patrick.net

Ceo of Toll Brothers say worst is over

D.R. Horton CEO: '2007 is going to suck'

I’d hate to think of buying now and having to move in 5 years.

Not unless prices double again in 5 years.

If I thought they would, I'd buy. Of course, I'd be wondering who was going to pay for a 1.8 million dollar home in Sunnyvale...

Of course, I’d be wondering who was going to pay for a 1.8 million dollar home in Sunnyvale…

The question would be, what dollar? ;)

Hopefully most of the people buying now are doing the same thing. I’d hate to think of buying now and having to move in 5 years.

No one ever really plans on selling in a short amount of time; but they wind up doing it anyway.

No one ever really plans on selling in a short amount of time; but they wind up doing it anyway.

I'm pretty sure the people getting on the ride on the way up figured they could move if they needed to, and even make money doing it. Buying now is almost guarenteeing that you can't move for at least 10 years without losing tons of money. And probably buying right now, you won't realize a 'real' break even until after the mortgage is paid off and you start living the TI lifestyle.

D.R. Horton CEO: ‘2007 is going to suck’

I'd say that's language plain enough even for Joe Six-pack to grasp.

Ceo of Toll Brothers say worst is over

D.R. Horton CEO: ‘2007 is going to suck’

This is interesting considering there's a recent piece in the WSJ analyzing the big HBs for the next year. They think exactly the opposite - HBs focusing on the lower range market like DR Horton or Centex with national (read diverse) exposure will likely do best, while luxury builders like Toll may be in for a lot of hurt. I sense yet more BS spin from Toll and maybe even a glimmer of realism from DR Horton.

The problems is MSM still reports median and that's what get's discussed at the dinner parties.

But I think the following supports what many of us have mentioned as anecdotal evidence. I continue to believe that the BA housing market is indeed in a strong downturn which is superficially masked by good job market and cheap credit.

From the perma-bull site http://sanjoseproperty.com/newsletter.html

For sellers, while sales are increasing, they're still not at the level we saw during 2003-2005. The market is also quite different. Back then, anything sold. Now, buyers are being very particular. They want homes in the best neighborhoods and in move-in condition.

Hence all the weird statistics and median madness. One day, even MSM will start printing that median is bogus.

The problems is MSM still reports median and that’s what get’s discussed at the dinner parties.

But I think the following supports what many of us have mentioned as anecdotal evidence. I continue to believe that the BA housing market is indeed in a strong downturn which is superficially masked by good job market and cheap credit.

Stuck,
As I think you well know, if you look at all of the more sophisticated RE analysis out there, uniformly they all note that a decrease in sales volume (like we've seen for over a year now) is a leading indicator before price declines inevitably follow. That's just economic common sense. When sales dry up, eventually there is downward price pressure, no matter how much kool-aid is in the tap water in the Bay Area. I would almost be willing to say further price declines, even measured by the blunt and innacurate median price, are "in the bag," to borrow a corrupted phrase...

SFBubblebuyer,

that is the bad part of Saratoga, east of 85. In essence, Saratoga wannabes who cannot afford the real Saratoga shoot for that part of town simply because of the address although it looks and feels like San Jose.

It also goes to the Moreland school district. If that house is situated a bit to the left so that it will fall into the Lynbrook school district, it would not have been so "distressed", at least you can count on a few Asian parents bidding it up.

DR Horton builds lower end homes btw, which jives well with the sub-prime mortgage market.

Stacey Dwyer, said subprime borrowers - those with weaker credit histories - account for fewer than 5 percent of its customers.

They are lying! Filty bastards.

Haven't we already determined this?

