patrick.net

This is from the DQ press release this morning...

"The median price paid for a home in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties was $485,000 last month. That was down 0.2 percent from a revised $486,000 in March and up 9.0 percent from $445,000 in April a year ago"....

I couldn't find any press release that revised the median price to 486K for March from the 501K number announced earlier in April. Infact DQ news made a big deal about the median price with this headline on April the 18th....

"Southland passes half million mark"....

The median price gets revised but the sales volume doesnt. How
can that be? That too, such a big revision??? Whats going on?...

Wouldnt such a big difference affect the CA numbers too?

It is my experience that RE agents do have access to the best listings first...which will play an important role in this declining market. I know one agent who has been consistantly buying a house a year and renting them out for a good return.
He is selling several now. He has 4 kids approaching college age and he is a smart man, unloading now.
Many people have pushed for me to get "the license" but
I don thin so Lucy!
Between the sheeple and the slimy cutthroats and the orange haired big earringed smokervoiced bitchy realtwhores out there...
well...I would shrink like the wicked witch of the west into nothingness with only a vapor rising from what used to be a soulful being.
I do however have an avid interest in RE. I follow the market...have an excellent recollection of the numbers, listings and prices....
but I couldn't...
I just couldn't....

WWII,

I may have done some wreckless things in my time here but I have never accused you of being on thread! Just kidding. You bring up a good point though. I had NO IDEA that there were that many blogs in Cali alone! There is such a thing as the "investment letter index" which is kind...... of close. They track bullish/bearish sentiment on everything from the long bond to individual stocks. Now that's not to say the consensus opinion is always right but it at least it gives an idea where sentiment is! The sheer amount of bearish input from all corners of the media and decidedly negative articles may perhaps even be drowning out the blogs?

A realtor friend of mine calls her RE office
'face lift central'
Seemed appropriate.
Maybe they have their face surgically altered to have those idiotic smiles permanently implanted?

@Randy H,

Don't know if you already saw my post in the last thread, but I wanted to know on what data you were basing this statement:

This is propelled by both fundamentals and financial reasons, not the least of which being (in the BA) wage inflation, rent inflation, and job growth.

At best I've only seen evidence that wages & rents are tracking (real) inflation --approx 5-6%/yr. Even that infamous March-April asking rents spike (/) trolls love to trot out is now petering out and falling back to earth. As far as job creation goes, it seems pretty anemic outside RE/construction/mortgage related industries, and those sectors are already reversing course.

Are you going bullish on us, dude?

WW2
I googled housing bubble blog
and , yes, Patrick is still #1!

LILLL,

I don't want you to even worry about! The retention prevention committee has been called up and are on their way. I do ask however that until they arrive to disconnect the phone, unplug the TV and block all your e-mail! I will talk you through this, focus on my voice right now O.K?

OK

How about we call it the
retention prevention intervention
committe?
Sound good?

Dinor,
I just hope that in a few years, we can come back to a blog like this one and chuckle to ourselves. " boy- remember back when buying anything in California SUCKED? ha ha.. good thing things arent like that anymore....

WW2 -

Personally, I dream of Charles H Smith's historically supported Bay area SFH median target: $315,00.00 - now that would be SWEET!

http://www.oftwominds.com/blogmay06/shiller-housing.html

HARM,

"Are you going bullish on us, dude?"

Firstly let's not go off the deep end alright? In regard to the HUGE RENT SPIKE I'd be more focused on WHY rents are likely to raise. If rents are moving up (however slight or much) IMHO that is something of a BULL capitulation! When unlimited upside is no longer the order of the day Mr. Specuvestor sits down and says to himself. "It was never my plan to be "stuck" with this property that long". I don't have the resources to fill this hole month after month. I suppose many have tried to do yet another re-fi and been turned down so they are playing out the only option left. This may even be true where "management" companies are involved.

However, regarding bubbles, Charles H Smith should not be referring to a "hockey-puck ascent to unsustainability", but rather a hockey-stick ascent to susustainability.

Oh well, metaphors can't always make sense...

/
__/ This is a hockey stick graph

( ) This is a hockey puck graph

WWII,

And we shall, and we shall. As far as my personal finances are concerned I know I'll feel a lot better at a neighborhood cook out when people in 2007/2008 ask me how long have I lived there? Then I get to tell them we're still moving in and I just stopped over b/c Mrs. DinOR hasn't unpacked the plates yet. I'll be getting mileage out of the "still moving in" line in 2009 and beyond.

This whole "rent spike" thing seems to be something cooked up by realtors and the like as fodder to pitch to current renters. " If you won't buy, well you'll be priced out or renting too! ha ha! Baloney. Rents will never come close to being the same as buying at this level except the few exotic high rises in SF. The day they even come to being within 20%, that will be when prices on housing has already fallen a considerable amount.

