May 19, 2014

The Frenzy Is Discouraging Some Would-Be Buyers

The Mercury News reports from California. “In a milestone for the Bay Area housing market, April’s home prices reached the highest levels since just before the recession began, with Santa Clara County hitting a new peak in records going back 26 years, DataQuick reported. With too many buyers chasing too few homes, Silicon Valley has seen bidding contests with houses fetching thousands of dollars over asking prices. The frenzy is discouraging some would-be buyers. ‘I see clients giving up,’ said Avi Urban with Keller Williams in Palo Alto. ‘They’re saying it’s crazy with the competition, and they’re staying at home.’”

The Press Democrat. “Sonoma County’s home sales remained lackluster in April, as agents reported that an ongoing lack of inventory has left many first-time buyers frustrated. Buyers purchased 356 single-family homes in April, according to The Press Democrat’s monthly housing report compiled by Pacific Union International VP Rick Laws. Sales declined 24 percent from a year earlier and remained below the 10-year average for April of 396 transactions.”

“The county’s median sales price declined nearly 5 percent from March to $468,975. The median remained nearly 8 percent higher than a year earlier. For the year, sales are at their lowest level since 2008, a period of recession and plunging home prices. Tim Freeman, manager of Coldwell Banker in Santa Rosa, said some first-time buyers are leaving the market after concluding that they can’t purchase a home at today’s prices. He recalled the experience of one of his agents. ‘She lost four clients within the last month because they all feel they’re being priced out,’ Freeman said.”

The Sacramento Bee. “Home prices in Sacramento have reached levels not seen since the recession gripped the market in the last decade and drove down home values, DataQuick reported. Despite the rising median, year-over-year price gains have been moderating lately, said DataQuick analyst Andrew LePage. Sacramento County’s 19 percent increase in the median home price from April 2013 to April 2014 was the lowest year-to-year gain in the past 16 months, he said.

“Many investors have left the market, reducing upward pressure on prices. Interest rates have risen. And affordability is also becoming a factor limiting sale prices, he said. ‘It wasn’t long ago we were talking about 30 to 40 percent gains,’ he said.”

“Pat Shea, president of Lyon Real Estate, said one factor limiting the number of homes listed is the historically low mortgage rates that homeowners refinanced to in recent years. Even if they want to move, people may be hesitant to give up those ultra-low rates. ‘People may not love their homes, but they do love their mortgages,’ Shea said.”

The Desert Sun. “Southern California home prices increased at a slower pace in April as inventories improved and investor purchases waned, DataQuick said. Sales fell but less sharply than previous months. ‘The housing market’s pulse quickened a bit in April. If the inventory grows more, which we consider likely, it’s going to make it a lot easier for sales to reach at least an average level, which we haven’t seen in more than seven years,’ said DataQuick analyst Andrew LePage.”

The Los Angeles Times. “Not long ago they were the punching bags of American real estate, accused of rank incompetence, wrecking home sales and failing to pick up on signs of the housing turnaround. That was then. Today appraisers are suddenly getting much more favorable reviews. ‘My personal belief is not so much that the incompetent appraisers are gone,’ said Gary Kassan, a Los Angeles-area realty agent in an email, ‘but rather that they have better comps to work with.’ With prices on the rise, ‘they have more latitude and are more comfortable stretching the comps to bring the appraisal in at sales price.’”

The San Fernando Valley Business Journal. “There were 7,521 foreclosures in the six-county region, down nearly 12 percent from the same month last year, according to RealtyTrac. In the greater Valley, Palmdale topped the list, with foreclosures in one out of every 415 homes. The other Antelope Valley city continues to struggle, with one out of every 420 homes in Lancaster in foreclosure.”

“Other Valley communities with high foreclosure rates include Granada Hills, with one in every 512 homes; Sylmar with one in every 530; and Canyon Country with one in every 554. Despite the overall decrease in foreclosures, bank repossessions – one step of a process that ranges from notices of default to bank sales – are on the rise. In Southern California, repossessions were up 49 percent in April to 1,528, compared to the same month last year.”

The Press Enterprise. “Bank repossessions – the last step in the foreclosure process – have gone up across the nation from March to April. California has seen a 27 percent increase, the RealtyTrac report says. One place where banks are calling in property at the so-called bottom of the barrel is Inland Southern California. There were 2,616 Inland housing units in April – 1,402 in Riverside County and 1,214 in San Bernardino County – that got a foreclosure notice of some kind. Yet, 1,090 total filings were notices of default, a first step in the foreclosure process. Another 790 trustee sale notices and 648 were notices of bank repossession.”

