Southland’s Slowdown ‘A New Constant’
Dataquick has some new numbers out. “Home sales in Southern California slowed for the sixth month in a row, making last month the slowest May since 1999. Homes are appreciating in value at their slowest pace in almost six years. A total of 27,286 new and resale homes were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month.”
“That was down 11.7 percent from 30,886 for May a year ago, according to DataQuick. The median price paid for a home in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties was up 6.4 percent from $456,000 for May last year. The 6.4 percent year-over-year increase was the lowest since July 2000 when the $205,000 median was up 6.2 percent from $193,000 a year earlier.”
“Despite the year over year rise, the median price was the same last month as it was in April, and was a tick below March’s median of $486,000, which was the Southland’s record. In some places, the rate of appreciation was even lower. San Diego County posted virtually flat growth at 0.4% and Ventura County saw a 3% rate of year-over-year appreciation.”
“The latest housing statistics reveal a new constant: The Southland’s real estate market is in the midst of a slowdown.”
“Accelerated listings and declining sales in the first five months of 2006 combined to expand the supply of resale homes in Inland Southern California to the highest level in at least eight years.”
“The Multi-Regional MLS, which tracks real estate activity in the two Inland counties and the San Gabriel Valley, reported that from January through May there were 56,371 home listings in that region, a 46 percent increase over the same period a year earlier.”
“Comparing that to the first five months of 2005, the number of home sales dropped 12 percent to 18,331.”
“The supply of unsold homes, measured by how long it would take to deplete the region’s unsold listings at the current sales rate, more than tripled from 2.4 months to 7.6 months, which the listing service said reflects the largest supply since it began recording such data in 1999.”
“‘We have had a growing supply of listings since the middle of last year. But last year the sales were strong and this year the supply of listings has continued to grow and sales have slowed,’ said Gordon Maddock, the service’s secretary treasurer. Maddock said the 48-day listing average may be misleading because it only reflects houses that have sold. He said some houses are unsold after six months.”
“The number of listings, Maddock said, probably has been bolstered by ‘a lot of investors dumping properties,’ people selling to tap built-up equity, and small home builders putting new homes on the multiple listings in an effort to speed sales.”
“The listing service reports that the average sales price of homes in the first five months of this year was $467,898, up 13 percent from a year earlier. Maddock said the regional price increase is due in part to a shift in sales toward the pricier San Gabriel Valley and away from the Inland Empire, where resale homes face stiffer competition from new home tracts.”
“President Richard Tegley said, ‘With a growing inventory of homes in the (listing service) plus a large new-home inventory we will probably see prices level off.’”
“Garey Teeters, (a broker with) real estate offices in Hemet, Beaumont, Yucaipa, Highland and Rancho Cucamonga, said the market has slowed ‘back to normal’ after years when home buyers had to endure bidding wars. ‘Last year, the sellers were in control. The buyers are in control now,’ Teeters said.”
“The supply of unsold homes, measured by how long it would take to deplete the region’s unsold listings at the current sales rate, more than tripled from 2.4 months to 7.6 months, which the listing service said reflects the largest supply since it began recording such data in 1999.”
7.6 months is “slowing back to normal?!? Gee… I was nieve enough to think 2 to 3 months was “normal.”
Come on baby! Get past that “magic” 8.7 months of inventory required for prices to start going down.
I like all of the news on interest rate reset foreclosures… and to think there won’t be any significant number of those foreclosures until mid to late 2007. Hmmm….
Neil
More interesting is the IE. San Bernardino up 17.2% y-o-y. And in case anyone missed it; +2.6% unit sales increase.
Something going on? Nope, just seeking a regional stasis. Something best described as an IQ or economics test. There are still reasons to BUY in San Diego and Ventura but there are no reasons to INVEST in either location. Thus SD and VenCo are flat, lack of speculation. Thus San Berdoo is way up where the last and most stupid are still operating.
The inventory number is no longer operative. The NAR and MLS data is no longer reliable and sales are entering a wildly in additon to a “seasonally adjustable” period. Besides, unlike underpricing, overpricing means a property is not for sale. Imagine an ad that says; “Fully priced (at least) and positioned in the market for the very highest price no matter how long it takes.”
Ah… the cold, refreshing taste of Truth in Advertising.
A shame our society is so accustomed to sugar coated, half-truths and outright lies in advertising. RE-speak is a prime example of this.
OT. Anyone notice how car commercials lately advertise the monthly price in big letters and the actual sale price in small letters? I imagine the same thing will come to RE industry at some point. Big letters: “Own for only $1,000 per month” Small Letters: “6 month intro price only…blah blah blah… sale price $900,000″.
