patrick.net

Michael, Thanks for posting the thread. The spin of this article clearly is, "California is different." We'll see about that.

As SF Woman pointed out, the uptick in median price in CA is still below annual inflation. Good ROI, Mr Flipper!

Let's see what the Chronic-le has to spin, er, say about the new home sales numbers...

California will be the last domino to tumble, that's all.

Ask anyone in San Diego trying to sell a condo right now if prices are up.

The spin that buyers are waiting for something they're not going to see is pure wishful thinking on the part of sellers and realtors.

If buyers wait, they will see the prices they want. It will just take a little time.

Imagine the panic and hysteria next spring if the current inventory is still sitting there as next years sellers add to the pile?

Ouch.

I respect people that have the guts to "make the call" on a peak or trough but Chris Thornberg does everyone a disservice by placing it in 2007. It tends to imply if you can hold your breath that long that a turn around will be at hand. Had "I" been making that statement I would have qualified it by adding,

"Even though we won't see the bottom until sometime in 2007 don't look for a return to the outrageous appreciation we've enjoyed in the past several years. We're by no means out of the woods and there will be several false starts before meaningful traction is gained".

Doesn't that create for more realistic expectations?

Oh, saying "We have a big issue on our hands" to me anyway, tends to indicate that it will be a "bottom feeders paradise" the minute the dust settles.

While prospective buyers "might" be able to find a more reasonable entry point it would be irresponsible to imply that we'll have found the "keys to the old man's 1999 Time Machine" for another thrilling joy ride.

@DinOR,

There's data (like today's new home sales numbers), and then there's the cacophony of pundits and economists whose living it is to opine about crap. Every opinion that gets quoted, every paper they publish, it's another notch on the CV. Hell, they can be wrong half the time - that's probably no worse than anyone else, so there's no credibility lost.

We're all armchair economists on this board, anyway. Only we don't make a living off of our predictions (at least I don't).

Captain, I think we have soft-landed. But there is a cliff in front of us.

Could we as a country be entering the perfect storm.....
Iraq
N Korea
Iran
Housing Bubble
Dow at all-time high
Dems take over and raise taxes

I hate to sound doom and gloom but it's hard to be optimistic

Home prices are still holding up in California

Because Californians are slower than the rest of the country? I bet Hawaii is holding up even better. :)

It is a "time zone" thing.

Could we as a country be entering the perfect storm…..

I still think the proliferation of veganism is more worrisome than the proliferation of nuclear weapons.

If CA is last to fall, it could also mean that it falls the hardest. That is how it is in most bubble scenarios.

skibum,

Yeah, I hear ya' I'm just a little critical of Chris of late as he seems to be back peddling from his early positions while still w/ Ed Leamer at the Anderson Report.

austingal,

I'm not sure I'm qualified to speak to the use of a RE atty. for a closing and I'm real sure I'm not qual'd to give out advice to pregnant women!

Randy H has used one that I believe came highly rec'd and seems satisfied. Then there are the horror stories where they charge excessively and botch the whole transaction in the process. In other words, nice work if you can get it.

We had the option to buy our existing rental about a year and half ago and are still glad we didn't. The CA Equity Locusts are about to be cut off from their primary source of funding and will soon be left stranded trying to figure out what the hell they're doing in Texas? Me? With all the data that's coming out, I'd rent if you can tolerate it. A "few hundred bucks" is 2,400 to 3,600 a year? Not huge but...... meaningful.

Very much off topic, but I couldn't resist. Apparently Casey Serin has taken a shine to our very own SQT. Maybe he worked out what the QT stands for, or maybe she's convinced him of the error in his ways?

@SQT: hey! another local person. Lets get together for lunch of something. Where do you live. Maybe you can help me convince the haters that this thing is real.

So the real question is, should we send Surfer-X to meet Casey for lunch in SQT's stead?

I didn't read far enough.

@SQT: I will show you my mortgage docs and closing statements over lunch if you want.. and take you to the properties.. and walk you to the recorder’s office and show you the recorded deeds… so come on… swing on by sometime!

Hell, maybe I'll go with Surfer-X to "have lunch" with this joker.

@austingal,

Congratulations on the pregnancy. I don't know if it's your first, but here's a small piece of advice. The nesting instinct can come on something fierce during the last trimester, and if you're considering buying, you should be aware of its emotional influence on your housing decisions. I know this from personal experience. We had to sell during my wife's third trimester, and it wasn't pretty.

Yikes! Homebuilders take no prisoners on the way down. Nothing like a capitalist to spoil the comps (and I imagine still a lot of "hidden goodies" for the price?) Has anyone seen CA specific new home numbers?

HOME INVENTORIES EASED

New single-family home sales increased 5.3 percent in September to an annualized rate of 1.075 million from a downwardly revised rate of 1.021 million in August. Analysts polled by Reuters were expecting September sales to ease to a 1.045 million rate from an originally reported August rate of 1.050 million.

However, September sales were down 14.2 percent from the 1.253 million annualized rate in September 2005.

The median sales price of a new home fell 9.3 percent to $217,100 in September from $239,300 in August as builders cut prices to lure buyers. The September median was down 9.7 percent from $240,400 a year earlier, representing the biggest year-on-year price drop since December 1970, when the median price fell 11.2 percent.

The supply of homes available for sale in September at the current sales pace fell to 6.4 months' worth from 6.8 months in August. There were 557,000 homes available for sale at the end of September, down 1.9 percent from 568,000 in August.

