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…… back to housing


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2006 Jul 16, 11:59am   19,392 views  312 comments

by Peter P   ➕follow (2)   💰tip   ignore  

All right guys, let's talking about housing again.

How is inventory growing in your area of interest? How are prices responding to inventory? Any observation you would like to share?

#housing

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1   Peter P   2006 Jul 16, 12:11pm  

Did you mean "priced to sit"? ;)

I get frustrated when sellers relist their properties at the same price after being on the market for months. What are they trying to accomplish?

2   Allah   2006 Jul 16, 12:13pm  

It's all just Realthore talk! They will do anything to make it look like it's time to jump in. They claim it's a buyers market, but yet it is not a buyers or sellers market for that matter. Using the words "priced to sell" is kind of idiotic if you think about it, because if it was priced to sell, you wouldn't have to claim that it is; it would just sell! :lol:

Realthores also talk up the property "breathtaking views", "paradise", they even use what they call staging (making the house appear to have potential), but just the fact that they have to use these tactics only shows their desperation. They didn't have to do all these things a few years ago!

3   Allah   2006 Jul 16, 12:17pm  

I get frustrated when sellers relist their properties at the same price after being on the market for months. What are they trying to accomplish?

I love when they keep their house price high, because this way no one will buy it and by the time they realize that the only way they can sell it is by lowering the price, interest rates and inventory will be much higher; so they will have to lower their price more significantly, thus giving us a much bigger crash :twisted:

5   Peter P   2006 Jul 16, 12:25pm  

It is ridiculous. We could actually devote a whole thread to realtwhore talk. “Cozy” and “charming” actually mean tiny and cramped. And “light fixer” means falling down.

Yes, "lowest priced unit" means "worst location". :)

6   Allah   2006 Jul 16, 12:28pm  

In my neck of the woods, there is this RE sign that reads "Honey, stop the car!". My wife and I laugh every time we pass this house and the three others on the same block for sale.

As far as people who hold out on their price, I wish there were more of them. We're basically at the point where the cost of living has squelched most peoples ability to pay their price. When the interest rates rise another point or two, along with all the ARM resets, there is going to be a serious meltdown!

7   Allah   2006 Jul 16, 12:38pm  

“light fixer” means falling down.

"Light fixer" means "land for sale" :lol:

8   Allah   2006 Jul 16, 12:45pm  

The purpose of this is to make it look like a new listing. Who wants to buy a house that has been on the market for 6 month? If it was just listed this week you got a much better chance to get top dollar for it.

I think using this approach is more dangerous because people who are looking for houses will know that it was relisted and this will reveil the sellers desperation. They are much better off lowering their price now and taking a small beating rather than being pummeled beyond recognition!

9   Allah   2006 Jul 16, 12:48pm  

Hans Writer:

The good old days of cheap real estate are gone. People these days invest rather in “real” estate than in stocks and the like.

You must be new here. :lol:

10   Allah   2006 Jul 16, 12:54pm  

Two words "ARM resets"

11   Allah   2006 Jul 16, 1:13pm  

Housing prices doubled/tripeled in the last few years, just like gasoline, health care and many other things. That’s just inflation.

Did salaries double/triple?

Compare current U.S. house prices to European real estate, it’s just about the same. And properties sit on the market there for a year or two, still no crash or bursted bubble.

The bubble has burst already, we are now in the denial phase. This is the time when the sellers hold out on their prices, buyers don't buy and inventories keep rising. We are almost at the next phase, the actual crash. If you read as much news as I do, you will know that foreclosures are breaking all time records all over the country. The crash is just beginning.

It’s normal for a half million dollar item to sit for a while, if it sells within the first few weeks then it was priced too low.

So in other words, you believe that all the houses that were purchased in the last few years at a break neck pace were priced too low?

What are you?

A Realthore? A homedebtor in denial? or a combination of the two?

I could show you tons of data that will prove witout a shadow of a doubt that a crash is on the horizon, but if you were a regular on this site, you would already be informed. Rather than try to present all this data to you and have to do it all over again for the next uninformed person, go back a year or two in the threads and start reading. It's all there in back and white.

12   Allah   2006 Jul 16, 1:23pm  

Ram Pee and Hans Writer:

Please read some of this.

13   Allah   2006 Jul 16, 1:27pm  

People still had to pay top dollar in 1989, 1990, 1992, unless they found a seller in an emergency

Those people who you refer to must live under a rock. During that period, you could have bought houses from the RTC for pennies on the dollar. I was very interested in buying at that time, but I was too young and didn't have the funds to invest though.

14   Different Sean   2006 Jul 16, 1:55pm  

allah Says:
Ram Pee and Hans Writer:
Please read some of this.

who runs the 'another FB' blog? is it a poster here?

