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House Prices Are Nowhere Near a Bottom, Says Analyst

By HousingBoom   2012 Nov 20, 4:17pm   2 links   30,221 views   105 comments   watch (1)   quote      

Numbers don't lie!!!

http://www.cnbc.com/id/49436858/?fb_action_ids=552912418057720&fb_action_types=og.recommends&fb_ref=s%3DshowShareBarUI%3Ap%3Dfacebook-like&fb_source=timeline_og&action_object_map=%7B%22552912418057720%22%3A306426616129186%7D&action_type_map=%7B%22552912418057720%22%3A%22og.recommends%22%7D&action_ref_map=%7B%22552912418057720%22%3A%22s%3DshowShareBarUI%3Ap%3Dfacebook-like%22%7D

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1   Kevin     2012 Nov 20, 5:41pm  ↑ like (1)   ↓ dislike   quote    

ProTip: Whenever someone makes claims, google their name and limit the time range to 2000-2010. Compare what they wrote in that period to reality.

Mr. Jurow's track record is very poor based on the three original articles I can find that he wrote in that period.

Ask yourself if someone is telling you new data or simply saying what you want to hear.

2   beershrine     2012 Nov 21, 5:50am  ↑ like   ↓ dislike   quote    

Home prices in the SO-CAL area are on the move up, it might be in part the continued lowering of interest rates and the holding of thousands of REOs still waiting for the market. There are plenty of home flippers still at work in this market. Averages can't tell you what going on.

3   RentingForHalfTheCost     2012 Nov 21, 6:07am  ↑ like (2)   ↓ dislike (1)   quote    

The Professor says

Housing inventories are at record lows, mortgage rates are at or near record lows, consumer confidence is rising steadily, underwater mortgages have fallen dramatically, foreclosures and short sales are shrinking and prices of these homes are rising steadily. Add in the fact that the Gen Xs and Gen ys are finally leaving their parents' homes and you will find that prices are rising steadily in almost every major market area.

Slightly rewritten to be closer to reality.

Housing inventories are at record lows, mortgage rates are at record lows, consumer confidence is still relatively low, banks are still playing games with foreclosure and short sale data and prices are barely holding steady. Gen X and Y's are without work and have no desire or means of entering into the real estate market. Shared renting is the new norm and will be for at least a decade for many.

4   RealEstateIsBetterThanStocks   174/174 = 100% civil   2012 Nov 21, 7:03am  ↑ like   ↓ dislike   quote    

who's Keith Kurow? never heard of him.

looks like anyone who can write 2 paragraphs can be an "analyst" these days.

5   iwog   1474/1475 = 99% civil   2012 Nov 21, 7:07am  ↑ like (2)   ↓ dislike (1)   quote    

There is no such thing as a market bottom without many analysts predicting further declines. This is a rock solid law of investing.

"Experts" drive markets. Therefore it is impossible for a majority of the "experts to be right about market direction. The majority must always be wrong otherwise the market would conform to the new expectations and MAKE the majority wrong.

Simplified, if all investors thought real estate was going lower, all investors would be out or short. Therefore there would be no one left to sell.

6   iwog   1474/1475 = 99% civil   2012 Nov 21, 8:01am  ↑ like (1)   ↓ dislike (1)   quote    

.Darrell In Phoenix says

They're speculators, not investors. It's time you learn this.

A speculator is an investor. It's time you learned this. The fact that a speculator might be misinformed, wrong, or reckless doesn't change the fact that the intended result is an investment that returns money.

http://www.investopedia.com/terms/s/speculator.asp#axzz2Cu9AFnNh

Speculators are typically sophisticated, risk-taking investors with expertise in the market(s) in which they are trading and will usually use highly leveraged investments such as futures and options.

7   iwog   1474/1475 = 99% civil   2012 Nov 21, 8:15am  ↑ like (1)   ↓ dislike (1)   quote    

Darrell In Phoenix says

iwog says

A speculator is an investor.

No LieWog. You're not going to take wide latitude with this definition either.

Right........the extraordinary wide latitude I took was quoting the definition on Investopedia.

