Patrick.net

Housing Inventory Ghost Town

By tannenbaum   Follow   Tue, 27 Nov 2012, 11:01pm   8,079 views   196 comments
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http://loganmohtashami.com/2012/06/11/orange-county-ca-housing-inventory-ghost-town/

This post, somewhat ironically coming from a loan officer in Orange County, CA, is several months old, but remains equally relevant today and succinctly explains the completely dysfunctional real estate market of 2012.

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1. ELC Follow Befriend (3) 3 threads 657 comments Fort Lauderdale, FL

   37   10:44am Thu 29 Nov 2012   Share   Quote   Permalink   Like   Dislike   CDon says To wit - some will give up, some will hold out just a bit longer, and some will vascilate I think they will follow herd mentality as usual and at a certain point all give up. BTW, great post.

2. ELC Follow Befriend (3) 3 threads 657 comments Fort Lauderdale, FL

   38   10:56am Thu 29 Nov 2012   Share   Quote   Permalink   Like   Dislike   CDon says The answer to me seems obvious - meaning the forecast is years of stagnation to (at best) a market that rises lower than the rate of inflation while the remaining excesses are worked off. Like the saying goes, "the market abhors a vacuum." No one makes money in stagnation. It won't be tolerated for long. If the efforts to create a bubble fail you will see a push to create a crash. The Government is going to run out of the juice it will take to create a bubble. And really what it will take is going back to no-doc loans and the lifting of buyback clauses, and I don't see that happening soon.

3. CDon Follow Befriend (1) 217 comments

   39   11:58am Thu 29 Nov 2012   Share   Quote   Permalink   Like   Dislike   ELC says BTW, great post. Thank you. while im not above the occasional snark, I do appreciate discouse too. ELC says I think they will follow herd mentality as usual and at a certain point all give up. OK, but arent they, by definition all following the herd now? Right now, the herd is (1) sitting tight toughing it out and (2) capitulating so slowly and so infrequently as to cause the dearth of inventory and bottom we see now. It sounds like you are assuming the herd (which has been following the path above for the past 3-4 years) will suddenly capitulate en masse. Outside of a black swan event (which IMO if you worry about this everpresent fact of life is a reason to never buy) is there anything specific you see happening that will change the situation? ELC says Like the saying goes, "the market abhors a vacuum." No one makes money in stagnation. It won't be tolerated for long. If the efforts to create a bubble fail you will see a push to create a crash. Abhorent or not, they do exist. Witness for example the early 90s real estate bust. From 1992-1998 the stagnation continued, pretty much unabated before prices took off again. No money was made (or lost) during that time. As an aside - if you go gack to the early days of the internet chatrooms, you see some interesting paralels where people are fairly convinced the 92-98 stagnation was just a prelude to a much bigger catastrophic drop in home prices. ELC says The Government is going to run out of the juice it will take to create a bubble. And really what it will take is going back to no-doc loans and the lifting of buyback clauses, and I don't see that happening soon. Here we disagree, not only in intent but in scope. TPTB intent is not to create another "bubble", but instead a "floor". Thats why I believe all those who are calling for a real "recovery" will be disappointed as we continue to stagnate and work off the excesses. As to scope, frankly, I dont think you have any real idea how far they are willing to go to keep a floor in place. Remember, back in 08, a real honest to goodness liquidity trap was setting up - CPI actually fell, Ted spread was off the charts, we broke the buck for godsakes. All that talk of "we were 6 hours away from TEOTWAKI in the form of electronic bank runs" was not all hyperbole. Among many of the wonks, that really was how close we were. So, rightly or wrongly, you have to keep in mind thats what is driving their thinking and the scope of how much juice they have to keep the floor in place. The thinking among TPTB is that a true honest to goodness liquidity trap is so dangerous that it simply cannot be allowed to happen. Revolutions are borne on the shoulders of such events. Thus, before they have to roll out the tanks to defend the status quo, ask yourself what they will do to prevent this possibility. Interest rate changes Changes in Discount rates ZIRP QE TARP QE2 Operation Twist QE3 (we are here) QE to infinity Nationalization of industries or sectors of the economy. Debt Jubilees Selective Defaults Printing of checks to every man woman and child in the US (remember, the moniker "helecopter ben" isnt mere hyperbole - read his position paper on how far he would go to prevent deflation). The Sale of govt controlled assets. Privatization of licenses. The sale of Alaska. Again, not saying I agree with their viewpoint. I do however understand what they (at least think) they are up against. So long as thats the case, I really dont see why they will suddenly "rip the band aid off" given the alternative is so much more potentially devestating than the status quo.