15   Different Sean   2006 Jul 16, 1:58pm  

They put up a big billboard with the headline “There’s still time” facing the intersection at least a year ago, but I still only ever see about 20% of the lights on in the evening.

yeah, there's always the real estate agent lies... 'only a few left', '30% pre-sold', etc etc. there is no authority scrutinising their claims or regulating them. better to live in soviet russia and shoot them all or send them to the salt mines to rot their lungs by way of atonement... they're such arrogant tossers at showings as well...

16   Different Sean   2006 Jul 16, 2:00pm  

ram pee, i'm trying to find out who authors the 'another FB' blog referenced in allah's post. nothing to do with your posts...

17   Peter P   2006 Jul 16, 2:03pm  

The purpose of this is to make it look like a new listing. Who wants to buy a house that has been on the market for 6 month? If it was just listed this week you got a much better chance to get top dollar for it.

Yes, but relisitng at the same price does not change anything. I will only deal with honest agents and/or sellers.

18   Different Sean   2006 Jul 16, 2:06pm  

apparently everyone is going crazy in perth, western australia, right now, as the boom rolls around there, and peters out everywhere else. they have benefited from the commodities boom there, being a mining state, particularly iron ore to china, but that is all. it’s a very remote city of about 1M people, and most young people try to leave, which leaves the rental market shaky. spruikers and developers are doing their best to cash in while they can on the phenomenon.

an article in the paper last week bemoaned how sydney is ‘losing ground’ against other states in ‘price growth in property’ — not only is it already 40% more expensive than the next city, but has lead the boom for 2 decades. the article presents the situation as though it is mass unemployment or a recession, and the state is falling behind in the economy. naturally, it’s completely unproductive growth, and it’s more a signal to voracious investors to tear off and look for new turf… none of that ever gets a mention of course. it really is a sick society…

19   Peter P   2006 Jul 16, 2:08pm  

Although inventory is growing, psychology is still the same, people still expect top dollar and will not settle for anything less.. yet.

Psychology is not quite the same anymore. Sellers are getting defensive.

20   Peter P   2006 Jul 16, 2:17pm  

Rates are still historically low.

This means that rates can only go up?

21   Peter P   2006 Jul 16, 2:21pm  

Rates are still historically low.

This is misinformation #1. Rate being historically low will not help the market if the fact is more than discounted by the market and reflected in the price.

Falling interest rate helps. Low interest rate does not do much by itself.

22   speedingpullet   2006 Jul 16, 2:43pm  

Comes out at about a dollar a flea by the sounds of it.

23   Peter P   2006 Jul 16, 3:07pm  

Guys, I still see it this way so please tell me if I’m wrong:
If an area does not have any special drawing power … like an ocean view or high tech jobs … then a median home should cost 3 maybe 4 times the median yearly income. Right?

I think a range of 3 - 5 will still be reasonable.

The return to a normal multiplier is sure to happen as soon as the voodoo loans stop getting wrote and a few lenders get silver braclettes. A wee bit of boarder security wont hurt either.

It can take a while to mean-revert. A reduction in volume is perhaps a sign of this being underway.

Then find out if they are legal and speak english.

How do I ask if they do not speak English? ;)

24   Different Sean   2006 Jul 16, 3:28pm  

one way to get rid of fleas in an empty property is to walk through the house (in boots, with your trousers tucked in :P), then leave it locked up for a couple of weeks. in the flea life cycle, vibrations actually cause them to hatch, cos they're expecting a big mammal to come along to feast on. they literally hatch and jump on you in a few seconds... leaving the house empty for 2 weeks without a bite means they have nothing to live on so they die of starvation. or else lob in a flea bomb for good measure...

doesn't help with the condition of the furnace, the bathroom, the kitchen, etc... or the housing boom...

25   Different Sean   2006 Jul 16, 3:36pm  

yeah, thanks MAC, good fatalistic, individualistic advice about how every purchaser can get a 'good deal' in property. terrific.

overlooks the fact that property prices doubled relative to wages over the last few years, leaving many in 'payment distress' of way over 30% of household income going to rents and mortgages. that really helps 'over the long run'. and don't over-extend, although there is nothing affordable in the market, and it's become a speculative Ponzi scheme. it's up to the individual to 'educate' themselves tho. education is the key.

and realtor lies don't matter, it's a free country. i can ask any price i want, and i can make any claims i want. no-one can stop me selling a formula that i say turns lead into gold either, cos regulation and honesty is immoral... anyway, i've already made the infomercial...

26   Different Sean   2006 Jul 16, 3:38pm  

I’m obviously psychic

hmm, very contemporaneous... whereabouts are you living now, ajh?