Actually, this is really sick, but I did see this for the first time in one of those free RE booklets you pick up at the grocery store:
One of the RE company’s had a full page of home pix (as usual) and where the price would normally be, a monthly payment was there instead.
NOWHERE in the add did it say what the price of the home was. Only monthly payment and, to top it off, no mention on what kind of loan to get that particular payment.
I guess we’ll see if Seattleites really are the stupidest people in America if this thing catches on.
Meanwhile in some zips 50% of the properties are price reduced and you have to be brain dead to not see what’s happening.
Where does “magic” 8.7 come from? It doesn’t sound unreasonable, I’m just wondering where. I’m looking for monthly number of sales per city or region, by the way. It looks like MLS people have them.
I’ll wager that this summer mops of the last of the buyers at current fantasy prices, sales numbers will plummet come August, and the inventories will increase at a steady rate. Then # months inventory, which I think is the single variable of importance in all of this, will then be launching into orbit.
Then, my friends, that’s all she wrote. Unless Helicopter Ben dumps a lot of liquid in personel payrolls, the Real Estate Market will officially be toast.
Yea, if my weekend tour of the city was any indication the party is over and only the drunks are still in the bar.
What city was that? LA ?
Yea I was all over the city this weekend. I don’t know if it’s because I read this blog a lot or what. But it’s very apparent that something is wrong in Denmark if you will.
While reading through these blogs one analyst reduced previous recession data and found prices started to drop once there was 8.7 months of inventory on the market. (He was trying to disprove 9 months of inventory created a price drop.) Alas, I forgot the link… But remembered only the number.
A quick google just turned up my own posts!
Neil
“Despite the year over year rise, the median price was the same last month as it was in April, and was a tick below March’s median of $486,000, which was the Southland’s record. In some places, the rate of appreciation was even lower. San Diego County posted virtually flat growth at 0.4% and Ventura County saw a 3% rate of year-over-year appreciation.”
Obviously SoCal’s median real estate prices have reached a permanently high plateau…
Clearly that’s so!
Only a delusional fool would think otherwise….
I’m sorry, I couldn’t hear. The winds of change up here on the permanently high plateau have started blowing an ill wind and your lone voice was lost in the wilderness.
Since CPI inflation was “officially” 4.2% YOY in May, I guess you could say San Diego house prices (real ones, that is) are now down almost 4% from last year. Throw in 6% commish to sell, etc., etc., and you’re talking about a loss of almost 10%. Ooops
“President Richard Tegley said, ‘With a growing inventory of homes in the (listing service) plus a large new-home inventory we will probably see prices level off.’”
Leveling off…. So when a Jet goes from 30,000 ft to 4,000 ft in 10 seconds…is THAT leveling off too?
Like the chimps in that commercial…it’s all in how you tilt the chart.
Thanks for the visual…made me picture all the RE industry people being quoted as chimps dressed up in suits.
The buyers are in control now,’ Teeters said
____________
No, they buyers are not in control. They will be in control when the sellers are no longer “fishing” for idiots, and are facing foreclosure in record numbers. Buyers will be in control when the sellers are begging buyers to take their houses off their hands, even though they will be losing money — simply because they can’t “feed the alligator” any longer.
We have a long way to go before buyers are in control.
The buyers are in control now,’ Teeters said
____________
No, the buyers are not in control. They will be in control when the sellers are no longer “fishing” for idiots, and are facing foreclosure in record numbers. Buyers will be in control when the sellers are begging buyers to take their houses off their hands, even though they will be losing money — simply because they can’t “feed the alligator” any longer.
We have a long way to go before buyers are in control.
Sorry for duplicate post and typos!
Where is that edit button?
Yes we do. When buyers are in control, they won’t be buying from today’s sellers, they’ll be buying direct from the bank.
No seller can sell a house he owes 600K on for 350. The bank will have to be the middleman.
People just won’t be able to bring themselves to sell for less than 50K or 100K what the paid for the place, or what they paid + equity loans. They’ll spend every last penny of savings, and what they can borrow from family, and what they can hock, awaiting the “turnaround” sooner than they would admit they are stupid morons.
Or as Bubblefucious says:
“Buyers cannot control sellers, and sellers cannot control buyers, but hungry alligator lives in sellers back yard.”
Bubbluefucious say:
“Seller who worry about feeding squirrels should be worried about feeding alligator.”
“Forecloser not worry about squirrels; buyer will feed to alligator.”
The non-buyers are in control, like me.
Let ‘em live with the “deals” they struck.
Wanted to conduct a quick survey.
