patrick.net

"Home Prices RISE"

http://news.yahoo.com/s/ap/20091027/ap_on_bi_ge/us_home_prices

Third month we are seeing prices rise in the Standard & Poor's/Case-Shiller home price index of 20 major cities. We will continue to view this data and see how it develops.

I see it thusly:
If the leftists are still pleading for that $8K, or $?K, "buyers incentive", then the bottom aint in.
If the news papers put "housing heats up" on the front page, the bottom aint in.
If the unemplyment in a particular locale is still over 10%, the bottom aint in (there).
If the illegal population is not compelled to go home, the bottom aint in.
If welfare Section 8 rentals are not cut, the bottom aint in.

When the incentives are removed (including city and state level incentives), and when the print media is no longer on the REwhore bank-roll, and when more people that want work are working, and when the illegals and their spawn go home, and when welfare Section 8 is cut ... then the market for buying a home in California may very truely be on the level ... dead level ... and just as Doc Nomo says it will be pancake flat for a long, long, looooong time.

On rare occasions, I *do* agree with Bap33.

"I was so ugly as a baby, that my parents had to tie a pork chop around my neck to get the dog to play with me." - Rodney Dangerfield

Yeah pull out all the subsidies & tax credits and let's find out if this is the bottom or not.

this is so hellish, go california go you are HELL

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/10/28/BA621ABOF6.DTL&tsp=1

I’m all for good news, but if a statistically meaningless one month bump in 5 years of data is best result we get from all trillions of BORROWED dollars being dumped into the system, not to mention massive political manipulation of the system, then I’m not that impressed. Somewhere the stimulation has to end because we can’t continue to borrow unprecedented amounts of money forever. What we have done is shift massive unsustainable borrowing from individuals to the government. No country in history has borrowed it’s way to prosperity unless the money was used as an investment in infrastructure, like the US did in the late 1800’s.

I agree with Claire, all the garbage has to shake out first. There will be a bottom, there is always a bottom. Some places may even be there now. But a lot of places aren’t.
--I agree with Bob completely. This is what I've been saying all along. Now one other question, is wanker (I don't capitalize people's names who don't deserve respect) one of those arrogant home owners?

I agree with bob completely. This kind of thing is what I've been saying all along.

Vicente says

On rare occasions, I *do* agree with Bap33.

I second this with some cosmetic corrections:
If the fascists are pushing for that $15K, “ALL buyers" drug shot, then the bottom aint in.
If the news papers put “housing heats up” on the front page, the bottom aint in.
If the REAL unemplyment in California is 20%, the bottom aint in (there).
If the white junk still "owns" exurbs homes rather than going to populate the slams of Detroit, Kansas city etc., the bottom aint in.
If anyone still dares to call the bottom, the bottom aint in.
Finally, if an average American still spends more than 30% of income on housing, the bottom aint in. BTW, these expenditures include all taxes we pay to support housing deductions, credits, housing related bail-outs, government backing of housing lenders and such. Much of these are covered with the "inflation tax".
I think we'll hit the real bottom when our housing expenses will go below 15%. Simply because in healthy economy they need to be lower than expenses for each of the following:

Food
Energy
Education
Health care

But at that level nobody will care about the bottom of housing market, since housing won't be investment, speculation item, hedge against inflation, American dream, etc. It will be just a place we may use for all kind of activities.
Till then all bottom is just a false bottom with all the implications.

youngniceeyes says

I’m all for good news...

Me too, we all are. Falling housing prices - these would be good news.
I would be most happy to news that housing prices fell 60% from their current level.

We are constantly told that unemployment is the "last thing" to improve in an economic recovery.
How can house values go up before people get jobs? Wouldn't real estate have to be the last thing to recover since nobody can get a mortgage without a decent job in the current situation?
In fact won't it take at least a year or two on the job before banks will loan any money to buyers?
How can there be a housing turnaround at all without jobs? It makes no sense.

I’m all for good news...

