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There is no real estate bubble !


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2006 Sep 6, 3:39pm   13,487 views  160 comments

by StuckInBA   ➕follow (0)   💰tip   ignore  

tombstone

I now agree with the housing bulls. There is no housing bubble.

The bubble is no longer "is", it is now "was".

Yes, I think it's time to officially declare that there is no longer a housing bubble in USA. There was one, whose size, implications and aftermath are the only remaining questions. The MSM has jumped on the bandwagon. The bulls (NAR, CAR and their mouthpieces) have no clue as to how to describe the situation.

The depth and speed of the unwinding process seems to have surprised everyone. Take a look at the DQ charts for Bay Area.

http://www.dqnews.com/ZIPSJMN.shtm

San Mateo and Santa Cruz have -ve YOY gains for the median. Santa Clara is holding to a 0.1% gain. The price per SQFT is also rapidly trending downwards. Sales have fallen over the cliff. No matter how faulty and lagging these indicators are, they will make headlines. I was hoping to see that (-ve YOY median in Santa Clara county) happen by the end of this year. Seems like we are way ahead of schedule.

Maybe we all wish this to get over quickly, but we know it won't. Still, do you think it's happening faster than you had expected ? Or slower ? Or about the same ?

- StuckInBA

#housing

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81   Peter P   2006 Sep 7, 9:34am  

You could claim you thought sea urchins were a vegetable.

You mean it is not? 8-O

83   Peter P   2006 Sep 7, 10:14am  

I think the movement to force vegetarianism upon humanity is real. If we do not act we will soon face a crisis.

We are seriously being distracted from real issues like terrorism, diseases, and overpopulation.

Someone should start a Human First initiative.

84   a_friend_of_patrick   2006 Sep 7, 10:18am  

long time lurker here ... first time posting.

thought I'll share what I read in Rob Black's blog: http://robblack.typepad.com/robblack/

>>
Real Estate . . . These days there are more ``home for sale'' signs then than at any other point in time since 1993. Most gauges are confirming that the housing market has hit the brakes and may be in a tailspin. Existing-home sales dropped a more-than-expected in July while new-home sales fell 22 percent from the same month last year. And construction spending fell the most in five years. Higher mortgage rates and affordability concerns have been the bogeymen in the current U.S. housing decline but little attention has been paid to the adjustable-rate mortgages. Those with adjustable-rate loans -- almost a quarter of all U.S. mortgages -- will face re-adjustments soon. That means higher monthly outlays. Some 1 million people may lose their homes when 60 percent of adjustable loans ratchet borrowing costs higher by the end of 2006. Those at greatest risk are typically credit-challenged, carry high-cost, sub-prime adjustable loans and are mostly black or Hispanic. For the record, these borrowers tend to be concentrated in all urban areas in California.

Home-price growth slowed during the second quarter from a year earlier in the sharpest three-month plunge on record since 1975 which indicates this year's housing slump is deepening. The quarterly slowdown came during the ``spring selling season,'' when about half of a year's home sales typically occur, suggesting the housing market may be slowing more rapidly than economists initially predicted.
>>

85   Peter P   2006 Sep 7, 10:24am  

As a first course or appetizer? Ewwww. Not even with a solid grenache. I’m not even a fan of cheeses in the first salad but a heavy meat early on? No, humans should never be served before the red wine.

Hor D'oeuvres. :-D Just kidding.

86   Michael Holliday   2006 Sep 7, 10:45am  

Phoenix is coming undone.

87   requiem   2006 Sep 7, 10:50am  

I am truly worried about our future in the hands of those who think animals have more rights than humans.
How can we fight back?

Such people can be handled by "Stray Human Projects"; they can be caught, spayed/neutered, and released into the Kalahari or other wild area to live as nature intended.

(With apologies to the person who originally suggested this, in Another Place.)

88   astrid   2006 Sep 7, 11:01am  

The PETA people deserve just that. They make a mockery of themselves and discredit more reasonable efforts to improve animal quality of life via spay/neutering, shelters, humanely raising meats, and so on.