Do you think that it is more productive to go to open houses and low ball every seller, or to stay home and monitor the price declines on the MLS?
When you attend open houses the realtor can tell their client that they had some people come through, and they probably would not tell them about the low ball offers.
My vote is for just stay home.
Let the sellers live with the deal they struck and wonder where did all the buyers go?
I would love to have a picture of their face once they have that eipiphany.
I would wallpaper my living room with those shots.
A couple tales from San Diego.
Friend of a friend bought a house in Alpine for $330K. Put $20K into it. Was told they could sell it for $440K. No offers since December. ARM will reset in August. Credit cards maxed out. Next stop, bankruptcy.
Townhouse in Mira Mesa. Purchased in 90s at a reasonable price. Listed at $430K. Initial offer within a week for $416K. Held out. Eight months later just sold for $386K.
Fat lady is singing it loud here in the SD.
Similar tale from Atlanta (recounted before, updated now).
Parallels are funny!
Single family home in burbs. Purchased in 90s at a reasonable price. Listed at $320k. Initial offer within a month for $309K but with contingency. Held out. Lowered price to $309K later. No offers above $300K. “Insulting” offer for mid-200’s rejected out of hand, even though it would have been a nice profit.
Eight months later, trying to rent it just to make the mortgage and taxes. Unable to find a renter at that price, and even get calls from the few prospective renters saying how many $hundreds less they are paying at “the other place” they found! Hint, hint, hint!!!
Feed that gator!!
The car is nearing the top of the hill on the rollercoaster. Still moving up but slowing down significantly. Next comes the stop at the tippy top and then the slow drop on the other side of the hill. How fast and far it falls depends on the angle and height of the hill. Hang on for a wild ride down!
but, but, but,
It’s DIFFERENT here in Phelan…
They’re also not making any more land between El Mirage and Lake Los Angeles.
Phelan real estate will always go up. It is called the San Andreas Fault Pressure Ridge.
The San Andreas fault has been known to create some (permanently high) plateaus; however it creates many more jagged peaks that rise steeply seemingly out of nowhere and then fall back to the same nowhere.
Oh, you’ve been to Phelan. My condolences.
phelan: gateway to hesperia
phelan: thats where the la county probation dept sends there gang bangers when they get released.
Now a report just came out(I believe in nature magazine from the La Jolla scripps institute) that the San andreas fault(SAF) is overdue for That big(7.6 or greater) earthquake along it’s SCal (100-200) mile section from SAn Bernardino to the Mexican border.
Will this shake up the Scal RE Markets?
According to plate tectonic theory the SAF is the colliding boundary between the pacific plate(west of the SAF) and the North american plate(the eastern side of the SAF)
The current theory is that the Pacific plate side is sliding-grinding in a northwesterly direction at a rate of 6-10 centimeters a year average. This means that eventually all SC RE will eventually slide toward San francisco, which is good news for RE bubbleheads.
If The SAF does its predicated (every 300 years or so)massive sudden movement 30-60 ft all at once(relieving built-up stresses) which results in that 7.6+ earthquake, the fault will either slip left-lateral(sideways) or be an upthrust-type, where one side heaves up relative to the other side. This will all at once result in an immediate increase in values for all RE on the uplifted side( Re is always higher in elevated places).
Just a footnote: the San fransisco quake of 1906 which killed 3000 people occurred along the northern section of the SAF, which runs 800 miles through California.
Unfortunately, the LA Times choosing to place this article in the Business section instead of the Real Estate section shows just how far we still have to go. The LA Times is still worried about backlash from their advertisers. I’ll believe this thing has turned when they are putting these stories in the RE section.
And yes I agree CA renter - the buyers are NOT YET in control. Another 3-4 years maybe. Certainly not now.
At the rate this is going these articles will be hitting the front page in 6-12 months. A runaway train picks up speed on the way down. Oh, that’s right, we’re only “seeping”….sorry, I forgot.
For them to put it into Tuesday’s edition of the business section is a giant leap. Everyone knows that Tuesday is the day for real real estate information in the L.A. Times. That was a huge warning shot to the industry and those who seriously track real estate in the Los Angeles area.
Buyers have now dwindled to a handful of morons who are (a) are horrendously wealthy anyway, (b) have just sold at a fat profit and are looking for another place, (c) are buying now in anticipation the place they still have will sell at a nice profit in a month or so, (d) are morons who are getting an interest-only ARM because they truly believe this is the very last chance they will have to get their foot in the door.