Right—I'm all for actual good news, but I suspect we won't see a true rebound until credit—and the alleged "economy" that supports—crashes hard. Then, some companies might see the light to build products/services whose value outweighs initial/running costs. All that overpriced junk that's a cost liability is an artifact of the credit bubble—a negative net value and unsupported by fundamentals. How many homes bought in the last 5 years are cost liabilities? Let the fundamentals return and sort out these businesses and their products. I suspect our economy and housing will stabilize at a very different level than the Koolaid years of 2003-5

NAR Economist David Lereah wants you to know that:

A classic "pay no attention to the markets" moment, lmao.

pinnacle says

We are constantly told that unemployment is the “last thing” to improve in an economic recovery.

How can house values go up before people get jobs? Wouldn’t real estate have to be the last thing to recover since nobody can get a mortgage without a decent job in the current situation?

In fact won’t it take at least a year or two on the job before banks will loan any money to buyers?

How can there be a housing turnaround at all without jobs? It makes no sense.

Absolutely agree. But, there is no common sense. Sheeple want to believe what the gubbermint say. It doesnt have to recover, but, it should appear to be in recovery. To get out of this particular recession unemployment should go way down, and people are getting backwards. But again, these are the same people who bought houses at 2005.

The bottom will be here when near the end of the foreclosures on those ARMS. Until then, I plan to stay in my deluxe apartment in the sky!!

today i got an email from CNN "breaking news" saying "-- Economy grows for first time in a year, with GDP rising 3.5 percent in third quarter." ...is this a joke?????????

@Lilsuperstar @EVERYONE

Today i got an email from CNN “breaking news” saying “– Economy grows for first time in a year, with GDP rising 3.5 percent in third quarter.” …is this a joke?????????

No, this is not a joke. The 8% tax credit and cash for clunkers programs are working.... along with the tax breaks Obama laid out in his economic recovery plan. GDP for the past 30 years has been financed with the equity of homeowners. This does not mean that I agree with this method, because I feel the markets should be allowed to reset. We cannot continue to finance GDP with equity. Apparently, the thought is that we have to keep credit flowing..

Obama's economic tax incentives are working, but I disagree with keeping home prices high.

New tax credit
House— About $145 billion for $500 per-worker, $1,000 per-couple tax credits in 2009 and 2010. For the last half of 2009, workers could expect to see about $20 a week less withheld from their paychecks starting around June. Millions of Americans who don’t make enough money to pay federal income taxes could file returns next year and receive checks. Individuals making more than $75,000 and couples making more than $150,000 would receive reduced amounts.
Senate — The credit would phase out at incomes of $70,000 for individuals and couples making more than $140,000 and phase out more quickly, reducing the cost to $140 billion.
Conference- Tax Credit reduced to $400 per worker and $800 per couple in 2009 and 2010 and phaseout begins at $75,000 for individuals and $150,000 for joint filers. Note retirees with no wages get nothing.[27]

Alternative minimum tax
House — No provision.
Senate — About $70 billion to prevent 24 million taxpayers from paying the alternative minimum tax in 2009. The tax was designed to make sure wealthy taxpayers can’t use credits and deductions to avoid paying any taxes or paying at a far lower rate than would otherwise be possible. But it was never indexed to inflation, so critics now contend it taxes people it was not intended to. Congress addresses it each year, usually in the fall.
Conference - Includes a one year increase in AMT floor to $70,950 for joint filers for 2009.[27]

Expanded child credit
House — $18.3 billion to give greater access to the $1,000 per-child tax credit for low income workers in 2009 and 2010. Under current law, workers must make at least $12,550 to receive any portion of the credit. The change eliminates the floor, meaning more workers who pay no federal income taxes could receive checks.
Senate — Sets a new income threshold of $8,100 to receive any portion of the credit, reducing the cost to $7.5 billion.
Conference - The income floor for refunds was set at $3,000 for 2009 & 2010.[28]
Expanded earned income tax credit
House — $4.7 billion to increase the earned income tax credit — which provides money to low income workers — for families with at least three children.
Senate — Same.

Expanded college credit
House — $13.7 billion to provide a $2,500 expanded tax credit for college tuition and related expenses for 2009 and 2010. The credit is phased out for couples making more than $160,000.
Senate — Reduces the amount that can be refunded to low-income families that pay no income taxes, lowering the cost to $13 billion.