"Between the starts and the aggressive pricing on sales they are clearing inventories in a very rapid fashion," said Societe Generale's Gallagher.

Maybe he worked out what the QT stands for

What else can QT stand for? Q-tips?

Queen of Tangents. ;)

(sing along): SQT and Casey sitting in a tree, k-i-s-s-i-n-g...

I’ve been voted (voted??) Queen? Coool.

No voting in a monarchy.

Like all real royalty, SQT ascended to Queen through Divine Providence. Voting is for the Prols.

SQT, what if Casey hypnotizes you into buying one of his local fixers?

Hypnotize the Queen? I think not.

True. That would be a High Treason punishable by HDQ.

I looked up the listing on the MLS and saw that their starting asking price is $620,000. Nice $30k loss right off the top, not including probably ~$20k of “improvements”.

And Help-U-Sell will charge at least a few thousands...

Sold at the Peak,

Well that is quite a little tale now isn't it! Sounds like a job for.....

Flippers in Trouble Man!

Damn, let's just hope they were playing with their own money. See? This is what I mean. What a pathetic waste of resources. Time, money......pergraniteel. Oh, I don't know if that was a Freudian slip or a typo? Hell-U-Sell? Sure you didn't mean Help-U-Sell? If it was intentional, cool.

People have vastly different risk profiles. Those flippers who are selling now are the very risk-adverse type.

The question is, what got them into flipping in the first place?

WAAAYY OT, but this perfectly illustrates many of the things wrong with America today:

http://money.cnn.com/2006/10/26/news/economy/weighty_drivers/index.htm?postversion=2006102613

Oh, you guys are killing me. I have to go put the little dude down for his nap, so you’ll have to continue the jokes without me for awhile.

At first, I thought you were referring to Casey... Sorry!

skibum, I agree many Americans are too fat.

However, this "Declaration Of Food Independence" makes sense: :)

http://www.consumerfreedom.com/article_detail.cfm/article/155

@Peter P,

What is it with you and the Center for Consumer Freedom, aka the Restaurant and food industry's mouthpiece?

I'm all for individual choice without regulating food, unless there is clear scientific evidence of cause-and-effect harm (like trans fats - no, I don't want to start that tangent again!)

However, people will need to be responsible for their own actions. I for one do not want my (hopefully) healthy lifestyle and resultant low burden on the healthcare system to essentially subsidize the care of fat, unhealthy people (or smokers, or drunk drivers, whatever) who have no self-control.

Dems take over and raise taxes

I'm not sure why this meme keeps coming up all over the place. If the Dems win this year, it'd only be the House and Senate, since the president is not up for reelection.

So, it's not like they can go all willy nilly raising taxes (as opposed to borrow and spend) unless The Decider(TM) signs off as well.

However, people will need to be responsible for their own actions.

I am all for adjusting healthcare premium based on mandatory periodic health checks. Unhealthy lifestyles should have consequences. But they should not be banned.

We cannot stop people from harming themselves. We can only stop tem from harming other people.

We cannot stop people from harming themselves. We can only stop tem from harming other people.

Agree with the first sentence. The second: we try, but we haven't been too successful.

I have an old Navy buddy that flips houses. The difference is he's done it since, well........ we both got out of the service! He works neighborhoods you and I wouldn't be caught dead in, buys for basically the cost of the lot and really has a great time of it! This is more crumbling foundation/seriously leaning type stuff.

The guy is good at what he does. People like this are for real, the rest? Pffft. There is no way in hell I'm paying a premium to have some weekend doofus slop paint and hang wall paper!

The second: we try, but we haven’t been too successful.

On the bright side, with more fat people, airlines will soon have to provide bigger seats. That would be nice.

BTW, if airlines change seat pitch from 32 inch to 37-38 inch and make them 8 across instead of 10 across, they will lose only around 30% seating capacity. If they charge 30% more (as opposed to 200% more in business class), enough people will run for it. Now, they can also make up with heavier cargo, which makes eeven more money per weight.

This means more profit. Why don't they do that?

PETA = People Eating Tasty Animals?

(I did not invent this.)

Not all shills are bad. Especially those who fight for your interests.

Peter P,

Everything at the "carriers" is determined by ASRM or Available Seat Revenue Miles. They have treated the seats like a commodity and (as I'm sure you've heard) some airlines will book your flight on another carrier if that can be done cheaper than they can do it, AND pocket the difference! Whenever I spoke to the old DLJ Aviation Analyst he was keen to remind me that seats were like so many bushels of corn!

Peter P,
I recall reading somewhere that "industry analysis" has demonstrated over and over again that consumers are willing to accept narrower seats in return for lower airfare. I don't know who these consumers are, because I sure hate it. Especially when that obese subscriber to the "Center for Consumer Freedom" plops their derrier into the seat next to mine. Now that's one of life's little crushingly disappointing moments.

skibum,

I understand the frustration, really I do. How many flights have we all been on where it's the flight crew, two attendants and a drunk guy that won't be coming around until this baby hits SLC? Yet here you are "sitting at attention"?

I recall reading somewhere that “industry analysis” has demonstrated over and over again that consumers are willing to accept narrower seats in return for lower airfare.

They must be conducting the survey outside a walmart or something like that.

Many consumers will gladly pay a 30% premium for 30% more room on a transcontinental or intercontinental flight. They can still charge an arm and a leg for lie-flat seats.

Freight capacity is also very valuable. That can be freed up with fewer people onbroad.

I have a 36-inch waist and coach is already feeling tight.