patrick.net

April is the cruelest month.

Here's a fluff piece from Marketplace (video) - Kai Ryssdal interviews Dolores Conway from USC about where the RE market is heading. Her take is somewhere between bearish and bullish, more on the very soft landing side of the coin.

http://marketplacemoney.publicradio.org/videos/moneyclip/moneyclip_20061124.shtml

Is the article a piece of fiction? Should there be a disclaimer?

Mr Iwasright? Is that an Armenian name?

Remember how I've mentioned a few times that Boston is one of the cities leading the housing downturn? Well, check this out:

http://business.bostonherald.com/realestateNews/view.bg?articleid=169540

The headline, "All Hub (ie, Boston) gains since March ’04 vanish" may be somewhat panic-inducing, IMO...

Skibum,
Interesting you should post a MarketplaceMoney link. I heard one of their shows a couple of weeks ago and came away completely incensed. Summary: Reporter barely breaks even on Cleveland home and becomes renter in North Carolina. Renting depresses her and she uses the radio piece to justify her home purchase. Choice qutoes from the show follow:
Economist David Wyss at Standard & Poors says it's a good question... He says that's because the best time to buy a house is whenever you want and need one. Still, Wyss says home prices are only half way to the bottom in many markets....

" But Colby Sambrotto with the website ForSaleByOwner.com says I need to be more Zen about it. Real estate is really worth what someone's willing to pay for it. There's no standard yardstick that can be used ultimately to measure the value of a property."
Actually, looking at the statements now, I realize they are somewhat balanced. I completely idiotic comment (buy now, no yardstick) followed by a warning (home prices falling, find a greater fool). I guess talking about rental rates or home prices/median income for an area was too much of a stretch.

As Dick drives off down the street, he passes through a virtual sea of “For Sale” signs.”

Now why would that happen? What external shock would cause this?

It's not like speculators were driving up the Marina ala Miami.

The only thing I could see is if rate hikes continue - but even then we don't know what the mix of mortgages in the Marina are like.

Good article. Very authentic. You missed the 2 mandatory phrase (maybe there is a law that requires these to be present)

- providing yet another sign of that the once red hot real estate market is cooling

and

- signs of market distress are [largely absent]/[at a moderate level].

Oh this reminded me of something that I read looong time ago. I could not google it and I am really hoping some one remembers more about this than me.

During the dot-com madness a financial analyst used to write on quicken.com. He was very sceptical of the valuations. So one of his pieces was exactly like what Randy has written. It was titled "Class of 2012" or something similar. It was an article written in future, looking back at the then madness. Very nice. Mostly it was about ridiculing the "new paradigm". It also talked about deification of Cramer/Bezos/Abby Joseph Cohen et al.

In the next article, he said he sold all his CSCO at 84 ! I remember that because before that I had capitulated and finally bought CSCO around the same price. I am sure some shares came from him. #$%* !

skibum posted:

> Remember how I’ve mentioned a few times that
> Boston is one of the cities leading the housing
> downturn? Well, check this out:
> The headline, “All Hub (ie, Boston) gains since
> March ’04 vanish”

The article says:

> Statewide, Warren reported median house prices
> fell at a 6.9 percent annual rate to hit $312,000.
> Median condo prices likewise declined 4.8 percent
> to $261,750

Whenever I see home prices around Boston and NYC that are about half the price of the SF Bay Area it reminds me that we have a long way to drop…

Daily, I enjoy patrick.net,

Nouriel Roubini's blog-

rgemonitor.com/blog/roubini/

also, for a list of current articles-

www.latestblognews.com/portal.form?

The Charles Hugh Smith Weblog- www.oftwominds.com/blog.html

and www.housingbubblebust.com

Collectively the above sites give me a good overview of the real estate debacle that our nation is facing, and a myriad of views on the topic. What surprises me is the optimistic view common in the press, and most investment periodicals. Soft landing....blah blah....where we expected to be....goldilocks....expected adjustment ....etc.