27   Peter P   2006 Jul 16, 3:39pm  

I would think that the establishment of a new UC campus in Merced had something to do with the increase in house prices over there. Many people believe that it’s a good long-term investment to buy in proximity to an emerging UC campus.

Misguided belief.

28   Peter P   2006 Jul 16, 4:01pm  

SP, thanks for your observations.

29   Mike/a.k.a.Sage   2006 Jul 16, 4:07pm  

Check out the YTD sales data from the Northern Virgina association of realtors. YTD sales volume down $3.5 billion compared to the 1st half of last year. That's just one small segment of the entire US market. What if a company like Microsoft saw it's revenues drop by $3.5 billion. Can you imagine the number of layoffs that would cause? I wounder what the drop in YTD sales volume is for the whole country.

http://www.nvar.com/market/pressrelease/prgnvjune06.html

30   Grape   2006 Jul 16, 4:14pm  

I have just finished a VERY interesting book, titled "SELL NOW! The End of the Housing Bubble". It is a fascinating read, and provides poignant articulation of the various factors that have contributed to our national, global, and state crises. The author, John R. Talbott reveals the parts various culprits have played, such as Greenspan, aggressively permissive lenders, and realtwhores. He explores the historical RE crash in Japan, and makes parallels to our demographics and situation. He makes some drastic predictions for our national economy, as there will be huge ripple effects from the loss of RE industry incomes, and the carnage of unprecedented foreclosures. Analysis indicates we will return to 1997 prices, adjusted for inflation, as 1997 was the last year that most prices were in line with statistics from the previous century.
In my area, the foreclosures are beginning to stockpile. www. realtytrac.com is a good indicator of the notice of defaults, and pending trustee sales in my area, San Luis Obispo County. A glut of REO hitting the market at fire sale prices will do wonders for the sellers who have homes priced to sit.
I wonder how much of the banker woes will be shouldered by the tax payers when the soft landing is recognized as being the catastrophe that it really is.
Tulip mania, Ponzi Schemes, the Great Depression, and other historical events become models for future generations. The years ahead will likewise be recognized historically for their grief, hardship and sorrow.

31   Jimbo   2006 Jul 16, 6:21pm  

mbarl you are definitely in the right place. But I don't think anyone is going to challange your assertion that lots of mortgage fraud is going on, so no need to back it up with so much data.

Wait till you get into an argument with Robert Cote about transportation issues 0:-)

Where I live in Noe Valley in San Francisco I can definitely feel the beginnings of a change in the air. Last weekend there were five signs at a major intersection for open homes. I heard an older couple walk buy and say "At the prices they are asking, no wonder!"

I read Alexander Clark's SF home sales newletter and the local free paper, the Noe Valley Voice and neither seem to show any real change in the market. Well the change is that homes have stopped going up so fast in price, but they haven't started going down. Just in the last couple of weeks though, there are a lot of homes on the market.

I will let you know if prices actually start coming down. They have pretty much stopped going up, as far as I can tell.

32   DinOR   2006 Jul 17, 12:57am  

Option Dude,

John Talbott (Saint John) has been such a breath of fresh air and sanity in a world gone mad. I'll have to pony up and just get the book myself. I (like he) feel that 1997 was the starting point where where housing prices and reality took seperate paths.

In early 1994 my wife and I bought my folks old place of about 2,400 sq. ft. on 3 acres just outside Portland, OR for 130K. Now I realize that sounds very cheap but it actually was FMV for the area at the time. We sold on the last day of 2003 (that's about all I wanted to push my luck) for about 300K. Most of the increase came from say 1998 on! Just ridiculous. I'd love to know how long "Saint John" predicts it will take to get back to 1997 prices (where we can all build our lives from a sound footing) but to find that out I guess I'll just have to buy the book.

33   DinOR   2006 Jul 17, 1:08am  

mbarl,

I appreciate your input. We here at Patrick have long suspected that lending guidelines have stunk to high heaven for some time but it's always nice to have the data to back that up. Many of my firends that are mortgage brokers also realize that I'm very bearish on housing so they take pains to conceal (or at least down play) wacky lending practices when they speak with me. When 40% of the homes sold in 2005 were not "primary residences" you just know there had to be a whole lot of deception by just about all parties involved. I'd heard that Washington Mutual is letting their "in house" appraisors go in favor of an outsourced firm in what I can only guess is an effort on their part to distance themselves from the value of the loans they will be underwriting going forward. Personally, I think it's a little late to avoid scrutiny but what the heck?

34   edvard   2006 Jul 17, 2:05am  

How is inventory holding up in my neighborhood?