4. robertoaribas Follow Befriend (23) 55 threads 3,793 comments Scottsdale, AZ robertoaribas's website

   40   12:42pm Thu 29 Nov 2012   Share   Quote   Permalink   Like   Dislike   ELC says Like the saying goes, "the market abhors a vacuum." The saying is "nature abhors a vacuum"... markets don't give a crap about anything, they just are.

5. CDon Follow Befriend (1) 217 comments

   41   2:50pm Thu 29 Nov 2012   Share   Quote   Permalink   Like (1)   Dislike   robertoaribas says cdon just wrote a very cogent explanation of the market... and immediately gets a dislike... see, that is what starts to set some people (like me) off on this site. His response was frankly one out of a hundred in terms of quality on this blog; If you don't like his premises or conclusions, explain how you see the world differently... Ive always found that strange too. Construct a decent argument and (other than ELC who had a thoughtful one) get nary a peep in response other than a bunch of dislikes. If there was a agree/disagree button, that would make a bit more sense - almost like "I disagree with what you are saying, but I dont have the time or energy to pen a response". And maybe in fact that is what people are trying to say. Still, the more time I spend here, the more I see a common theme emerging. Many of the posts here are made with a surprising amount of emotion and more often than not that emotion is fear and or anger. So my guess is more often then not the dislike is either: "I dont like what you are saying. I think you are wrong, but I dont have the ability to debate you on the merits, so let me stick out my tounge and run away" or "I actually think you could be right - but I dont want to admit that, and I dont like that you are telling me something I dont want to hear...so let me stick out my tounge and run away" Either way, its rather disappointing. Incidentally, I won der how many dislikes this post about the nature of dislikes will get?

6. ELC Follow Befriend (3) 3 threads 657 comments Fort Lauderdale, FL

   42   5:21pm Thu 29 Nov 2012   Share   Quote   Permalink   Like (1)   Dislike   CDon says Still, the more time I spend here, the more I see a common theme emerging. Many of the posts here are made with a surprising amount of emotion and more often than not that emotion is fear and or anger. I find it that way on all forums where it's free to join and you can post anonymously with little moderator interference. Emotions are purposely exagerated to elicit a response. That's why when you compose a serious down to earth post you seem to be ignored. It's the way Internet discussions have always been. I assure you very few are actually angry. In fact they're probably watching TV and talking with their spouse at the same time they're typing. Others have a whiskey in one hand and are typing with the other. Don't take it to heart.

7. Kevin Follow Befriend 40 threads 2,652 comments

   43   5:30pm Thu 29 Nov 2012   Share   Quote   Permalink   Like (1)   Dislike   I *only* use message boards while drinking

8. MsBennet Follow Befriend 4 threads 207 comments

   44   12:43am Fri 30 Nov 2012   Share   Quote   Permalink   Like   Dislike   Roberto, I was really admiring you for being ahead of the curve and daring to buy a bunch of homes and rent them out. But your need for adoration is quite puzzling. By continually bragging, it makes me wonder if you are telling the truth at all or if you have some deep-seeded need to cover up past rejections. Perhaps from your childhood. You had my respect but now I'm little sad for you.

9. bmwman91 Follow Befriend (7) 37 threads 1,535 comments Mountain View, CA bmwman91's website Premium

   45   1:01am Fri 30 Nov 2012   Share   Quote   Permalink   Like (2)   Dislike   Protected   MsBennet says Roberto, I was really admiring you for being ahead of the curve and daring to buy a bunch of homes and rent them out. But your need for adoration is quite puzzling. By continually bragging, it makes me wonder if you are telling the truth at all or if you have some deep-seeded need to cover up past rejections. Perhaps from your childhood. You had my respect but now I'm little sad for you. He just needs to put the douchebears on ignore. I did, and Pnet sure seems a lot cleaner to me!