“It’s been a slow wind-down, said Daren Blomquist, VP at RealtyTrac. ‘I doubt this is the final gasp, although it is one of the final gasps of the foreclosure crisis,’ he said, explaining that the numbers have not caught up to the estimate of foreclosures that were delayed last year by the California Homeowners Bill of Rights.”

“To put the numbers in context, there were 7,600 Inland properties with foreclosure filings monthly in 2012. When the new law took effect in 2013, the number dropped more than 60 percent to 2,900 properties with filings. From 2010 through 2012, foreclosure filings had been dropping consistently by 25 percent to 30 percent. Given that rate, the Inland region should have seen 5,700 properties with foreclosure filings a month, not 2,900. ‘So, we still have a deficit of 2,800 foreclosure filings a month, or more than 30,000 for the year that need to be caught up in the Inland Empire,’ Blomquist said.”




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92 Comments »

Comment by Combotechie
2014-05-19 04:44:10

“With prices on the rise, ‘they have more latitude and are more comfortable stretching the comps to bring the appraisal in at sales price.’”

Stretching the comps?

Let’s see, if Macy’s want to move inventory then Macy’s will lower prices, but in the real estate industry if you want to move inventory you raise prices, and in order to get financing for these raised prices you need to “stretch the comps”.

And the homebuyer is all in favor of this because …?

Because people are smart.

Comment by Blue Skye
2014-05-19 05:37:37

That’s a beaut, isn’t it? It’s what the realtor considers “competence”.

Comment by Whac-A-Bubble™
2014-05-19 05:40:08

It’s what the Realtor® considers “mo’ sales.”

 
 
Comment by oxide
2014-05-19 06:08:44

Let’s see, if Macy’s want to move inventory then Macy’s will lower prices, but in the real estate industry if you want to move inventory you raise prices,

Evidently you don’t know much about needs industries or unspoken monopolies or immobile product.

Comment by Combotechie
2014-05-19 06:59:00

“Evidently you don’t know much about needs industries or unspoken monopolies or immobile product.”

This works in the stock market as well, whether or not the stocks are in the “needs industry”, as you put it, or whether or not they are an “unspoken monopoly or immobile product”.

 
Comment by Blue Skye
2014-05-19 07:04:04

He knows enough not to overpay for a house by 200%, and not to chain himself to a wagon loaded with 30 years of pounding debt service.

Comment by Housing Analyst
2014-05-19 07:06:25

^lolz.

She’s a beaut.

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2014-05-19 09:39:34

Everyone knows that there are only two choices in life:

[1] Either you buy a house, or

[2] You live under the bridge begging for food scraps.

All of us are in the latter category according to Mz. Craterton.

 
Comment by Blue Skye
2014-05-19 09:56:01

[3] You live on a yacht and eat ribeye steak.

 
2014-05-19 10:30:53

That’s basically the bridge at a “higher” level.

 
Comment by Blue Skye
2014-05-19 10:50:02

I embrace the stigma of it.

 
2014-05-19 11:03:25

It’s such a burden, isn’t it?

 
 
 
 
Comment by Whac-A-Bubble™
2014-05-19 07:02:52

“…but in the real estate industry if you want to move inventory you raise prices,…”

Also supply mo’ credik…

Comment by rms
2014-05-19 17:22:11

“Also supply mo’ credik…”

+1 dats right.

 
 
Comment by Guillotine Renovator
2014-05-19 11:10:51

Appraisers are nothing but market-fluffing, hit-the-numbers hacks. What a joke of a profession- assuming you could even call it that.

Comment by MrsLolaSoros
2014-05-19 15:05:39

I don’t worry about appraisers. People believe what they want to believe and if some fool wasn’t willing to pay it, the appraiser wouldn’t have a number to hit.

What does an appraiser get anyway? Something like $500 bucks? What does the Stealtor or Banker complicit in the fraud get? It’s like worrying about the street level dealer selling dime bags.

Comment by Guillotine Renovator
2014-05-19 15:36:04

I’m not worried about the money they’re getting paid, I’m just saying they’re an absolutely useless piece of the transaction. Completely unnecessary.

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Comment by MrsLolaSoros
2014-05-19 19:41:31

They provide cheap “insurance” for the underwriters who can claim the loan was proper. I agree as a practical and truthful matter they are a worthless anachronism. As is truth apparently.