Homebuyer credit
House — $2.6 billion to repeal a requirement that a $7,500 first-time homebuyer tax credit be paid back over time for homes purchased from Jan. 1 to July 1, unless the home is sold within three years. The credit is phased out for couples making more than $150,000.
Senate — Doubles the credit to $15,000 for homes purchased for a year after the bill takes effect, increasing the cost to $35.5 billion.
Conference - $8,000 credit for all homes bought between 1/1/2009 and 12/1/2009 and repayment provision repealed for homes purchased in 2009 and held more than three years.[28]
Home energy credit
House — $4.3 billion to provide an expanded credit to homeowners who make their homes more energy-efficient in 2009 and 2010. Homeowners could recoup 30 percent of the cost up to $1,500 of numerous projects, such as installing energy-efficient windows, doors, furnaces and air conditioners.
Senate — Same.
Conference - Same;
Unemployment
House — No similar provision.
Senate — $4.7 billion to exclude from taxation the first $2,400 a person receives in unemployment compensation benefits in 2009.
Conference—Same as Senate
Bonus depreciation
House — $5 billion to extend a provision allowing businesses buying equipment such as computers to speed up its depreciation through 2009.
Senate — Similar.

Money losing companies
House — $15 billion to allow companies to use current losses to offset profits made in the previous five years, instead of two, making them eligible for tax refunds.
Senate — Allows companies to use more of their losses to offset previous profits, increasing the cost to $19.5 billion.
Conference - Limits the carry-back to small companies, revenue under $5 million [29]

Government contractors
House — Repeal a law that takes effect in 2011, requiring government agencies to withhold three percent of payments to contractors to help ensure they pay their tax bills. Repealing the law would cost $11 billion over 10 years, in part because the government could not earn interest by holding the money throughout the year.
Senate — Delays the law from taking effect until 2012, reducing the cost to $291 million.
Energy production
House — $13 billion to extend tax credits for renewable energy production.
Senate — Same.
Conference - Extension is to 2014.

Repeal bank credit
House — Repeal a Treasury provision that allowed firms that buy money-losing banks to use more of the losses as tax credits to offset the profits of the merged banks for tax purposes. The change would increase taxes on the merged banks by $7 billion over 10 years.
Senate — Same.
Bonds
House — $36 billion to subsidize locally issued bonds for school construction, teacher training, economic development and infrastructure improvements.
Senate — $22.8 billion to subsidize locally issued bonds for school construction, industrial development and infrastructure improvements.

Auto sales
House — No similar provision.
Senate — $11 billion to make interest payments on most auto loans and sales tax on cars deductible.
Conference - $2 billion for deduction of sales tax, not interest payments phased out for incomes above $250,000.[30]

lilsuperstar16 says

today i got an email from CNN “breaking news” saying “– Economy grows for first time in a year, with GDP rising 3.5 percent in third quarter.” …is this a joke?????????

CNN just reports it. It is our beloved govt. who is reporting that. Fairly easy to figure it out.

@dadab

today i got an email from CNN “breaking news” saying “– Economy grows for first time in a year, with GDP rising 3.5 percent in third quarter.” …is this a joke?????????

CNN just reports it. It is our beloved govt. who is reporting that. Fairly easy to figure it out.

GIt is silly to make statements that this is conspiracy, GDP rose for the first time in a while. Economists all over the world have come up with these numbers. It does not indicate the bottom of the market slides because if people dont have wage paying jobs then they cannot buy 400K plots of dirt. We have 3 years to go before markets return to normal.

I'm just reporting the facts from the Case-Shiller Home price Index. I don't write the numbers they do. It seems as if this site only wants to report Case-Shiller Home Price Index numbers if they work with the theory that the bottom won't be reached for years to come. Why not report all the information and let the chips fall where they may?

@ 4PLY
Please keep us posted on your house hunt~~~I'd love to see the 3/2 house available in Sierra Madre for $200K.

GDP went up because 2 of the most influential measures it relies on, were heavily stimulated by government deficit spending.

If I am deeply in trouble, but run up all my credit cards to keep up appearances, while having furlough/salary-reduction and possible layoffs looming, you would say I was being extremely irresponsible. You would say this "false wealth" was not based on productive reality, it was illusion and there would be a reckoning.

Why anyone thinks this will end differently for USA I dunno. We seem to have lots of fools who think the horse will learn to sing.

GDP, has a different meaning these days vs say 10-15 years ago. The index is outdated and disconnected to OUR standard of living.