All except buyer (a) are about to disappear from the marketplace. Buyer (a) can lose a million bucks without even noticing, so there aren’t many of them anyway. (b) will be okay if they are spending within their means, (c) and (d) are FB’s, and the remaining 98% of us can discover the Blogosphere, sit back, and enjoy the show.
I wouldn’t quite go so far as to call them morons.
financially illiterate
ignorant
sheeple
but not necessarily morons
Actually buyers do have a large degree of control based on the fact they are not buying. Pricing will eventually come down, albeit slowly.
The refusal of median sales prices to drop is an indication that more high priced homes are selling, as compared lower priced starter homes. For example, a speculator could lose money on a million dollar home sale; yet the median sales price value would be raised by that transaction. The real measure of home values is the historical sales record of the same house or similar valued homes. I think those numbers are down at least 5% to 10% almost everywhere except very strange markets. gordo
“The real measure of home values is the historical sales record of the same house or similar valued homes”
Even those numbers might be suspect, given the extensive use of teardowns, re-models & upfitting. It’s impossible to remodel a reasonable kitchen for less than $50K these days.
Of course then you have the RE agent flipper that throws on a coat of paint and some entry room flooring and jacks up the price $200K. The truth is the median should go up since there’ are always going to be newer, generally larger and more costly homes in the mix…
From DQ
Los Angeles 10,128 9,654 -4.7% $459K $509K 10.9%
I still can’t believe it. The avg PoS in LA including south central, Compton, Inglewood, and all the rest of the sh*tholes you encounter driving from the beach to Riverside… is over $1/2M and up 10% - $50K - over last year.
Wow. Something just isn’t right. These are lagging numbers since they are closed… so arguably at least 3mo old, but these numbers are insane!
You should see all the Escalades and Navigators with 22s in those neighborhoods.
Guns, wheels, or both?
What drives current RE bubble in South-central/compton is the vast amount of drug dealing and illegal alien smuggling, both activities non-taxed and highly lucrative. Thus you see Hummers with 2000 dollar wheels(each) going down a POS hood in watts or willowbrook.
Did you know that the no. one economic activity in compton is stealing. Yes, Nothing is made or manufactured in compton, it is all “imported” from other burgs or from warehouse thefts. Even the local city government is into filching, usually from the state taxpayers.
Don’t shoot the messenger. LOL. I’m still long all these pigs
Technical Analysis
How to Rebuild Stake in Homebuilders
By Richard Suttmeier
RealMoney.com Contributor
6/20/2006 4:13 PM EDT
URL: http://www.thestreet.com/p/rmoney/technicalanalysis/10292771.html
The situation for homebuilder stocks has gone from lousy to dire. A year ago the homebuilders were the strongest momentum stocks, but that strength came to an end in July as the housing market index (HMI) began to decline.
What a difference a year makes. Homebuilder stocks have gone from being overvalued and overbought to trying to dig out of sinkholes with undervalued and oversold profiles. These stocks have declined to straddle my annual value levels and their 200-week simple moving averages (SMA). At these levels, my model suggests that all possible bearish events have been discounted by share-price weakness year to date.
Let’s take a look at just how dire things have gotten. The latest piece of data, the National Association of Homebuilders/Wells Fargo Housing Index (HMI) for June, shows the housing market has reached a nadir. The index has fallen to 42 this month from 46 in May; the current level is the lowest reading since April 1995. The catalysts for this rather sharp decline from a cycle peak of 72 a year ago are rising mortgage rates, worsening affordability issues and the flight of housing speculators, known as flippers.
This morning, housing starts for May were reported up 5.0% to a 1.957 million annual rate from April. This rebound is not that significant, though, as housing starts peaked at a 2.265 million annual rate in January. With demand for new homes sliding, increased housing starts merely signal that the glut is growing.
Housing construction has accounted for 20% of the 4 million new jobs created over the past two years, and layoffs in this industry could pose a problem for economic growth in the quarters ahead. KB Home (KBH:NYSE) recently announced that it would lay off 7% of its workforce.
New single-family residential construction reached the highest levels in our country’s history in 2005 and now averages approximately $5,300 per household. On an inflation-adjusted basis, this level of investment is $1,000 higher than the prior peak of $4,300 per household in 1972. This investment-per-household equivalent is 55% higher than the post-World War II inflation-adjusted average of $3,400 per household.
That looks pretty bad. But again, my model suggests that all bad news is priced into the homebuilding stocks. I’ll be watching for signs that the stocks in this group are stabilizing. The homebuilders began their long-term trends above their 200-week SMAs back in the third quarter of 2000, so it’s important for these uptrends to hold now. If the homebuilders trend below their 200-week SMAs, I will begin to worry about a potential housing crash, which I would define as a 20% decline in home prices over the next 12 months.