 
 
 
Comment by rms
2014-05-19 17:27:30

“Appraisers are nothing but market-fluffing, hit-the-numbers hacks. What a joke of a profession- assuming you could even call it that.”

+1 Appraisal is another Luddite profession; made obsolete with databases and networks.

 
 
 
Comment by Whac-A-Bubble™
2014-05-19 04:47:55

“In a milestone for the Bay Area housing market, April’s home prices reached the highest levels since just before the recession began, with Santa Clara County hitting a new peak in records going back 26 years, DataQuick reported.”

Standard narrative:

1) Housing prices were going up at normal levels until the nasty recession hit in the 2007-08 period.

2) Now that the long recovery from recession is over, housing prices are finally back to normal again.

Comment by MrsLolaSoros
2014-05-19 15:07:03

Ignore the Bay Area. Just ignore it, the same way you should ignore New York City. Not relevant to 99.9 percent of people buying houses.

 
 
Comment by Mr. Banker
2014-05-19 04:53:05

“‘People may not love their homes, but they do love their mortgages,’ Shea said.”

Bahahahahahahahahahahaha

So do I! They, the house buyers work, I, the mortgage holder reaps.

And I didn’t go to them for this arrangement, they came to me. In droves they came to me. And they are still coming!

Bahahahahahahahahahahaha

Comment by Neuromance
2014-05-19 10:02:28

And if they don’t pay, their neighbors - the taxpayer - will (SFW image).

Quite an impressive ecosystem you’ve created Mr. Banker, bravo.

 
 
Comment by Housing Analyst
2014-05-19 05:01:03

There it is. Tens of thousands of excess empty and defaulted houses in Riverside and San Bernardino counties.

With 4.4 million excess empty houses in California, this is Jo surprise.

Comment by Rental Watch
2014-05-19 08:41:22

Actually, this is a surprise.

Riverside and San Bernardino Counties total about 3.3 million people (a bit under 9% of CA’s population).

If your 4.4MM number is correct, then this should be HUNDREDS of thousands, not tens of thousands.

Especially since R and SB counties are behind the coasts in terms of getting through their foreclosures (ie. they have MORE than their fair share).

Comment by Rental Watch
2014-05-19 08:52:00

Sorry, my mistake, there are about 4.3 million people in SB/R counties (more than 10% of CA’s population).

The point is stronger.

Comment by Ben Jones
2014-05-19 09:24:14

‘The point is stronger’

It’s interesting to me that you are content to keep up a running argument with one anonymous poster on this blog, while a huge housing bubble is forming all around you.

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Comment by Blue Skye
2014-05-19 10:15:13

There are clearly 17 million empty housing units in the USA. There are something like 10 million properties with residential mortgages (some in the empty category) that are already in trouble (headed for foreclosure), and the bank/government alliance are doing everything to avoid, hide and delay a reckoning. When the liquidations start in earnest, the shadow inventory is going to force prices down and throw millions more into distress. The total number of houses or families headed to the trash bin is foggy but the immensity of the disaster looming is not.

Having a second bubble top now is absolutely crazy. Having the government encourage this at taxpayer expense is criminal. Believing that owning mortgaged property right now is a healthy proposition is delusional.

 
2014-05-19 10:33:10

Don’t forget that the Fannie/Freddie covenants are being loosened at this point.

Anyone, who’s observing better sit back with the popcorn. House prices are going higher, a LOT higher.

You can foam at the mouth but this is the game.

 
Comment by Ben Jones
2014-05-19 10:36:39

‘House prices are going higher, a LOT higher’

Click!

‘You can foam at the mouth but this is the game.’

So anyone that doesn’t agree with you is foaming at the mouth? Got it.

 
2014-05-19 10:41:44

I’m no more invested in the game than you are. I don’t care. Apparently you do.

However, I can reason out what loosening the covenants does to the housing market and I’m sure you can too.

Is this a “good” thing? Obviously not.

But reality is what it is.

 
Comment by Ben Jones
2014-05-19 10:54:45

I’m about 100% involved in real estate right now, especially with my time. So I happen to know prices are already falling in many formerly “hot” markets. The retail guy or gal can even see this now, with inventory numbers, low sales, etc.

I don’t know what’s going to happen with the Fannie/Freddie stuff. I do know most of what they said recently was previously announced changes that will not happen, not new loosening. The FHA loan limits were just cut all over the country. IMO, this run looks tired. Investors dropping out, Ma and Pa snake-bit, maxed-out or not that interested.

