patrick.net

donjumpsuit
"Here comes the fictitious appraisals and subprime loans!"
yes they will come as will ARMS when rates go higher-that will signal the blow off top/crackup boom before the crash

ARMs are already back. They have been for a while. You still need to put down at least 10% to get one, 20% if you are looking over $420k. A LOT of my wife's coworkers are using them. Honestly, I can't figure out why given that rates are rising right now, and the only answer they give is, "because I can get a 5/1 or 7/1 for SUCH a low rate right now! I'll just re-fi later before it resets." I don't get it, but whatever.

Hausmeister T says

The wealthy, the highly educated, as well as Asian Business Millionaires are moving into California.

It will be interesting to watch them flip their own burgers, and scrub their own shorts.

CaptainShuddup says

Hausmeister T says

The wealthy, the highly educated, as well as Asian Business Millionaires are moving into California.

It will be interesting to watch them flip their own burgers, and scrub their own shorts.

Work is for poor people. They are buying RE here to launder their money out of Asia and into something that Beijing can't forcibly take from them or their kids. When they say that RE here is an "investment" they mean it more as a way to preserve some fraction of their wealth, not necessarily as a way to grow it. That is actually the one thing that, "makes this time different." When faced with the possibility of losing all of your money, or "just" half of it, the choice is clear. Now, if China is able to work-out a white collar criminal extradition treaty with the US (which they ARE working on), that would be a game-changer.

I like your website, and the content, I think, it may just depend on the day.

Yes, I think there will be a reversal of demand.

As mortgage rates rise, things like that Affordability graph will turn negative, consumer confidence will fade.

Next there will be an article about Real Estate being a Buyer's Market.

It makes no difference to you, if you bought well, in the right Metropolitan area. Some market places never seem to change.

APOCALYPSEFUCK is Shostakovich says

bmwman91 says

Now, if China is able to work-out a white collar criminal extradition treaty with the US (which they ARE working on),

Got a citation?

Do tell.

Is here now.....

Ceffer says

Just perused Zillow last night in Santa Cruz and Pleasanton. Showed a sharp spike downward in sales prices in june, is that a trend? Is it yam time? Is the bubble bursting? Is the music over? Are the sellers starting to run for the doors? Is the sky falling?

I would say....yes.
http://www.zerohedge.com/news/2013-08-23/new-home-sales-crater-lowest-october-biggest-drop-may-2010-median-home-price-6-month

John Bailo says

smaulgld says

I expect for a short while there will be a rush to get homes before rates rise. This will probably be a mistake as prices will fall as rates rise

Rates will fall again.

Rates will fall once the fed realizes that they created a housing "recovery' that only "recovers with low rates and they stop the taper talk. If they insist on stopping QE, rates will soar and real estate and the stock market will "tank" because as Bernanke says "the economy is weak"

http://smaulgld.com/bernanke-warns-of-tanking-the-economy/

Facebooksux says

I would say....yes.
http://www.zerohedge.com/news/2013-08-23/new-home-sales-crater-lowest-october-biggest-drop-may-2010-median-home-price-6-month

You'd be wrong then. New home sales are a small % of the overall market. Here's the number you should be looking at:

http://finance.yahoo.com/news/existing-home-sales-rise-july-154831473.html

tatupu70 says

Facebooksux says

I would say....yes.
http://www.zerohedge.com/news/2013-08-23/new-home-sales-crater-lowest-october-biggest-drop-may-2010-median-home-price-6-month

You'd be wrong then. New home sales are a small % of the overall market. Here's the number you should be looking at:

http://finance.yahoo.com/news/existing-home-sales-rise-july-154831473.html

July New home sales are reflective of sales made by signing of contract to buy in JULY- after rates had rises significantly.

Exisiting homes were contracted for before July and before the rise in interest rates- this bubblet is over.

Interest rates like deficits matter!

Keep in mind this blog post predicted this back in mid June

smaulgld says

People are fleeing california and college graduates there like every where else are having a hard time finding jobs and have tons of student loan debt. How are they going to be able to afford houses, especially in California.

Doesn't matter. That's what the H-1 program is for.

Princelings' kids (and kids of "princeling-equivalents-from other places in Asia, say like, Mumbai) with their newly minted PhDs from US schools, debt free and money from "back home" will fill the cubicles and fill the housing.

No matter how expensive and crowded the housing may seem to you in the Bay Area, it is dirt cheap, wide open prairie spaces, at Bargain Prices, in comparison to the crowded polluted cities they came from.

The same thing that makes prices rise also makes them fall...greed. Cognitive dissonance is driving the current rise. Fear drove the last two bubble bursts. It will again this time. Also the greatest bubble of all time, the bond bubble, could destroy credit as we know it.

The real estate market is 100% dependent on Fed QE-without it forget it

I am not sure how you can simply correlate housing demand or need based upon only price. In fact, housing demand and need should be based upon population.