10. robertoaribas Follow Befriend (23) 55 threads 3,793 comments Scottsdale, AZ robertoaribas's website

    46   9:12am Fri 30 Nov 2012   Share   Quote   Permalink   Like   Dislike   MsBennet says Roberto, I was really admiring you for being ahead of the curve and daring to buy a bunch of homes and rent them out. But your need for adoration is quite puzzling. By continually bragging, it makes me wonder if you are telling the truth at all or if you have some deep-seeded need to cover up past rejections. Perhaps from your childhood. You had my respect but now I'm little sad for you. maybe I just get too mad when someone calls me a liar... in any case, you can look up all my purchases at www.maricopa.gov recorded docs... by searching my name;

11. Goran_K Follow Befriend (4) 25 threads 1,520 comments Laguna Beach, CA Premium

    47   9:14am Fri 30 Nov 2012   Share   Quote   Permalink   Like (2)   Dislike   Protected   Roberto, I agree with bmwman. Use the ignore button. I think your post are pretty informative from the landlord perspective, but getting into flame wars where you're calling people "morons, little girls, etc" and talking about buying exotic private islands kind of makes you a catch 22 sometimes.

12. robertoaribas Follow Befriend (23) 55 threads 3,793 comments Scottsdale, AZ robertoaribas's website

    48   9:29am Fri 30 Nov 2012   Share   Quote   Permalink   Like   Dislike   Goran_K says and talking about buying exotic private islands kind of makes you a catch 22 sometimes. It was liarwhaterver that started that "buying exotic private islands..." I intend to RETIRE to an exotic non private island... why the hell would I want a private island? where would I go out to eat? do yoga? hang out in coffee shops playing on the internet? find friends to kayak and mountain bike with? I'm thinking panama, ecuador, thailand, or the philippines...

13. Goran_K Follow Befriend (4) 25 threads 1,520 comments Laguna Beach, CA Premium

    49   9:36am Fri 30 Nov 2012   Share   Quote   Permalink   Like   Dislike   Protected   Man, I was in the Philippines a while back when I used to work for Goldman sachs. All I remember is that metro Manilla was brutal. The heat, the smog, the traffic. I'm guessing whereever you're moving isn't near there.

14. CDon Follow Befriend (1) 217 comments

    50   9:53am Fri 30 Nov 2012   Share   Quote   Permalink   Like   Dislike   Billybigrig says you may have received one dislike but did anyone once use a condenseding retort Only mildly. But still, fair point. Billybigrig says the only thing this guy is doing is trying to say a few hail Mary's and thinks everthing will be all warm and fuzzy again... In my neck of the woods we call it backpeddling... Not sure I understand. What "guy"? ELC says Emotions are purposely exagerated to elicit a response. That's why when you compose a serious down to earth post you seem to be ignored. It's the way Internet discussions have always been. I assure you very few are actually angry. Probably true as im relatively new to blogging. Still seems like a waste of time to mostly log in to hurl insults, but obviously, im in the minority. robertoaribas says and talking about buying exotic private islands kind of makes you a catch 22 sometimes. It was liarwhaterver that started that "buying exotic private islands..." I intend to RETIRE to an exotic non private island... why the hell would I want a private island? where would I go out to eat? do yoga? hang out in coffee shops playing on the internet? find friends to kayak and mountain bike with? Completely OT, but I happen to know a guy who bought a private island...Big Mistake. Theyre actually kinda cheap so the guy (who had IBM ground floor money) bought it on a lark. The reason they are so cheap however is they are undeveloped - and development costs a FORTUNE. Had to build a mini wastewater treatment facility to get enough drinking water. For the pouring of the slab, it was actually cheaper to build a facility & manufacture the concrete on site, than it was to ship in fully loaded cement trucks from the nearest islands. Insurance was sky high as risks like "piracy" were built into the policy. He had to contract with the Govt to ensure they would defend his island if it were invaded. Overall it was a nightmare.

15. coriacci1 Follow Befriend (1) 65 threads 268 comments

    51   4:02am Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   MsBennet says By continually bragging, it makes me wonder if you are telling the truth at all or if you have some deep-seeded need to cover up past rejections. Perhaps from your childhood. You had my respect but now I'm little sad for you. somethings are best said in italian: ce l’ ha piccolo!