 
2014-05-19 11:10:22

OK, so this run is over. Fine.

If it drops out, they’ll start buying bonds again. There are more than a few legal papers about what the Fed can or can’t do. Have you read them? Maybe you’d like to take a gander. Do you know the legal rules?

Take a look.

It ultimately just comes to some baseline philosophy — You’re an idealist and I’m a pragmatist (a.k.a. failed idealist.)

If I may ask a horribly loaded question, how come in spite of all your smarts and your prescience you don’t manage to get a single interview that matters?

This is a serious question. Ask yourself this. You can’t just sweep it under the rug after 10+ years.

 
Comment by cactus
2014-05-19 11:12:09

Was talking to my flipper friend this am and it looks like a stall.

Lots of inventory on the market but no buyers.

Los Angeles CA

 
Comment by Guillotine Renovator
2014-05-19 11:15:45

How is it that you presume to know he has not been offered interviews which “matter”?

 
2014-05-19 11:17:32

How is it that you presume to know he has not been offered interviews which “matter”?

He’s stated it often enough. Including the ones that turned him down.

I take it on face value.

 
Comment by Blue Skye
2014-05-19 11:27:07

What does it mean, an interview that “matters”? …and how is that a positive correlation with insight?

 
Comment by Ben Jones
2014-05-19 11:33:16

Don’t mind him. It proves my point though; if we don’t all sit at his feet and accept everything he says as absolute truth, he makes personal attacks. These internet bullies are a dime a dozen.

 
Comment by Roy G Biv
2014-05-19 14:24:51

I learned a long time ago that once someone makes a personal attack … you have won the argument.

 
Comment by MrsLolaSoros
2014-05-19 14:37:38

If you think prices are going higher, fine, buy 10. Buy now in PHX, see where you sell them in the next 5 yrs.

There is no money, Mel Watt won’t bring back New Century.

 
Comment by polly
2014-05-19 14:43:30

I think that Cat was just pointing out that people who control the media outlets that have large audiences don’t want to publicize the fact that there was anyone who saw it coming way before the bubble got absurd. How can you justify giving all that respect to [fill in whoever you blame who does get interviewed], when Ben knew that they were wrong all along.

 
Comment by Ben Jones
2014-05-19 15:06:55

I’ve done plenty of interviews/had profiles over the years. In no particular order. LA Times, SF Chronicle, Orange County Register, Newsweek, MSNBC, Associated Press, Christian Science Monitor, Globe and Mail, twice. The second radio interview I did was a NPR show out of New York that had 13 million listening on XM Radio. I was on NPR’s Talk of the Nation. Lots of local shows.

Keep in mind that I hardly posted for 2 years, and only got back at it because it looked like the bubble was re-emerging. In the past year I haven’t been able to check my gmail account very often and missed interview requests from BBC World Television, the Canadian broadcast station and Reuters. But I have lots of obligations to investors and tenants, so I can’t sit at a computer at home like I used to when I was blogging 14 hours a day.

 
Comment by MrsLolaSoros
2014-05-19 15:31:20

A kind reading Polly, but I don’t think it squares with this:

House prices are going higher, a LOT higher.

We shall see…

 
Comment by Rental Watch
2014-05-19 17:14:49

“It’s interesting to me that you are content to keep up a running argument with one anonymous poster on this blog, while a huge housing bubble is forming all around you.”

I get skewered for posting data from sources like the Census, NY Fed, LPS, etc., that help me form my opinions.

Yet very few people call out HA on his garbage numbers/data.

And yes, I agree with you…a housing bubble is forming. It is strongest along the coasts but moving inland (SF is back to peak, but places like Stockton are no where close to peak).

Nationally, the Shiller inflation-adjusted national home price data reached a reading of 198 at the peak (in 2006)…we are now at 134–CLEARLY above the trendline, and consistent with other cyclical peak values.

It’s just that I don’t YET see the conditions necessary for it to have the top blow off on prices and the bubble to pop…for that to happen, I expect we need to see a lot looser lending standards (giving lots of money to people with terrible credit–which may be coming), or a lot more residential construction.

It seems a pretty good time to exit to me. NOT a good time to enter the market.

 
Comment by Housing Analyst
2014-05-19 17:21:40

You never pass up an opportunity to distort reality do you J._Fraud.

 
Comment by Blue Skye
2014-05-19 17:41:46

You didn’t get skewered. You got challenged. You got challenged again above.

