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Now in some areas prices might still have 5% to 10% to go, but on the average, we're probably more or less at the bottom. Prices may move slightly (+/- 1.5%) up or down month to month from here on out, but from my take on the available data, the days of large year over year price drops are over.
Just my two cents.
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Gentle Readers,
Bottoms, anyone? Link:http://img.metro.co.uk/i/pix/2008/11/sloggibumcompEPA_450x464.jpg
Regards,
Roidy
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tatupu70 says
The flippers and calculatedriskblog are all about numbers. Very little actual opinions, so I disagree with you. Numbers don't lie, unless someone is manipulating them. Could the sites I listed be manipulating the numbers? Absolutely they can. However, for what reason, benefit? There is no money trail to justify the corruption in this case. Just the way I like it. You show me someone making money from something and I will show you some form of manipulation of the data. I work in data and make very good money analyzing it each and every day. Have been doing it for 30 years now and I don't think I am far from the best at it. Each day I see the corruption, even in my work group. I can smell it, like other people can smell a spoil infant in a restaurant. :)
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Oakland, CA
tatupu70 says
classic confirmation bias
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Victorville, CA
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toothfairy says
i agree with whoever is right.
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Murrieta, CA
Time will tell.
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Scottsdale, AZ
robertoaribas's website
flippers in trouble? those examples prove that buying an extremely expensive home in 2006 was a bad idea... thank you for the news flash!
However, in any market today where someone can buy a home 20% down 30 year fixed, and lock in a mortgage way the heck under rent, in some cases at half of rent... what is your point again?
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robertoaribas says
No real point, more of a progress to stupidity. It started with the OP claiming a bottom. I posted data suggesting that it is a tough call (highly improbable) and then there was a backlash saying I only look at data one sided. However, no alternative data was presented. My biasing was questioned and then ridiculed. Still no data. Guess that bottom must be happening with all the proof that was posted. Interesting thought process we have here. ;)
So, can we get all the realtors in this forum to agree that purchasing a house in 2006 was a big mistake? I bet we can't. I bet they have some hair-brained reasoning that makes buying that house still correct in their minds. Remember "It is never a better time to buy... repeat". Have they all called up the clients they sold to during that time and apologized?
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EastCoastBubbleBoy says
CNN ..
Too bad none of these news portals like CNN, MSNBC, San Jose Mercury News have come out and apolgoized for dismissing the Housing Bubble in the first place, and frankly getting it wrong.
Bottom.. for a home your buying ... 1997 price PLUS inflation which can be 35-40%. Thats the bottom...
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If we overshoot to the downside in housing... I predict we bounce hard off the new bottom, just like the stock market did in March 2009. I dont think we see 2007 prices again though until 2025 or later.. And most of it will be due to inflation... Wages will be a lot higher... Hell, physical money will probably be phased out... Our debt will be so high as a country... The US will only survive by devaluing the dollar... If anyone thinks we will pay off our national debt with more deflation of assets they are insane!
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LAO says
The things fuelling equities are not the same that would be fuelling residential real estate.
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Here's why I think that we're at bottom.
In the last two bubbles (1970's and 1980's) prices didn't overshoot on the down side. At the end of the 80's bubble (and even in the smaller mid 90's bubble) prices did not revert to the benchmark index value of100. They reverted to an index value of about 110. My hypothesis is that this is due more multi-income homes being commonplace, but I haven't dug up the data to support or refute that.
At the end of the day an index value of just over 110 (say 112 to 113) is about the right place for a bottom. So if the article is correct that prices have returned to 2001 prices in most areas... That's why I'm saying that this is the bottom - certainly time will tell if I am right or wrong.
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EastCoastBubbleBoy says
Those weren't really bubbles. Those were like booms or overheated markets. What we had in '02-'06 was first and foremost a credit bubble.
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Victorville, CA
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No realtors here. I am a investor. I am buying as many houses as I can. ; -D
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Victorville, CA
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Huh? How the hell do you mean?