Outrageous! LOL

8   iwog   1474/1475 = 99% civil   2012 Nov 21, 8:22am  ↑ like (3)   ↓ dislike (1)   quote    

Darrell In Phoenix says

It's just another one of your fabrications. We know you all too well.

You got me there! I fabricated the definition of speculator on Investopedia to make you look bad.

9   iwog   1474/1475 = 99% civil   2012 Nov 21, 8:26am  ↑ like (3)   ↓ dislike (1)   quote    

Darrell In Phoenix says

Your fabrications make you look bad and you alone.

I know. I was agreeing with you.

My nefarious plot to change the definition of "speculator" on Investopedia to define it as a type of investor was discovered and I now hang my head in shame.

I'll change it back as soon as I can figure out how.

10   RentingForHalfTheCost     2012 Nov 21, 8:38am  ↑ like (1)   ↓ dislike (1)   quote    

iwog says

Therefore there would be no one left to sell

We are getting there. The smart/lucky already sold. The followers are stuck or have lost their homes already. End result - no sellers, only debt payers for life.

11   iwog   1474/1475 = 99% civil   2012 Nov 21, 8:43am  ↑ like (1)   ↓ dislike (1)   quote    

RentingForHalfTheCost says

iwog says

Therefore there would be no one left to sell

We are getting there. The smart/lucky already sold. The followers are stuck or have lost their homes already. End result - no sellers, only debt payers for life.

That is simply not the reality I am seeing on the ground.

All I see around me are rising rents and investors who don't care if prices stay low for 100 years.

I repeat: Supply and demand in the real estate market DO NOT MATTER if rents are stable or climbing. You can take a 100% loss on a 15-year financed home and still make a ton of money. That's the theory.

The practice is that investors will never let housing fall below a certain threshold when rents are paying the mortgage plus a profit. Do I need to quote Warren Buffett again?

12   RentingForHalfTheCost     2012 Nov 21, 8:48am  ↑ like (1)   ↓ dislike (1)   quote    

iwog says

All I see around me are rising rents and investors who don't care if prices stay low for 100 years.

Rents are falling around me. I'm considering asking for a rent reduction when my lease is up for renewal. There are 2 houses that I have seen in the last week that have way lower rents than I saw just 4 months ago. People are hurting. Not sure what ground you are talking about. Not the stuff I'm walking on.

13   Bellingham Bill   70/70 = 100% civil   2012 Nov 21, 8:55am  ↑ like (1)   ↓ dislike   quote    

Darrell In Phoenix says

Rental rates are falling. And so are prices. Yep. Even in the bay area.

The cost of shelter, which includes rents, rose 0.3 percent, the most in more than four years. Rental vacancies have declined in recent months, pushing rents higher

http://www.insidebayarea.com/financial-markets/ci_22001696/us-consumer-prices-tick-up-rental-costs-rise

14   Kevin     2012 Nov 21, 8:56am  ↑ like   ↓ dislike   quote    

iwog says

The practice is that investors will never let housing fall below a certain threshold when rents are paying the mortgage plus a profit. Do I need to quote Warren Buffett again?

I agree with you, but:

- "certain threshold" will still be relative to RoI elsewhere.

- There are still regions of this country where the houses are incredibly cheap, but the rents still don't work out.

For example, in my home town of Toledo you can buy 3 bedroom SFHs for $50k. They rent out for $8k a year.

On paper this looks amazing: 15% annual returns! The house pays for itself after a mere 6 years!

However, many of these houses have major repair needs that could easily add up to 40,50,60k themselves. Nobody is bothering with upkeep because it would be less expensive to just buy another house.

The basic idea that rents set the floor in house prices is fundamentally correct though. I just don't know what a good formula is for determining what that floor will be.

15   iwog   1474/1475 = 99% civil   2012 Nov 21, 8:56am  ↑ like (2)   ↓ dislike   quote    

RentingForHalfTheCost says

Rents are falling around me. I'm considering asking for a rent reduction when my lease is up for renewal. There are 2 houses that I have seen in the last week that have way lower rents than I saw just 4 months ago. People are hurting. Not sure what ground you are talking about. Not the stuff I'm walking on.