 
Comment by Rental Watch
2014-05-19 17:59:28

“Challenged”?

BS. I get criticized for my data sources time and time again, only for the counter-argument (your “challenge”) to have NO source at all.

Example, where did you get your 10 million mortgages headed to foreclosure? Do you have a source?

That is 20% of all mortgages…there are about 50 million mortgages in the US.

 
Comment by MrsLolaSoros
2014-05-19 19:44:14

20 percent, is that really unbelievable after what you saw in the last 6 years?

 
 
Comment by Housing Analyst
2014-05-19 11:33:12

‘House prices are going higher, a LOT higher’

Will that occur pre-crater or post-crater?

I have a wager you’re not going to be around here much longer. It’s only $5 but I still want my money.

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Comment by MrsLolaSoros
2014-05-19 15:10:29

There are hundreds of thousands of defaulted houses in Riv and San Berdoo. Banks just let them slide, massively under waters, not paying, with losses not recognized by the banks or whomever they were offloaded to because to recognize the losses and foreclose would destroy the system.

It is true and it is really that simple. Massive amount of defaults just being ignored and hidden.

Comment by Housing Analyst
2014-05-19 16:22:37

“Massive amount of defaults just being ignored and hidden.”

That’s right. And anyone who denies this reality on every street, road and boulevard is lying.

 
Comment by Rental Watch
2014-05-19 17:32:45

Based on what data?

Corelogic reports serious delinquency in Riverside/San Bernardino at 3.8%.

And by the way, they DO know how to report higher numbers…there are a few markets in FL that CLGX reports at over 10% serious delinquency rates.

If you think it’s the banks hiding it, I’d be very curious as to how they are hiding this from the Feds, since the FDIC reports on the balance sheets of FDIC insured institutions quarterly.

And if you think it’s one massive conspiracy, is there any data source that makes you think so? “It is true” is a pretty definitive statement. What makes you believe this so fervently?

Here is a puzzle for you if you are correct…

1. It is true that home prices have been going up in places like Riverside/SB from the bottom. I’ve yet to see any data to the contrary.
2. It is also true that if homes are NOT underwater, then banks can get themselves out of trouble by foreclosing.
3. So, as prices go up, fewer homes are underwater, and we SHOULD see an increasing number of theoretically delinquent homes being put into default so the bank can force the sale of the home with the deadbeat borrower, and get their money back.

Why is this NOT happening?

Per Property Radar, NODs are down 33% from April 2013 to April 2014 in San Bernardino, and 37% year on year in Riverside. Zillow reports prices up over 20% in each county year on year.

If lenders were waiting for prices to recover before foreclosing, then with increasing prices, the number of NODs should go up, not down.

Why aren’t they?

Comment by Housing Analyst
2014-05-19 17:57:08

Quoting housing crime syndicate operators gets you nowhere R._Fraud.

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Comment by MrsLolaSoros
2014-05-19 19:39:13

How does core logic capture houses that the banks have ignored despite payments not being made on them. The FDIC is a willing participant.

The FDIC reports show what? I know they have monkeyed with FASB 157 to allow them to mark to fantasy. I would not doubt that there is some corrollary to that that allows them to pretend someone is paying. Or during the bail outs the no performing mortgages were offloaded to somewhere they aren’t reporting.

You are living in the past. Like back when having a short sale or foreclosure meant you couldn’t buy a house for years. Government deliberately monkeyed with all of this, messed with the primal forces, and they will eventually pay.

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Comment by MrsLolaSoros
2014-05-19 19:46:58

2. It is also true that if homes are NOT underwater, then banks can get themselves out of trouble by foreclosing.

Here’s your flaw. Houses are still underwater. Doubly so because the actual claimed median price is also a fraud as there is no demand for the houses. No one will buy them and they are still underwater, even if they have supposedly recovered some.

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Comment by goon squad
2014-05-19 19:13:38

Riverside and San Bernarndino Counties = CRATER

Game over, please deposit $0.25 to continue your game of “Inland Empire”

 
 
Comment by Combotechie
2014-05-19 05:03:19

“‘I doubt this is the final gasp, although it is one of the final gasps of the foreclosure crisis,’ he said, explaining that the numbers have not caught up to the estimate of foreclosures that were delayed last year by the California Homeowners Bill of Rights.”

“The Homeowners Bill of Rights”.

