patrick.net

This is the third time Wanker is planting one of these price-cheerleading stories in less than a week. What is up with that?

Newsflash: Prices almost always go up from April to May, because May is the peak of the buying season, every year . But they have not risen when seasonally adjusted (year-over-year).

Here is the debunk:

http://www.calculatedriskblog.com/2009/07/case-shiller-prices-fall-in-may.html

'Planting'? Thanks for sharing, justmoi.

Doesn't this also have the inherent flaw that when homes in higher priced markets finally start selling it skews home prices upward.

I'm a little surprised it isn't up more than that. The gov't is throwing everything at this and it can only manage 0.5 increase.

Doesn't this just mean that some higher priced houses are being sold cheap?
If the "price increases" are not applied to comparable homes how does indicate anything?
When they put out these numbers they never give any details on what types of homes or areas are being compared to the previous months sales.
All of these sales are only locking in lower property taxes for years to come.
Riverside County is now lowering the tax valuations on thousands of properties so
the general economic situation will only get worse with reduced revenues.
Riverside County alone has lost about 250,000 jobs so there is not likely to be much
price increase there for a really long time.

drfelle says

justme says

This is the third time Wanker is planting one of these price-cheerleading stories in less than a week. What is up with that?

I’m not saying I’m onboard with his optimism yet. However, it’s just a matter of time before Wanker is going to be able to say, “see, I told you so”.

But I'm not really an optimist. Like FOX news, I report and you decide.

Still, I think that positive news is being ignored by Patrick.net. Just like those who stuck their heads in the sand and denied the existence of the bubble there are many people here who don't want to see the possibility that the market doldrums might, just might (mind you), be lifting.

camping says

Doesn’t this also have the inherent flaw that when homes in higher priced markets finally start selling it skews home prices upward.
I’m a little surprised it isn’t up more than that. The gov’t is throwing everything at this and it can only manage 0.5 increase.

Raising the sales price, however nominally will have an effect on all levels of housing in an area. The entry level houses will have a bump in price because more 'higher priced' homes are selling, even at bargain prices. The drop in lower priced homes due to the Sub~prime crisis brought down the price per square foot and the median prices all around them. As more expensive homes are sold they will begin to raise the price of entry level 'bargain' houses. It's just inevitable.

And the government is probably not finished throwing everything it can at the housing problem. Think Stimulus Package 2.0 Once the $8K credit is gone, I would not doubt that it will be replaced by one for $15K. Many of you voted for 'hope and change' and that may very well be what you will get.

pinnacle says

Doesn’t this just mean that some higher priced houses are being sold cheap?

If the “price increases” are not applied to comparable homes how does indicate anything?

When they put out these numbers they never give any details on what types of homes or areas are being compared to the previous months sales.

All of these sales are only locking in lower property taxes for years to come.

Riverside County is now lowering the tax valuations on thousands of properties so

the general economic situation will only get worse with reduced revenues.

Riverside County alone has lost about 250,000 jobs so there is not likely to be much

price increase there for a really long time.

Counties need to start living within their means. If it means no more hand~outs and freebies, so be it. Responsible homeowners learn to live within their means. Now that property tax revenues are down, is a good time for the Counties to find out what can be cut out and what is needed for survival. I don't have a problem with that.

drfelle says

WillyWanker says

there are many people here who don’t want to see the possibility that the market doldrums might, just might (mind you), be lifting.

As things recover you will see less people hanging out talking about the crash. Heck, there are a lot of members I haven’t seen for awhile; I think maybe they got into the market ; ) The ones that stay here and continue to post about the crash (even though it’s recovering) will probably never dive into the market anyways. Prices will never be low enough for them.

I, too, suspect that some people here are destined to be renters forever.

The Standard & Poor’s/Case-Shiller home price index of 20 major cities rose 0.5 percent from April, but was still 17.1 percent below May a year ago.

0.5% up from April and 17.1% down from lasy year May. So much positiveness!!!!!!

