patrick.net

You tell me.

http://www.doctorhousingbubble.com/california-has-nearly-9-years-of-housing-supply-58-county-mls-supply-and-foreclosures/

odds are that prices will fall this year. nobody knows by how much.

only retards are predicting price increases this year, then again retards have been predicting price increases for the last 5 years so that's nothing new.

fewy says

We might get a good rise in housing prices.

Yeah right.

fewy says

The inventory is half of what it used to be last year and it seems like the inventory that comes onto the market is quickly bought up.

That's exactly the reason why we haven't had authentic price discovery yet. All of the folks who would be for sale (as either short sales or reos) are stuck in loan-mod limbo.

If the extend-and-pretend shenanigans ever stop, expect supply to rise and prices to fall again. Of course, they might never stop and we're just going to be stuck in neutral for another decade.

What do I think RE: Bay Area houses?
1. Foreigners pooling capital and buying. Particularly Chinese and corrupt Chinese officials. The Bay Area and Vancouver are popular, and California in general.
2. Foreigners and nerds working in well paid high tech buying so they can attract and please females. Females want to see a "nest", this is their normal behavior.
3. Clueless among 1&2 above who have been here in USA a short time and think it's not unreasonable to pay $700K for a place having no historical reference except falling prices if they have not been here that long. H1B visa guys who have high salaries may not care.
I may have left some people out.

I don't believe so, although flat housing prices with inflation means lower prices over the next few years.

What I am seeing right now (in SF proper) is low inventory and many buyers for anything decent under 600K. Open houses that we have attended are mob scenes, with dozens and dozens of people filing in to look.

Crappy over-priced places sit and then get price reductions, anything in good shape that is not fantasy priced gets multiple offers within a week. We've been outbid twice in the last month and the all cash buyers, whoever they are, are out there in force.

I guess that's the "pent-up demand" at work. I know we've been waiting to buy, and apparently so have a lot of other people. Rents are crazy here and the rental market is tight.

I can only speak for my experience, which is limited to houses in the 400-600K range in the city.

1sfrenter says

I guess that's the "pent-up demand" at work. I know we've been waiting to buy, and apparently so have a lot of other people. Rents are crazy here and the rental market is tight.

Demand seems high only because Supply is so low.

clambo says

Females want to see a "nest", this is their normal behavior.

When you boil just about everything that men do down to it's most basic level - where they live, what they drive, how they dress, where they work, what they eat, etc. - it's almost always to attract and keep a woman. Deep down, we're all cavemen.

gregpfielding says

Deep down, we're all cavemen.

lol. nice one.

RentingForHalfTheCost,

Do you have any new data, this seems to be 3 years old. Since they are using the cure rate from 2009 with NOD from 2010. This website http://bayarearealestatetrends.com/2012/01/24/california-foreclosure-activity-tumbles-in-2011/ states that we had 61,517 NODs filed last quarter. Which is about 20,000 a month. In December we had 37,734 home sales in California. Lets assume inventory didn't change since your article was published at 468,833. So 468,833/(37,734-20,000) gives us 26 months of inventory. But if the inventory number is less than 468k and we get a NOD cure rate higher the zero the months of inventory number will drop fast.

I am beginning to believe that the great crash in the nicer parts of the bay area where people with families would "ideally" love to reside will never happen. I am basing this on my own experiences in visiting a lot of open houses (I have visited over 120 open houses over the past 1.5 years in 3 local cities) in certain parts of the bay area where anything around a million is snapped up with multiple offers (hint, hint - houses in school districts with sky high APIs and in cities with "clueless foreign investors and rich FOB immigrants" as per many threads on patrick.net).
It seems that I need to wait until I am old and gray for there to be a 50% - 65% price drop until I can go shopping. By which time, I may not need a house in the bay area at all. I might need to shop around for retirement homes. So, a lot of $$$ saved for my retirement!

fewy says

RentingForHalfTheCost,

Do you have any new data, this seems to be 3 years old. Since they are using the cure rate from 2009 with NOD from 2010. This website http://bayarearealestatetrends.com/2012/01/24/california-foreclosure-activity-tumbles-in-2011/ states that we had 61,517 NODs filed last quarter. Which is about 20,000 a month. In December we had 37,734 home sales in California. Lets assume inventory didn't change since your article was published at 468,833. So 468,833/(37,734-20,000) gives us 26 months of inventory. But if the inventory number is less than 468k and we get a NOD cure rate higher the zero the months of inventory number will drop fast.

No, nothing yet to reference. Thanks for the updated data. I think these numbers are key to understanding where we are going and it will be interesting to see the next few quarter. The inventory and NOD cure rate could really help us out of this mess for sure. That NOD cure rate will unfortunately come at taxpapers expense you can be sure. ;)

Guys, we'll continue to update that chart as DataQuick releases the data. It'll be posted at http://bayarearealestatetrends.com/

I think "Bay Area mid range" (say up to 600k) is pretty reasonably priced compared to local incomes and rents. I don't expect a lot of additional falls.

On the high end (>600k or for that matter >1MM) I would expect some further falls (10-20%?). Lots of strategic defaults, lack of move-up-buyers, and still a bit high price-to-rent ratios.

drtor says

I think "Bay Area mid range" (say up to 600k) is pretty reasonably priced compared to local incomes and rents. I don't expect a lot of additional falls.

I would disagree. 600k is still basically at a nosebleed level. I say this as someone who makes 6 figures. If using traditional means of measuring affordability, the buyer of a 600k house would need to be pulling in a total of 200k per year and do so consistently. Last time I looked the medians even in the most expensive Bay Area locations is nowhere near that high.

The problem is that due to the bubble, 600k sounds "cheap" to a lot of people simply because they've grown accustomed to outrageous pricing. 600k was way too much during the boom and its still too much now.