The price action for the homebuilders over the past 12 months is another lesson in why investors should book profits on strength when stocks become overvalued and overbought, and have parabolic price charts. Investors looking for a soft landing in the housing market should rebuild positions using the levels in today’s table as guidance.
The Homebuilders
June 19 Close Rating % UV/OV% Fair Value MOM 5-Week MMA 52-Wk Low 200-WK SMAs Value Levels Pivots Risky Levels
Beazer Homes (BZH) $45.58 BUY -26.60% $62.62 OS $52.85 $43.82 $40.58 45.33 A 54.97 S 59.59 A
Centex (CTX) $48.14 BUY -19.40% $59.76 OS $52.41 $44.13 $48.42 none 52.95 A 61.24 A
D.R. Horton (DHI) $24.01 BUY -24.40% $31.78 OS $27.50 $22.55 $23.50 none 25.29 A 30.83 A
KB Homes (KBH) $44.81 BUY -15.20% $52.83 OS $56.19 $41.95 $44.53 none 49.83 A 59.59 A
Lennar (LEN) $43.88 BUY -27.20% $60.28 OS $49.77 $42.81 $45.63 43.51 A 48.71 M 57.35 A
Pulte (PHM) $27.77 BUY -17.60% $33.71 OS $32.65 $26.49 $27.08 none 28.60 A 34.88 A
Ryland Group (RYL) $44.01 BUY -26.80% $60.13 OS $53.31 $40.93 $47.28 none 53.83 M
Toll Brothers (TOL) $26.54 BUY -2.40% $27.19 DM $29.26 $25.30 $25.48 25.59 A 29.99 M 36.98 S
Key: OB, overbought; DM, declining momentum; RM, rising momentum; OS, oversold; M, monthly; Q, quarterly; S, semiannual; A, annual. A value level is a price at which my models project that buyers will emerge; a risky level is a price at which investors are likely to reduce holdings, according to my models. A pivot is a value or risky level that has been breached in its particular time horizon; the stock will likely trade around this pivot.
Source: Global Market Consultants
Fair values for the homebuilders have been declining in recent months along with share prices. The table above shows that the recent lows set between June 8 and June 13 were below annual value levels and pivots on all the homebuilders. The lows were also below all the 200-week simple moving averages, except for $40.58 on Beazer (BZH:NYSE) , which makes this homebuilder the one to watch on weakness.
If the homebuilders stabilize, look for a rebound to the pivots, and perhaps to the risky levels.
“That looks pretty bad. But again, my model suggests that all bad news is priced into the homebuilding stocks.”
My model suggests that firms try to withhold bad news on the downhill of a boom, and also attempt to fool their shareholders into believing a rebound is in the works, while insiders cash out their personal holdings until they are richer than King Midas. The result is a steady stream of worse-than-expected news releases. So far, my model has been on target…
I can’t believe it txchick57 long on the builders at this stage in the game.
There is really no reason whatsoever why the HB stocks might not go back up at this stage of the game, given the propensity of their prices to levitate on bad news…
“…all the bad news is already priced into….”
No matter what the stock or industry, this phrase is uttered most often by clueless analysts who were blind-sided. As in: “At $12 a share all the bad news is already priced into Enron.” This phrase is more revealing of the speaker than of the industry/company he/she is purportedly analyzing. For investors it should be a red flag to sell. Bad news almost always begets more bad news.
Those analysts who are closest to an industry are often among the last to see the obvious.
Maybe they are too big to fail.
It’s a trade for an oversold bounce and nothing more. Things don’t go down forever just like they don’t go up forever.
“Things don’t go down forever just like they don’t go up forever.”
Bankrupt companies have a way of not going back up again.
You may be right. I’m not a trader. But there is no sign of the factors that drove homebuilders down abating anytime soon.
Just a good natured teasing, I couldn’t resist.
As someone who has been and will remain short on the HBs, I have seen many a 4, 5, and 6% (!) bounce on no special news whatsoever and never find it surprising anymore.
I just don’t think I’m clever enough to call them and know what the long term will be!
I think most of us on this blog a year ago believed HB stocks were going to go down. I’m a fairly sophisticated investor (not in RE), but the stock buybacks, possibly backdated options, and possible PPT action (if it truly exists) have scared the crap out of me! Pigs get slaughtered. I stay out of the game.