This is simply not true at all and I have multiple sources that prove your personal experience is not typical. Rents are increasing, have been increasing since 2009, are near all time highs, and have increased the most during 2012.

http://www.cassidyturley.com/Research/MarketReports/Report.aspx?topic=Alameda_County_Apartment_Q1_2012_Market_Report&action=download

16   iwog   1474/1475 = 99% civil   2012 Nov 21, 8:57am  ↑ like (1)   ↓ dislike   quote    

17   Bellingham Bill   70/70 = 100% civil   2012 Nov 21, 8:58am  ↑ like (1)   ↓ dislike   quote    

iwog says

The practice is that investors will never let housing fall below a certain threshold when rents are paying the mortgage plus a profit. Do I need to quote Warren Buffett again?

the only way rents could fall is if the government goes hardball on raising taxes and/or cutting spending on/for the middle class.

I can shake the magic 8 ball but not see an answer here. The singularity is the debt limit fight coming early next year, plus of course what new bullshit the system vends about the expiring tax cuts.

I wouldn't bet against more bullshit though. That's the #1 product in this country now.

18   iwog   1474/1475 = 99% civil   2012 Nov 21, 9:01am  ↑ like (1)   ↓ dislike   quote    

Kevin says

The basic idea that rents set the floor in house prices is fundamentally correct though. I just don't know what a good formula is for determining what that floor will be.

The time to buy was 2008-2009. At least in Northern California, there was nothing like it. The housing boom was still fresh, which meant that most of the foreclosed homes had fresh remodels and current repairs funded by liar loans and HELOCs. Homeowners were dropping like flies and quality tenants were everywhere as long as you didn't hold a foreclosure against them.

Quality has since declined and the last two homes I purchased were nightmares from a renovation standpoint although they were extremely cheap. One is rented to my secretary, another is not rented yet although it will hopefully be ready by January.

19   Bellingham Bill   70/70 = 100% civil   2012 Nov 21, 9:04am  ↑ like   ↓ dislike   quote    

those houses are generally empty for a reason

20   iwog   1474/1475 = 99% civil   2012 Nov 21, 9:07am  ↑ like (1)   ↓ dislike   quote    

Bellingham Bill says

the only way rents could fall is if the government goes hardball on raising taxes and/or cutting spending on/for the middle class.

I can shake the magic 8 ball but not see an answer here. The singularity is the debt limit fight coming early next year, plus of course what new bullshit the system vends about the expiring tax cuts.

I don't think rents CAN fall. Housing starts are barely recovering from depression levels and it will be years before we see new supply. Furthermore most of the over-built areas are hours of commute time away from job centers, so even if they do get converted to rentals, they are extremely dependent on cheap gasoline.

What the cities need are high rise apartments, however Northern California remains mired in rent control and the burbs want no part of multi-unit housing.

Obviously I'm talking my book, but it wouldn't be my book unless I had some pretty good reasons for being here.

21   Kevin     2012 Nov 21, 9:09am  ↑ like (1)   ↓ dislike   quote    

Darrell In Phoenix says

iwog says

The time to buy was 2008-2009.

Only if you ignore the 20-30 million excess empty houses in inventory.

You're arguing that 30%+ of all houses are empty. You are either just making shit up, or are you confusing the term "owner occupied" with "occupied" (hint: non-owner occupied means "rental")

22   SubOink   50/50 = 100% civil   2012 Nov 21, 9:10am  ↑ like (1)   ↓ dislike   quote    

Darrell In Phoenix says

Rents are falling.

Nope they are not. LOOK AROUND.

23   iwog   1474/1475 = 99% civil   2012 Nov 21, 9:15am  ↑ like   ↓ dislike   quote    

Darrell In Phoenix says

Sure they are. They're down almost 3% in LA.... and falling.