Here is the SF Bay area population increases for the past 60 years;

1950 2,681,322 54.6%
1960 3,638,939 35.7%
1970 4,628,199 27.2%
1980 5,179,784 11.9%
1990 6,023,577 16.3%
2000 6,783,760 12.6%
2010 7,150,739 5.4%

Some are projecting that by 2040 that population in the Bay Area will grow from 7.1 million to 9.2 million — an additional 2.14 million people and a projected need of 660,000 new housing units. So we need to build an average of 22,000 units/year to accommodate the population increase.

So how many new units are we constructing/year? Are we keeping up or slipping behind to meet the demand? I am not sure. Anyone with stats? Thanks.

You guys stress me out.

I'm not sure what to do.

Buy now with prices just insanely high (san diego)? Or rent for the next few years, hoping to save up more?

Rates are so low, I can't help but to think when they rise 3-5%, prices will have no choice but to go down.

bufferoverflow says

You guys stress me out.

I'm not sure what to do.

That's funny.

Bloggers stress you out and you don't know what to do?

How about what not to do?

Like, don't read blogs that stress you out.

You guys stress me the F* out.

"PRICES WILL GO TO INFINITY"

"NO THEY WONT, PRICES ARE CRASHING!!"

What the HECK!

Buster says

I am not sure how you can simply correlate housing demand or need based upon only price. In fact, housing demand and need should be based upon population.

Here is the SF Bay area population increases for the past 60 years;

1950 2,681,322 54.6%

1960 3,638,939 35.7%

1970 4,628,199 27.2%

1980 5,179,784 11.9%

1990 6,023,577 16.3%

2000 6,783,760 12.6%

2010 7,150,739 5.4%

Some are projecting that by 2040 that population in the Bay Area will grow from 7.1 million to 9.2 million — an additional 2.14 million people and a projected need of 660,000 new housing units. So we need to build an average of 22,000 units/year to accommodate the population increase.

So how many new units are we constructing/year? Are we keeping up or slipping behind to meet the demand? I am not sure. Anyone with stats? Thanks.

Isn't the bay area already high with respect to population density?

And it's going to *grow* by 30%?

That's impressive. Where were these numbers collected from?

APOCALYPSEFUCK is Shostakovich says

bmwman91 says

Now, if China is able to work-out a white collar criminal extradition treaty with the US (which they ARE working on),

Got a citation?

Yeah it is part of FATCA. The US wants all foreign financial and banking institutions to turn over the account details of US citizens living abroad-else they will be punished.

China has asked for data of assets and financial data of Chinese nationals in the uS in return. The US has so far refused-but if they agree-them Chinese will flee to Canada.

bufferoverflow says

And it's going to *grow* by 30%?

That's impressive. Where were these numbers collected from?

http://www.sfbg.com/2013/05/28/planning-displacement?page=0,0

http://www.census.gov/construction/nrc/pdf/newresconst.pdf

http://www.nbcnews.com/business/new-home-sales-tumble-raising-recovery-worries-6C10984422

These are the stats putting the number of new construction at 900K units, and sales at 400K units.

There just isn't the demand for the housing units, and apartment construction is the highest since 1986.

Come on, get on board. Housing units are different than stocks, but are subject to intense speculation in assets.

egads101 says

Buying a house in 2006... you thought the price would go up, but it went down.

You did not pay the bank...

I see you sayin in 2010 that prices would go down more.

You were wrong again.

The house we bought in 2006 we made a $64K profit on by selling it.

What you mean is we refinanced our personal residence for $570K which we bought in 2003 for $300K.

Bank of America bought our $70K HELOC from Countrywide, but didn't have a clear title, they are still trying to sort that out.

We always have the option to walk away from any property, but we've decided to keep this mill stone, because it is now worth more than the total owed.

In 2010 no one saw the 1% mortgage rate drop in 2011. The Real Estate market should have been allowed to correct, but it didn't.

So pretty much you are wrong about everything, the way most Real Estate amateurs are.

I'll stick with my strategy, because so far I'm making more in my market place.

egads101 says

That is the housing word.

The word is prices will drop like a rock. I have a different point of view given how much has been invested in Real Estate. Prices will deflate, the same as wages are deflating now.

Bring data next time.

http://www.housingwire.com/articles/26376-multifamily-construction-pushes-housing-starts

More about apartment building:

http://www.usnews.com/news/blogs/home-front/2013/02/13/multifamily-housing-growth-poised-to-continue-in-2013

Housing units are a mix. One chart shows residential new construction dropping, but apartments are catching up to where they were before the Real Estate bubble.

I should write a post about that, but no one wants to hear about Real Estate.

egads101 says

The oracle is sad for you.

I do feel sad for all the people in the past three years who over paid. I'm not one of them, because I have enough money tied up in properties that are losing value.

The bears have been right all along.

Next time, bring data.

egads101 says

you should meditate on your error for at least one hour a day.

You're a nut job.

Next time bring data.

Also, the way the market is turning, right now, as we type, many people who listened are grateful they waited until the Fed stops fooling around.

egads101 says

data? such as that released this week that home prices are up 14% in the past year?

Price spikes are irrelevant.