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Victorville, CA
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You show me some evidence that Texas or anywhere here in the Inland Empire is on the fritz and I'll grant you that I am wrong. I am not a proud guy in that way. I am reasonable and sensitive. But otherwise these little tit-for-tats are just wasting both our times and energies.
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Time will tell who is right.
I knew I'd get flack for this thread, but I stand by my perdiction that when we look back on this mess in another year or two, early 2012 will bee seen as "the bottom".
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Corning, NY
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EastCoastBubbleBoy says
It all depends on what the fed does with the money supply and interest rates. If interest rates stay at rock-bottom, and if lots of new money is created and finds its way into real estate, we'll get rising prices again. And if (or when) monetary policy is tightnened, prices will go down. It's all at the mercy of the Fed.
I don't know about you, but I can't predict the Fed's actions. So I'm not going to make bets which are subject to those actions.
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I'm going to throw my opinion in the hat and state that no- we haven't hit bottom. At least that's my guess. The only reason I say is due to my own ancedotal observations I'd mentioned on another thread. For all practical purposes where I live is more or less a broad representation of the general Bay Area populace: well-educated, well-paid professionals living in a Bay Area bedroom community in the east bay. Lately I've noticed what seems to be a sudden uptick in short sales and foreclosures. What's more, stuff is just sitting and sitting. We're not talking about a neighborhood full of folks who flip burgers for a living. They're probably about like me and do pretty well financially. Yet I'm starting to see foreclosures and short sales where I haven't seem them before.
So my wild and highly speculative guess is that the bust will finally start affecting the areas that had previously not been affected as much... in other words, the areas most people want to live.
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Belmont, CA
wthrfrk80 says
They are going to kick the can down the road until it causes so much inflationary pressure it will likely get out of hand fairly quickly. The country would default very quickly if rates were to rise to even a normally low rate of 5%
What are we at now? 0 to 0.25%?
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edvard2 says
i've noticed the west side (ie the nice side) of belmont, san carlos, millbrae which are second tier cities start to have reasonably priced non-crappy, non-tear-down homes - as low as $600k which i've never seen before this year.
this coming year should see more inventory priced in this lower range.
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$600k seems still rather steep. Then again I'm not familiar with stuff in Millbrae or Belmont. Around here we're seeing stuff sell in the $350-$450k range. Anything higher generally sits. Even the lower priced stuff doesn't sell immediately.
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San Carlos, CA
1sfrenter says
I think your anecdote shows a lot of truth to where things are - a market trying to find it's equilibrium.
The crappy over-priced specifically smells like desperation, sucker fishing, or folks hoping the fringe effect (people settling for less, and sketchy loan instruments pumping up buying power) isn't really gone.
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Tarzana, CA
pkowen says
That spells it out for me.
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Danville, CA
gregpfielding's website
The real issue is that because the market is so disjointed, everyone here could be right. Some places in the Bay Area are probably at or near bottom. Others still have a way to go.
Here's an excellent comparison of zip codes 94611 and 94621 in Oakland. 94621 is probably, pretty darn safely, bouncing along the bottom.
http://bayarearealestatetrends.com/2012/02/27/location-location-locationand-a-reversion-to-the-mean/
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The big gorilla in the room is the 70 million baby boomers that will be dying in the next 30 years.
My crystal ball is very murky, but here's one other possible scenario. Housing starts have been crushed by the downturn. Perhaps they never return to historic levels and demand is met by boomer inventory. Hard to know how the markets will reach their equilibrium as we've got the normal business cycle and boomer dieoff both feeding back into the system.
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Los Angeles, CA
Katy Perry says
that's exactly why it won't go there
EBGuy says
Newsflash - People die all day. And baby's are also born daily. Amazing, eh?
Those houses will be passed on to the next generation that will rent them out, fixed income without having a dime invested is nice. I wish I had that coming.