Someone on another thread said that "psychology is everything" at the height of the bubble there was a lot of truth in that statement. There is no doubt that the bubble was fueled and filled by hot air exhausting from mouths of the RE industry and the media infecting the sheeple who then infected each other. After the bursting of the bubble psychology has less resonance but is still a factor. After all except for a very small number (relatively speaking) of people who have been not so patiently waiting for prices to return to a level where buying makes economic sense and or first time buyers pretty much everyone else desires stabilization and increases in housing prices. Thus the spin on every news story that can possibly be spun in a positive way is stilted toward stabilization and or increasing prices. That said, it does appear that pace of the decline in most of the country has slowed and in some cases a plateau may be in sight. Personally, I believe that at the edge of this plateau is another cliff which will drop down to the valley floor which is wide and flat. Its good to remember tha tthe country is made up of a vast number of different real estate markets of which most of the people on this forum really only care about what happens in the one they are interested in buying in. If I was living in the Central Valley as opposed to the North Bay I might have already bought a house.

WillyWanker says

Raising the sales price, however nominally will have an effect on all levels of housing in an area. The entry level houses will have a bump in price because more ‘higher priced’ homes are selling, even at bargain prices.

I don't have a problem someone makes his case based on some solid trend. But it seems you are jumping too fast based on 0.5% month-to-month increase (and guess what, it is 17% down from last year).

WillyWanker says

But I’m not really an optimist. Like FOX news, I report and you decide.

And your this post demonstrates perfectly where you stand.

P2D2 says

WillyWanker says

But I’m not really an optimist. Like FOX news, I report and you decide.

And your this post demonstrates perfectly where you stand.

It does? I had no idea I was modern~day Kirkegaard. But, thank~you.

WillyWanker says

I, too, suspect that some people here are destined to be renters forever.

As a matter of fact I would like very much to be able to be a renter forever.
However, if being a renter turns out to be MUCH more expensive that being home debtors, I will need to buy. Hate to even think about it, but market rules.
At any rate, prices today are so high that they support building more even when there is a huge inventory of uninhabited homes. As long as the prices are as high the inventory will keep growing. This is a perfect condition for next crash. We really have an alternative: either housing prices crash or the whole economy burdened by mis-allocation of resources will crash. All these stimulusa do one and only one thing: they support mis-allocation of resources.

TenPoundBass :

Your brother should put the 10k offer in, then spend his weekends tearing the house down and filling the pool if it goes through. Making it a double lot would be cool!

The usual summer uptick in prices. Nothing to write home about.

Long run, I think it’s safe to assume that real estate prices have *much* farther to fall, probably to early 1990s levels. There’s still a large inventory of bank foreclosures that has yet to hit the market. Banks that hold these foreclosures will soon need to raise more capital, particularly as they find the need to roll over their own debt. They've been doing this slowly so as not to reduce home prices. How long this is sustainable is an interesting question.

In addition, there’s a just a plain old-fashioned glut. In Houston, condominium projects whose money was obtained prior to the crash are still going up. Houston had a housing glut *before* the crash. It’s just going to get worse once all the new condo projects (necessarily overpriced to cover costs) are created for their now nonexistent customers who fear losing their jobs. One large, recently completed luxury high-rise near Kirby street has hundreds of units. As of a few weeks ago, only 7 were inhabited.

So WillyWanker, when your bipolar meds kick in, I suggest you take a long, sober look at the real numbers and what’s coming down the pike, particularly at larger macroeconomic factors (Bank holdings of derivatives to the tune of $200 trillion in notional value, oil supply declines over the next decade, the coming national debt and our inevitable inability to finance it through bond sales, etc.)

Money isn’t magic and it's not something that's unaffected by the grungy details of the business or physical world. That kind of dimwitted MBA magical thinking is what caused our economic problems in the first place.

Optimism is not yet warranted.

Sorry to be Mr. Cold-water-of-reality-man, but there it is.

I agree that counties should live "within there means" but the fact that are actually lowering property tax
assessments seems to be pretty strong proof that they do not expect a significant rebound in housing prices. With Proposition 13 limiting increases on assessments going forward this indicates that even the
government knows there will be little growth in home values for many years to come.

