patrick.net

Marin is pretty quiet. Perhaps it will pick up soon?

I just spoke with a friend who owns a home in the east bay. He told me that he's received postcards from two realtors in the past week telling him the time is ripe to sell. Should be an interesting summer.

Housing is luxury item like diamonds. NO ONE needs one (SFR that is). Might as well complain about the Debeers diamond monopoly as well as the 'governemnt making prices always go up in RE'.

Only purpose of diamonds is to make jewelers rich, enhance ego/status of buyers. Same with housing.

Anyway I still like complaining.

rowemoore says

I just spoke with a friend who owns a home in the east bay. He told me that he's received postcards from two realtors in the past week telling him the time is ripe to sell. Should be an interesting summer.

We receive those postcards regularly, doesn't mean anything. Some realtors are even go door to door :) When we rented a few years ago some realtors knocked asking if we're would like to sell...

edvard2 says

you have to look at the type of population that's moving in

Yeah, when I moved to LA 5 years ago, there were usually only about 10 illegal migrant laborers hounding me at the Home Depot parking lot entrance. Now there's at least 15 or more. There's your 1% yearly population increase.

APOCALYPSEFUCK is Tony Manero says

Did you?

what do you mean? sell a house that we rent?

zhanka says

rowemoore says

I just spoke with a friend who owns a home in the east bay. He told me that he's received postcards from two realtors in the past week telling him the time is ripe to sell. Should be an interesting summer.

We receive those postcards regularly, doesn't mean anything. Some realtors are even go door to door :) When we rented a few years ago some realtors knocked asking if we're would like to sell...

I have rec'd some of these here in Marin -- but only 1 every month or 2 - saying that the market could be like this for years and since interest rate are so low now is the best time to sell.

My friend said the cards he got referenced the same info as the OP saying the if you've been waiting , the wait is over!

If I was looking to sell, I'd probably do it this summer.

Greg, thanks for the graphs. Inventory is low in Sonoma County as well, nice stuff is selling at 1997 prices in nominal dollars.

Here's one of the disturbing trends of the out migration from California to other states. According to Mr. Kotkin, most of those leaving are between the ages of 5 and 14 or 34 to 45. In other words, young families.

EBGuy says

Sure, crap like that happens all the time.

Just read about a racketeer who sold a guy's house from underneath him after 21 years of paying down a 30 year note.

Spanish speaking guy he defrauded through a translator making him believe he was taking out a HELOC when he was selling the place.

This is what the RE trade is all about!

Reminds me of mess we had in Russia in 1990s, many people back than lost their properties in exchange for "another" one which was just a worthless piece of paper that looked like a real one with all needed signatures.

Rental Watch says

All three of these will fuel price increases and new home development once the distressed sales begin to decrease.

How do employment numbers and income factor into this?

Rental Watch says

For California, I would point to three statistics:

1. Homeownership rate is approximately 50%...ie. the median home price needs to match up with approximately the 75th percentile earners (under the assumption that the top 50% buy, the bottom 50% do not--not a perfect assumption, but you get the point);

2. Vacancy rates in CA are now 5% for rentals, and 2% for owner occupied homes...this is quite low; and

These are very good statistics.
Let me add one more.

73.63% Of All Statistics Are Made Up.

xenogear3 says

These are very good statistics.
Let me add one more.

73.63% Of All Statistics Are Made Up.

http://www.census.gov/hhes/www/housing/hvs/rates/index.html

Tables 1, 2, and 3.

I did exaggerate a bit, CA's homeownership rate is estimated at 54.4%, not 50%.

rowemoore says

How do employment numbers and income factor into this?

The low homeownership rate helps on both counts (meaning there are generally more people who have been renting and can step off the sidelines if they see an opportunity). But absolutely, employment and income matter. Most of the unemployment however, is caught with people who have lesser educations and generally lesser incomes (ie. renters for the most part). Factoring in affordability, homes in CA are actually quite affordable historically relative to incomes and interest rates.

http://www.car.org/marketdata/data/haitraditional/

I know...can't believe the CAR (they have a dog in this hunt)...take a look at the historical numbers to see what affordability used to be. Based on rents I'm seeing compared to home prices, their numbers do make sense.

I also think there will be a bit of a positive feedback loop created once construction improves...lots of construction jobs were lost that haven't come back. The construction workers will generally spend the money that they earn.

I think the bigger issue in CA is actually availability of credit, and appraisers (which will take a while to make the leap that markets have turned and values have improved).

Rental Watch says

I think the bigger issue in CA is actually availability of credit, and appraisers (which will take a while to make the leap that markets have turned and values have improved).

