m in Phoenix right now. I am noticing multiple for-sale signs popping up in condominium complexes, and they are not going away. The only time a for-sale sign goes away, it always just disappears, without getting a “Pending” notice first. There are multiple houses to choose from in any give neighborhood as well.
Not true Fred, if you sell your property you can “exempt it from the MLS”, many homes look like they dropped off, in reality folks don’t want the neighbors to know.
It just happen in my sisters area, they thought the house across the street was removed from the MLS instead a moving truck came and moved out.
The reason, they bought the home for 989k and sold it for 909k they were embarrass and the real estate agent told them hardly anybody will check public recorded in 60 days, by then all won’t care.
Of course a comp of 909k also won’t be in MLS only the appraisers will know.
‘In 2012, the US Department of Justice and the attorneys general for 49 states touted a historic legal settlement with big mortgage lenders, saying it would provide justice for people who lost their homes in the foreclosure crisis and would prevent further abuses by banks that had caused the Great Recession.’
‘San Mateo attorney Matthew Mellen has also filed hundreds of civil actions against banks for their ongoing violations of state laws in spite of the National Mortgage Settlement. Many of his clients are like Hyatt Chaghouri, who purchased a small house in San Bruno in 2006 with a loan from World Savings Bank. Chaghouri alleges that a World Savings loan officer “concealed from her that the loan was actually negatively amortizing,” according to a lawsuit filed two months ago in the San Mateo County Superior Court. The negatively amortizing feature of the loan caused Chaghouri’s monthly payments to balloon in 2007. When Chaghouri sought a loan modification from Wells Fargo (which purchased World Savings in 2008), the bank failed to provide her with a single point of contact, repeatedly passing her off to different “home preservation specialists,” said Mellen. This was in direct violation of the National Mortgage Settlement and the Home Owners Bill of Rights.’
“The National Mortgage Settlement is useless,” said Mellen. “This is the greatest fraud in history, and it’s going on right now day after day. Millions of more people are going to lose their homes, and the banks are incentivized to keep doing this.”
‘Lenore Albert is a plaintiff’s attorney in Orange County where she represents a seemingly endless stream of clients who contact her with stories of bank fraud and misconduct in direct violation of the National Mortgage Settlement and other laws. As to why these banks haven’t been prosecuted for the foreclosure crisis, and why they’ve been allowed to continue violating the National Mortgage Settlement and numerous state and federal laws, Albert said, “that’s the million dollar question.”
“What we see is that anything having to do with the National Mortgage Settlement [is] not being prosecuted by the attorneys general. They decided to settle everything out of court and just take the money.”
‘The banks have refused to release detailed data on the financial relief they’ve provided. Moreover, the total level of relief is small relative to the size of the foreclosure crisis. For example, there were approximately 34,000 foreclosures in Alameda County from 2006 through 2013…Yet the big five banks covered by the settlement only provided 1,600 first-lien mortgage principal reductions as a result of the settlement.’
‘Even more worrisome is the fact that the foreclosure pipeline is still in effect. There were 2,800 notices of default issued in Alameda County last year, three times the number of foreclosures. Many of these borrowers recently hit with notices of default will be foreclosed on in the next year or two.’
“34,000 foreclosures in Alameda County”
Ok…..34,000 excess, empty and defaulted houses in Alameda county with contractors throwing up new spec houses on every street and there is “low inventory”?
BHWAHAHAHAHAHAHAHAHA
“For example, there were approximately 34,000 foreclosures in Alameda County from 2006 through 2013″
You conveniently left out that 34,000 is not the current number, but the total over SEVEN years.
As of today, REO (foreclosed and NOT resold) in Alameda County is 1,200, so 96% of that distress has been recycled back into the market already.
That number is COMPLETELY IRRELEVANT to today’s supply of shelter.
Whether its seven months or seven years is entirely IRRELEVANT to the fact there are tens of thousands of excess, empty and defaulted housing units in Alameda County, CA.
“there are tens of thousands of excess, empty and defaulted housing units in Alameda County, CA.”
Based on what?
Q4 2013 Census Vacancy Data for the SF/Oakland/Fremont MSA:
Rental Vacancy Rate: 3.2% (US Average - 8.2%)
Homeowner Vacancy Rate: 0.9% (US Average - 2.1%)
Yeah, really seems like there is a lot of excess housing slack in the part of the country.
Based on the 4.4 million excess empty and defaulted house set aside as a result of CA foreclosure moratoriums.
……back it up HA. You can’t, so STFU or put up the stats. Rental Watch is eating you alive.