WillyWanker says

It does? I had no idea I was modern~day Kirkegaard. But, thank~you.

LOL! I think you are overestimating yourself by comparing with Kirkegaard. I have a better and suitable label for you - cheerleader.

Please thank me for one more time.

ian807 says

...I suggest you take a long, sober look at the real numbers and what’s coming down the pike, particularly at larger macroeconomic factors (Bank holdings of derivatives to the tune of $200 trillion in notional value, oil supply declines over the next decade, the coming national debt and our inevitable inability to finance it through bond sales, etc.)

Oil supply declines and not being able to finance our debt through bond sales are highly inflationary. When you talk about going back to 1990 levels are you talking about inflation adjusted numbers?

michaelsch says

WillyWanker says

I, too, suspect that some people here are destined to be renters forever.

As a matter of fact I would like very much to be able to be a renter forever.

However, if being a renter turns out to be MUCH more expensive that being home debtors, I will need to buy. Hate to even think about it, but market rules.

At any rate, prices today are so high that they support building more even when there is a huge inventory of uninhabited homes. As long as the prices are as high the inventory will keep growing. This is a perfect condition for next crash. We really have an alternative: either housing prices crash or the whole economy burdened by mis-allocation of resources will crash. All these stimulusa do one and only one thing: they support mis-allocation of resources.

Not me. I have an intrinsic need to be able to control the material of the flooring in a house. And all the finishes. I don't like living in someone else's vision of decor and lifestyle (I'm still in my Rancho Mirage rental) . I've been renting for years now and I must say: I hate it. I couldn't find the right house at the right price. Even though rentals here have always been a lot lower than elsewhere in Southern California (rents averaged @ $1.00 a square foot and are a bit less than that now) I couldn't find the size of house @ 4,000 square feet in the style I prefer (modern architectural with minimalist fixtures and design). All that was available out here at the time were ersatz Mediterranean and phony Tuscan villas with everything I hate: wrong colors, textures, finishes and the most pedestrian and vulgar of styles.

Besides, I have thousands of books, so I, therefore, need a library and collect modern and contemporary art~work so I need a lot of wall space for my collection.

Many people are fine with renting all their lives. Renting for me has just been a means to an end. Nothing more.

P2D2 says

WillyWanker says

It does? I had no idea I was modern~day Kirkegaard. But, thank~you.

LOL! I think you are overestimating yourself by comparing with Kirkegaard. I have a better and suitable label for you - cheerleader.
Please thank me for one more time.

'...overestimating yourself by comparing with Kirkegaard.'??? 'Please thank me for one more time.'??? What does that mean? I assumed I was corresponding with someone who knew how to read and write in English. My mistake. But thanks for playing.

P.S.
Where are you writing from? Thailand? If so, Sawasdee~krup!

WillyWanker says

‘…overestimating yourself by comparing with Kirkegaard.’??? ‘Please thank me for one more time.’??? What does that mean? I assumed I was corresponding with someone who knew how to read and write in English. My mistake. But thanks for playing.

Aha! Now it is coming from a person posted this one - "just like those who ...... are many people here who don’t want to see ..."

What was that? Freight-train English? :)

You don't have much of an argument, do you?

interpretame says

EVERY statistic & index in the U.S. is currently COOKED, MASSAGED and TWISTED in order to get them to reflect the ‘right’ numbers.

I think media got bored with bad news. So even with microscopic uptick that lasts only microsecond, media starts jumping "it is stabilizing, it is positive".

The " improvement" is very small and only with enormous manipulation and infusions of money
to keep interests rates artificially low.
Last week a local television report on California foreclosures
described how 70 percent of homes in the foreclosure process have been halted after sending out the 21 day notification of sale.
All of these homes could be dumped on the market at any time without any additional delay. The people on the show who were with various foreclosure assistance agencies were all very concerned with this pile of foreclosures being parked on the edge of a cliff.
I don't hear this on any national news media but some of the local stations are actually providing a lot more
significant information and none of it sounds positive.