patrick.net

DinOR Says:

Personally, all of the research was done in 2003/4/5 so all that is left for me to do is to sit back and watch. Ben Jones does a great job keeping everyone “on task” but I consider my travels through the “epicenter” of the bubble fairly valuable “on site intel” b/c you get to see abandoned sub divisions first hand! I live in the PDX area and yes, (we’re in a bubble too)!

Did you have a chance to read the link I posted on this thread? The Mercury News had a bold-type, screaming front page headline that it's a buyer's market in the Central Valley. (btw, it's not really yet). Interesting to hear about your observations. I like the idea of now taking the tack of sitting back and watching this whole mess play out.

The central valley has only begun to see the beginnings of a “buyers market.” I think the realtors® are calling it a buyers market to scare the last holdouts into buying before “it goes up again.”

Never a better time to buy, right? ;)

http://marinrealestatebubble.blogspot.com/2006/06/where-are-we.html

This morning on KFOG, I heard a radio spot for KB Homes - did anyone else hear it? Haven't come across such an ad on mainstream FM radio before. To paraphrase:

A "young couple" needs to move out of their condo w/ new babies, etc. so they go to a KB development. Because of rumors of a buyer's market, they decide to "take the plunge" and buy. The KB agent gives them a great mtg rate beating the rising mtg rates, incentives, and gets them a great home at a great deal.

Sounded very desperate to me.

Because of rumors of a buyer’s market, they decide to “take the plunge” and buy.

Well, if they can afford it, why not? A home-purchase is more than a financial decision. They better be prepared to be in for a wild ride.

skibum,

I will check out your link!

Mrs. DinOR came up with a name for all of the sub divisions we saw coming down 99E. "Roof Farms" b/c it's all you can see for miles like so many rows of corn! And built so close to the freeway? We then started the debate about could a squirrel go from SAC to Fresno without ever touching the ground?

While in LV my client (gun nut) insisted we "go out to the desert" to make some noise! Well, uh O.K. I'm figuring "hell's half acre" here and we get just past the South Coast and he pulls over and we begin to bake. I'm not complaining mind you, the guy has money and in a twisted way I kind of like the heat. Perhaps something only an Oregonian can appreciate. So were a blastin' away and I ask about all of these "frame only" shells we see all around us and he explains that some days a construction "big wig" comes out to the job site with a clipboard and walks around but assures me many have been in the same state for almost a year. I guess I'd have to say they are "pre-abandoned"? It looks to me that financing has dried up and there they'll sit until they manage to work through the inventory. Many of the billboards (NO, not "those" billboards) tout condos' in the mid 100's!

We then started the debate about could a squirrel go from SAC to Fresno without ever touching the ground?

If squirrels are not all starved to death because house-buyers are no longer feeding them.

DinOR,

I love the "Roof Farms" - it may deserve consideration for the hosing bubble dictionary. The observation of an increasing number of abandoned construction projects seems to be happening much earlier in the cycle than I would have thought. Someone posted earlier about all the abandoned sites in LV, I've read about a few in Boston, too. I would think that with financing secure, land purchased, etc., the financially smart thing to do would be to go ahead and finish the project. I wonder if it's flippers bailing (and probably eating the deposit)?

Just a guess, but a year, year and half ago there wasn't much any where in the LV market avail. for the mid 100's let alone a NEW condo. I emphasize "new" not that it means that much to me but seems to mean everything in LV.

Daughter #1 (and husband to be) just had their offer accepted on a nice older home. About 1,800 sq. ft. w/ all new faux wood floors and much updating for 196K. I can't say I was "sick" about it, after all his folks came up with a sizeable downpayment for for the kids. Who was I to say anything? It had sat for months without an offer and I think they could have got it cheaper but they're happy and I don't see a lot of room for downside other than the opp. cost for the 50K down. Since I didn't write the check it wasn't my turn to talk. I really am trying to be the "perfect" in-law here people!

Peter P,

LOL! Oh you are in rare form today sir!

LOL! Oh you are in rare form today sir!

As opposed to medium-rare?

DinOR,
I don't know the LV market at all, but either way, as long as the usual mantra stays true - they plan to live there a while, they are not financially stretched making a purchase (sounds like it given the in-laws' help), etc. etc. - then sounds okay to me.

BTW, according to:

http://www.benengebreth.org/housingtracker/location/Nevada/LasVegas/

median ASKING price is down in LV from 349K a year ago to 339.5K this week (~2.7%), while inventory is up from 16K to 22K.

skibum,

A couple of months ago I would agonized over just who got stuck with unfinished condos/projects. Not that it's unimportant. It's certainly important to whom ever had to eat it, it's just not important to me! F'd is f'd. I must admit though that I hadn't heard about "derailments" in Boston! And yes, I didn't think this phase would occur so damn early. But in the end this WAS the world's biggest game of musical chairs so as flippers re-invested their "profits" into a bigger better, nicer newer project they and their cash were bound to part company. All that raw lumber just sitting there is ugly and someone here mentioned what will become of all these vacant and un-airconditioned homes after year+ in 120 degree heat? That IS a good question!

skibum,

Oh oh oh, I should have mentioned, the home they are buying is about four blocks from us here in Oregon. The wife and I were just visiting in LV while I did a few client appts. So the kids actually will pay a little over a hundred dollars per sq. ft. but I will say that for all of the updating (much remains to be done). It's just one of those deals where an older home needs a younger couple (and I think I'll leave it at that).

