patrick.net

Dear Mr. Prentice,

If prices have doubled in the last 4 1/2 years as your data indicates is the question, should the market retain 90% of that, OR is the question IS 1.85% a MONTH "appreciation" sustainable!

Assuming that a doubling in one's "investment" every 54 months is standard, customary and reasonable the MEDIAN price by June 2010 should be what? 1.2 mil? O.K. That's all I needed to know.

DinOR,
Mr. Prentice's quote should be added to the list of "idiotic predictions by RE industry shills", ala Gary Watts and David Lereah.

skibum,

Oh absolutely! And thank you for bringing that little "nugget of knowledge" to my attention! I'm working on a proper "handle" for Mr. Prentice but simply referring to him as "MP" may create confusion as it is not fitting a man of his "stature".

Hell, I'm open.

The dead give away as Mr. Randal H. esq. suggests is in the language.

Most BS statements start with 90%!

"This guy strikes out 90% of the time"

(Well, anyone that strikes out that much wouldn't even cut in the minors).

Another way to decimate your credibility is to preface your statement with "always" or "never"!

Randy,

Your wife might be the exception. My short short short academic and working experiences agrees with SQT. I find men to be much better mentors than women, they just tend to have a better grasp of the big picture. I get this a lot with my professors, the women professors never share their life experiences and have cut through the BS moments. And men do seem to enjoy working a lot more than women. The job usually seems more like a chore to women I've worked with and they can't wait til the end of the day. Meanwhile, the (best of) of the men get really into the job.

I suppose it could be me, I'm hanging out with the wrong sort of people.

http://www.dqnews.com/RRBay0906.shtm

DQ has the latest on Nor Cal.

The money quote from that British article SF Woman posted earlier:

"And meanwhile, it's probably too late for the housing market. US median house price may fall next year for the first time since the Great Depression, Gabriel Stein of Lombard Street Research tells Bloomberg. Last year, the US savings ratio went negative on an annual basis, also for the first time since the Great Depression.

We imagine that we will be seeing a lot more problems that haven't happened since the Great Depression in the coming months."

It really is "different this time". This housing bubble is "special".

lunarpark Says:

DQ has the latest on Nor Cal.

How about:
"The median price paid for a Bay Area home was $620,000 last month. That was down 1.1 percent from $627,000 in July, and up 0.2 percent from $619,000 for August a year ago. Last month's year-over- year increase was the lowest since March 2002 when the $381,000 median fell 1.3 percent. "

YoY increase of 0.2%!! What'you talkin' bout Willis?!??!! I also like how the median price of $381K merely 4 years ago is completely glossed-over.

Alameda, Marin, San Mateo counties are negative YoY in price, most are basically flat. The only significantly (+) numbers (barely) are Napa and Solano. Solano barely counts as the BA, in my book, anyway. We're likely to see all BA, perhaps all CA negative prices YoY within the next month or two.

SFWoman Says:

The women were oddly competitive in a way the men weren’t, they seemed threatened by younger women. Not all of them, but several. And if you were better looking than they were, watch out.

Claws out, "MEOW!"

tannenbaum Says:

http://www.federalreserve.gov/boarddocs/press/monetary/2006/20060920/default.htm

Yawn. Not really much of a shocker, eh? The current toolbuckets at the Fed will be remembered by history as the fools who let inflation out of the bag. Can we say, "Election time?"

You gotta love Jeffery Lacker, though. Twice in a row dissenting and voting for a rate increase.

"Indicators of market distress are still largely absent"

Thus begins another DQ (keep the Debacle Quiet) (TM) closing paragraph.

Uh..... I don't want to tell you guys how to run your business but did you bother to read the chart you provided below the closing standard "ostrich" paragraph?

Are BA rents really going through the roof as indicated at patrick.net? Those charts, esp, 2 bedrooms, seem a little too unbelievable.

SQT,

You should cut Skibum a break on that comment. I think the meow was intended for women threatened better looking women and certainly not for SFWoman.

I suppose in the mainstream work place I must have been something of an anomaly. Very good at mentoring and a lot of younger people I still run into remark they never had that much fun at work (and haven't since!)

Yet...... gifted in the Art of Gossip! (My buddy who we'll call "Frankie") was in AA so he had "the goods" on everybody. Even knew about the ex-stripper on the Apprentice and her "best lap dancing customer" before he ran out of $'s and resorted to...... Anyway, it is possible to be a work/life mentor but if you don't have the "dope", why would I listen to some old guy?

My objective was alway to make the next 8, 10, 12 hours pass as painlessly as possible! But you have to remember to "give" too! My former co-workers still love to tell the story about when I walked down to the local tavern at closing time in my bathrobe and slippers DEMANDING to be served!

http://www.mercurynews.com/mld/mercurynews/15565577.htm

Mercury News on the DQ numbers.

"We’re likely to see all BA, perhaps all CA negative prices YoY within the next month or two."

I agree that this seems possible now.

John M,

I'm not ready to throw in the towel just yet! (But the Twins season is basically over and the only real schedule they face is the Sox!) On the other hand it is make it or break it time for the southside!

RANDOMGUY! Friends don't let friends buy condos! (Or houses, at this point anyway). I thank you and Surfer X thanks you!

Hey SQT,
astrid is correct - I was referring to the catty scientists that SFWoman referred to. SFWoman has never to me seemed catty or petty in any way. Moreover, I think men are in fact dissed ALL the time about this kind of crap. Women are called catty or bitches, men are assholes and jerks. I really don't think this sentiment is biased one way or another.