They should be locked in a cage with 20 or so rabid minxes.

89   Peter P   2006 Sep 7, 11:05am  

Just to clarify. I am not entirely against vegetarianism as a religion. However, it should not be involuntarily forced upon others. Sadly, I see this as a trend.

90   Peter P   2006 Sep 7, 11:06am  

Animal welfare should only be an after-thought at least until we archieve Utopia.

91   Peter P   2006 Sep 7, 12:26pm  

That’s a very, very common Science Fiction subtheme.

Culturing meat is already possible. It is just not economically feasible yet.

92   Peter P   2006 Sep 7, 12:43pm  

Do you suppose this guy still works at Channel 6?

Huh?

93   Peter P   2006 Sep 7, 12:51pm  

Isn’t that a little high? Even in the US most colleges don’t charge in the millions.

don't? won't?

94   anonymous   2006 Sep 7, 1:12pm  

*unlurks*

I've got my issues with the PETA. THere are these Toronto Vegetarian Association ads that offer to send you a free vegetarian cookbook if you email / write an address. But what you get is not a cookbook. Nooo it's a booklet with graphic articles / picture of animal cruelty, with maybe a few random vegetarian recipes at the back. No useful articles on how to make the switch, or what protein sources can replace the essential amino acids in meat (most vegetable protein sources will not give you ALL the amino acids you need).

Said mailout also contained a CD. I'm sure, with PETA docu-footage on more graphic stuff which I did not view. I guess their idea is to SHOCK you into vegetarianism and maybe some activism. Well, all good and fine, I guess, if you're into animals. I wrote them a pissed off email because I didn't like the deceptive nature of their ad and their tactics. but of course they never bothered to write back.

My primary interest in going somewhat vegetarian was to have a smaller ecological footprint and to be healthier (less fat intake). Ironically, I think PETA / Toronto Vegetarian Association set me back a few years.

Oh, and more U.S. housing bubble-trouble articles appeared in the Toronto newspapers this week. With more disclaimers that "it could never happen here". Yes yes, Toronto housing prices rose faster than inflation for the last five years, but not as fast as in Bubblicious California. Of course, the authors didn't bother to realize that housing prices do not have to shoot to the sky to fall -- they can just as easily fall from a not-very-high-plateau because it is already very difficult for median young family to buy a house, or even a townhouse, unless they move far out to the 'burbs.

*relurks*

95   Peter P   2006 Sep 7, 1:22pm  

My primary interest in going somewhat vegetarian was to have a smaller ecological footprint and to be healthier (less fat intake).

You can begin by eating more veggies. I love veggies myself, although I do not like lettuce.

I guess their idea is to SHOCK you into vegetarianism and maybe some activism.

I doubt I can be shocked into vegetarianism by any graphic video.

96   Peter P   2006 Sep 7, 1:29pm  

Many private schools are already at about $160,000 for four years.

And that is before sushi.

97   Michael Holliday   2006 Sep 7, 1:29pm  

HARM Says:
My apologies if someone has already posted this, but… wow!
Scroll down to “Reported Attacked!” link.

http://www.foxnews.com/oreilly/
_____

I would have whacked that chick if she hit me with the water bottle.

I would have slapped her so hard on the left hand side of her face, she'd still be fricken' seeing stars.

Plus, my big-ass palm print would be permanently emlazoned on the side of her face in crimson, glowing red infamy!

I would have taken that dude to the ground, choked him out, then slapped another big paw print on his chubby cheeks like that chick.

Then...then...

I woke up.

Yawn...what a nightmare!

I dreampt of this weird ass housing bubble in California and all sorts of weird sh-t. Thank god I'm back in Kansas Toto. There's no place like home!

98   Peter P   2006 Sep 7, 1:32pm  

The detiny of food is to be eaten.

Perhaps I should make this into a T-shirt.