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gregpfielding says
Nope, eventually all prices will track down. Only one group will be right. Houses from the sea, in the hills, across the valleys will all be aging and devaluing in this country. "Location, Location, Location" will only be heard from someone that stutters. If a realtor even so much as mumbles the words people will be running them out of town. The "Buy now!", "Interests rates will never be better", "Home prices always go up" rhetoric is old. It worked during the Ponzi scheme growth, but now that everyone is wiser (well almost everyone), realtards better change the vocabulary. Buy for quality, value, because you cannot see yourself living anywhere else. Stop trying to time the market and make a buck. Go to work for money, invest in stocks to grow your savings, live in a friggin house Goddammit. If you want get rich quick, then watch the late night infomercials.
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SubOink says
SubO, you aren't saying that the baby boomers are being replaced 1-to-1 with the new generation. Wow, that is out there. We are not having another bab boom right now. If anything our baby rate is pathetic. We are going to be screwed by the aging baby boomers, no doubt. They put us in the hole with the debt and they will keep putting us in the hole. As soon as a baby is born he/she goes ~50K in debt. Thanks baby boomers, we love you.
http://www.brillig.com/debt_clock/
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I think we'll have several more years of no movement in real estate industry. I certainly do not see prices go up without people willing to go into debt with as much uncertainty as there exists today, and huge rotting inventory.
At most you'll get a tiny temporary increase during summer for seasonal adjustment. And NAR will use this Bull Trap as an excuse to sucker unsuspecting buyers.
A few rare deals here and there is not a trend, plenty of crazy people out there trying to live off flipping still. Stocks returning 10% last year now that was a trend, which has at least few more years to go.
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Danville, CA
gregpfielding's website
RentingForHalfTheCost says
Clearly you were so excited to promote your own point of view that you didn't bother to read the article...
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Pleasanton, CA
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gregpfielding says
I read it, and concluded that one area has more people in denial than the other. The macro economics of the country will affect all areas. The more distress quicker than the more affluent. Eventually, though, even the affluent neighborhoods will adjust to the circumstances. Remember, many people who are buyers of the higher priced homes actually come from the selling group of the lower priced. Not many people just start out buying a million dollar home. You need locked in equity or other forms of luck. We just screwed a whole generation of starter home folks in the 2000's. You don't think that will affect the high end homes? Just because there is a lag, doesn't mean there isn't correlation.
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Los Angeles, CA
RentingForHalfTheCost says
What does this look like to you?
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Los Angeles, CA
Realtors Are Liars says
Ok. So growth is at the lowest level - that means its still growing! Just slower. What don't you understand about the very straight forward graph that I posted. Do you have data that shows that the population in the US is actually going down?? Please upload. Just because you say it is - doesn't mean it is.
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Real estate only goes up. Buy now, or be priced out forever.
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Prices are going up.
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Los Angeles, CA
Realtors Are Liars says
Even if you say it 100 times....population growth is what it is. It describes GROWTH as in MORE PEOPLE.
My graph is very clear and useless to argue.
Period.
Realtors are liars (what does that have to do with anything we are discussing???)
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Los Angeles, CA
Nomograph says
No, don't do that. 1975 prices just around the corner...
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Scottsdale, AZ
robertoaribas's website
really guys, put on your thinking caps!
Population growth ranks as one of the stupidest claims for real estate investment ever!
Did the population grow over the past 4 years? YES! did it keep house prices from collapsing? NO!
Need more? Japan: 125,000,000 people on less land then the state of a medium sized state...And half of it is too mountainous to build on!
Japans population density per square mile is over 800, US is 84... yet Japan has had a multi decade housing price decline.
So, clearly population, even very high density is not enough to keep housing expensive...
try a little research sometime, instead of going back and forth on bs!
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Los Angeles, CA
robertoaribas says
Correct.
The population growth discussion started with somebody talking about baby boomers dying, I then posted a response to that...it was not really meant to prove anything that had to do with house prices going up or down.
I was saying that it wouldn't matter if baby boomers died because old ones die and new ones are born. The population curve is going up, even with baby boomers dying so the point of house prices must go down because the baby boomers will die is BS just like saying house prices must go up for the same reason.
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Los Angeles, CA
But some here are so determined for house prices must go down - realtors are liars that they don't even leave things alone...
Me: I just ate at McDonalds
RaLiars: Don't twist it around. House prices must go down. Realtors are liars.
Lol