patrick.net

dunnross says

robertoaribas says

Only if I rent to you, halfabrain!

I don't think you will be in the position to choose, at that point. You will be too busy writing essays to your prospective tenants, explaining why they should rent from you and not the other 10,000 desperate landlords.

As much as I disagree with your stance about the housing market, you can be funny sometimes.

Cheers. :)

robertoaribas says

Only if I rent to you, halfabrain!

I screen my landlords quite extensively. Sorry, you wouldn't make the cut. I only rent from landlords who are not investors and care more about the continued quality of their homes than the positive cash flow. They are out there and do exist, just takes some leg work to find them. Still a lot less leg work than finding a home to buy IMHO.

robertoaribas says

investor90 is off his meds... what a load of made up crap! REO's sell and sell fast once they are listed, you can make up all the fiction you want, but someday, you might want to live in reality!

Not true. I've seen REOs in my area linger for YEARS, being re-listed up to a dozen times. I offered on one that took about 5 months to finally sell--below my offer. I got sick of the listing agent's games and pulled my offer.

Oh. And I live in a "fortress" area.

rufita11 says

robertoaribas says

investor90 is off his meds... what a load of made up crap! REO's sell and sell fast once they are listed, you can make up all the fiction you want, but someday, you might want to live in reality!

Not true. I've seen REOs in my area linger for YEARS, being re-listed up to a dozen times. I offered on one that took about 5 months to finally sell--below my offer. I got sick of the listing agent's games and pulled my offer.

Oh. And I live in a "fortress" area.

San Ramon is considered a fortress?

dublin hillz says

rufita11 says

robertoaribas says

investor90 is off his meds... what a load of made up crap! REO's sell and sell fast once they are listed, you can make up all the fiction you want, but someday, you might want to live in reality!

Not true. I've seen REOs in my area linger for YEARS, being re-listed up to a dozen times. I offered on one that took about 5 months to finally sell--below my offer. I got sick of the listing agent's games and pulled my offer.

Oh. And I live in a "fortress" area.

San Ramon is considered a fortress?

Not the crappy hoods near Dublin, but the ones near Blackhawk.

rufita11 says

Not the crappy hoods near Dublin, but the ones near Blackhawk.

Oh snap.

PockyClipsNow says

Hell if/when mortgage rates hit 2% even some of the perma bear renters will buy if they can do a low down payment.

No they wont, by the MIP and servicing fees, will be $500 a month.
That 2% may well be a 12% mortgage by that day.

I think Jobs and economic security is holding the market back the most.
Well I know it's the single biggest factor.
And not just economic insecurity because of the way the cookie has been crumbling. But because there doesn't seem to be anyone involved with the decision making process, that gives the slightest sliver of hope to anyone other than the upper crust.

I bet if we sent Ben Bernake and Tim Geitner on a 3 month long vacation, where there were unable to make any decisions. The economy would rebound. If people with money had to actually risk their money and put it to work.

Roberto, you bring up a good point in that there is no shortage of buyers either standing on the sidelines waiting or trying to buy but continually getting out-bid (I didn't say "over-bid" on purpose by the way), especially for lower end real estate.

This site has no shortage of cheerleaders that are quick to rip on real estate agents and call them liars (no opposition here). But worse than a lying agent is the cheerleader type who will never be able to buy a house and yet constantly harps on how real estate has another 65% to drop any chance they get and to anyone that will listen.

robertoaribas says

RentingForHalfTheCost says

robertoaribas says

Only if I rent to you, halfabrain!

I screen my landlords quite extensively. Sorry, you wouldn't make the cut. I only rent from landlords who are not investors and care more about the continued quality of their homes than the positive cash flow. They are out there and do exist, just takes some leg work to find them. Still a lot less leg work than finding a home to buy IMHO.

sure you do... sure you do...

you are an utter idiot, and you know it..

I know what an idiot is, that part is true. ;)

Call it Crazy says

.... they don't have two plugged nickels to use as a down payment, no matter what the mortgage rate might be....

And that's a good thing - people who have no choice but to live check to check should not be buying homes.

*grunch*

The reason you don't hear about shadow buyers is because they only come out when prices drop low enough where they are comfortable buying.

Prices would have to drop to around 10% below rental partity to appreciable increase the population of buyers, and even then the overall number is limited to those that can qualify for loans or have cash at the lower price point.

Real estate has proven to me to be a sucker game for fools well-crafted by a few to make a quick buck off many. Get out of their spin cycle and maybe you will start to generate real wealth.

Remember the old saying if you don't see the sucker in the game? The sucker is YOU.

Prices are going up. The unseen hand is guiding the market. The inventory will never hit with volume and drive prices down. Sorry guys.

domara says

Prices are going up. The unseen hand is guiding the market. The inventory will never hit with volume and drive prices down. Sorry guys.