I am with StuckInBA on this one. It ain't melting down in Santa Clara... yet (even sales volume is only marginally down).
Here are aggregate numbers that NV didn't post

Community Price % Chg* $/SqFt # Sold % Chg*
All homes $669,500 2.2% $467 1,551 -1.6%
Total resale houses $730,000 4.3% $485 949 -5.4%
Total condominiums $510,000 4.5% $434 341 -1.2%
Total new homes $633,500 7.1% 261 14.5%

I see FDIC just issued cease and desist against Fremont.

http://calculatedrisk.blogspot.com/index.html

NV,

I belong to one of those you are talking about (from HK initially and came here around the time you mentioned). But the new wave of Chinese coming here from mainland China are quite different, they have never seen capitalism growing up. Also, those who came here later never saw the bad times so their frame of reference became very skewed.

Not all Chinese are shrewd and smart. Chinese culture (and Japanese too) is largely centered on herd mentality and conformity. If everyone is buying in Saratoga, you have to buy one there. If everyone is investing in real estate, you will look like an outcast if you don't.

That's why I kept my mouth shut in the last few years among my Chinese friends when they became so excited over the housing market. They tend to put personal pride into business judgement, if you question the business decision, it will be taken as a challenge to his intelligence and pride.

Many of my Chinese friends and acquaintances did participate in bidding wars in the last few years. They still do.

NV,

you are also mixing up being shrewd with being cheap. All Chinese are cheap, but only very few of us are actually shrewd.

If you see a popular Chinese restaurant with lots of Chinese patrons, I can guarantee that it is not because of the food, it's because of the price. Chinese grocery markets here usually offer the rock-bottom price taking the quality along with it.

Being shrewd means getting the best bang for the buck. Jews are much better than Chinese in that respect. Chinese are just good at parting with the least buck.

OO,

I have asked you before and ask you again. Are you sure you are talking about Chinese people ? I can say the same thing about Indians, Indian grocery markets etc ;-)

The herd mentality part although comes from being immigrant. Indians in India do not have any "extra" herd mentality than other societies. Conformity and cost consciousness are trademark of my generation. The freshly minted rich youngsters from Banglore are spendthrifts and VERY VERY different.

Even though I feel Indian buyers haven't come around to accept that RE prices can decline big time, it seems that no one is afraid to be priced out forever. Just my gut feeling. They just feel smarter to buy at a lower price than last year.

The TOL CEO must be desperate to try this ridiculous spin. Cancellations can go to zero but what's the big deal if sales also go to zero ? Cancellations are important only to identify change of sentiment from positive to negative. If sales don't pick up, who cares how cancellations are doing ? People cannot cancel orders they have never placed.

Maybe DELL can learn something from them. "Not as many people are placing orders, but that's not important. What is important is not as many people are canceling their orders. WOOOOOHOOO."

I see FDIC just issued cease and desist against Fremont.

Tomorrow I will cray half a tear for FMT bottom feeders. Hmm. Maybe not.

s/cray/cry

You mean, like these townhomes “starting in the $1,500,000″ range?

To be fair, most of their offerings are a little cheaper than that. :) And that IS Shallow Alto they're building in, there.

I'm just saying that most of what they build is cheaper than 1.5 million, not that housing isn't retarded right now.

At least you didn't offer to refi my home with an option ARM, PAR. :)

AG,

Welcome to the blog! Come breathe the free air of Truth.

Maine politicians complain of “brain drain” and can’t figure out why so many young people leave.

Once again, I think that Upton Sinclair quote applies:

"It is difficult to get a man to understand something when his job depends on not understanding it."

All politicians are afraid of saying ANYTHING negative about loanownership --regardless of what they really think-- because:

(a) It's the "Amerikan Dreamâ„¢", and you... do... love Amerika, don't you...?
(b) Nearly 70% of their constituents are loanowners vs. JBRs.
(c) The percentage of loanowners who regularly vote is also significantly higher than JBRs.
(d) They are getting an a$$load of lobbyist money and campaign contributions from NAR/NAHB/MBAA and like organizations.

State and local politicians are even MORE beholden to the REIC, because state/local budgets get a disproportionate share of their tax revenue from property owners.

It's all about knowing which side your bread is buttered on...