16. RentingForHalfTheCost Follow Befriend (8) 38 threads 2,006 comments Pleasanton, CA Premium

    52   4:19am Sat 1 Dec 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   robertoaribas says pazuzu says "Roberto is in it too deep to have an open mind. If he had an open mind he wouldn't be able to sleep at night." That's what the bottle is for. yes, with 13 homes and 5 mortgages, I feel really nervous. I mean, I only take in $13,000 a month in rent, and I have to pay $7000 in bills including the home I live in... Hell, if things turned really bad, i'd actually have to use some of my salary for living expenses. Oh the horror! Quick, look over here! Look at how great I am! Roberto, if you only knew the kind of lot that many readers on here are carrying. Your Phoenix empire would barely carry the monthly cost for a regular 2bd condo in many metro areas. Give it a rest. Go help your students skip a grade. That would be more honorable than calling people names over and over on this site.

17. Mark D Follow Befriend 63 threads 484 comments Simi Valley, CA

    53   4:27am Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   bmwman91 says MsBennet says Roberto, I was really admiring you for being ahead of the curve and daring to buy a bunch of homes and rent them out. But your need for adoration is quite puzzling. By continually bragging, it makes me wonder if you are telling the truth at all or if you have some deep-seeded need to cover up past rejections. Perhaps from your childhood. You had my respect but now I'm little sad for you. He just needs to put the douchebears on ignore. I did, and Pnet sure seems a lot cleaner to me! touche

18. robertoaribas Follow Befriend (23) 55 threads 3,793 comments Scottsdale, AZ robertoaribas's website

    54   9:25am Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   RentingForHalfTheCost says Quick, look over here! Look at how great I am! Roberto, if you only knew the kind of lot that many readers on here are carrying. Your Phoenix empire would barely carry the monthly cost for a regular 2bd condo in many metro areas. Give it a rest. Go help your students skip a grade. That would be more honorable than calling people names over and over on this site. I teach college not grade school, and honestly, comparing an income producing series of investments to inflated living costs? what does one have to do with the other? your insults simply show your jealousy.

19. yup1 Follow Befriend 10 threads 379 comments

    55   10:33am Sat 1 Dec 2012   Share   Quote   Permalink   Like (1)   Dislike   robertoaribas says I teach college not grade school Jr College :)

20. yup1 Follow Befriend 10 threads 379 comments

    56   10:34am Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   When did this become a censored forum?

21. iwog Follow Befriend (48) 274 threads 12,545 comments 47 male Lafayette, CA Premium

    57   11:18am Sat 1 Dec 2012   Share   Quote   Permalink   Like (1)   Dislike (1)   Protected   yup1 says When did this become a censored forum? A forum is destroyed unless it is censored. The most hateful, ignorant, childish, and destructive trolls end up dominating everything while reasonable people simply leave because they can't be bothered with idiocy.

22. yup1 Follow Befriend 10 threads 379 comments

    58   11:37am Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   iwog says yup1 says When did this become a censored forum? A forum is destroyed unless it is censored. The most hateful, ignorant, childish, and destructive trolls end up dominating everything while reasonable people simply leave because they can't be bothered with idiocy. A forum is destroyed if it IS censored.

23. iwog Follow Befriend (48) 274 threads 12,545 comments 47 male Lafayette, CA Premium

    59   11:50am Sat 1 Dec 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   yup1 says A forum is destroyed if it IS censored. What do you base that on? Do you think posting the exact same thing 100 times in a row and flooding the site like some idiot did a few days ago contributes or destroys a forum? How about marking hundreds of legitimate posts as spam so no one can see them? Patrick is doing an exceptional job, probably the best I've seen by any forum administrator, at allowing legitimate disagreement and even heated flame wars before pulling the plug. Those who are censored probably deserved to be terminated months ago.

24. yup1 Follow Befriend 10 threads 379 comments

    60   11:54am Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   I did none of those things. I had a dispute with one other user.

25. yup1 Follow Befriend 10 threads 379 comments

    61   11:56am Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   iwog says What do you base that on? I base that on the contitution and the supreme court. You have a way to not listen to whomever you don't want to listen too.

26. yup1 Follow Befriend 10 threads 379 comments

    62   11:59am Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   iwog says How about marking hundreds of legitimate posts as spam so no one can see them? What is legitimate? What you think is legitimate? The only issue with that feature is that it is even available. Don't censor anyone if people don't want to hear it they can block the individual.

27. iwog Follow Befriend (48) 274 threads 12,545 comments 47 male Lafayette, CA Premium

    63   11:59am Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   Protected   yup1 says I base that on the contitution and the supreme court. You have a way to not listen to whomever you don't want to listen too. Oh get off it. You have the right to free speech, you don't have the right to take over a private forum paid for with private money and force other people to read what you write. How the hell can you even begin to justify this nonsense?

