Watch
A quote from the Chronicle:
National housing prices took a record fall in September as the pace of sales skidded for the sixth consecutive month.
The median price for an existing home nationwide -- including single-family houses, condos and co-ops -- dropped 2.2 percent to $220,000 from $225,000 a year earlier, according to the National Association of Realtors. It was the biggest drop on an annual basis in monthly housing prices on record.
Meanwhile, the pace of sales last month was off 14.2 percent from a year ago.
In California existing home prices appear to be weathering the downturn slightly better than the rest of the country, a fact that some economists attribute to good economic conditions and a relatively tight housing supply compared with other states.
The median price of an existing single-family home in California climbed 1.8 percent to $553,050 last month from $543,510 in September 2005, according to the California Association of Realtors.
"Home prices are still holding up in California, first of all because the job market is still respectable," said Lawrence Yun, senior economist for the National Association of Realtors. "The technology job market in the Bay Area, in San Francisco and San Jose, is really coming around strongly, and those are high-paying jobs."
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Fear mongering at its best.
The balance of fear has shifted. Now who is fearful?
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"if not a full-fledged depression"
And the winner of the Housing Bubble Quote of the Year is!
Damn skibum, that is messed up!
I think it's very important for all consumers/investors to understand that we can have an expanding economy without having housing as the lead growth engine! This article does a great job showing just how that can happen!
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"Now who is fearful?" Certainly not I :)
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Buyers have more waiting power than sellers. It is all about burn-rate again. Another flashback.
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I’d be interested in seeing a break down of the penninsula of the Bay Area vs California in general.
http://viewfromsiliconvalley.com/id157.html
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"The balance of fear has shifted."
I agree!
I believe the same way buyers in the last few years were scared that if they didn't buy they'd be out forever; the sellers today are starting to be afraid if they don't list for sale a property, even if they were considering selling in the next few years, they'll miss the last buyers (at these falling prices).
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And more and more sellers are burying statues of St. Joseph, who “knew about moving on a moment’s notice” and “what it’s like to have housing trouble,” to help sell their homes, according to the Patron Saint’s Index Web site…. ”
Looks like divine intervention is the only realistic way.
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@Peter P,
OT: Here's a site that will get your goat (pun intended):
http://www.universal-life.cc/english/animals/Free_Material_layout.htm
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the sellers today are starting to be afraid if they don’t list for sale a property, even if they were considering selling in the next few years, they’ll miss the last buyers (at these falling prices).
Not yet. But we are swinging towards that direction.
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OT: Here’s a site that will get your goat (pun intended):
Is it a parody?
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EBGuy
Or are new homes technically not sticky as they are built by capitalists (unlike the the previously owned homes which are occupied by “the people who know better”)?
As a good rule of thumb, if you need to ask "is it now unstuck", then price action is sticky. In order to become "unstuck", it had to be stuck.
9% is a good sign that prices may be lurching. I haven't dissected the number, but assuming it's correct, it is big enough that this could be a ratchet. If home builders are leading price action, they'll likely ratchet prices instead of "smoothly flowing" prices.
--(If you don't care about sticky thisorthat, stop reading here)--
I do think that home builders are less sticky, but there's a catch. The two groups -- companies selling homes and people selling homes -- are distinctly different. Their supply curves are different. Their marginal costs are different. Their options are vastly different. And, the demand isn't totally interchangeable either. Not 100% of buyers would interchange freely between new construction and existing homes.
My expectation is that home builders cause prices to be _very_ sticky for the early stages of a decline. They do all that stuff that's linked in the analysis on my blog. They shift inventory, give incentives, defer costs, etc. Eventually, if the downturn is sustained as it is now, they rapidly unstick to unload stranded inventory while they can still make a profit.
It's really pretty simple if you have all the numbers (which only they do). They calculate the costs of dropping prices. They calculate the costs of not dropping prices. They keep prices set, or ratchet down a couple times, until they can get better returns by stimulating demand with lower and lower prices.