Some very bright minds can see the stock market collapse that will likely come like a thief in the night. THE BULL CLIMBS THE STAIRS, BUT THE BEAR JUMPS OUT THE WINDOW. The DOW highs, adjusted for our decline in dollar value are not highs at all. Convert previous highs by the euro conversion rate of the day. The volatility of our stocks will be evident when the lag factor of unemployment and the binge of equity tapping has passed. Contemplate Kondratieff winter. It is coming.

I am increasingly convinced that we are seeing only the tip of the iceberg in terms of our national financial woes, our decline as a world economic and military leader, and the relative strength of our currency.

We have many perfect storm components that are worse than those around at the time of the great depression. Note the excellent insight at www.dollarcollapse.com. Time will tell, but there are those who think we are seeing the beginning of the death of our great civilization, as history repeats itself. Note the "Mexifornia" syndrome.

What is going to happen when China, Japan, India, Germany, and other nations no longer accept American funny money printed to pay our daily BILLION dollar trade deficit, or the hundreds of BILLIONS of dollars that we pay annually on interest alone, for our national debt?

How low will the mortgage industry allow rates to go in order to stem the tsunami of foreclosures on the horizon?

Check http://www.bankrate.com/brm/graphs/graph_trend.asp?web=brm for handy at- a- glance current fixed mortgage rate averages, which are at 5.61% as of today. Previous bubbles have seen major interest rate declines. What will be majorly lower than 5.61% ?

When $1.7 TRILLION worth of Frankenstein, suicide, neg-am, teaser rate, or neutron bomb financing resets next year, how low will fixed rates be pushed?

Peter P,

I added a little disclaimer of sorts. I wouldn't sweat it. We still have the First Amendment left.

Any offense taken by those who would be offended is well deserved.

LOL :lol:

Turns out that the M3 has been growing like crazy...

http://usmarket.seekingalpha.com/article/21027

What is going to happen when China, Japan, India, Germany, and other nations no longer accept American funny money printed to pay our daily BILLION dollar trade deficit, or the hundreds of BILLIONS of dollars that we pay annually on interest alone, for our national debt?

Carrier task force groups? en.wikipedia.org/wiki/Us_navy#Aircraft_carriers\

Don't forget boys and girls we do still make one thing well in the US.

SFWoman, would love to meet you for snacks or beverages. How's about Fri-day? Remember I'm 37% less offensive in person. Randal H, sushi?

Albert, SF is more expensive than Tokyo.

Is it a special area or something where you get skrewd in every industry housing, commodities etc?

Have you ever been bumped for a job given to a mid aged MPB (male pattern baldness) leather boy? Never underestimate the power of buttless chaps. SF Uber Alles.

Crash? What crash? The "crash" depends on one thing and one thing only, how many fucknobs bought with "exotic loans"? Someone somewhere must have this stat. How many, when reset. That tells the magnitude of the crash. Otherwise it's just jackingoff billing the man for boredom during the day.

Peter P. sushi in SF this week or weekend?

Randall H. beers with whitey in Mill Valley/Marin?

April 1, 2007

We tell ourselves stories in order to live. Only, I'm not certain the story I've been telling these past two years is really mine.

The speaker, attractive 24-year-old Toulouse native Jeanne Bertrand, is waiting - as I am - for the doors of Bullock's to open, and a surfeit of caffeine has overcome her natural reserve.

Relais et Chateau placed me here last year, and it all seemed rather refreshing then, though I've never owned so much black gabardine before. You see it was necessaire to remain visible against the taupe. But now the listers have become sniffy - and among buyers there is sangfroid. What is one to do? Je m'ennui.

For myself, I think Hong Kong. I realize it is on the latte/blackberry axis, but this should be amusing for awhile, no? Do they wear black in Hong Kong?