I think you need to lay off whatever you are ingesting dude.

Darrell In Phoenix says

Sorry kiddo but prices are falling in price per square foot irrespective of location.

Worse yet, there are 25 MILLION excess empty housing units in the US today.

I live in a very high-end residential island that is extremely desirable. I see houses on every block foreclosed on and/or For Sale. I could NOT agree with you more, it is the worst I have seen it where I am in my lifetime. In this economy anyone who thinks that prices are rising or sales are increasing are in for a rude awakening if they ever snap out of their delusion.

Reader says

domara says

Prices are going up. The unseen hand is guiding the market. The inventory will never hit with volume and drive prices down. Sorry guys.

I think you need to lay off whatever you are ingesting dude.

Reader

Nah. You should have said. That's some good stuff you're ingesting there. Can I have some? (sarcasm) wouldn't that be funnier? ;)

On the other hand I would like to see it illegal to list, then reduce, reduce, reduce and realise oops this looks like shite I better take down and relist just not to show drops in pricing. It is all desperation.

Gentlemen, you may disagree with me. I had a similar opinion a few months back. I ask you to look at what is happening in California. Prices are going up, supply is contricting and the unseen hand is buying what little supply makes it to the market. This will happen across the US. I believe you will see that prices will go up and the inventory will never come onto the market in any significant volume. You are free to tell me I am wrong in the coming months, if that is the case or write me and discuss real estate if I am right. domara@watson.com

Drop me a line if I am right, I have an ego too and love to gloat a little.

domara says

Prices are going up, supply is contricting and the unseen hand is buying what little supply makes it to the market.

Ok. We know that. Spill the details. Who is manipulating the housing market?

I do not know.

The banks all pulling back on REOs, the hedge funds funded and ready to go would lead me to believe this was concieved in 2011 and implemented in 2012.

domara says

I do not know.

:-) Thanks. I'll agree with that. You're theory is as good as anyone's.

David,

I commented because the majority of contributors were waiting for the onslaught of shadow inventory and lower prices. I think the game has fundementally changed with the banking strategy and with policy from the federal level. Just thought I'd share a new persepctive.

Domara,

And you may be correct! That is why I asked for details.

For the market to linger in this quasi state for this many years certainly means something.

David9 says

For the market to linger in this quasi state for this many years certainly means something.

I have posted this paper before, but here it is again -- since we are talking about another huge price dip which IMO is unlikely.

Why Credit Deflation is more likley than mass inflation

the Federal Reserve’s most likely course of action is to keep the mortgage market, in which most of the losses are concentrated, in a sort of stasis, where losses are acknowledged slowly over time. Such a policy, which might well be called “controlled deflation,” would lead to a prolonged period of
high unemployment and slow growth, as capital was only slowly reallocated to satisfy consumer preferences. Further, the insufficient or barely sufficient creation of new credit to make up for debt paid down, or defaulted on, would cause a low growth in aggregate prices, which might occasionally become
negative. Not until the losses of the housing boom are fully cleared—which might takes years under a policy of controlled deflation—should we expect an inflationary credit expansion and a significant rise in prices.

uomo_senza_nome says

the Federal Reserve’s most likely course of action is to keep the mortgage market, in which most of the losses are concentrated, in a sort of stasis, where losses are acknowledged slowly over time. Such a policy, which might well be called “controlled deflation,” would lead to a prolonged period of
high unemployment and slow growth, as capital was only slowly reallocated to satisfy consumer preferences. Further, the insufficient or barely sufficient creation of new credit to make up for debt paid down, or defaulted on, would cause a low growth in aggregate prices, which might occasionally become
negative. Not until the losses of the housing boom are fully cleared—which might takes years under a policy of controlled deflation—should we expect an inflationary credit expansion and a significant rise in prices.

uomo,

That's exactly the state we're in right now. Very well written and articulated. I can see another 5 years of this going on. I just came back from the bank, and the interest rate for a conforming purchase money loan is 3.375% for a 30-year fixed with no points and $2,500 in closing costs. 2.875% for a 15-year fixed.

Thanks for sharing.

Darrell In Phoenix says

In the meantime, prices continue to fall and inventory is larger than ever.

Why buy now with prices grossly inflated and falling? Buy later after prices crater for 65% less.

I cannot disagree with that. Thanks for the tips.

robertoaribas says

If all those papers prove that housing can't recover given this scenario, care to comment on why prices are increasing in so many markets?

Election year for one. Easy money and relaxing standards for credit are the culprits. Add to it the flight by the Chinese to take money out of the falling Shanghai Stock Exchange and put it outside the country. It has fallen from 6000 to 2000 since the collapse.

http://finance.yahoo.com/echarts?s=000001.SS+Interactive#symbol=000001.ss;range=20051003,20120831;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Also, I am starting to get the checks again in the mail to extract home equity. Here we go again, as if the consumer wasn't sucked dry enough.