*ALERT TO SURFER X*

My folks back at corporate just sent me an e-mail. PBS is going to be airing a special tonight on "Boomers, finances and why they're screwed!" Now I wouldn't want you to miss that!

If rents are moving up (however slight or much) IMHO that is something of a BULL capitulation!

DinOR, we must do something immediately to prevent end-game bear capitulation! You're the expert on these matters, so you can be in charge. We could call it the "housing bubble blog bear retention prevention intervention committee" (HBBBRPIC for short).

To repeat my earlier point, rising asking prices for rentals does not necessary imply rising rents. If Patrick is reading this, I'd sure love it if he could produce asking volumes to go along with his prices graphs. Volumes have to be greater than 2000, but I have no idea if they've dropped since, say, 2003.

Likewise, consider the drop in median prices is San Mateo (as reported by this realtor's site:

http://www.creeksiderealty.com/bay_area_real_estate_market_newsletter/statistics_graphs/houses.htm

When this is coupled with the dramatic increase in inventory, it implies a drop in the market that is much worse than the drop in median prices alone. In either a rental or housing market that is flooded with inventory, the best houses will be the ones to go first. This implies superior product moving at inferior prices.

Or, I confess, it could imply crazed buyers grabbing the cheapest POS they can find... ;-)

We need to move away from using median statistics (median price, median income, median rent, etc). They are meaningless especially when we try to understand their inter-relationships.

We should understand the situation using:

1. same house price trend
2. same house (or comparable house) rent versus price
3. cost of housing versus income in the same household

Dinor,
Oh boy! I wouldn't want to miss that piece on boomers. Funny that PBS would air something like that since their core programming and audience are boomers anyway. On 2nd thought, maybe that's why they're airing it.
Actually, I thought I'd mention that while at the library last week, I saw this book: http://www.amazon.com/gp/product/0312326408/102-9353934-4868103?v=glance&n=283155
Anyhow, I couldn't help but wonder why you would need to write an entire book on defending boomers. hmmmm...

Dinor,
you should also read some of the rather long-winded reviews of that book. One of them- the longest one is really amusing. did you write that?

The Greater Generation : In Defense of the Baby Boom Legacy (Hardcover)
by Leonard Steinhorn

From Publishers Weekly
Baby boomers have been vilified as noisy, self-centered, childish, elitist and self-indulgent. Steinhorn forcefully and gracefully defends his age cohort against these stereotypes in a paean to the generation that has forever altered the face of American culture. The so-called "greatest generation," he says, imposed a cultural complacency whose worst elements included racism, sexual inequality and anti-Semitism. Boomers rebelled against their parents' values, striving to create an inclusive society that would recognize the contributions of all of its members. Defying and denouncing authority, the baby boomers protested against an unjust war and challenged an unethical political system. Even after the clamor of the 1960s quieted down, boomers refused to tolerate environmental violations, continued to challenge racial and sexual discrimination, rejected religious intolerance and defied racial and sexual taboos. And despite an apparent conservative turn in America, says Steinhorn, boomer values have in fact permeated our society to the point where a younger generation takes them for granted. This powerful book by Steinhorn, a professor at American University's School of Communications, reminds us that boomers continue to provide the methods and the impetus that are moving many young people today to challenge political arrogance, deceit and jingoism.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

OMFG! Someone please locate a barf bag for me... or two.

My source is the CA EDD.

* CA unemployment (overall) has fallen to equal the nat'l average.
* All non-farm classifications but one posted job gains
* Information posted modest declines (1800 jobs) mostly due to publishing and telecoms cutbacks.
* Farm jobs, even when seasonally adjusted, continue to shrink

* Most new jobs were created in Leisure and Hospitality, with half of those in food services.
* Tourism has recovered to pre 9/11 highs, and is on track for a record in 2006.

* Manufacturing gained about 1%; mostly in chemical mfg.

* Professional Business Services posted 21st consecutive month of job growth, mostly in professional, scientific and technical services.

* Unemployment in the BA is FALLING by 16.6% annualized; one of the fastest recovery rates in the country.

Yes, Boomers can take credit for all of the following:

--modern civil rights movement (started in the 1950s --at least)
--womens rights movement (started as far back as 19th century)
--landing a man on the moon (F-- you to WWII vets & Werner Von Braun)
--and end to "political arrogance and deceit" (Yeah, none of that in TODAY's world --especially around Berkeley uber-liberals. All my shrill left-wing activist friends just *love* to hear my opinions on illegal immigration, free ridership and personal responsibility. And they all listen SO patiently.)
--increased sexual promiscuity and accompanying rise/spread of STDs (oh, wait... actually they can take credit for that)

* Most new jobs were created in Leisure and Hospitality, with half of those in food services.