SFWoman,

The Realty Times article you posted was very revealing. What it ultimately shows us is that in 2003 "only" 11% of home sales were to investors. By 2004 (the AG quotes are from OCTOBER 2004!) that number would more than triple to 36%. 2005? 40%!

What in essence we've allowed to happen is to turn rank and file local lenders into VC guys! Due in large part to the "primary residence" wink/nod rubber stamp approval this crowd wasn't even playing by the normal rules that govern commercial/investment property!

Imagine for just a minute walking into a commercial lender and telling them you have no experience other than making mortgage payments and that you would like to purchase a parking garage, airplane hangar and strip mall with a zero down I/O loan? Imagine further that you can now access this capital just by going to their web-site!

If this isn't a recipe for a "Silent Spring" what is?

George,

Thanks and I know I speak for all at patrick.net when I say we wish you well in ALL your future endeavors!

So much for the "throw the bums out" theory of firming rents eh? Since I'm a sales guy too I always try to couch things in terms of, well...... what kind of script could we come up with for the "Spring Miracle 2007"? What are your fellow agents saying? What are they basing this on? I mean other than blind faith?

Peter P. sushi in SF this week or weekend?

Sure. Who else is coming? Where should we go?

SFWoman, will do!

George,

Now imagine having to go back to all of the people that bought homes in 04-05 and tell them, "It's not bad enough you couldn't sell that home for anything near what YOU paid for it but it's gone negative equity so you'll have to send a check in before close of business Friday or we'll have to sell it out from under you!"

(Think NASDAQ 2000-2002)

OT, but do you guys know where I can get a hold of some dragon fruits (hylocereus undatus)?

Peter P,

All you have to do is put salt on a dragon's tail and you'll have all the dragon fruit you like!

All you have to do is put salt on a dragon’s tail and you’ll have all the dragon fruit you like!

Huh?

Paul: (from previous) OT

My understanding of a "bucket shop" is when a MF manager is getting out of a position they can contract a firm to peddle the shares to retail investors to support the stock as they liquidate the position. I'd have to say that GCI is a market maker using the the NYSE to price their CFD's. In all actuality you would never be able to take "physical possession" of any shares, period.

All others proceed to "the Real Estate Heaven of 2007"!

Peter P,

When we were kids grandparents would tell us, "If you want to catch a bird, all you have to do is put salt on his tail". Well for crissakes granny if I could put salt on his tail......

New thread on astrid's blog: The Ethics of Eating Shark Fin

I think food is 2 times more expensive there for some reason.

Nah, it's only 20% more.

http://www.burbed.com/2006/11/23/how-to-save-20-on-your-groceries-for-thanksgiving/

Nah, it’s only 20% more.

And it is 20% more because housing is 20% more? Sad.

Surfer-X,

Fri-day? Remember I’m 37% less offensive in person. Randal H, sushi?

Sounds great. We could see if we could all meet somewhere in SF.

Sounds great. We could see if we could all meet somewhere in SF.

Any good sushi restaurant with easy parking?

Any good sushi restaurant with easy parking?

I like Ebisu in the Inner Sunset and Grandeho Kamelkyo in Cole Valley.

You heard it here! Home prices have bottomed out! It's only up from here (according to the home builders, to be specific...)

http://money.cnn.com/2006/12/05/news/companies/toll_brothers/index.htm?postversion=2006120512

Weren't there plenty of articles calling the bottom of the last downturn ('89-'94) all the way down to the bottom five years later?

Randy H,

Psst. (Shorter over @ Ben's tearing his heart out over the builders rally). Psst. (It's very funny to hear shorters say 'the market just doesn't make sense any more', it's just gambling, researching doesn't pay! yada yada)

Hey! What are we whispering for? Classic case of survivor's bias meets gone to the well one too many times.

skibum,

Psst. (The "real" reason the builders are rallying is b/c of that stoopid Gates Foundation rumor) not an unbalanced article with a who's who of RE shills being quoted. Sush. (Just between you, me and the fence post).