And the individual home owner? She can only change price. All that other junk is really almost insignificant (pay closing costs, mow your lawn, pay for pool service for a year, etc.). So she doesn't want to ever move price until she has to. She doesn't maximize her returns/profit. She maximizes her fictitious returns as she's organized her mental accounting in her head, which ignores all kinds of opportunity costs/benefits.
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It seems that all animal "rights" sites rely on the false premise that animals are equals to us. I think animals are clearly lesser beings.
Back to housing:
She doesn’t maximize her returns/profit. She maximizes her fictitious returns as she’s organized her mental accounting in her head, which ignores all kinds of opportunity costs/benefits.
Exactly. Emotion does not maximize utility.
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What kind of spin, if any, can the NAR put on THIS data?
Prices are still higher, compared to 730 days ago.
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Soon they will use price appreciation since 2000.
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….and those buyers must feel really stupid about now.
People never feel stupid. They will just feel wronged.
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Basic Mental Accounting tenant, which has been repeatedly demonstrated in about every area of human endeavor, including buying and selling houses, to the point of boredom:
People hold losers too long and sell winners too early. People *feel* the effect of losses about twice the intensity of gains. They don't want to *feel* the loss, so they defer it, even if they logically know it will be a bigger loss later. That is because people also think *they will be the exception*.
This is why professional stock traders have to be trained, practice, learn, study, and make lots and lots of mistakes along the way ... just to be an average trader.
Joe Homeseller has not been trained as a professional home trader. He thinks he's the exception, and he will hang on much longer than any logical, rational, trained professional would. He'll hang on until something else poses a much bigger potential *feeling* of loss, and he has to eminently choose between the two. At that point, he will *feel* like he's _gaining_, because he's avoiding a bigger loss.
He'll come out of all of it thinking he was shrewd, never realizing that he suffered much bigger total net losses than he would have otherwise.
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People hold losers too long and sell winners too early. People *feel* the effect of losses about twice the intensity of gains. They don’t want to *feel* the loss, so they defer it, even if they logically know it will be a bigger loss later. That is because people also think *they will be the exception*.
This is addressed in behavioral finance.
This is why professional stock traders have to be trained, practice, learn, study, and make lots and lots of mistakes along the way … just to be an average trader.
I hold the view that traders cannot be trained without massive psychological conditioning and re-programming.
The trader, even armed with the best trading models, is still always the weakest link.
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People never feel stupid. They will just feel wronged.
I feel stupid all the time.
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@allah,
That's #10 on my buying guide earlier in the thread!
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I feel stupid all the time.
We are the exceptions. ;) (See Randy's post)
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Sorry guys, I have to delete most of the initial post. It's probably a copyright violation to post a whole article from another source. Quoting it for discussion is OK, but not a whole copy.
Patrick
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I believe the same way buyers in the last few years were scared that if they didn’t buy they’d be out forever; the sellers today are starting to be afraid if they don’t list for sale a property, even if they were considering selling in the next few years, they’ll miss the last buyers (at these falling prices).
There is a fundamental difference in buyer and seller psychology when it comes to houses. There is a bias in favor of home ownership in our economy/society/culture/age. Buyers don't *feel* like they have the option of not buying nearly as strongly as sellers *feel* like they have the option of _not selling_.
I still maintain that mental accounting is in full force, and sellers will slog along more stubbornly than any of us would prefer.
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Sorry guys, I have to delete most of the initial post. It’s probably a copyright violation to post a whole article from another source. Quoting it for discussion is OK, but not a whole copy.
No problem, Patrick. We should be careful about legal issues.
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I still maintain that mental accounting is in full force, and sellers will slog along more stubbornly than any of us would prefer.
As I have said many times, market is 99.5% psychology and 0.5% data entry error.
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I hold the view that traders cannot be trained without massive psychological conditioning and re-programming.