99   Randy H   2006 Sep 7, 1:40pm  

I would have taken that dude to the ground, choked him out, then slapped another big paw print on his chubby cheeks like that chick.

Yea, maybe I'm just made of essentially dumbass, midwestern, redneck, farmtown boy stuff, but I'd have twisted that chump's head off like a rusty bottle top out of an old pop machine.

(One too many Ikura & Sake tonite. Pardon.)

100   Peter P   2006 Sep 7, 1:47pm  

Ikura & Sake

Which came into existence first: sake or ikura?

101   Randy H   2006 Sep 7, 2:30pm  

What we have here in Bend is a massive Bid/Ask spread.

And people berate me for uttering the word "sticky".

102   requiem   2006 Sep 7, 2:38pm  

Yea, maybe I’m just made of essentially dumbass, midwestern, redneck, farmtown boy stuff....

I think that only effects the 'how' you'd take them to the ground, not whether you'd do it at all. I think most rational people would do something to neutralize the threat. Personally, I think it's more efficient to step aside and help them find their way into a nearby section of wall or pavement. Seems easier, less liability, repeat as needed.

Oh, and "Vegetables aren't food. Vegetables are what food eats."

103   Michael Holliday   2006 Sep 7, 2:42pm  

requiem Says:

"...Personally, I think it’s more efficient to step aside and help them find their way into a nearby section of wall or pavement. Seems easier, less liability, repeat as needed..."
_____

Ha, ha!

That's what I'm talking about.

104   astrid   2006 Sep 7, 6:21pm  

"Cats are just a front for the dolphins. Who rules? Who gets all the good sushi? There’s your answer."

By that logic, I think sea otters are the real masterminds. They're the ones scarfing up prime sea urchins and abalones.

106   skibum   2006 Sep 8, 1:31am  

austingal Says:

Also, saw three comentators on FOX this am, making fun of people who own rental properties. Saying things like, “yeah, I still own my rental properties, how ’bout you?” Something about being the last to know.
The tide has turned.

When Fox commentators are acting like the bubbble's a done deal, you know it's been over for a while. They're as much a lagging indicator as you can get in the MSM.

It's also typical of their high school bully-like attitude, making fun of people on the air (see O'Reilly). What a bunch of yahoos.

107   astrid   2006 Sep 8, 1:53am  

"Just thought I’d mention that they need more hot men on CNBC."

I haven't watched CNBC for years, but I recall that their male reporters were all quite easy on the eyes and ears.

Stephen Colbert is very mesmerizing. And Hugh Laurie (English or "American") and Kiefer Sutherland voices are extremely mesmerizing. Those three could read a phone book and put it on a loop, and I could listen to it all day long.

108   FormerAptBroker   2006 Sep 8, 1:57am  

newsfreak Says:

> At present I like cats because they do not talk,
> they are all eyes, and prefer to sleep and eat.
> At least cats do not bark.

But they smell, leave hair all over and destroy furniture...

P.S. If anyone wants a free couch I spotted one this morning on the California Street sidewalk (around 8th St.). It was either owned by a cat owner or some guy that tried to rip it up with a claw shaped knife...

109   DinOR   2006 Sep 8, 1:58am  

"yeah, I still own my rental properties"

Anybody TIVO that? What a sign of the times! If we think it will be bad with SFH's wait until they begin to delve into the "condo flipping" mess. They'll have a hard time figuring out who owned what and who owes who! Any time there seems to be "guaranteed profits" and "can't lose" propositions people start "going in" with co-workers, relatives and total strangers. When I peruse the closings in our area I see a lot of properties being flipped by "Sunshine Happy Happy Good Times L.L.C"!

(Good luck getting to the bottom of that)

110   Claire   2006 Sep 8, 2:32am  

Has anyone made a prediction as to how much house prices will drop by in Mountain VIew, Los Altos - Silicon Valley? I'm thinking 20-40%, but at the prices they want, that could be a lot of money, so I want to narrow the range down so I know when I see a bargain.