“Whether its seven months or seven years is entirely IRRELEVANT to the fact there are tens of thousands…..”
Sure, but it is entirely relevant to your post.
The duration it took to develop the volume of excess empty houses is irrelevant.
Now lets discuss it. 4.4 Million excess empty houses in the state of CA alone. 25 MILLION nationally.
Go ahead.
Name your source.
You say I ignore the source because I don’t like it…is the source the Census?
Name your source.
You don’t like the source. Deal with it.
“You don’t like the source….”
Is that because you are the source, HA? Ha, ha, ha!
Fundamentals J._Fraud…. fundamentals.
-Resale housing prices 300% higher than long term trend
-Excess empty housing inventory of 25 MILLION houses
-Housing demand collapsing to 20 year lows
Millions will lose their homes, and millions of others will gain those same houses at reduced pricing. So what?
California Housing Demand Collapses 11% YoY; Plunges To 4-Year Low
http://www.zillow.com/local-info/CA-home-value/r_9/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D14%26r%3D9%26el%3D0
Nevada Housing Demand Plunges 28% YoY; Now At 10-Year Lows
http://www.zillow.com/local-info/NV-home-value/r_42/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D14%26r%3D42%26el%3D0
Hawaii Housing Demand Slides Lower 5% YoY; Now At 3 Year Lows
http://www.zillow.com/local-info/HI-home-value/r_18/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D14%26r%3D18%26el%3D0
Virginia Housing Demand Craters 16% YoY; Slide Accelerates
http://www.zillow.com/local-info/VA-home-value/r_56/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D14%26r%3D56%26el%3D0
Georgia Housing Demand Dives 12% YoY
http://www.zillow.com/local-info/GA-home-value/r_16/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D14%26r%3D16%26el%3D0
New York Housing Demand Crumbles 5% YoY; Declines Continue
http://www.zillow.com/local-info/NY-home-value/r_43/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D14%26r%3D43%26el%3D0
Arizona Housing Demand Dives 19% YoY; Crumbles To 10 Year Low
http://www.zillow.com/local-info/AZ-home-value/r_8/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D14%26r%3D8%26el%3D0
I guess homebuyers will rent and sit on the sidelines for many a moon, not???
This is a now a classic standoff of buyer and seller, much different then lending practices that caused the crisis.
What this latest trend is the home prices were going up to fast, underwater sellers want somebody to bail them out of their 2006 mistake.
Many sold homes over the last 1.5 years were sellers who took a bath to get from underneath the payments and sold at a loss.
Now what was left , people who can afford to stay in their underwater homes or sellers who want to move to new digs.
Prices have stabilized over the last 90 days, buyers are still hoping for a housing crash not going to happen.
Either the Fed will come up with creative ideas to get the homes sold or sellers will stand pat, reduce prices 3 to 5% or remove the listing. That puts millions of buyers in limbo, and Americans are very impatient animals, they want to get it done.
In the end, folks want to live in their own house, apts or house renting is for single, out of work, and divorces etc. who can’t buy a house anyway not anymore with tight lending practices.
Qualified buyers will buy again they always do, it is just a matter of waiting out the market and this time the Feds, banks, and sellers will have much more patience?
Prices resumed falling as they should.
Remember, current asking prices of resale housing are 300% higher than long term trend.
What this latest trend is the home prices were going up to fast, underwater sellers want somebody to bail them out of their 2006 mistake.
There are two examples of that very thing within easy walking distance of the Arizona Slim Ranch. Matter of fact, one of them is right behind me. Fourth time that house has been on the market since 2007. And the guy’s taking a real haircut this time.
Either the Fed will come up with creative ideas to get the homes sold or sellers will stand pat,”
No the Banks have been bailed out the FED won’t care anymore about housing anymore. They will be worried about deficits and how to fund them without a dollar collapse. part 2 broken promises ahead
Yup, the Fed will prevent all prices from going down, just like they always have.
How can housing demand collapse in so many different ways simultaneously?
April 23, 2014, 7:37 a.m. EDT
U.S. mortgage-application volume falls 3.3%: MBA
By John Kell
The average number of mortgage applications last week slid 3.3% from the prior week’s level, as interest rates broadly increased, the Mortgage Bankers Association said Wednesday.
Mortgage applications tracked by MBA have now slid in five of the past six weeks, and volume has generally declined in 2014. The MBA has reported higher mortgage applications for only three weeks since early February.