I should have mentioned, the home they are buying is about four blocks from us here in Oregon.

That is great. 2-4 blocks is the optimal distance. :)

So the kids actually will pay a little over a hundred dollars per sq. ft.

I doubt it is possible to get anything built for less than 200/sqft here in the silly valley, land EXcluded.

Whenever Peter P starts in with his food references, I totally lose my focus. On that note: If I was a rich specuvestor, instead of sitting in my cubicle eating a ham sandwich reading patrick.net, I'd be eating at L'Opera in Long Beach, having porcini mushroom & locatelli romano ravioli, with a nice Brunello di Montalcino -- something from the 1999 vintage, perhaps. Or maybe sushi with an Alsatian Gewurztraminer. Mmmmm.

Mmmm, ravioli. I used to work in a restaurant that served great butternut squash ravioli in the autumn. Oh, and the goat cheese calzones were to die for.

My favorite ravioli: oxtail ravioli

Now I’m craving carmelized onions. Yum!

That should not be too difficult to make.

Must plan for a blogluck party!

Much higher inventory with rising prices, albeit rising slower than last year, or even stable prices, is not a "buyers market".

Sure, there's more choice, but what it really is, is a "realtors(TM) freaking out 'cause there's not enough volume to go around" kind of market.

As in all things, the buyers market occurs when the price is near the bottom, when "price/earnings" is no longer insane, a la Warren Buffett. Prices in the 5-7 times median family income range are the target for a buyers market.

Calling it a "buyers market" now is a desperate attempt to sucker those still on the sidelines into taking the plunge, like lemmings. Last man holding the bag is the greatest fool.

Uh, I prefer the McDebors, McMortgage Brokers and McRealtors to take the plunge first, thank-you.

Looking forward to the correction in 2007-2011... ;)

-McDebors
+McDebtors

From Housing Bubble Glossary

Buyer’s Market: When used by a Realt-Whore®, this means a housing market with exploding inventory, plunging sales and sellers that refuse to negotiate on price.

Buyer’s Market: When used by a Realt-Whore®, this means a housing market with exploding inventory, plunging sales and sellers that refuse to negotiate on price.

Should we call it Seller's Non-market instead?

Seller's market: seller has the power
Seller's non-marker: seller does not have the power

How about "Null market": market where neither seller nor buyer have a clear advantage.

How about “Null market”: market where neither seller nor buyer have a clear advantage.

Who has the advantage then? I thought it was a zero sum game. :)

The funniest thing right now about this "buyer's market" is that the ones getting pinched the most on a cash-flow basis are probably the realtors, who need the commission $$ to get paid.

DinOR: sorry about the misread re: OR vs. LV.

RW: the rich specuvestor may be living the fat life, but the FB's probably doing the Maruchan ramen - can you recommend a wine pairing? Perhaps a cab for the "beef" flavor, or maybe a sauvignon blanc for the "shrimp" flavor?

the FB’s probably doing the Maruchan ramen - can you recommend a wine pairing?

Oh, please allow me:

http://www.bumwine.com/

HARM,
LOL. Can you hijack the graphic and change the word "fired" on the guy 2nd from the left to "foreclosed"? I'll admit Night Train is the only one I've had the pleasure of sampling before. Nasty stuff.

Skibum:
Maruchan ramen? Surprisingly, I thought I was the only one who knew about bumwines, but HARM has surprised me. My suggestion is Cisco, because, while it pairs with nothing except perhaps raw sewage or creme of goat tongue, the FB will be feeling no pain after one or two bottles. They can drink themselves lucid and find a temporary escape from the fact that, while their rear end is torn and aching, they can look forward to successive forced entries every single month as their ARM adjusts ever-upwards.

newsfreak,

Yes, Susanville is quite nice and we were surprised at how rugged that stretch of CA is! Also Lakeview, OR looks a lot like the "resort areas" of our youth with an emphasis on family activities like boating, horse shoes and ice cream. The place looks frozen in time. No disgusting displays of wealth at the canoe rental.

I usually do not vent anger about Realtors. To me they will always be sales people trying to make money.

But lately a random sampling of their comments is coming out as stupid, idiotic and clueless. You can find a lot gems on Realty times site.

"Are squashed housing prices preferable to inflation ?"

"Newspapers are scaring people from buying. This is actually a great time to buy".

"Despite the speculation of a RE bubble ...."

Last one is hilarious. I don't think she even realized what she was saying. She is not just denying the speculation in RE. She is saying that some people are speculating that there is speculation in RE. I say, there is a lot of speculation by realtors about speculation of RE bubble.

Why is it hard for realtors of all the people to see that house prices are ... umm ... unaffordable ? Hello ?? Knock, knock. Buyers are not a problem. Sellers are. They are stopping you from earning money by asking unrealistic prices. It's in their own interest for prices to go down. (Of course, as sales people, they don't want the prices to crash, and people to be wary of buying at all. That's not what I am saying.) I have seen very few agents blaming it on sellers - like the one OO mentioned in the last thread.

