WatchOkay, this is my first posted Real Estate Discussion, please feel free to tear apart at will. I expect nothing less.
Articles like this irritate me, so I thought I would take quotes from the article and write my housing bear thoughts, which the article did evoke.
1.) "Joe {Last Name}, a real estate agent in the Minneapolis suburb of Eden Prairie, said he recently concluded a streak of 13 consecutive bidding wars over homes that his clients wanted to buy. Each sold above the asking price."
-- I just don't buy these stories and every time there is an opportunity to search for the sales record I can't find it.
2.) "Millions of people remain underwater" & "Millions of families still face forclosure"
-- So how in the hell is there a housing recovery and / or bottom?
3.) "Our sense is that the market is recovering"
-- Well, isn't that reassuring. Data? A thread of evidence?
4.) "The trend is clear in the data. The widely respected S.&P./Case-Shiller index reported earlier this week that sales prices for existing homes rose in April for the first time this year." & "Indeed, in a growing number of areas demand for homes is outstripping supply."
-- Yes, that is true. There is no inventory. Why? Please refer to # 2
5.) "This is the fourth consecutive year that the housing market has shown signs of revival, and each previous episode ended with prices renewing their downward slide."
-- And this year is different because?
6.) "Government efforts to help homeowners have intensified, allowing more borrowers to refinance or avoid foreclosure."
-- Yes.
7.) "The influx of investors is a major reason that the market is looking stronger"
-- Really? Ok, in what way? True, Wall Street is a cash cow for a few.
8.) "And the rise in prices is happening despite the vast number of vacant houses awaiting buyers, up to two million more than the normal level, with several million more houses still at risk of being foreclosed."
-- Again, this indicates a recovery?
9.) "There are still reasons for caution."
-- Agreed.
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Oakland, CA
APOCALYPSEDUCK is Shostakovich says
Do I get 6% regardless of whether they eat you or you eat them?
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David9 says
Earlier today, I driving and listening to an AM "Financial" show, they were interviewing a Space Coast (FL) Realwhore who made the same "Getting multiple bids" BS.
She also trotted out the "3 months of increasing sales" (which we've seen before nationally and in many locales, only to reverse again) BS and the "You'll regret not buying when blood is in the streets."
The blood in the streets will begin when the Boomers who DO still have jobs go to sell their 3-4 bed/2 baths in the burbs to fund their retirement - and realize there are no buyers, and the $300-500k they planned on for it ain't comin'.
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Well these days with unstable employment, buying real estate is way too risky especially in overpriced bay area. I am waiting few more years, saving and will find job where I can work remote and move to south Florida.
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San Jose, CA
tclement says
Well if you don't buy now you will be priced out and if you don't sell now no one will buy your home later because they will be priced out.... do the math.
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Tarzana, CA
thunderlips11 says
Right. I'm not comfortable buying unless I know I have a reasonable chance of selling it, 1.) Period, just being able too. 2.) Near the price I paid for it.
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Sebastopol, CA
Here in Sonoma County the low end is on fire. Winning bids are all cash or at least 50% down. 18 offers in one case, many go for above the appraised value. This is the $250k-$400k range. There is more or less normal activity up to $650k where it drops off dramatically. There is very low inventory except in the $1MM-$2MM range, where there is a glut. I suspect we are seeing people buy who are trying to preserve capital instead of chasing yield.
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Pleasanton, CA
Stop calling people Liars unless you are actively looking to purchase a home.
You really don't understand pricing until it's your money your plunking down for a house. For example, I need a three-four bedroom home with two living spaces a large backyard in a relatively safe area (if you can call Oakland Safe). Six months ago I could have found a house having 2,000-2,500sf. well within my price range. Now I am looking at paying over $100,000 MORE for a 1,200-1,650sf house with a smaller yard. I am also being out bid on the nicer homes for sale. This is a FACT. You don't know Jack diddly until you actually look.
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Pleasanton, CA
This market is absolutely being manipulated.
The Banks are hording their supply of foreclosed houses.
Foreign Investors are buying up houses in the US.
American's with money are buying houses for rentals.
Investment firms are buying foreclosures in bulk.
And now I'm noticing articles popping up about the poor home owner who needs a mortgage reduction.
Rents will continue to rise, underwater home owners will be bailed out, investor will dominate in the housing market (they already do), Banks will
release one house at a time (same as burning all the empty houses ~Greenspan~) average people will continue to pay exorbitant prices for a basic necessity of life.
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I agree.
I called a very well known bank where I keep money and asked if they had foreclosures or REO's and had to fight like crazy to get someone on the phone. Finally, after days on end, someone called back.