Has a nice ring to it, no? It did a fine job of restricting inventory, of restricting supply, and when you restrict supply and increase demand then you get - what?. You get a price rise, that’s what.

And in the crazy upside down world of real estate a price rise will INCREASE demand, and - presto! - a real estate boom is once again formed.

 
Comment by Whac-A-Bubble™
2014-05-19 05:06:34

‘they have more latitude and are more comfortable stretching the comps to bring the appraisal in at sales price.’

Is there a difference between ’stretching the comps’ and lying?

 
Comment by Housing Analyst
2014-05-19 05:27:14

“Pat Shea, president of Lyon Real Estate, said one factor limiting the number of homes listed is the historically low mortgage rates that homeowners refinanced to in recent years. Even if they want to move, people may be hesitant to give up those ultra-low rates. ‘People may not love their homes, but they do love their mortgages,’ Shea said.”

Lyon Real Estate? Love their mortgages?

This one is priceless Jonesy. :mrgreen:

2014-05-19 10:26:07

I think the article is saying a little more than it reveals and you might not be “getting it”.

It’s basically talking about the how-much-a-month mentality.

Meaning rates will go up (highly doubtful, IMO) but they want to hang on to the payment they signed up for even as the price craters.

 
Comment by MrsLolaSoros
2014-05-19 15:13:55

People aren’t not moving because of mortgage rates. Mortgage rates are still pretty low despite shills crying for years that they are going to go up.

How much a month needs to worry about being underwater or about not being able to afford the better house they want now that prices have ticked up, but not ticked up enough to bail them out.

 
 
Comment by Housing Analyst
2014-05-19 05:43:25

‘My personal belief is not so much that the incompetent appraisers are gone,’ said Gary Kassan, a Los Angeles-area realty agent in an email, ‘but rather that they have better comps to work with.’ With prices on the rise, ‘they have more latitude and are more comfortable stretching the comps to bring the appraisal in at sales price.’”

I think he really meant to say this;

With prices on the rise, ‘they have more latitude and are more comfortable stretching the comps truth to bring the appraisal in at sales price.’”

As we’ve stated all along… housing is rife with fraud once again.

Comment by SD Renter
2014-05-19 07:56:39

He doesn’t stretch the truth, it’s just that he values it so much that he uses it sparingly.

 
Comment by trader jack
2014-05-19 14:55:03

the solution is to prevent the appraiser from knowing the asking or selling price!

I appraised for State of California, and FHA for about 30 years and know that it is easy to appraise in a rising market, but not many can not do it in falling market.

I used to tell the seller , when appraising the house, all I give is my opinion, if you want something else, I can not do it.

When a buyer complained about the appraisal I would tell them why do you worry about the appraisal , either you want the house at the price offered to you, or you don’t want the house for that price.

go look for another one!

you could see what was happening to house prices 50 years ago when they started to tell the buyers that the house would go up 3-5% a year and they would alway be ahead financially.

as to falling prices when the prices get low enough they will give up the house to but a better one at a price less than the owe on the present one.

And that, dear friends , was when you had higher interest rates and down payments.

 
 
Comment by Housing Analyst
2014-05-19 06:01:59
 
Comment by Housing Analyst
2014-05-19 06:08:24

Rancho Mirage CA Housing Prices Turn Negative YoY In Single Month; Price Slashing Up 145%

http://www.movoto.com/rancho-mirage-ca/market-trends/

 
Comment by Housing Analyst
2014-05-19 06:12:02

Palm Desert, CA Housing Prices Sink 5% YoY; Inventory Rises 21% As Sellers Slash Prices

http://www.movoto.com/palm-desert-ca/market-trends/

 
Comment by scdave
2014-05-19 06:31:18

Even if they want to move, people may be hesitant to give up those ultra-low rates. ‘People may not love their homes, but they do love their mortgages,’ Shea said.” ??

I believe this is true…And, if we see rates go significantly higher at some point, it may get worse…I just don’t see people letting go of 3% mortgages given a choice…

Comment by Blue Skye
2014-05-19 06:43:39

When prices drop, people “can’t afford” the mortgage, even if the interest rate is low.

 
Comment by Doom
2014-05-19 06:45:59

Also, the grossly underwater who can make their payments are not going to take a bath if they can’t at least break even, they are on the sidelines for maybe a very long period?

Comment by MrsLolaSoros
2014-05-19 19:48:51

They will eventually walk too, once the echo bubble pops they will realize they’ve just been foolish in continuing to pay on something they bought at a grossly inflated price.