Agreed. But jobs -- or that lack thereof -- will continue to keep the market relatively flat for years to come in all markets except the fortresses.

rowemoore says

Agreed. But jobs -- or that lack thereof -- will continue to keep the market relatively flat for years to come in all markets except the fortresses.

I just looked at some of the jobs data in CA yesterday...over the past 12 months, they have added a fair number of jobs, something like 180,000...CA still plenty to go, but this is not an insignificant number relative to the vacancy rates in the state, which I consider the best indicator of slack in the housing market...after all, we're talking about supply of shelter as it relates to number of people who want shelter...a high vacancy rate is the best indicator of a supply/demand imbalance, IMHO.

Rental Watch says

I just looked at some of the jobs data in CA yesterday...over the past 12 months, they have added a fair number of jobs, something like 180,000

Yeah, now take away the service jobs. Or check out the jobs which pay over some living wage, say 80K. Nothing.

Yeah, we can all pay 650K for houses on starbucks jobs.

The world has been poisoned with printed fiat money, and the wages seem to be the last things going up.

The roof, the roof, the roof is on fire.

We don't need no water, let the motherfucker burn.

Burn, motherfucker, burn.

gregpfielding says

The East Bay is on Fire

Again?

Must be talking about Oakland two days ago, that was just burning cop cars.

eastbay19 says

Last week I did searches at foreclosureradar.com and Redfin for the city of Oakland, where I'm hoping to buy my first house. I found about 600 active listings and 1,650 houses in some stage of foreclosure, for a ratio of 2.75 to 1.

It's been that way for 6 years now and the bulk of those foreclosures have not and probably will not come to market. Most will be modified or maybe even sold to institutional investors. It's true that the shadow inventory is huge, but Uncle Sam and the big banks have been able to keep those home off the market and I don't expect them to change.

drtor says

I find it difficult to believe that this is only or even primarily driven by (lack of) new construction. Even during "normal" (or bubbly) times new homes is a pretty limited proportion of total sales. I think other factors are the major drivers
- Banks holding back supply
- Individuals hope they can get more if they sell later

The main factor is that all of the homes that would be for sale as short sales or foreclosures are in the process of modifying and/or waiting to see if there will be some sort of principal reduction program announced.

Why bother selling short if you are living in your house for free and there are rumors that Uncle Sam might write down your mortgage?

rowemoore says

How do employment numbers and income factor into this?

Unemployment will reduce demand. But with supply so low, it doesn't make any difference.

gregpfielding says

rowemoore says

How do employment numbers and income factor into this?

Unemployment will reduce demand. But with supply so low, it doesn't make any difference.

East Bay Real Estate Agent and Blogger

High unemployment will affect prices in most markets. Mostly because lenders will stay or become more restrained. There are a lot of reasons for the uptick in sales and low inventory, but none of these point to significant increases in prices.

So, my advice to those looking to buy is to wait 6 months. Of course, I own, so that's easy for me to say.

gregpfielding says

The main factor is that all of the homes that would be for sale as short sales or foreclosures are in the process of modifying and/or waiting to see if there will be some sort of principal reduction program announced.

Why bother selling short if you are living in your house for free and there are rumors that Uncle Sam might write down your mortgage?

I agree, this is probably a big factor. Being an election year & all, I think that there is even more hope among these folks that the candidates will make promises to give them free money during the campaign season. I don't expect any changes in the low inventory until after inauguration day (or some time after than when it becomes clear which promises will be kept & which will be broken).

wow RE is completely broken in this country.

millions of people living for free not getting foreclosed waiting for free principal reductions? WTF country is this?!?!?!

PockyClipsNow says

wow RE is completely broken in this country.

millions of people living for free not getting foreclosed waiting for free principal reductions? WTF country is this?!?!?!

USA, babay! Land of the FREE(loaders)! The system is broken, no doubt about it. Just because the cogs are still moving, doesn't mean it is WORKING.

The day of reckoning is coming. It may not even be in my lifetime, but it is coming. That much is crystal clear.

bmwman91 says

The day of reckoning is coming. It may not even be in my lifetime, but it is coming. That much is crystal clear.

Yep. History shows that when complex societies unravel, it's sudden and nasty.

Yeah the soviet collapse is a good lesson.

Although they lasted like 80 years before complete destruction of governemnt,finance,currency and rebuilt from scratch (with slightly different set of crooks in charge).

CCCP might not be a good comparison as their economy was 100% government controlled/owned and ours is probably what only 50%? So maybe things will get waaaaaay more insane and then stay insane for 80 years, and then collapse? Although they stayed in power with murder and prisons, not with free S-8 and food stamps and money printing ponzi stock/housing market. Impossible to predict.