28. yup1 Follow Befriend 10 threads 379 comments

    64   12:00pm Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   iwog says yup1 says I base that on the contitution and the supreme court. You have a way to not listen to whomever you don't want to listen too. Oh get off it. You have the right to free speech, you don't have the right to take over a private forum paid for with private money and force other people to read what you write. How the hell can you even begin to justify this nonsense? I am also standing up for you to post what garbage you want to post, Fool!

29. iwog Follow Befriend (48) 274 threads 12,545 comments 47 male Lafayette, CA Premium

    65   12:01pm Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   Protected   yup1 says What is legitimate? What you think is legitimate? The only issue with that feature is that it is even available. Don't censor anyone if people don't want to hear it they can block the individual. Patrick allows people to mark a post as spam if it's: 1. Spam (stunningly difficult to comprehend I know) 2. Pointless childish personal attacks with no relevance to the conversation or the forum Patrick does not allow you to mark things as spam if you simply disagree with what is being posted. That will get you banned immediately and if that was your crime, you deserved to be removed.

30. yup1 Follow Befriend 10 threads 379 comments

    66   12:02pm Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   iwog says yup1 says I base that on the contitution and the supreme court. You have a way to not listen to whomever you don't want to listen too. Oh get off it. You have the right to free speech, you don't have the right to take over a private forum paid for with private money and force other people to read what you write. How the hell can you even begin to justify this nonsense? I mention the constition and the supreme court and your response is get off it. That is sad.

31. iwog Follow Befriend (48) 274 threads 12,545 comments 47 male Lafayette, CA Premium

    67   12:03pm Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   Protected   yup1 says I am also standing up for you to post what garbage you want to post, Fool! I don't have the right to use a private forum to be heard and neither do you. It's a privilege and if you abuse that privilege you shouldn't be here.

32. yup1 Follow Befriend 10 threads 379 comments

    68   12:03pm Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   iwog says That will get you banned immediately and if that was your crime, you deserved to be removed. Not my crime I am saying we need free speech on this public forum

33. iwog Follow Befriend (48) 274 threads 12,545 comments 47 male Lafayette, CA Premium

    69   12:04pm Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   Protected   yup1 says I mention the constition and the supreme court and your response is get off it. That is sad. ROFLOL.....mentioning the Constitution and Supreme Court makes you win the argument eh? That literally made me crack up. Now stop it so I can finish my coffee.

34. yup1 Follow Befriend 10 threads 379 comments

    70   12:05pm Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   iwog says yup1 says I am also standing up for you to post what garbage you want to post, Fool! I don't have the right to use a private forum to be heard and neither do you. It's a privilege and if you abuse that privilege you shouldn't be here. Ok so I did nothing that you mentioned. Why was my account deleted?

35. iwog Follow Befriend (48) 274 threads 12,545 comments 47 male Lafayette, CA Premium

    71   12:05pm Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   Protected   yup1 says Not my crime I am saying we need free speech on this public forum This is not a public forum, this is a private forum with public access exactly the same way a McDonald's is a private restaurant with public access. You do not have the constitutional right to pull down your pants at a McDonald's and you certainly don't have the right to verbally waive your weenier here either.

36. yup1 Follow Befriend 10 threads 379 comments

    72   12:05pm Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   iwog says That literally made me crack up. Now stop it so I can finish my coffee. Until you get censored

37. iwog Follow Befriend (48) 274 threads 12,545 comments 47 male Lafayette, CA Premium

    73   12:06pm Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   Protected   yup1 says Ok so I did nothing that you mentioned. Why was my account deleted? Why are you asking me? Write Patrick an email and ask him.

38. yup1 Follow Befriend 10 threads 379 comments

    74   12:07pm Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   You are the one responding and saying censorship is ok with you.

39. iwog Follow Befriend (48) 274 threads 12,545 comments 47 male Lafayette, CA Premium

    75   12:08pm Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   Protected   yup1 says iwog says That literally made me crack up. Now stop it so I can finish my coffee. Until you get censored I'm being censored right now. There are threads I can't post in because a premium member doesn't like what I say. It's not a big deal.

40. iwog Follow Befriend (48) 274 threads 12,545 comments 47 male Lafayette, CA Premium

    76   12:08pm Sat 1 Dec 2012   Share   Quote   Permalink   Like   Dislike   Protected   yup1 says You are the one responding and saying censorship is ok with you. Absolutely correct.

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