Food service... :-P

There are just SO many free-spirited, altruistic, selfless and generous boomers out there! Take the following, for example:

G.W. Bush
Karl Rove
Rush Limbaugh
Ann Coulter
Ralph Reed
Bill Kristol
Jeff Skilling
Michael & Timothy Rigas
Rob, John, Jim & Alice Walton
David Lereah

HARM,

Don't worry, I'm not turning into a Bull. But remember, I was never a Bear either. I just go by the data. And everything is in motion; nothing is static. Reversion to the mean and closing the affordability gap can and will happen, but it will probably do so with dozens or hundreds of variables, not with only one: nominal home prices.

Don’t worry, I’m not turning into a Bull. But remember, I was never a Bear either. I just go by the data.

I am still a bear, and I go by the feel.

Reversion to the mean and closing the affordability gap can and will happen, but it will probably do so with dozens or hundreds of variables, not with only one: nominal home prices.

I agree. However, the affordability gap may also be closed by building higher-density housing (i.e. smaller condo units) though.

Boomers, the Greater Generation
Er, they mean greater in girth, right?

Where are the good sectors to hide out if we are indeed heading into a Great Depression / Great Stagflation?

Any thoughts on that?

I wonder where the hospitality / food service jobs will go when we head into recession. :-)

I predict a rise in the consumption of ham croissants.

If I were to be cynical, I'd say that a weakening dollar bodes well for the Hospitality & Food Service sector, being that tourism in the US will become very affordable for the rest of the world. Maybe we can all get jobs selling hot dogs on the pedestrian approach to the GGB.

Thanks, hymie --I hope the comb-over wasn't too obvious ;-).

Randy,

When it gets really bad, we can send out kids out to beg.

HARM Wrote:

> @FAB, If I get the license but don’t actually practice
> the trade/join an agency, am I legally obligated to
> represent myself as a buyer’s agent (for commission/
> tax purposes) in my own private transactions?

You don’t have to represent yourself if you have sales or brokers license.

> If so, what if I just get the training but forgo taking the
> license exam? Do you think it’s still worth it?

You will learn more helping a top real estate agent for one day than you will learn studying for a real estate license. Most of the stuff on the real estate exam is stuff you will never use.

Randy,

I was talking to some German friends over the weekend. They are located in the Bavaria region.

It seems that the employment situation in Germany is picking up, one guy is in machine tool business and he says they have increased pay by about 12% last year. German companies are very cautious about taking on new headcounts because it is extremely difficult to lay people off, so unemployment rate still remains high, but those who have a job generally have a higher pay raise. His feeling is, the German machine tool industry is benefiting from the infrastructural investment in China. Germans and Japanese are major beneficiaries in supporting the machine tools and automation lines for the world factory in China. But who is this world factory serving? I believe that the Germans and Japanese are just again serving the US consumers in the end, via China.

Another friend from there also mentioned that Germany will start to implement VAT tax (sales tax?) later this year, and people are generally concerned, because it may hurt the burgeoning German internal demand. The same concern also exists in Japan, which is going to implement its own sales tax very soon. We will see how that works out.

So in a way, I am looking for a big and furious housing crash, but sometimes I also wish for soft landing. Right now it almost seems that Americans are singlehandedly lifting the world consumption, so if our demand dries up too fast, we may send the world into recession that will hurt everyone, except for the very rich.

Hello!
$ucka Clara County inventory continues to climb. 4509 SFR & Condos, compared to the mid-October-2005 peak of ~4350. This according to mlslistings.com. Yes, some $ucka's are still buying; but even more are selling....
Good day all!

SQT,

I think it is because people who read a certain type of blogs already have their mind set up about certain things - they are already going there, the blogs are just giving them a push.

This is because a lurker need to spend more time and effort looking for a blog that suits his spiritual needs (or inquisitive mind). I didn't come to patrick.net because it is recommended on WSJ or Economist. I was a marginal housing bear and coming here makes me a fundamentalist housing bear.

So blog reading is a self-selective process, a particulary type of blog just has a bigger impact on people of the SAME MIND.

OwnerOccupier says:
It seems that the employment situation in Germany is picking up, one guy is in machine tool business and he says they have increased pay by about 12% last year.

Wow. Are you sure? That would be great. In the last couple of years, the raises in Germany were either non-existent or more like 1%-2%. Germany became poorer relatively to other industrialized countries.

Another friend from there also mentioned that Germany will start to implement VAT tax (sales tax?) later this year, and people are generally concerned, because it may hurt the burgeoning German internal demand.

I heard they're actually increasing the existing VAT from 16% to 19% (which is a hike of unprecedented magnitude) in order to support their "big government" policy financially (you know, "take from the workers, give to the slackers").
The last SPIEGEL title read: "Wieviel Steuern braucht der Staat? Die Große Koalition zur Verteilung nicht vorhandenen Geldes". In other words: "How much tax income does the government need? The Great Coalition for distribution of nonexistent money". The article scared me a lot.

I'm losing hope on Germany. But that's just me.