The average rate on 30-year, fixed-rate mortgages with conforming loans climbed to 4.49% from 4.47% the previous week. Rates on 30-year, fixed-rate mortgages with jumbo-loan balances grew to 4.41% from 4.39%.
The average rate for 30-year, fixed-rate mortgages backed by the Federal Housing Administration increased to 4.2% from 4.14% the prior week.
The average rate for 15-year, fixed-rate mortgages climbed to 3.55% from 3.54% the prior week. The 5/1 ARM average ticked up to 3.16% from 3.15%.
…
How can housing demand collapse in so many different ways simultaneously?
And houses still remain unaffordable?
‘Foreclosures peaked in Sonoma County in 2008 amid a dramatic plunge in housing prices. Lenders are still dealing with problem loans that were originated eight years ago before the housing bubble burst. Most of the California loans in default are from the 2005-2007 period, DataQuick reported. For more than four years, the median quarter of origination for such loans has remained the third quarter of 2006.’
‘James Madison, an agent for Coldwell Banker in Santa Rosa, said he still has enough work this year with about 30 bank-owned properties under his care at any one time. “I anticipate that this thing will go on for another year, maybe another two years,” Madison said. “I’m not really sure.”
‘Lenders, he said, these days seem to be dealing more with problem properties, including those in flood zones or with tenants still living in the houses. In some cases, the banks have sent default notices or scheduled foreclosure auctions on several occasions for the same property. “It is a little mind-boggling,” Madison said.’
But there’s no shadow inventory:
‘For more than four years, the median quarter of origination for such loans has remained the third quarter of 2006′
“But there’s no shadow inventory”
I am a CPA in West Palm Beach, Fl. I have dozens of clients who still live in their homes rent free without making ANY payments to the bank. I read recently in the Palm Beach Post that shadow inventory had decreased significantly in Palm Beach County, almost to pre-crisis levels. I dont see it.
There’s bidding wars still going on in my area for 3/2’s in good neighborhoods in good school districts. My insurance agent client and friend told me this. Many of my aforementioned clients LIVE in 3/2’s in good school districts and their houses are in foreclosure and they have not paid anythhing in over 5 years.
Realtors down here are pulling in sellers saying that the cold winter up in the northeast will help them attract buyers at prices that, in my opinion, are unreachable.
Yet, just today, the newly released US housing report said that MOM sales decreased everywhere in the US except the Northeast.
Also, I just read an article on CNBC that said Traders were SHOCKED today that the market was basically flat despite the poor housing report.
I know this post is all over the place, and may seem rambling, but to sum up, there just seems to be a major disconnect between what info is available and reailty. Any thoughts?
” there just seems to be a major disconnect between what info is available and reailty. Any thoughts?”
Stick around here and read and you’ll find out in a hurry. Theres a small but loud minority who’ve staked their wallets on false narrative you’re talking about. Here are the truthful housing fundamentals;
-There are 25 MILLION excess empty and defaulted houses. Most of which are concentrated on the coasts. An additional 35 MILLION are just starting to empty as boomers retire. (think how the reverse mortgage scam fits in here)
-Current asking prices of resale housing are at a very minimum 3x long term trend price and 6x on the coasts.
-Current asking price of resale housing are 3x construction costs
-Housing demand has fallen to 20 year lows and still sliding
Now these are the primary fundamentals you’re referring to and alot of money is spent to suppress any discussion of them. We encourage you to make them central to your discussions of housing as they are not going away no matter much money is spent to divert attention from them.
Are you trying to say that it’s hard to believe we have a “recovery” in house prices, even while banks still feel the need to allow ppl to live in their collateral rent-free? It’s hard for me to believe as well.
On a similar note, inventory in Phoenix is up 95% from last year, yet prices are very slowly trending upward. Might the upward trend be a result of the psychobabble that the mainstream media bombard us with every day? Like buyers still believe that they HAVE to offer above asking to get a house, even though they actually don’t because there are more sellers than buyers. It’s only a matter of time before reality catches up.
they have not paid anythhing in over 5 years.
This is the situation that gets me the most angry…….all because i didn’t want to buy a house i couldn’t afford…
The amount of money ohbewanna has tossed to DEADBEATS is staggering.
$1500 month..$18K yr over $90K and ill bet they didn’t save a dime…so we will see them on TeeVee whining about the sheriff tossing their stuff to the street.
This is why, in general, I am for moving taxes and spending to a more local level. When the pot gets as big as it is at the federal level, these kinds of “pet projects” get undertaken 20 Billion dollars at a time with a single vote, or even just a single policy change at the FHA/Fannie/Freddie/etc… . At least if the money were at the local level you would have to make the same bad policy decision 50 times (once per state) instead of just once to get to the same magnitude of waste. I like to think that not every one of the 50 states would make that same bad mistake.