"is a basic measure of a country's economic performance and is the market value of all final goods and services made within the borders of a country in a year. It is a fundamental measurement of production and is very often positively correlated with the standard of living"

http://en.wikipedia.org/wiki/GDP

Our nation exported the manufacturing and other functions outside the borders which increased the standard of living of other nations GDP. We may report higher sales of Ipods, but they are engineered / manufactured by far more workers outside our borders than inside. As such the benefit increased overseas standard of living vs declined internally to our borders. A far cry from prior decades.

@willywanker

I reccomend that you check pre-2000 prices before you start believing home prices are not going to recess along with our economy. If you look at the below you will notice that homes were well below 300K prior to the bubble that began early in 2000. If I were to simply continue the curve without using any math I would say homes right now in sierra madre should range between 400-500K yet they still hover above 600K.

We must not be so eager to jump into a house right now, $8,000 is not a lot of money when compared to a 300K depreciation in the value of our properties.

@Wankster

Just so you dont think I am wanking your chain. See below for Pasadena.

@Wankster

I understand how low income dwellers like yourself wouldnt see how you could one day afford to live in Sierra Madre. I mean, seeing the below charts I dont ever know how I could afford 300k.

What the Fed's Worried About THE U.S. HOUSING BUBBLE ISN'T GETTING ANY SMALLER....
By Anna Bernasek
Fortune/ CNN Money, October 11, 1999
http://money.cnn.com/magazines/fortune/fortune_archive/1999/10/11/267016/index.htm

Let's take a closer look at the house-buying mania. Part of the reason for the boom may be a last-minute rush to buy homes ahead of further rises in rates, but there's more than that going on here. Competition among lenders has changed the market, and the result is that long-term mortgage rates may play a less important role than they used to. Lenders now offer adjustable-rate mortgages, for example, determined more by a bank's short-term cost of funds, and buyers are snapping them up. The mortgage-approval process has become faster and easier because of computerization and the Internet. Then there's a whole new group of homebuyers, in part driven by the federal government's aim to increase the stock of affordable housing. Those who once only dreamed of owning their own home are today being courted by mortgage lenders that require lower down payments and no credit history. According to Fannie Mae's chief economist, David Berson, at least as important as these changes in the mortgage market is consistently high consumer confidence bolstered by growing employment. "Without that," he says, "there would be no housing boom."

Here is a zinger! from 1980 to 1995, prices were 'stagnant at best'...

"But there is a boom, and it's a big one. Suddenly, buying a home has become a great investment--and that's not true just in coastal or Sunbelt hot spots, it's true even in places like suburban Detroit. In 90% of all U.S. metro areas, in fact, real house prices are rising an average of 3% a year. After a 15-year period from 1980 to 1995, when home prices were stagnant at best, any real gains are a major achievement. In some centers, such as New York City, the San Francisco Bay Area, and Los Angeles, where supply can't hope to keep up with demand and demand is driven by phenomenal stock market wealth, real price increases are more in the magnitude of 20% a year. With prices accelerating, homebuyers have come to expect big gains when they sell and are willing to saddle themselves with higher mortgage payments."

4X says

@Wankster
I understand how low income dwellers like yourself wouldnt see how you could one day afford to live in Sierra Madre. I mean, seeing the below charts I dont ever know how I could afford 300k.

4PLY, I would only look at 3 bedroom 2 bath homes for use as servant's quarters. I would never live in anything as tiny as that. Besides, Sierra Madre is an armpit of smog. For me the only thing that exists in Los Angeles County is the West Side. And I mean NOTHING east of La Cienega and south of Sunset. Pasadena (CERTAIN areas ONLY), San Marino and La Canada Flintridge are the only areas of the San Gabriel valley that are acceptable. Sierra Madre is stricly pedestrian. I'm sure YOU'D fit right in.

@WinkyDinkyDoodle

I would only look at 3 bedroom 2 bath homes for use as servant’s quarters.

It has nothing to do with the size of the place you live in and everything to do with location. Sierra Madre has a small town feel with many community events.

@ 4PLY Brentwood has a 'small time feel' as well (without the smog). You forget that SMOG gets trapped in the San Gabriel valley and shrouds everything in a dirty brown haze. I can't imagine how anyone could live with the smog.

What type of 'community events' are held in Sierra Smogre? Besides 'smog alerts' I mean.