Average L.A. apartment rents rise 5 percent to $1,670 monthly -- among highest in nation

http://www.dailynews.com/business/ci_21096560/average-l-apartment-rents-rise-5-percent-1

Rents on the Rise Across Southern California
http://www.nbclosangeles.com/news/local/Rents-on-the-Rise-Across-Southern-California-147394535.html

According to a report released this week by the University of Southern California Lusk Center for Real Estate, rents are on the rise, and they’ll continue to go up until 2013.

Rising rents outpacing home sale prices
http://thehill.com/blogs/on-the-money/1091-housing/266005-rising-rents-outpacing-home-sales-prices-

The top 10 price increases, which ranged from 8.7 to 24.9 percent, included three cities in California — San Jose, Oakland and San Francisco.

24   iwog   1474/1475 = 99% civil   2012 Nov 21, 9:20am  ↑ like (2)   ↓ dislike   quote    

Darrell In Phoenix says

Sorry.

I've seen your old data. All you did was show rents dropped in 2011, not 2012. You have a nasty habit of posting old articles and claiming they represent current news.

25   iwog   1474/1475 = 99% civil   2012 Nov 21, 9:23am  ↑ like (3)   ↓ dislike   quote    

Darrell In Phoenix says

iwog says

I've seen your old data

Wrong again. It's 2012 data.

It's 1st quarter 2012 data you twit comparing rental rates to 1st quarter 2011.

26   iwog   1474/1475 = 99% civil   2012 Nov 21, 9:26am  ↑ like (1)   ↓ dislike   quote    

Darrell In Phoenix says

iwog says

t's 1st quarter 2012 data

You're learning to read. This is good!

Yes but you still don't know how to read. The drop you reported was YoY from Q1 2011. It has no relevance whatsoever to the rental market in 2012, which is on fire. It's totally worthless.

27   EastCoastBubbleBoy     2012 Nov 21, 9:29am  ↑ like   ↓ dislike   quote    

Darrell In Phoenix says

And worse yet(for you anyways), another 35 MILLION housing units have just started to empty as boomers head to the grave.

Not necessarily. Most boomers will leave their homes to their children. Their children will then be faced with a decision.

1) try and sell it
2) try and rent it out
3) move into it
4) do nothing, and let it rot into the ground (or revert to the lender)

So all things being equal, only a fraction of the 35 million houses will become inventory – and even then it will be a process that plays out over decades.

The oldest baby boomers are just now turning 70. The youngest are only 48.
The average life expectancy in the US is 78.2 (75.6 yrs for men, 80.8 yrs for women)

The inventory will not flood the market all at once, and who knows where house prices and inventory levels will be ten or fifteen years from now.

28   Kevin     2012 Nov 21, 9:36am  ↑ like   ↓ dislike   quote    

Darrell In Phoenix says

Kevin says

ou're arguing that 30%+ of all houses are empty. You are either just making shit up, or are you confusing the term "owner occupied" with "occupied" (hint: non-owner occupied means "rental")

Learn math. There are 130million houses in the US... and growing. 20million are empty.

And worse yet(for you anyways), another 35 MILLION housing units have just started to empty as boomers head to the grave.

Ah, right, I was looking at outdated data that said there were about 105M. The CB says 132M.

But your vacancy rate figures are still pure bullshit:

http://www.census.gov/housing/hvs/files/qtr312/q312press.pdf

~3.8M empty rentals
~1.7M empty non-rentals

Retiring baby boomers will sell their homes and move into apartments. Unless they burn the house down or die it will have zero impact on vacancy rates.

29   swebb     2012 Nov 21, 10:14am  ↑ like (4)   ↓ dislike   quote    

iwog says

It's just another one of your fabrications. We know you all too well.

You got me there! I fabricated the definition of speculator on Investopedia to make you look bad.

IWOG, for the love of god, click the "Ignore" link on this idiot. He isn't interested in intelligent debate, seeking truth, or as far as I can tell anything worthwhile. I ignored him and it's fantastic. I only see his posts when a) he is the original poster, b) someone responds to his idiotic posts. People like him detract from / dilute the value of the forums. If we could just get more people to click the ignore link it would make this a better place.