Robin,
Agree. I’ve had pretty substantial short positions on most of the big homebuilders for a long time now. Been slowly getting out these past few weeks and am considering accelerating my exit strategy. Even gone long on a couple (like Txchick). I’d especially watch ones like TOL where the CEO is a founder and would like to exit with some dignity (get bought out and exercise remaining options after the uptick — someone let me know how the SEC looks at this). KBH was looking into doing more luxury homes before the downturn, so TOL would be a nice buyout, IMO. Just something to kick around.
I am a bear’s bear, but know there’s a time to take money off the table (admittedly, I tend to be early). What I worry about most are consolidations. IMO, we’re going to see a lot of movement in the near future with the HB stocks. Shorts may well get slaughtered playing the HBs, right now. Unless one has inside information, I’d stay out at this point in the game.
“That looks pretty bad. But again, my model suggests that all bad news is priced into the homebuilding stocks.”
Except for a few things: The onset of quarterly operating losses. GAAP-required write-downs of inventory. Lines of credit shut down by lenders who were just paid a visit by BB’s gestapo bank examiner units. When perusing the HB stock message boards, it’s amazing to see how some posters are getting suckered into buying ’cause “Heck, the P/E is only 4.77! Forward P/E is only 7!” Come Q2 of 2007, the P/E’s for most of these HB’s will be “N/A”.
“Maddock said the regional price increase is due in part to a shift in sales toward the pricier San Gabriel Valley and away from the Inland Empire, where resale homes face stiffer competition from new home tracts.”
Being a lifelong SGV resident, I find it hilarious that they’re deeming my neck of the woods as pricey meaning quality. It’s all relative. This time next year MLS will be quoted as saying “the shift in sales toward the pricier West LA region and away from the San Gabriel Valley”…
“Maddock said the regional price increase is due in part to a shift in sales toward the pricier San Gabriel Valley and away from the Inland Empire, where resale homes face stiffer competition from new home tracts.”
Does he include pomona,azusa, montclair, Baldwin park, west covina, covina, monrovia,glendora, irwindale, san dimas, laverne, as part of the San Gabriel valley? Has he been out to Pomona, azusa, montclair or baldwin park?
I doubt that there are any million dollar homes in any of these “pricy” SGF communities( Maybe in parts of West covina, covina,San dimas, duarte, glendora but very small parts). Pomona and Baldwin park not especailly what you call high-end areas. Ditto for Montclair.
All of the SGV communities are facing unfavorable headwinds in the RE Market:declinig aging populations, immmigrant intrusions, lack of high-paying jobs sectors, bad traffic commutes, smog blowing from LA, ad nauseum. This even affects the still “pricy and exclusive” hill communities of glendora, duarte, Monrovia, azuza,San Dimas, claremont.
He is correct that the IE resale homes face stiff competition from new home tracts. I have seen all of the new tracts going up all over the IE, especially along the 15 freeway up and down and along the new freeway 30.
west hollywood, CA home prices anticipated to go “higher” than any other city in California in coming months.
http://www.nctimes.com/articles/2006/06/20/news/state/17_53_516_19_06.txt
oh, puhleeze!!!!!
“Duran noted that after the council passed a resolution recommending that officers not arrest couples engaging in sex acts in cars, the number of such arrests went down.
According to Duran, the city asked law enforcement to merely “tap on the window of the car and say `go home,”‘ instead of arresting couples found having sex in cars, which legally constitutes lewd conduct and a crime.”
What about the “Prostitution Abatement” zones near Santa Monica and LaBrea? Anyway, that was just one more reason to move away from that hell hole: public sex acts.
As a married woman living in WeHo, I can say there’s a lot to recommend the place, but the fact that the City Council considers its “core constituency” to be a lot of doped up, oversexed gay guys with too much money and not enough sense is not one of them. As the link below illustrates:
http://www.wehonews.com/z/wehonews/archive/page.php?articleID=453
WeHo is being levelled one reasonably priced rental building at a time to make way for $800K condo buildings featuring lots of granite and stainless steel. Only market forces will stop this, since the entire City Council is on the take from big developers.
Grrrr….
yes - agreed…I prefered to live there over Palms, or W LA, for instance, but let’s just say I saw a lotta things I would never tell momma…
OT, but I think that David Lereah openly begging the Fed to stop raising rates was the worst thing he could possibly do.Because idiots actually listen to this guy, the alarm bells are going to go off for them when the Fed raises here real soon. He just opened up another way to excellerate the fear in the market. DL should’ve kept his mouth shut. Not a lot of people really know what these rate hikes mean, only that DL thinks they might be in trouble if the Fed raises again. I can’t wait to see what the inventory numbers do after the Fed announcement here real soon. My guess is another fear induced inventory spike is on it’s way. Nice going, DL!