Take this Mr. Gentry reported in that SJMN article about central valley. He paid 300K for a house in Los Banos in 2003. Now 3 years later, he is whining because no one is "taking the plunge" at his 585K price. Why should Los Banos appreciate that much ? Or appreciate at all ? That is so not commutable from BA, and on top of it, it is one hell of a crappy town. Even Tracy house are not selling for that much any longer.

So who is the problem here ? How can it be a buyer's market when sellers still think they can get away with insane prices ?

When I was a poor college student in San Jose, I used to buy Maruchan Ramen when they were 10 for a dollar -- there must have been 30 different flavors. Maybe five different varieties of Chicken flavor alone -- creamy chicken, regular chicken, spicy chicken, etc. Basically, the different "flavors" were just different colors of little foil packets of ultra-refined salt. I used to just make the stuff and grimace, but I had a neighbor who could make all kinds of things using Top Ramen as a starting point, some of them almost edible.

Peter P -- What's your favorite flavor of Top Ramen? Do you prefer Nissen or Maruchan? Or maybe one of the more obscure brands that can be found in most Japanese markets? Please tell us.

"torn and aching"

"successive forced entries"

DAMN! It took until Friday but I think we have our "post of the week" winner!

Peter P — What’s your favorite flavor of Top Ramen? Do you prefer Nissen or Maruchan? Or maybe one of the more obscure brands that can be found in most Japanese markets? Please tell us.

Nissan Cup Noodle. I prefer imported variants found in Japanese markets. They taste different from those found in Safeway.

There are other brands that I like. But I forgot the names. I will get back to you.

Nissin makes much better tasting ramen. I used up my boyfriend's Maruchans with soy sauce, wine vinegar, and a dab of sesame oil.

Another use is to drip a mixture of peanut butter and rice vinegar. Mix the peanut butter with a bit of hot water and then mix til fairly smooth, then add vinegar to taste.

Look at this ramen page:

http://www.maruwa.com/onlineshop/ramen/ramen.html

NISSIN CHICKEN RAMEN is pretty good with an egg.

MYOJYO also has pretty good noodle.

With any kind of noodle, it is very important not to overcook.

Me too. The American version is okay, but the Asian version is really addictive. They (and a couple cans of tuna packed in oil)really saved me once in Southwest Sichuan where the restaurant food was incredibly terrible.

Shin is pretty good if you like spicy noodles.

DinOR,

Welcome back! So you've pretty much visited all the craziest bits of land speculation outside of Utah, Arizona, and Florida. What do you consider the craziest patch?

I think the bad traffic is partially due to BA vacationers. The last leg of our trip from Tioga Pass to Pleasanton took about twice as long as we expected.

They (and a couple cans of tuna packed in oil)really saved me once in Southwest Sichuan where the restaurant food was incredibly terrible.

Sardine packed in oil is even better. But I will completely skip the soup base.

Do you like spicy food?

they can look forward to successive forced entries every single month as their ARM adjusts ever-upwards.

That's gotta hurt. Reminds me of having to do "manual disimpactions" as an intern.

TBAoNTBA, Yes, that Mercury News article chronicles a parade of idiots. One FB after another. However, I suspect realtors will more and more begin pressuring sellers to lower prices out of self-interest. It's sort of happening already. I think articles like that one are possibly RE Complex sanctioned scare tactics for stubborn sellers. There are also a fair number of anecdotes about realtors either refusing listings from sellers "testing the waters" or at least urging them to be more realistic.

Some examples:

Joyce Ren, SJ realtor: If your home is on the market for more than 60 days, you need to have a reality check and stop living in the past.

or try this from Realty Times:
http://realtytimes.com/rtcpages/20060609_pricingrightjob.htm

or this contradictory gobbledy-gook from a Boston realtor:
I respectfully suggest that sellers postpone launching their property on the market until the fall market which commences promptly after Labor Day Weekend. The opposite applies to buyers...there could be no better time than the present and throughout the summer doldrums to find a real deal with a seriously motivated seller who's property may be lingering on the market! ... if there ever was a time to find a "deal" it would be right now and throughout the summer doldrums if you identify a property that is listed for sale with a truly motivated seller! In addition, capturing the current interest rates is the balancing act that only you can answer. If mortgage rates rise over the next few months your borrowing power may be diminished. During these uncertain economic times, I highly recommend that you focus on new inventory that has been priced attractively and/or properties that have been appropriately reduced! It is very important to note that once September is here you will be dealing with new sellers with a renewed confidence in the height of the fall market!

I prefer Sapporo Ichi Ban ramen, myself.

That's Sapporo Number 1, translated roughly from the Japanese.

The vegetable flavour is alright, fry some pork and add some spring onions, then add only half the pack of salt/MSG.

Or cubed tofu is okay, but that's only if you like tofu.

What is your favorite soup base for (non-instant) ramen noodle? The "white" soup from pork and chicken bone tastes pretty good, although I also like soy sauce soup.