*DinOR,

I gossip can be a force for good or evil. It really depends on the spirit of the comment and the type of work place. Your gossip seems to be good humored and informational, rather than focus on making specific people look bad. Gossip is fine as long as it doesn't hurt people or distract people at work. Plus, I bet your younger coworkers all found that story a hoot.

* because I'm really sure DinOR is not your real name either

lunarpark,

WHOA! Wait a sec here. Check out the numbers from the Merc:

"The median price of existing single-family houses sold in the nine-county region in August was $664,000...2 percent higher than a year earlier, but down 1.5 percent from July 2006.

In Santa Clara County, the median price of houses sold last month was $725,000. That's down from $750,000 in July, but 1.6 percent higher than the August 2005 median price of $713,500."

And the DQNews actual press release:

BA median price: $620K
BA YoY change in price: +0.2%

Santa Clara median price: $658K
Santa Clara YoY change in price: +0.6%

The Merc is off (favoring a less significant slowdown, of course) on all of these numbers. What gives????

Oh, and SFWoman, if you did indeed take my "claws out" comment as directed at you, rather than the people you referenced, my apologies - it was directed at the folks in your story.

The hag was a looksist!

lol. Probably not a looksist, but just extremely insecure, is my guess.

Inter-Office MEMO:

Brokerage Firm Guidelines for suitable Office Gossip:

1. Any story involving alcohol (especially if used to excess) meets firm guidelines for "fair game".

2. Wives are OFF LIMITS.

3. Ex-wives are fair game as long as the ex-husband initiates the character assasination.

4. Once a story has left the domain of general office gossip and becomes common knowledge ie. (it's in the local paper) it is NO LONGER cool to gossip about it b/c you're a dickhead and if you have to wait until it comes out in the "funny pages" YOU good sir are obviously out of the loop!

5. Try and make the most out of your "water-cooler time".

Some guy on CNBC saying everything's fine, will bottom out in the next quarter and then go up, people won't loose much equity in their home....

Pleeease!

SFGuy,

Huh? The outfit was a bit on the expensive side, but it conforms to standard interview wear. I'm generally advised to wear dresses and pantyhose (hate!) to interviews, so I don't think SFWoman was overdressing.

When will they stop saying it's because the interest rates went up and now that they've paused everything will be hunky dory again?

- dresses
+ skirts

Claire,

Do you know who made that prediction?

I wouldn't take house buying advice from someone who appeared on CNBC. Most of them don't live in reality anyways.

DinOR Says:

Uh….. I don’t want to tell you guys how to run your business but did you bother to read the chart you provided below the closing standard “ostrich” paragraph?

I think it's not an "ostrich" statement, rather, a "calm the masses" statement. We don't want a panic, do we? Titanic Captain: "No worries. We just hit a tiny piece of ice in and a bit of choppy water!"

Claire,

At this point with words of comfort and wisdom coming from the likes of Marshall Prentice joining the ranks of DL and LAY it may be more beneficial for us to track from our foriegn correspondents? Please see HARM's post above (just look for the dark print).

Since obviously our MSM and even analysts have conflicts of interest here perhaps the UK and the folks "down under" can provide more objective and meaningful coverage?

"Not even God himself could sink this market!"

/someone had to say it

Astrid,

I didn't get his name - just one of the people they trot out to give predictions on the market and to be honest when he said it, I was not too interested in what he had to say after that because he was either deliberately putting a spin on lower housing starts etc, or he was completely out of touch with reality!

skibum,

Interesting. So it would be financial disaster planning at work. This market is still in the denial phase, with some FB anger tossed in.

austingal,

Had you the cash (and I don't) to pay the mid price of 400K that's about a 3.3% return on your money! Not bad huh?

randomguy Says:

-Very grateful patrick.net reader

*sniff* It's stories like this that make all the time I piss away here seem worthwhile. Thanks, randomguy! :-)

Oh, per side? Okay, then a 6.6% return. Uh, unless they've defaulted muni bonds don't require eviction notices.

Claire,

Yeah, now that I heard skibum's take, the pieces all seem to come together.

Most of these financial analysts (as opposed to honest to God real academic economists) seems to forget the relationship between housing costs and income. Right now, housing is so expensive that 80+% (apologies to DinOR) of CA can't afford to buy their own home on their own income with a traditional loan. A 10% increase in wages is not going to correct that situation. Housing prices have to go down.

astrid,

It's close enough. I'd heard it's actually 78% but when you're that high up in a range I'm not going to make a liar out of you over 200 bps!

DinOR,

Huh? I crunched the numbers

(12*1100-6,500-1,000)/400,000 = 0.01425

Assuming 6.5K in annual property taxes, 1K in insurance and other costs, and 400K as average selling price.

So the return would be less than 1.5% and you gotta pay income taxes on that princely return.

randomguy Says:

> I was very close to buying a condo in San Jose 6 months
> ago for $515K. I only make $75K a year…

Only 6 years ago you could buy a nice big home near downtown Mill Valley or in Burlingame Hills for $515K (and the average buyers made around $175K a year)…

> It came down to the last day where I was supposed to e-mail
> the condo guy and tell him if I wanted it or not. I got scared
> I decided against buying the place. I think this blog saved me
> what would have been a lot of buyer’s remorse and financial
> hardship.

The guy who bought the condo probably makes $60K a year and probably bought the place with no money down using a neg. am IO first and a 2nd. Odds are that he will soon have two mortgage payments and HOA dues that are more than his take home pay…