DL and App-Young must be specialized RE cyborgs, created and positioned for the purpose of making ludricrous statements that defy common sense to such an extreme that no real human could ever utter such nonsense and keep from cracking up in laughter or tears or both.
If DL is now making statements to indeed accelerate the fear in the markets, it could be that the powers that be have indicated that now is the time to “pull the plug”. Being the smart money, they will have positioned themselves accordingly well in advance.
Pump and dump! They know the inevitable outcome, yet they exacerbate the situation, playing it both ways, suck everyone in, then at the right moment pull the flush handle down and laugh at the sheeple. The rich get richer, the poor get better benefits, the middle class is screwed.
Again, only a cyborg could pull it off.
Remember when the machines became self aware in “Terminator”? “They decided our fate in a microsecond!”
wrong movie - I think you need to quote from “They Live”
only we are the ones wearing the sunglasses
That movie gives me the heebie jeebies.
I think that he is secretly hoping for the Fed to raise rates so that he can use that as his alibi. That way, he can say that he warned them not to, and it’s the Fed’s fault that housing crashed. If only the Fed had listened to him, then the prices would have stayed on their plateau, and we would have had the soft landing he predicted. But, knowing that the Fed is going to raise rates (and won’t listen to him), he is using that as his excuse for why his predictions were wrong. Thus, he scapegoats the Fed to avoid liability for his own mistakes.
Agree!
Absolutely. No question. In that respect, it was the smartest thing he could have done. The only thing that matters is that the NAR comes out of this smelling like rose.
The 50 basis points killed the market.
The 50 Basis point “comment” killed the market? They have’t met yet.
Sales of Union Station Condos Suspended
Standard Pacific offers to give deposits back to buyers, citing delays by the builder of the project near Union Station downtown. >>
http://tinyurl.com/kkaeh
Ahhh the party is over in Downtown I guess. Will be interesting to see how that all falls out
OT. Anyone notice how car commercials lately advertise the monthly price in big letters and the actual sale price in small letters? I imagine the same thing will come to RE industry at some point. Big letters: “Own for only $1,000 per month” Small Letters: “6 month intro price only…blah blah blah… sale price $900,000″.
Developments in the open (annexed) spaces of Memphis and our North Mississipi ‘burbs are *all* advertised that way, at least on the billboards around the subdivisions. “THIS COULD BE HOME! FROM ONLY $863 A MONTH!” Not that way everywhere, then?
That would be against the law in California.
It’s going to be word of mouth that’s going to be the catalyst for a speedier decline. I still say it’s gonna happen in October (second installment of tax bill and preXmas). Right now I see shades of doom around the neighborhood appearing in unkempt yards that six months ago were well groomed and now sport a yellow color and a healthy crop of weeds (Gardners and water are expensive up this way). Another sign of the times are private single family homes sporting a RE type signs in their front yard advertising mortgage companies, one even advertises RE in Bakersfield (200 miles to the south). Next will be decreased numbers at upscale restaurants and upscale department stores.
More likely Wal-Mart and Target.
Right now I see shades of doom around the neighborhood appearing in unkempt yards that six months ago were well groomed and now sport a yellow color and a healthy crop of weeds…
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Funny you should mention that. I was just remarking to DH the other day that some houses looked like they were headed for foreclosure because they were starting to look abandoned (and this is a relatively good ‘hood). It’s probably not apparent to Joe Sixpack, yet, but for those of us who are watching this thing unfold (in very slow motion), the signs are slowly becoming obvious.
BTW, I posted on malls some time ago (specifically, NC Fair in Escondido). We went there yesterday, and many of the formerly closed stores (seemed like about 30% of the mall) are now open again under different names. Some stores are still closed, but it doesn’t look as bad as before. I’m glad about this, because it was truly depressing before. I don’t want to see the entire world crashing down around us; although we might not be able to avoid a financial meltdown, anyway.
Yea, I went out this weekend to check on some investments in the “hood” and came away with the impression that there are a lot more yards unkempt and vacant property. The Open Houses have almost taken on a carnival like atmosphere with big bright and gawdy signs. You read here about this happening in other cities but Los Angeles hadn’t taken that step yet. But it’s here in full motion now.
Been noticing the “dandelion effect” here in Seattle too.
In general, yards are kept so spectacularly well here, it really stands out.
Downey mortgage lenders keep troubles at bay
The latest financial report on Downey Savings includes a few numbers that are worrisome for a bank that always has lots riding on the mortgage business.
But the data also suggest that the mortgage veterans at Downey have the situation well in control.