I knew prices in S. Florida had plummeted and were still going down, but after talking a while to the lady from the bank, she was got really irritated when I told her the prices she quoted over the phone were the same or higher than in R.E. offices around town.
In other words, they didn't want to budge even for one of their bank customers who was ready to plunk down a lot of cash on a home. Maybe they'll always be banksters and our country is getting fatter, dumber and sicker (health-wise and many other ways). In housing, we're playing an "adult" version of musical chairs and the media is calling the shots by confusing everyone.
Yep, America the brave. Lock up your houses, your cars, the bathrooms (yeah, remember when you didn't need a key to get into a bathroom?) and everything else. Don't let your kids play outside and watch them 24/7. Are we really still a free country or simply a country being manipulated so well that we think we're free....
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San Jose, CA
Another Bank backed investment firm entering market:
Job Title
Acquisition Analyst
Job Summary
Leading, well-capitalized, national single-family buy and hold firm seeking an Acquisition Analyst for its Southern California office. We specialize in acquiring single-family assets with a long-term buy and hold strategy.
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803 comments
Puts you in charge.
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Los Angeles, CA
David9 says
How about this...
I bought my house about a year ago...for $XX - on my street there were two identical homes for sale, same sqft, same lot, similar floorplan in similar shape...they sold within 1 month for $XX + 10% more than we paid for ours. Obviously, interest rates are more than 1 point lower now, but...no landslide crash going on here.
Look guys, we were right in 2007, 2008, 2009...maybe 2010...but any crash has an end to it, just like every bubble has an end. It goes both ways and housing is friggin' cheap as of now. Does that mean there isn't an overpriced home out there? No. Does it mean you can find a decent home for what you pay in rent for it? YES.
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San Jose, CA
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SubOink says
There is absolutely no difference between now and 2008. The same sheeple fools who bought at the peak, in 2005-2006, foreclosed, and are now back in the market buying, using FHA loans, margined to the gills. Anybody who proposes that this time is any different, is either joining the ranks of these sheeple fools or is a realtard.
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How can they buy if their home was foreclosed on in 2006 -- it takes a long time for their credit to be restored after a foreclosure.
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San Jose, CA
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Musica2 says
I know people who got back into the market after 3 years. Some couples even get a "fake" divorce, just to get back into this giant Ponzi scheme.
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Los Angeles, CA
dunnross says
If you call prices being 30-60% less no difference then yes, no difference...
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San Jose, CA
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SubOink says
Although the prices are less, the attitude is exactly the same as it was at the height of the boom. It's amazing that after 5 years since the crash, people have already forgotten the crash, most still think that RE is a good investment, trust realtors, and ready to plunge into this market, head first, when realtors tell them that both prices and interest rates will not stay this low for long. Just, this fact, alone, is enough to keep any intelligent person out of the market.
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Pleasanton, CA
Dunnross addressed the people but not the other factors effecting home prices. I would also like to to when she thinks prices will fall to affordable levels.
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San Jose, CA
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Carolyn C says
As I pointed out on numerous occasions, before, prices need to be "ridiculously cheap", and not, just "affordable", before a bottom can be declared. There is no way we could have a mega-bubble like the one we had in 2006, end up with prices just being "affordable". Right now, Phoenix is "affordable", but it's not "ridiculously cheap". Bay Area is not even "affordable", so it has a very very long time to go, before, the bottom is in. In 2006, at the height of a market, almost anyone with a pulse could "afford" to buy, because of lax lending standards. This could happen again, but, this time, it will be because of low prices. In 2006 the sheeple bought, but they couldn't hold on to the house. When the bottom is finally in, the sheeple will be able to buy, once again, but they will be too scared.
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Los Angeles, CA
The pension funds, hedgies, and big time investors are buying up SFR's left and right. This with 2.5% mortgage rates (on a 5/1 ARM) and foreclosures taking 3 years and loan mods and principal reductions everywhere makes this year look like the nominal bottom to me.
If you are still renting waiting for bottom you should be really concerned. Intrest rates are only going lower and lower and lower.
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San Jose, CA
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PockyClipsNow says
Interest rates are going lower, not because we have a great economy. Interest rates are going lower, because Americans are hooked on credit, and this economy will completely collapse if interest rates were to go higher. This is why we are in a "Depression" for a long time to come, unemployment will only be rising, and there will be no floor to how low house prices will drop, in spite of the low interest rates.
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47 male
Lafayette, CA
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dunnross says
Yeah except that is total bullshit.