‘In a letter to investors in his fund, hot-shot hedge fund manager David Einhorn claims “we are witnessing our second tech bubble in 15 years.” To support his case Einhorn cites examples like the rejection of “conventional valuation methods,” short sellers being forced to cover positions and big first-day pops for IPOs.’
‘Mark Luschini of Janney urges investors not to paint the tech market with quite so broad a brush. “The tech sector is about 19% of the S&P 500 (^GSPC) so a lot of companies get rolled up into that space,” Luschini notes, “While I agree that particularly some of the social media companies that were trading at 20, 50, 100 times earnings or sometimes ‘priced to hope’ earnings ratios are indicative of bubble-like characteristics, I can’t say that for the tech industry in the aggregate.”
‘While parts of the tech space are fairly valued it’s impossible to have a bubble without mass mania. History strongly suggests that when panic buying ends the selling that follows is indiscriminate. Luschini’s advice for those concerned about the bubble possibly being formed is to focus on older, steadier names and when in doubt get out. “When companies like Facebook are paying $19 billion for WhatsApp it says something about a storyline that is long on expectations and short on current profitability.”
More dogs than children in San Francisco.
More dogs than children in San Francisco.”
yea that’s werid huh? 20 years from now that place will be 99% Asian and the dogs will be .. well I won’t say it.
Aphrodisiacs?
Nice. Boulder is in the same boat…my son’s elementary school in the middle of a nice part of town was 85% Hispanic. Very few of the white folks were having kids. So rather than build another school at the edge of town they were bused in to the existing school. Of course it would have still probably been 50/50 if it weren’t for white flight from the school among all those progressive-voting folks.
Back in the day, I was one of those bused-in kids. It was a newly integrated school, and there was a lot of tension in the air. Although I don’t recall any problems with the kids of color, my mother later told me that they were disciplined a lot more harshly than we white kids were.
“March 2006: The longest sales drop in 11 years was an early red flag that bad stuff was about to happen. Southern California homebuying would fall on a year-over-year basis for 15 more months – including an annualized drop of 32 percent by March 2007.”
Dum, dum,.dum,….dumb. That might be what it was to buy anything in So. Cal. in the last 5 years. POP!!!!
SHANGHAI—For years, Chinese property has been a sure bet for savvy investors looking to ride the country’s economic surge.
Now, some of the best-known names in Chinese investing are cutting back, at least for the present.
Since September, Hong Kong tycoon Li Ka-shing, widely considered Asia’s richest man, has sold office and shopping-mall projects in the cities of Shanghai and Guangzhou. His son, businessman Richard Li, sold a prime piece of real estate, a mixed-use complex in Beijing’s Sanlitun shopping district, for US$928 million in early April.
Soho China Ltd. 0410.HK -1.12% , which develops property only in Beijing and Shanghai, sold two office projects in Shanghai in February for 5.23 billion yuan (US$837 million) in total.
The move to sell real-estate projects “is looking like a really smart call right now,” said Colin Bogar, managing director of real-estate private-equity firm MGI Pacific. Hutchison Whampoa Ltd. 0013.HK -0.93% , one of the elder Mr. Li’s main property businesses, didn’t respond to several requests for comment.
They named him Richard?
“They named him Richard?” It’s more likely that Richard named himself for convenience. Many Chinese nationals doing business in the West will choose given names that sound western, and use a western name order. In this case father is Li Ka Shing, son is Richard Li. Richard’s original name was probably something quite different.
All of our colleagues in the Beijing office take on a western name.
Interesting observation:
For the past week or so shares of American Homes for Rent (AMH) have hovered at the $16.00 mark. Every time the price slipped below that IPO price, somebody’s moved in to prop it back up. Look at the 1 day chart to see what I mean. Smart investors? Not likely…
could be executive options expiring this year even 50 cents on a couple of million shares is a nice bonus.
Every time I feel like buying a house, I read this blog then lie down until the feeling passes.
‘The CBRE team: Historically, as borrowing costs have risen, cap rates have increased along with them. Today, however, due to an over-abundance of capital combined with a lack of inventory, we are seeing a continued compression in cap rates while borrowing costs rise.’
‘A seemingly never-ending flood of capital and a lack of quality supply (particularly net-leased credit tenants in areas with dense populations and solid demographics) creates a lack of internal investments.’