Comment by doom
2014-05-20 17:02:05

I disagree with you lot of times, but one thing we can both count on a huge problem for the grossly underwater as you stated. Maybe you can make the payments for a period of time, but you must realize if you are down 30 to 60% during the crisis you have a big problem ahead.

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Comment by Ben Jones
2014-05-19 07:01:13

‘Swimming pool builders in Northern California said Tuesday that business has come roaring back to levels not seen in years. Builders credit rising home values, easier access to credit and, perhaps surprisingly, the drought.’

‘On one street in Granite Bay, 13 of 14 new homes are being built with pools. Patrick Rabe said he decided to invest $80,000 in a 45-foot by 20-foot pool for his new backyard. “I see the economy really moving on and things are looking up,” Rabe said.’

‘Another neighbor will have a Bali-themed pool, complete with its own island, bridges and imported statues.’

‘Michael Bradley, owner of NorCal Pool Productions, said he has not been this busy in nine years, not since the last swimming pool boom peaked in 2005. “(During) the first quarter, I did (sales) over what we did in all of last year,” Bradley said. “And most of the pool builders that I deal with are saying the same thing. Everyone’s real busy.”

‘Jeff Grunden of Atlantis Pools and Spas said most builders have a wait list five or six weeks long. He said demand is being driven by the rebound in the housing market and easier access to credit from new lenders in the pool industry itself, which — unlike most banks — do not require owners to take out a second mortgage.’

“They give loans that are unsecured,” Grunden said. “So, you’ll see a lot (it’s) easier to get the money. They’re more comfortable. I guess people feel a little more comfortable in buying a pool.”

Uhh…

‘not since the last swimming pool boom peaked’

Comment by Whac-A-Bubble™
2014-05-19 07:04:49

Gonna need more movie stars out here to populate all those homes with backyard swimming pools…

 
Comment by oxide
2014-05-19 09:27:20

I grew up north and there were backyard pools all over. But strangely, there aren’t that many pools in my area.

 
Comment by rms
2014-05-19 17:43:04

“Another neighbor will have a Bali-themed pool, complete with its own island, bridges and imported statues.”

Attention star-bellies the toga parties are coming back!

 
 
Comment by Ben Jones
2014-05-19 07:07:18

‘Silicon Valley realtors continue to observe many foreign buyers at open houses, even with the rise in interest rates and home prices, according to members of the Silicon Valley Association of Realtors (SILVAR).’

“Approximately 60 percent of potential homebuyers that go through open houses are from another country,” said Palo Alto Sereno Group realtor Davena Gentry, chairwoman of SILVAR’s Global Business Council.’

‘Gentry noted that even though home prices are appreciating, the U.S. is relatively inexpensive in cost of living and housing. Data she shared from a March 2013 CNBC article indicated that in Hong Kong, the average property prices in the fourth quarter of 2012 ranged from $4,570 to $5,050 per square foot, and Shanghai ranged from $1,820 to $2,020 per square foot, compared with $769 per square foot in some places in the Bay Area.’

‘She added that American retirees are also moving globally and are projected to be the fastest-growing segment in the overseas property market. Many retirees are attracted to countries where they can live but still receive Social Security benefits…Gentry reported that a growing number of American workers are not able to afford retirement where they currently live. They are looking for the ideal climate and location for their preferred lifestyle. Foreign countries are attempting to attract retirees with specific visa programs. International developers are building resorts and gated communities designed with retirees in mind.’

Comment by salinasron
2014-05-19 08:37:45

“Many retirees are attracted to countries where they can live but still receive Social Security benefits…Gentry reported that a growing number of American workers are not able to afford retirement where they currently live.”

Yes, but do the people living there want you there!!!

 
 
Comment by Ben Jones
2014-05-19 07:41:44

‘Ceres, for many, has been that place that one tolerates as one makes the way down 99 or Mitchell Road between a home in Turlock and a job in Modesto; or those in Modesto who make a mad dash to try out the trendy restaurants found in downtown Turlock.’

‘In my opinion, Ceres suffers from a glut of lower income housing and not enough of the higher. Past councils have been too eager to approve zero-lot lines and single family homes so close together you can hardly floss between them. Don’t’ get me wrong - affordable housing is needed and in fact required by the state. And yes, Eastgate is better housing stock than most of Ceres but if you want move-up housing like that found in east Turlock, forget it.’