PockyClipsNow says

Housing is luxury item like diamonds. NO ONE needs one (SFR that is). Might as well complain about the Debeers diamond monopoly as well as the 'governemnt making prices always go up in RE'.

Only purpose of diamonds is to make jewelers rich, enhance ego/status of buyers. Same with housing.

Anyway I still like complaining.

In California, a buying a house is a luxury. In Texas, it's like food...and almost as affordable.

wthrfrk80 says

bmwman91 says

The day of reckoning is coming. It may not even be in my lifetime, but it is coming. That much is crystal clear.

Yep. History shows that when complex societies unravel, it's sudden and nasty.

An intresting article linked from Pnet yesterday covers this:
http://hipcrime.blogspot.co.uk/2012/04/what-if-collapse-happened-and-nobody.html?source=Patrick.net

leoj707 says

wthrfrk80 says

bmwman91 says

The day of reckoning is coming. It may not even be in my lifetime, but it is coming. That much is crystal clear.

Yep. History shows that when complex societies unravel, it's sudden and nasty.

An intresting article linked from Pnet yesterday covers this:

http://hipcrime.blogspot.co.uk/2012/04/what-if-collapse-happened-and-nobody.html?source=Patrick.net

That reads like a Kunstler post. He's full of shit, too.

We have a hundred years or more of natural gas. We have about the same amount of coal. There IS still oil here but it's becoming increasingly more difficult to obtain.

Did you know the Germans almost beat us in World War II? Yes...and they didn't because we dwarfed them in natural resources. Our war with Japan was almost exclusively about natural resources.

Since it's all about resources, right there you know America isn't over but that's not the message most people who post here want to send. They would rather be miserable and it seems to me life's too short for that.

rootvg says

Since it's all about resources, right there you know America isn't over but that's not the message most people who post here want to send. They would rather be miserable and it seems to me life's too short for that.

When it comes to resources, we're ok. But it seems everything else is imploding.

wthrfrk80 says

rootvg says

Since it's all about resources, right there you know America isn't over but that's not the message most people who post here want to send. They would rather be miserable and it seems to me life's too short for that.

When it comes to resources, we're ok. But it seems everything else is imploding.

If we're okay on resources, we should be able to fix the demographic bubble issue. If they're gonna ask all of us to work a little harder and pay more in taxes, I'm good with it as long as we make sure we're paying what we need to pay and that money isn't being squandered.

Our physical infrastructure is a mess...and we fixed that before and we can fix it again. Public education is a mess...and we can fix that as well. Our universities are already the best in the world.

I don't think Gen X or Y or the Millenials are the problem. The barrier to progress is among the Baby Boomers who still have a weed up their ass about the sixties and Nixon and Vietnam. This is the group from whom "the agitators" here in California and especially the Bay Area always come. The earliest memory I have of that era is the moon landing and then the earliest days of elementary school which takes us up to about 1972. It was a LONG time ago.

I think you just warned a lot of Bay Area folks to stay out of the bidding wars.

rootvg says

I don't think Gen X or Y or the Millenials are the problem. The barrier to progress is among the Baby Boomers who still have a weed up their ass about the sixties and Nixon and Vietnam. This is the group from whom "the agitators" here in California and especially the Bay Area always come.

I hope you're correct.

wthrfrk80 says

rootvg says

I don't think Gen X or Y or the Millenials are the problem. The barrier to progress is among the Baby Boomers who still have a weed up their ass about the sixties and Nixon and Vietnam. This is the group from whom "the agitators" here in California and especially the Bay Area always come.

I hope you're correct.

We live here. We see it on a daily basis.

They aren't in huge numbers down around San Jose where I work but in the more affluent, demographically older parts of the East Bay they seem to be everywhere. Go downtown Danville on a Friday or Saturday night and you'll see them driving incredibly well restored late fifties or early sixties Corvettes with women half their age or more riding along...usually the second or even third wife.

Weather is supposed to be perfect this weekend, so I'll post some images here. You'll love it.

rootvg says

Go downtown Danville on a Friday or Saturday night and you'll see them driving incredibly well restored late fifties or early sixties Corvettes with women half their age or more riding along...usually the second or even third wife.

Danville, Monterey, Woodside...yup, sounds about like that.

So let me get this straight. While the east bay RE may be on fire, the barrier to progress are baby boomers driving well restored Corvettes with trophy wives in Danville.

rowemoore says

So let me get this straight. While the east bay RE may be on fire, the barrier to progress are baby boomers driving well restored Corvettes with trophy wives in Danville.

Well, duh. I doesn't take a rocket scientist to put 2 & 2 together. Isn't it obvious?!