Credit demand sends rates higher. Credit supply sends rates lower. The federal reserve forces rates lower by increasing supply. (loaning additional money to the government via bonds) I'll say it again, you lack even a rudimentary comprehension of the way money and debt function in an economy yet you presume to lecture people. Why?
dunnross says
Really? Why?
dunnross says
Why? Because people are hooked on credit and interest rates are at record lows? Rantings of a lunatic.
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San Jose, CA
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iwog says
Iwog. I am afraid that it's you who is a lunatic, and an imbecile, on top of it, and it is you who has a total misunderstanding of how the credit system works. I never said that there was a high demand for credit. In a "Depression" credit demand is going down. This is called credit deleveraging. But, as people demand is shrinking, there is more demand from the gov't. People are hooked on credit, not because they want more of it. People are trapped by credit, gov't is trapped by credit, the greatest credit bubble in history, has taken this economy hostage, and there will be no recovery until this credit is completely deleveraged.
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Lafayette, CA
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dunnross says
Why?
Is there a problem you have where you can't explain your own position? Why must there be a complete deleverage of credit before a recovery?
People like you always speak in absolutes and blind assertions. I bet you don't even have a reason, you just take it all on faith.
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San Jose, CA
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iwog says
My position is clear. You must not have been a very bright student in school. It must be pretty obvious to most people (but not to Iwog) that you don't go out and get yourself deeper into debt, if you are already under water and maxed out on all your credit cards. But, even if you are an imbecile Iwog, and try to do that, there is no longer a bank which would allow you to.
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San Jose, CA
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dunnross says
But, even if you are an imbecile, and don't believe me, I invite you to read this report from McKinsey group about debt deleveraging, and how we are only 1/2 way through with it, while the rest of the world that iwog likes to compare us to, has only just begun deleveraging:
http://www.mckinsey.com/insights/mgi/research/financial_markets/uneven_progress_on_the_path_to_growth
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San Jose, CA
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iwog says
Look at this chart from the report. Notice how Sweden has already completed it's "total" deleveraging cycle, and is now, on its path to recovery. The fundamental source for economic stagnation during debt deleveraging can be summarized in this paragraph from the article:
"Expect constrained consumer demand. As consumers continue to deleverage and rely more on current income than credit to fund purchases, growth in consumer spending will be limited. In many nations, slow housing starts also will dampen demand in many categories. Current growth rates in consumer spending may be the “new normal” for quite some time."
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San Jose, CA
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dunnross says
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iwog says
Eventually you run out of Cocaine and everyone need to get sober!
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Bellingham, WA
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iwog says
I was going to post what dunross posted, that we've got the rest of this decade left to "deleverage":
http://research.stlouisfed.org/fred2/graph/?g=8nE
plus that chart is overstating the deleveraging because the top 5% have all the wages and none of the debt.
The true picture of the bottom 90% must be just brutal, but FRED doesn't break out their data by quintiles.
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Los Angeles, CA
thomas.wong1986 says
Why?
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SubOink says
nose bleeds are nasty!
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Why all the name calling? This is a serious discussion - name calling detracts from the discussion.
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47 male
Lafayette, CA
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dunnross says
Yeah except that has nothing whatsoever to do with anything you said. Do I need to remind you?
dunnross says
You didn't say anything about deeper in debt. You said there can be no recovery until the country is completely out debt. Despite numerous posts, you STILL have completely failed to answer the question.
So let me try again. Why? Why must we be completely debt free to have a recovery? There are no other examples in history of this being true so WHY do you think this is true now?
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47 male
Lafayette, CA
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dunnross says
So 90% debt to income is "totally" deleveraged? ROFLOL
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iwog: "So let me try again. Why? Why must we be completely..."
True internet duckshit. Dunross's overall big picture assertion is correct, all you can do is harp on "completely". The reason your question gets no answer is because it doesn't deserve any.
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pazuzu says
So what is the magical debt as % of income number when the US is "recovered"? 90% 91%, 95%? Does it change based on the interest rates?
And why?
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47 male
Lafayette, CA
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pazuzu says
Dunross made an ignorant assertion without a single supporting fact. I asked for a single supporting fact, and got nothing.
i don't accept his premise. I think a recovery can do just fine with current debt levels, in fact as interest rates decline this becomes more and more likely.
Now what? Are you and Dunross going to start every post with "I'm right so neener neener" or is one of you going to grow some balls and actually make a real argument?
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"I think a recovery can do just fine with current debt levels,"
We have to remember to revisit this one for a good belly laugh in the the future.
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Virtually all past declines have had mini rallies along the way down, this is just that, a mini rally. The eventual trend is downward because some of the key fundamental problems - unemployment, foreclosures, private market financing etc. remain unresolved.