‘Because of the housing and lack of good-paying jobs, an estimated 21.1 percent of all Ceres households live at or below the poverty level. The median annual household income in Ceres is $48,550 which is $13,081 less than California as a whole.’

‘Ceres also suffers from a language barrier that helps keep classes of people from advancing. An estimated 54.1 percent of Ceres citizens live in a household where English is not spoken. And 44.9 percent of Ceres households speak Spanish, of which 20.2 percent speak English “less than well.”

Comment by Blue Skye
2014-05-19 07:53:06

Apparently the solution to all problems is more expensive houses.

 
Comment by rms
2014-05-19 17:48:19

“Ceres…”

Ceres? Really?? The unemployed (no water, no farming, no income) Mexicans come with the scenery.

 
 
Comment by Ben Jones
2014-05-19 08:14:30

‘While home sales are heating up in parts of the state and nation, they have not caught fire yet in Tulare County. DataQuick reported recently that only 38 homes were sold during March, which is only two better than February and about half as many that sold in March of 2013.’

‘Home prices, on the other hand, are showing an increase. DataQuick reported the median price paid for a Porterville home in March was $126,500, a 10 percent increase over a year ago. However, that was down from the $153,000 median price paid in February.’

‘An estimated 32,923 new and resale houses and condos sold statewide in March. Last month’s sales were the lowest for a March since 2008, when 24,565 homes sold – a record low for the month of March. Last month’s sales were 23.9 percent below the average of 43,251 sales for all months of March since 1988, when DataQuick’s statistics begin. California sales haven’t been above average for any particular month in more than eight years.’

Comment by Housing Analyst
2014-05-19 08:23:28

“California sales haven’t been above average for any particular month in more than eight years.’”

Collapsing housing demand is no revelation considering current asking prices of resale housing are 300% higher than longterm trend.

 
 
Comment by taxpayers
2014-05-19 11:51:35

the recession was 2 years into the hp crash
why do they refer to that as a peak

5/2005 = peak

Comment by MrsLolaSoros
2014-05-19 15:17:58

2005? Maybe somewhere, but people were buying in Riverside CA for grossly inflated prices well into 2008 and are now hundreds of thousands underwater, still.

 
 
Comment by cactus
2014-05-19 13:16:28

DALLAS, May 19 (Reuters) - The Federal Reserve does not need to shrink its $4 trillion-plus balance sheet by even “a dime” for it to normalize monetary policy when the time comes, former Fed Chair Ben Bernanke said on Monday.

“The Fed has worked very carefully to figure out how to raise rates at the appropriate time,” Bernanke told a monetary policy conference. “That will eventually happen - we hope it happens because that means the economy is going back to normal.”

When the Fed does tighten, he said, “you can have some bumpiness” as markets potentially react to the changes. But in all, he said, “it will be a fairly normal process.”

The Fed under Bernanke bought trillions of dollars of long-term securities to help boost the U.S. economy and keep deflation from taking hold.

As the Fed exits from those extraordinary policies, Bernanke said, “There is absolutely no need or requirement for the balance sheet to go back to normal as monetary policy normalizes. The balance sheet could be kept where it is for a very long time if necessary.”

WTF ?

Comment by Carl Morris
2014-05-19 13:33:28

Sounds like unintentional and perhaps soon-to-be-hidden truth to me.

 
Comment by taxpayers
2014-05-19 14:14:14

see 1937 for a reference- nope ww2 stimulus plan then all forgotten

 
 
Comment by David
2014-05-20 14:58:35

Being a house hunter in the SF Bay area sucks right now. Multiple offers on meh properties. This gem is what falls within my budget right now. A $300k ex-meth lab - http://www.redfin.com/CA/San-Jose/Hobart-Ave-95127/home/1318357

Comment by Puggs
2014-05-20 16:23:50

The outdoor conference seating is an especially nice touch. They didn’t tout the open roof home gym, complements of the blue tarp?

 
 
Comment by doom
2014-05-20 17:09:10

Again I want to repeat what MrsLolaSoros has stated. For the many that got caught up in the buyers club of 05′ 06′ where the RE agents told them the sky is the limit and loan officers don’t give a hoot about liar loans.

There is going to be a mass burial of loans thrown away and a gov’t cover up to help these folks, or a mass burial of folks who will just have to walk into a grave of bank owned all over again.

Who thinks, they will get bailed out or just left to walk away?

Comment by Housing Analyst
2014-05-21 06:19:09

You’re forgetting every one who bought 2007- current.

 
 
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