The foreclosure rate in the La Canada-Flintridge-La Crescenta area is up about 800
percent year over year yet the prices remain very high.
I live a few blocks from the Sierra Madre border and the smog is not any worse here than any other area.
There are some houses for sale in Sierra Madre right now for under 400,000 so I don't know how accurate that chart is.
I looked at a condo there a few weeks ago and they were trying to get 249,000. It was not a bad place but I think it will be coming down in price soon.

WillyWanker says

4PLY, I would only look at 3 bedroom 2 bath homes for use as servant’s quarters.

Well it's good to know where you are coming from. Thanks for deigning to speak with the peasants.

The Fannie Mae figure, does that default rate include bad loans they've purchased from other firms (and now have on their books?) or simply loans that they have underwritten between the tail end of '07 and today.

Keep in mind their share of the mortgage market has increasing, so the increase in risk of default should increase as well; given that they are one of the few who extend credit to "marginal" borrowers in today's lending environment.

When things were going gangbusters in the first part of the decade, Fannie Mae was an afterthought. After all why put down 3.5% when you can take out a 120% LTV no money down loan wiht no proof of assets?

Seriously though a default rate of 4% isn't horrible; it's the rate of acceleration of default that's scary.

@Wankoff

@ 4PLY Brentwood has a ’small time feel’ as well (without the smog). You forget that SMOG gets trapped in the San Gabriel valley and shrouds everything in a dirty brown haze. I can’t imagine how anyone could live with the smog. What type of ‘community events’ are held in Sierra Smogre? Besides ’smog alerts’ I mean.

Its a small town with 177 events each year, that our community can enjoy. The area is very walkable, with hiking next door...plus we have old town in Pasadena to enjoy. Ohh...I almost forgot, unlike Brentwood we dont have to worry about our next career move since we have all of LA county in which we can job search. Should we want to start a business, we have the largest market in the world that we can sell to.

2/19/10 Wine Tasting 2010 Fundraiser Wine Tasting Library
12/10/09 Barks and Books! Children's Event Library
11/19/09 Third Thursday Book Club, 11-19-09 Book Club Library
11/12/09 Barks and Books is Back! Children's Event Library
11/7/09 Teen Advisory Board Meeting, 11-07-09 Teen Event Library
11/5/09 Planning Commission Meeting Cancelled, 11-05-09 Commission Meeting Development Services
11/5/09 Coordinating Council, 11-05-09 Community Meeting Community Services
11/4/09 SMTV3 Committee Meeting, 11-04-09 Committee Meeting Community Services
10/30/09 Halloween Happenings 2009 Children's Event Community Services
10/28/09 Library Board of Trustees Meeting, 10-28-09 Commission Meeting Library
10/28/09 Farmers Market 10-28-09 Community Event Community Services
10/27/09 City Council Meeting, 10-27-09 City Council Meeting City Council
10/22/09 UUT Oversight Committee Agenda, 10-22-09 Committee Meeting Administrative Services
10/21/09 Preschool Storyhour, Wednesday Evenings Children's Event Library
10/21/09 Tree Commission Meeting, 10-21-09 Commission Meeting Public Works
10/20/09 Canyon Zone Committee Meeting, 10-20-09 Committee Meeting Development Services
10/19/09 Preschool Storyhour, Monday Mornings Children's Event Library
10/19/09 to 10/24/09 Bargain Book Table Sale 10-19 to 10-24-09 Booksale Library
10/19/09 Community Services Commission Meeting, 10-19-09 Commission Meeting Community Services
10/16/09 Living with Wildlife, 10-16-09 Community Meeting Police Department
10/15/09 Third Thursday Book Club, 10-15-09 Book Club Library
10/15/09 Planning Commission Meeting, 10-15-09 Commission Meeting Development Services
10/14/09 Community Mudslide Meeting at City Hall ,10-14-09 Community Meeting Community Services
10/14/09 Strategic Planning Retreat-Cancelled Community Meeting City Council
10/13/09 City Council Meeting, 10-13-09 City Council Meeting City Council
10/10/09 Teen Advisory Board Meeting, 10-10-09 Teen Event Library
10/10/09 to 11/21/09 In-N-Out Reading Program comes to the Library Children's Event Library
10/8/09 Barks and Books is Back! Library
10/7/09 SMTV3 Committee Meeting, 10-07-09 Committee Meeting Community Services
10/6/09 City Council Special Meeting, 10-06-09 City Council Meeting

@Wankmydoodle

Here is what you get in Brentwood...enjoy your cornfest.