Let's see, I buy a house at these outrageous prices, pay to get a mortgage, then pay the selling costs to get out of the mess, plus what ever I have to put in to make the place pretty.

Where's the profit?

Price spikes don't mean anything until you collect.

I just showed you we made $330K in 2006, 2007 in my spare time. How much did you make?

Next time bring data, and try to make some sense out of it.

Yeah, we're done. You've got nothing here but a Case/Shiller, Zillow, and Trulia price bump for 20 metro areas.

You should get out of the house more.

How are things doing in Wyoming?

David Losh says

egads101 says

data? such as that released this week that home prices are up 14% in the past year?

Price spikes are irrelevant.

Let's see, I buy a house at these outrageous prices, pay to get a mortgage, then pay the selling costs to get out of the mess, plus what ever I have to put in to make the place pretty.

Where's the profit?

Price spikes don't mean anything until you collect.

I just showed you we made $330K in 2006, 2007 in my spare time. How much did you make?

Next time bring data, and try to make some sense out of it.

How did you make $330k in 2006/2007 when you've spent a good amount of time talking about being underwater, having tax liens against you etc..?

And I don't follow how your property/ies have been losing value if they've been going up in price.

Call it Crazy says

Quiz: Which is better for the economy and housing recovery, selling 10 houses
that appreciated 12% in the year or selling 50 houses that appreciated 2% in the
year?

I can answer that. And let me say, point to you, yes the volume of transactions is a very clear indication of a struggling economy - going up nonetheless - but struggling to do so.

So now that we have put that into the "asked and answered" column, lets move on to what most (not all but most) ordinary buyers care about --- prices.

So let me ask you In nominal terms, have prices bottomed? Yes or No??

I put this to you as a test of your candor and intellectual honesty. You can continue to maintain that prices will continue to struggle to move upward, and point out what a terrible investment homes can be, but again its a yes or no question -

In nominal terms, have prices bottomed? Yes or No??

The Professor says

Is that you Roberto?

I agree, but these are much more childish comments than Bob's.

egads101 says

David will always lose money.

I make money every day.

You must have missed the parts about the property in Wyoming. Maybe the great oracle can tell us how much prices have gone up in Wyoming.

egads101 says

you make money, then you quote a house in wyoming that is losing you money?

I want to sell the property, all of our property. I want my cash out of losing propositions so it can be invested in making more money.

Wait a minute, at least I have those options, what is it you've got? Let's get them out and measure, shall we?

Call it Crazy says

Quiz: Which is better for the economy and housing recovery, selling 10 houses that appreciated 12% in the year or selling 50 houses that appreciated 2% in the year?

50 houses, 2% appreciation?

egads101 says

You are still trying here?

So, you've got nothing.

I want to sell my properties rather than buy more. Anyone buying property today is buying at the recognized top of the market. So, I want to sell at the top of the market or as close to a top of the market as we will ever get.

It's explained here every day.

egads101 says

write gibberish.

Bob?

egads101 says

The word is prices will drop like a rock.

you have said this now for almost 3 years, and the opposite has happened.

Only because we are stealing from the future to try and create artificial demand. It will only mean the correction will be much worse when it eventually happens. Which at this point looks like the next 12 months. Giddy up. Down we go, all thanks to greed and stupidity.

The Professor says

egads101 says

In old times, david would just be the village idiot

Is that you Roberto?

It sure seem like it might be.

egads101 says

David Losh says

The really cool thing about Partick.net is all the people who have called it correctly.

you write that RIGHT UNDER your october 2012 prediction of price drops....

Or has this newbie really been following what David L said since 2012?

egads101 says

RentingForHalfTheCost says

egads101 says

The word is prices will drop like a rock.

you have said this now for almost 3 years, and the opposite has happened.

Only because we are stealing from the future to try and create artificial demand.

so when you are wrong, you always just make up an excuse.

sorry, but wrong is wrong.

Manipulation is always a risk when trying to estimate the future. If Buffet decided to take all his loot and buy up bubble-gum then the best analyst trying to predict the future price of bubble-gum would not have a chance. I wouldn't call them wrong, as you obviously would. I would call them slighted as we all are being in this country. Pumping future money into a broken system doesn't fix anything, it just makes it worse and delays the inevitable. All we have done (and I mean done as in the past tense) is create the artificial feeling of wealth for many that then buy into bubbles. Good luck to all on the backside of this coin. It will be absolutely amazing. Beyond your wildest dreams/nightmare.

RentingForHalfTheCost says

Manipulation is always a risk when trying to estimate the future. If Buffet decided to take all his loot and buy up bubble-gum then the best analyst trying to predict the future price of bubble-gum would not have a chance. I wouldn't call them wrong, as you obviously would. I would call them slighted as we all are being in this country. Pumping future money into a broken system doesn't fix anything, it just makes it worse and delays the inevitable. All we have done (and I mean done as in the past tense) is create the artificial feeling of wealth for many that then buy into bubbles. Good luck to all on the backside of this coin. It will be absolutely amazing. Beyond your wildest dreams/nightmare.

That was a good post.