It is no accident that most _top_ traders -- the superstars -- are at minimum borderline sociopaths. Once one has been successfully reprogrammed they take on a very godlike personality because they can see things "normal" people don't. They also often go down in a glorious display of fireworks at some point, if they first don't burn out and retire rich.
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Sorry guys, I have to delete most of the initial post. It’s probably a copyright violation to post a whole article from another source. Quoting it for discussion is OK, but not a whole copy.
Interesting. It seems this hasn't been a problem before. Did you get a call/email from the Chronicle? Could it be they don't want their article associated with a whole string of comments about how the market is tanking? Did the CAR read this thread and call up the Chronicle?
My paranoia is running amok!
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Do lesser being have zero rights compared to humans? Very few people in the US think that it is OK to beat a dog or other animal, which seems to indicate that they don’t have zero rights.
Animals should have zero rights. A reasonable person will not beat a chair. The same reasonable person will not beat an animal without a good cause. This does not mean that an animal has more rights than a chair.
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It is no accident that most _top_ traders — the superstars — are at minimum borderline sociopaths. Once one has been successfully reprogrammed they take on a very godlike personality because they can see things “normal” people don’t.
Absolutely.
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Why should animals have zero rights?
Why should they have any right?
http://www.aynrand.org/site/PageServer?pagename=objectivism_animal_rights
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If animals have zero rights, that would give labs the right to conduct experiments on them….Do you agree with this Peter?
Absolutely. Completely unfettered access to animal testing.
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The more difficult question is how much lesser are they? Do lesser being have zero rights compared to humans? Very few people in the US think that it is OK to beat a dog or other animal, which seems to indicate that they don’t have zero rights.
I love pets as much as the next guy (we have a cat, had a dog), but what irks me is that many of these animal rights groups have a bias towards animals with high degrees of perceived anthropomorphism, and how are we to know for sure that a snake or a cockroach is any less senscient than a dog or pony?
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Now that’s a side of you I never saw before!
Huh?
I love pets as much as the next guy
I love my cats too.
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How did we get so damn far off the subject?
Sorry, my bad. I posted that weirdo link for Peter P's amusement. Let's cut this tangent off, like the dead branch that it is.
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Me bad.
It is easy to go off topic when victory for housing bears is already "in the bag". :)
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It's all the fault of too much anthropomorphism in children's cartoons! (How's that for taking it into the weeds?)
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It’s all the fault of too much anthropomorphism in children’s cartoons! (How’s that for taking it into the weeds?)
Yeah, down with Bugs Bunny!
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Since this thread has run off course, maybe it's time to move on to the new one just posted by Patrick.
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newsfreak Says:
SQT + Surfer-X, Prince of Profanity, & Randy H, The Logical One
engage Casey Serin, King of Fools
I suggest this must be filmed from another booth for posterity!
Perhaps Peter P could attend as food advisor and Recorder of Deeds (actions that is, not property).
_____
Definitely sounds like an epic housing summit. However, you probabaly need a representative of the Boomer generation to balance out the Gen-X & Y presence.
I think the encounter between Surfer-X & Casey would be worth the price of admission alone, and could turn out to be an instant, Cannes Film Festival cult classic.
Now get those cameras rollin'.
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Different Sean's website
animals have advanced nervous systems and can feel pain. they should not have to feel unnecessary pain or pain inflicted maliciously, just as a person should not. the R/SPCA etc would have some guidelines on all this, as would the cruelty to animals act. that said, we still kill and eat many animals, so the 'golden rule' of doing unto others as we would have done unto ourselves doesn't really apply in a human-animal reciprocal rights formulation. and why do we distinguish ourselves from animals anyway? because we can?
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Computer issues this week had to reinstall windows and reformat lost alot of stuff all of my favorites and this site. I tememebered the web address thank. AAAAH technology blessing and curse. Did I miss anything good? HI LILLL.