111   Sylvie   2006 Sep 8, 2:33am  

My companion feline Noelle is the boss I've had her for over five years. She has seen plenty of boyfriends come and go. Cats are far superior they know intinctively when your having a bad day and come by and brush up next to you. She has moved with me several times even across the country. She keeps grounded and she care less whether we are living in a 1/1 or a 2/2 condo.

Cat's rule

112   lunarpark   2006 Sep 8, 3:39am  

My friend who is putting her house on the market in Cupertino is arguing with her realtor. Apparently the realtor wants her to price it $30k less than my friend feels it is worth. She's not going to listen to the realtor, she's listing it at the price she believes it is worth. I'm curious to see if she can get her asking price or if the realtor is right in this case.

113   Randy H   2006 Sep 8, 3:56am  

mike,

Thanks for your comments. I agree with your reasoning, although I'm not sure it's a specifically political-partisan phenomenon. I believe our lack of leadership in general by both parties has led us into this spiral.

I'm also not sure that the "Mexico" outcome is inevitable. The US has been much further along the road to ruin in the past, and yet has managed to emerge stronger. So long as we are able to balance free-market capitalism's "creative destruction" with common sense (stopping that destruction before it's irreversible).

I definitely agree re: price reductions. I think a lot of folks waiting to buy into neighborhoods inhabited largely by those who have benefited from this economy will be disappointed by how little prices fall. Maybe only 20%, which puts the area I'm in now only back 12-18 months in value.

114   e   2006 Sep 8, 4:41am  

The junky house says that it's: Pending: Continue to Show

115   Phil   2006 Sep 8, 4:46am  

This past 3 day weekend we decided to drive up to Seattle and back. After reading a lot about Bend, OR on Patrick.net, I thought we will drive up 97N ( also wanted to see Klamath and Crater ) and see for myself what this Bend in Oregon is all about. : ) I dont think 97N runs through the best parts of Bend but if it does, I dont understand why anyone will want to move there after living in California especially the Bay area. Other than white trash, I didnt find decent people living there, trailer park homes and manufactured houses. Whats the median income and housing price in Bend again?

116   Peter P   2006 Sep 8, 4:53am  

I think a lot of folks waiting to buy into neighborhoods inhabited largely by those who have benefited from this economy will be disappointed by how little prices fall. Maybe only 20%, which puts the area I’m in now only back 12-18 months in value.

Or... they see a 30% reduction but they do not want to buy any more.

Or... they see a 50% reduction but suddenly they cannot afford even the new price.

117   Peter P   2006 Sep 8, 4:57am  

We may not want to underestimate the newly-created wealth but we definitely cannot underestimate the fatality of human actions.

118   DinOR   2006 Sep 8, 5:13am  

Phil,

Our "resident expert" on all things Bend, OR is Michael Anderson. Perhaps if we can pull him away from daytrading for a minute he could insert his thoughts on the matter?

As I live closer to Salem, OR I can only say that the "appeal" regarding Bend has always mystified me. There are A LOT of really great towns in Central and Eastern OR, so why Bend? What exactly does it have over Silver Lake (or Paisley) for that matter? What could possibly be worth dealing with all the speed traps and traffic out in the middle of NO WHERE? Is it nice? Sure, but there's no employment (of course outside of building, selling or financing real estate). I have so many friends that grew up there and their memories are not of the fond variety. The described it as "poverty with a view". IMHO.

119   Peter P   2006 Sep 8, 5:14am  

The Federal Reserve has raised interest rates 17 times since mid-2004 in an effort to curb inflation.

Yes, blame the Fed. Were they cheering when interest rate was lowered to 1%? It would not have needed 17 hikes if they were not at a measured pace.

Now they can start lowering prices at a pace that is "likely to be measured".

120   Peter P   2006 Sep 8, 5:15am  

Actually the Fed has been quite proactive this time. The bubble could have been much, much bigger.

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