30   iwog   1474/1475 = 99% civil   2012 Nov 21, 10:26am  ↑ like (2)   ↓ dislike   quote    

swebb says

IWOG, for the love of god, click the "Ignore" link on this idiot. He isn't interested in intelligent debate, seeking truth, or as far as I can tell anything worthwhile. I ignored him and it's fantastic. I only see his posts when a) he is the original poster, b) someone responds to his idiotic posts. People like him detract from / dilute the value of the forums. If we could just get more people to click the ignore link it would make this a better place.

Literally LOL here.

What can I say, I'm a sucker for troll bait. Sometimes as in this instance however it's almost worth it.

Sorry Darrell, it's time for you to go. Swebb is right.

31   Fucking White Male   227/228 = 99% civil   2012 Nov 21, 10:35am  ↑ like (1)   ↓ dislike   quote    

Fwiw, I do agree that rents were rising during the past two years.

In Los Angeles, they actually did push too high. This creates all sorts of problems...namely people who don't pay and must be evicted, unauthorized subleasing which creates crowded buildings and increased chance of damage, etc

Rents hit a wall in September and have been declining since. I signed a new lease at the end of October and already regret it. I knew rents were starting to decline but was fearful that there wouldn't be many places available when my lease expired in January. Boy was I ever wrong. Last week, after nearly two years of 100% occupancy, my building advertises four units on Craigslist. And now all sorts of nearby units available, at prices from over two years ago as well.

I'll be VERY surprised if we don't see a 7-10% decline in rents in Los Angeles by the end of 2013.

32   Bigsby     2012 Nov 21, 10:47am  ↑ like   ↓ dislike   quote    

Darrell In Phoenix says

The truth? 20 MILLION empty housing units.

Wow, a 10 million drop since... well, your last made up figure.

33   Bigsby     2012 Nov 21, 11:15am  ↑ like (1)   ↓ dislike   quote    

Darrell In Phoenix says

Hello my realtor friend..... and we know what you realtors are about...... "bigsby". lmao

It's a new construction pimping life for Darrell.

34   Bigsby     2012 Nov 21, 11:46am  ↑ like   ↓ dislike   quote    

Darrell In Phoenix says

Bigsby the realtor and his imaginary contracting business..

Who's claiming to be a contractor? You. And at $60/sqft no less. "Darrell", the garden shed new construction pimp.

35   Bigsby     2012 Nov 21, 11:56am  ↑ like   ↓ dislike   quote    

Darrell In Phoenix says

And realtor bigsby backpedals furiously.

Did you really think we've believed you?

Wow, I'm a man of many talents. First I was apparently a realtor, now according to "Darrell", I've become a contractor. And all based from Kuwait. Long distance construction and home selling indeed. It all sounds nearly as impressive as your nationwide garden shed construction empire.

36   Bigsby     2012 Nov 21, 11:58am  ↑ like   ↓ dislike   quote    

Darrell In Phoenix says

You're no man... that we're certain of.

Oh, Darrell, you've hurt my feelings.

37   Bigsby     2012 Nov 21, 12:03pm  ↑ like   ↓ dislike   quote    

Darrell In Phoenix says

Substantiate your bidding, estimating and construction experience...."bigsby".

Sure... when you can demonstrate where I claimed any.

38   dunnross     2012 Nov 21, 12:05pm  ↑ like (2)   ↓ dislike (1)   quote    

The thing I can't understand is how can Iwog and Roberto the Realtor both claim that investors are going to buy up all the houses in the country to rent them out, and still state that rents are rising in the same sentence. These 2 guys have lied so much, that they are now stepping on their own tongues.

39   Bigsby     2012 Nov 21, 12:06pm  ↑ like   ↓ dislike   quote    

Darrell In Phoenix says

Bigsby says

Sure... when you can demonstrate where I claimed any.

You don't have any idea

How anyone can claim that building costs average $60/sq ft? You're right, I don't.

40   dunnross     2012 Nov 21, 12:28pm  ↑ like (2)   ↓ dislike (2)   quote    

robertoaribas says

Where I come from, being called a liar is serious

Are you from Saudi Arabia? What if I call you a Dog Fucker?

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