The shadow buyers are out there, they just can't afford to buy until the prices drop more.

robertoaribas says

If all those papers prove that housing can't recover given this scenario, care to comment on why prices are increasing in so many markets?

Roberto - I think you are referring to price increases in phoenix and stating that as a housing recovery. Given it came at the expense of ultra low interest rates, Fed buying mortgage bonds and increasing the monetary base exponentially -- the best you can say is they did not allow the prices to crater.

I think that there is plenty of factual data showing that there have been price increases MoM/YoY in many locales. Why easily verifiable facts are so objectionable to people is beyond me. I mean, I get that many are still angry about the RE insanity that occurred for the better part of a decade and want to be able to buy a house in their preferred area for change they found under their couch.

Prices have risen in many areas. Is it sustainable? I have no idea. Much of it seems to be driven by constricting inventory and the fact that RE seems to be one of the only investments with a return that beats inflation (I am not convinced that new-comers to this investment scheme will be successful though, the herd is fully on the move to THAT pasture).

Hey, if the NAr is as powerful as some say that it is, they should be able to lobby for higher inventories somehow, right? Mama needs a new pair if shoes, and low inventories just cramp her style.

Wake up people with 90% of the ocean's depleted of first 75% of the rivers in the world polluted, losing millions of acres per year to fire and logging,thousands of tons of top soil blowing away and the majority of crops are grown by the use of chemicals and fertalizers, animals,reptiles,and birds going extinct by the thousands and wars spreading around the world spreading nuclear waste and chemicals like phosphorus and agent orange. i have to say with 7 billion people eating and shiting everyday while we are running out of everything you must realize that they plan to take many of us out.So there will be lots of homes if your lucky enough to live.

robertoaribas says

If prices increased seasonally, then on a year over year basis, this year's higher summer prices would be compared to last year's higher summer prices, and the year over year increase would be zero.

Well, are we talking about nominal price or real price? If inflation is 3%, and home prices went up 3%, then it's a wash. However, we have been experiencing deflation (eyes rolling) on the magnitude of 3% annually. So a 3% increase in nominal home prices is equivalent to a 6% YoY increase.

So are we having inflation or deflation here? You can't have it both ways. Well, I guess we can. LOL!!!

robertoaribas says

hey the august data for phoenix is out!

median sale price went up another $2000 from 145,000 to 147,000....

what do you know?

average days on market continued downwards too...

incredible gains! cash out now while your still smiling.

robertoaribas says

Election year for one.

care to show when an election has ever made a damn bit of difference to real estate prices? holy crimminey, I know you can't think, but seriously, blame it on global warming or the fact that it is only 61 years till Haley's commet returns... that would make as much sense... halfabrain...

nah, i won't even try to explain it to you. Some people listen to facts others just hear what they want. You are in the later group and a time waister on everyone. I hope you make out okay all the same.

dodgerfanjohn says

Prices would have to drop to around 10% below rental partity to appreciable increase the population of buyers, and even then the overall number is limited to those that can qualify for loans or have cash at the lower price point.

Patrick, do we know how much prices would need to drop before we reach 10% below rental parity, in say your neighborhood of Menlo Park?

robertoaribas says

because elections mean nothing to the prices of homes, coffee, cotton, or anything else

Elections mean nothing. But gov't stimulus means a lot. Gone elections, gone the stimulus, and, alas, the willy coyote moment!

RentingForHalfTheCost says

20% up means a 20% correction is coming when the lies come to roost. Wait for it...

I think you are being too optimistic. Interest rates can still go lower, and you can bet your ass that the 40-year mortgage will become the new normal in the next decade.

Darrell In Phoenix says

Nonsense.

A seasonal bump in the median isn't "rising prices". Secondly, REO and foreclosures are EXCLUDED from any data.

Also, clearly what isn't being looked at are the many single multi-million dollar listings and shady deals that pop up that bump many of the "price indicator/rating/market etc." sites off the charts. It isn't real by a long shot. That shite in my opinion should be illegal. I have seem many that are so misleading they are providing to me outright fraudulent information.

E-man says

That's exactly the state we're in right now.

And are going to continue to be in for a very long time.

Darrell In Phoenix says

bmwman91 says

RentingForHalfTheCost says

20% up means a 20% correction is coming when the lies come to roost. Wait for it...

I think you are being too optimistic. Interest rates can still go lower, and you can bet your ass that the 40-year mortgage will become the new normal in the next decade.

If you think a 20% decline is optimistic, you're going to think you died and went to heaven as prices crater over the coming years and decades.

JAPAN but here it is going to be far worse. I knew a major property owner and developer in Tokyo in the late 1980s. They lost their shirt/s and pants, property NEVER went anywhere but down 20 plus years later still dead in the water.