‘The CBRE team: During the course of the past year, we have seen extremely low cap rates and aggressive prices per foot with our own properties. For instance, in the past couple of months, our team has sold two net-lease Chase Banks in Los Angeles County at record-setting cap rates below 4.5% and over $1,000 per square foot. We also sold a net-lease Starbucks at a sub-4% cap rate for over $2,000 per square foot. Recent multi-tenant sales included a Starbucks-anchored strip center in Oxnard and a neighborhood shopping center in Van Nuys, both of which achieved prices well in excess of $400.00 per square foot. All of these deals sold all-cash. We are continuing to see cap rates compress as investors strive to obtain properties they believe are safe yet profitable investments.’
Have I heard this before?
‘A seemingly never-ending flood of capital…’
I thought the capital stream was the explanation for way too much money in the stock market and treasuries. Now it’s the reason for way too much money in real estate too? If there is way too much money in everything, we should have a lot of inflation, but we don’t. What does that tell people?
We do have inflation.
Just not inflation that shows up in CPI, but inflation in the price of financial assets (including the stock market and real estate).
That’s not inflation. It’s price fixing.
crater
‘Fewer San Diego homes entered the foreclosure process in the first quarter of the year. That’s down 5.4 percent from a year ago. During that first quarter, 1,392 property owners got notices of default.’
“Barring a shock to the economy, we should see fewer and fewer people getting in trouble with their mortgage because fewer people are losing their jobs. More people are getting jobs,” LePage said. “But there’s also a pipeline of distressed properties that’s quite full for some of these lenders.”
http://www.kpbs.org/news/2014/apr/22/foreclosure-numbers-remain-low-san-diego/
“Statewide, there were 19,215 notices of default in the first quarter. The low mark was recorded in the third quarter of 2004, when there were 12,417. The peak was 133,431 notices of default in the first quarter of 2009.”
This seems like pretty good context for today’s level of NOD activity.
They could fall to zero and it still won’t save you.
So what you are saying is the lowest foreclosure rates occur at peak bubble times, just before a crash…?
Look no question a housing slow down has occurred to say anything different is to not recognize the elephant. As all know, I’m always bullish on buying and selling property, it means so much for our economy to keep construction and other related home industries in the blue not red.
That said, buyers and sellers must get together, a 5 to 10% reduction is very much in play for sellers. Yes buyers still have to qualify and the fringe buyer isn’t going to make it, they need to rent and save more and hope the new administration creates better opportunities which they will.
Will the Fed make a move to bolster sales and banks play along I think they have to. Buyers who have been on the sidelines again need a incentive and sellers who are marginally underwater need to sell.
As for the grossly underwater, seems like it is leveling off they can make the payments it looks like, they will have to sit and not list their home.
“it means so much for our economy to keep construction and other related home industries in the blue not red.”
I’m glad it “means so much to you”.
Erecting depreciating houses accounts for 10 or 15% of construction dollar volume.
Stick with something you understand.
test… I can’t post!
‘I can’t post!’
Who were you posting as before?
Yes your $55ft home? Where you going to build this palace?
Lets see coming soon:
Desert Vista Estates ( A Country Wide Development)
2×3 construction
2.5 bedrooms
propane
no sewers at present time?
11/4 baths
Complete landscaping with drips when (water becomes available)
Little or no down 40 year loans available
24hr 7 days a week bus service to Vegas Stateline gambling
Shopping coming soon? (minutes from downtown Barstow)
Take Land Mine rd make a kind of quick left at the old Rt66 sign. Pass the abandon Whiting’s Brothers gas station (watch for end of paved road sign)
That is what you are going to attract losers when your fantasy of housing collapses to $55ft?
‘when your fantasy of housing collapses to $55ft?’
Jeebus, are you people masochists? You can buy older houses for much less than 55 bucks/sq ft.
Housing Analyst,
I don’t know if you answered this before. Apologies if you did.
Do you rent or own?
If you rent, do you have any intention of ever owning?
if you own, do you have any intention of renting?
Stick with one username. Then let’s discuss these fundamentals.
-Resale housing prices 300% higher than long term trend
-Excess empty housing inventory of 25 MILLION houses
-Housing demand collapsing to 20 year lows
I am sticking with one name. Are you avoiding my question for some reason?
Stick with one username. Then let’s discuss these fundamentals.
-Resale housing prices 300% higher than long term trend
-Excess empty housing inventory of 25 MILLION houses
-Housing demand collapsing to 20 year lows
I am sticking with one name. I ask again, are you avoiding my question for some reason?
Why can’t I post?
Ah, finally!