Here in Alameda, the inventory has been fairly high since around October. There hasn't been a sudden buildup, but slowly from spring to summer to now, a steady supply of houses get put onto the market. It seems that abour every week or so, another 5-6 houses go up for sale.There is an ENORMOUS supply of homes for sale. The thing is that hardly anything has budged. I bike to the store every other day and go past the same houses for sale, week after week, month after month. Some of these have had " price reduced" signs sitting on top for months as well.

How are prices?

They are still well within the red zone of bubbleland. All in the minumum 650 to maximum 1.3 million for a victorian house. The reductions are hardly what I would call reductions. 5-10k tidbits, but nothing amazing.

Is anything selling?

There have been 4 houses that I know of in my broad roaming area that have sold in the last year. In every single instance, the "owners" drive ratty old cars, seldom water the brown, dried out lawns, and otherwise don't seem to be doing much to improve their prize house. Most that have sold are also fairly small. One home seems to have been bought by a family of 10 philipinos. They take good care of it, but then again 10 people helps. One home was almost utterly in teardown condition. The buyers seem to have immediatly began tearing out the windows, gutters, and started to repaint it in what appears to be a frantic flipper property. People are working on it around the clock.

What else is happening?

It seems that as prices don't go up and don't come down, there's a lot of anger from both sides. I have a friend who just bought a 600k condo. A mention that San Diego's housing market went negative last week sent him into a rage. There seems to be tons of sites full of angry priced out people demanding a change. The city of Alameda was asked to bring up meaure A, a measure that discourages new building and has recently been under fire from local housing groups that correctly state that the measure prohibits young couples from getting started.
For sale signs have recently started to "fall down" At first I thought they just fell down on their own, but it almost appears that someone is knocking them down on purpose. hmmm. One sign I saw recently was hanging by a screw, busted in half.

More and more of my friends- even Hard-Core Bay Area activist friends who you'd NEVER think would leave SF are now saying that they are priced out and will be finding a new area to live. This is kind of sad, but ultimatly signals that the end for the boom is well under way.
The question is whether only the 200k+ a year salary folks will become the replacements for the middle class moving out, only to start the cycle again so that their kind eventually will also be priced out by the next level of high rollers.

35   GallopingCheetah   2006 Jul 17, 2:20am  


More and more of my friends- even Hard-Core Bay Area activist friends who you’d NEVER think would leave SF are now saying that they are priced out and will be finding a new area to live.

Hard-Core Bay Area activist? What is that?

I hope the kool people from BA move to other parts of the country, say the Bush country or New Orleans. Don't come to ruin Northwest.

36   edvard   2006 Jul 17, 2:29am  

Hard-Core Bay Area Activist. More loosly termed might be "liberal". I'm not from California, and grew up in "Bush country". The only people that claim that other parts of the country are only full of hicks and bush lovers are those that have never been there. For my own personal selfish interests, I hope these californios don't overun the midwest and south.

37   GallopingCheetah   2006 Jul 17, 2:33am  

OT: Yahoo stock boards

Does anyone here use Yahoo stock message boards? The new format really, really sucks.

38   GallopingCheetah   2006 Jul 17, 2:36am  

I don't mean to put down the Bush country. It's a freedom-loving country. That's why I wish to send the "intolerant" liberal Nazis there to let them learn a few things about, uh, life. As for New Orleans, well, prison for them.

39   DinOR   2006 Jul 17, 2:43am  

SHTF,

I've seen much of what you describe here in Oregon. Either frantic efforts to get the property "saleable" in short order or a sudden indifference b/c the "hot" spring selling season has fizzled. Many that had been previously frantic are now indifferent. Any way you slice it they are NOT moving!

Our realtor neighbor in our condo complex seems to be "taking some time off" or "pursuing other interests" but of the 147 properties sold YTD only a handful appear to be SFH. The majority where either mobiles, smallish apt. complexes and lots. Many of the "transactions" were done at nominal costs among family members or relatives. Buyers seem to have NO sense of urgency and the quiet is deafening.

40   edvard   2006 Jul 17, 2:43am  

Hey Gov,
I can live in either place: Liberal paradise or bible-thumping land. I think what bothers me a lot about people that identify their entire lifestyle to being liberal is that they assume that liberalism automatically equates to a better quality of life. Perhaps if your only concern is to be around people who act-think-believe as you do, and ignore the crappy schools, unaffordable housing, traffic, and other life-wasting crap that exsists here, then the definition of quality of life is a very flexible term.
I'd rather live next door to Bill the Bush supporter in my own fully paid off home, with a stable job and decent school system than to George the Prius driver in an overpriced rental or crappy home with bars for windows in west oakland.

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