The Brentwood "Cornfest" occurs one weekend in July each year, culminating in a concert. Past performers include Eddie Money, Eric Burdon and The Fixx.
Numerous local farms operate produce stands or offer "U-Pick" opportunities.
A farmer's market is held on First Street in downtown Brentwood on Saturday mornings during the summer.

@ 4PLY
Wow, you mean you can ACTUALLY go to a CITY COUNCIL SPECIAL MEETING in Sierra SMOGRE? What a BARN-BURNER! *yuck yuck yuck*

http://finance.yahoo.com/news/October-home-sales-rise-101-apf-3980633502.html?x=0&sec=topStories&pos=1&asset=&ccode=

October Sales RISE 10.1%. Largest increase in 2 1/2 years.

The median sales price was $173,100, down 7.1 percent from a year earlier and off 1.6 percent from September.

Well here's a large chunk of that 10.1% spike.

http://miami.craigslist.org/search/rea?query=owner+finance&catAbbreviation=rea&minAsk=min&maxAsk=150000&bedrooms=3

the banks release some inventory, every three months or so, and cash investors buy them up as quick, as they hit the market.

here's a search with out the keyword "owner financing"

http://miami.craigslist.org/search/rea?query=&catAbbreviation=rea&minAsk=min&maxAsk=150000&bedrooms=3

It's not that I am looking for anything, I use 150K as a cap, to gauge what is going for 120K to 150K. It's gotten better over the year, but IMO, it has a way to go yet. There's still to many houses out there that belongs in the 120-150K range that is still in the high 190s to mid 200's.

These houses almost every single one I've inquired on, has already been purchased by a private equity firm trying to flip it for a big profit than what they paid the banks.

It's still a cooked books racket, they might as well claim sales are up 50%, but that isn't moving real inventory that I am actually interested in.

Those still sit unsold.

If sales are up why were mortgage applications down 12 percent in October?
It must be cash buyers who think they will be able to rent these houses out, but the rental market keeps slumping and jobs keep disappearing in the same areas with high sales turnover.
Who will want to rent there is there are no jobs?
Also I keep getting notices of "back on the market" homes that were counted as sales in the
previous statistics so a lot of these deals are falling through and being sold again.

pinnacle says

If sales are up why were mortgage applications down 12 percent in October?

It must be cash buyers who think they will be able to rent these houses out, but the rental market keeps slumping and jobs keep disappearing in the same areas with high sales turnover.

Who will want to rent there is there are no jobs?

Also I keep getting notices of “back on the market” homes that were counted as sales in the

previous statistics so a lot of these deals are falling through and being sold again.

Yep. My rent dropped 8% this year. Couldn't be happier...and slam dunk on that mortgage applications point :)

knewbetter says

I’ve been listening to people bitch about buying a house for over 15 years. You can always find a reason not to buy one. Even it they break the affordability secret code, now its because they don’t want to fix anything, or they may have to move, or now’s not a good time, or we need some more money to pay down the debt, or its just a hassle.
Whatever. Knowing what it costs to build a house I wouldn’t own a 1000sqft ranch for $500,000. But I wouldn’t expect prices to drop 70% in the most desirable markets in the U.S.

What about the 50% decrease in Japans real estate markets over the past 15 years?...this is evidence that markets can and will adjust.

WillyWanker says

@ 4PLY
Wow, you mean you can ACTUALLY go to a CITY COUNCIL SPECIAL MEETING in Sierra SMOGRE? What a BARN-BURNER! *yuck yuck yuck*

Stupidity seems to be your favorite color. Lets end our debate here.

4PLY, How's that house hunting going with your (modest) budget? :P

Did you look at the yoy DQ price jump for Sierra Smogre??? UP 26.5%!!! Gotta love the numbers. Perhaps you might want to try out La Puente instead.

http://www.dqnews.com/Charts/Monthly-Charts/LA-Times-Charts/ZIPLAT.aspx

Some of that wonderful air over Sierra Smogre. Air you can sink your teeth into. :P