The report, released late last week by the bank’s parent company, Downey Financial, shows that borrowers are getting into a little more trouble as interest rates rise. As of May 31, mortgages where monthly payments have stopped (plus any other “non-performing assets”) represent 0.23 percent of the bank’s total assets. That’s up from 0.17 percent a year ago.
The bank is protecting itself against further troubles by shifting its lending to borrowers with higher credit ratings.
A year ago, about 60 percent of the bank’s mortgages went to sub-prime borrowers. In May, only 13 percent did.
At the same time, the bank is beefing up its “interest rate spread” — the difference between what it pays to borrow money and what it charges to lend. That spread was 2.92 percent in May, up from 2.67 percent in January and 2.5 percent a year ago.
The pace of new mortgages dipped again in May, dropping to a total of $377 million for one- to four-family homes. That’s down from April’ss $394 million, but well within the broad monthly range of $279 million to $492 million the bank reported for April to June 2005.
Classic sign of tightening. This will make things worse.
“The bank is protecting itself against further troubles by shifting its lending to borrowers with higher credit ratings. ”
Too. Late.
At least a few junior lenders at Downey will be sacrificial lambs before year-end.
CA Renter: a couple of weeks ago I went to the mall in Monterey and three shops had gone out of business within a month. I don’t know how much lease renewals figure into the picture but I’ll be watching to see, if and when, what moves into their spots. Gilroy always has had the outlet stores but the new super WalMart seems to be drawing the local’s business and then there is the Costco across the street.
An equity share! I can share in an FB’s negative equity! w00t!
http://orangecounty.craigslist.org/rfs/173685462.html
Ahhhh! music to my ears.
Looking for a greater fool to bail out his BK and foreclosure.
Hmmm, who could have foreseen this outcome?
Not the RE industrial complex but Ben’s Blog!!!
My wife and I looked for houses to rent in Chula Vista (Southern San Diego) this past weekend. One of them, a 3BDR/2.5 single-family house, dropped from $2500/mo to $1800/mo. This is a completely brand-new house, mind you. No one has ever lived in it. The owners were clearly stressed. I think we were the only people to even look at that house in at least a month. We saw six other properties in the same general area. All of the owners were obviously stressed out. The tension was asphyxiating. Oddly enough, many of these properties didn’t have any grass in the backyard, just dirt. I ask them how come there was no grass and they said they were waiting on the homeowners association to approve it. I thought that was odd since these homes were approximately 5 years old. That’s a long time to go with no grass.
Hooboy. I’ve got to read Craiglist more often!
About five years ago, looking at rentals, we found a guy offering reasonable rent on what, if anything, was an oversized house, nice neighborhood, big yard…turns out he was very recently single, 2 steps ahead of foreclosure, had installed a makeshift kitchenette in a downstairs bedroom area, and was hoping to make the mortgage by renting his (furnished, full o’ crap) house out to a family, with him sticking to his little “wing”. Not even a garage apartment, it didn’t have so much as a separate entrance or locking door. Yeah, wonder how that worked out for him.
Considering likely slim pickingss for the “We buy homes!” equity sharks in a declining market, who knows what bizarre innovations in attempted depreciation offloading may ensue?
There was a rather funny post by someone on the Seattle Blog a couple months back that described a similar situation.
The owner had moved into the basement of the home and was renting the home proper out at a good (read cheap) price.
The poster said she didn’t take the place because she couldn’t imagine living above a “Bitter Owner” (!).
I actually know a few people in Seattle who are renting their newly bought (since ‘03) homes out and renting tiny apts. because they can’t quite swing it.
This is now considered “home ownership”?!!?
My friend in Apple Valley says the market has come to an abrupt halt there. It’s so bad, that a community that was originally sold as a 55 and older retirement community is now accepting buyers at any age because they couldn’t sell the houses. Can you say lawsuit?
Is that legal??
I don’t think it would be legal .
Speaking of inventory according to zipreality San Diego now has an all time record high, adjusted for population inventory of 22,203. The threshold was 22,144.
I know I should let go of the emotions and how the stupid OC Register RE blog played some regulars here, but I just got done watching Gustavo Arellano of the OC Weekly on the Colbert Report.
Man, it must really burn up the OC Register that a weekly somewhat seedy publication regularly provides better news coverage and gets national renown for columns that really resonate with the population.
Like Gustavo’s Ask a Mexican.
http://www.ocweekly.com/columns/ask-a-mexican/ask-a-mexican/25306/
Instead of the old and gray seizure world readership of OCR.
“San Diego County posted virtually flat growth at 0.4% and Ventura County saw a 3% rate of year-over-year appreciation.”
Yikes! T-Bills and Treasury notes are the deal du jour!