patrick.net

I hate roller coasters. The one in Disneyland is too much for me already.

Well I for one have HAD IT with all the whiners here complaining about whether RE is a good investment right now or not! You just have to "sack up" and get whatever loan they hand you and stop worrying about your entry point and property taxes built on fluff and hot air! In the long term that doesn't matter anyway.

Sure prices will probably be flat/free falling for the next 10 years or so while the well contained subprime meltdown and resultant foreclosure cycle runs it's course but you people want everything handed to you on a silver platter for crissakes! In the long run, they aren't making any more land so you have to decide. Are you a MAN or AREN'T you! WELL....?

No, I didn't make the video. I don't have time to play games anymore these days. But I think it's a great idea. Someone could use one of the other roller coaster sims to really do this right, including flaming crashes to the ground, panicking people and all.

Given the slo-mo train wreck we're witnessing (see PAR's post in astrid's thread), an interesting question is, what will be the next "major" or "significant" development in this tedious process? A dead cat bounce? Alt-A resets? Prices back to their relentless climb upwards (Bay Area only goes up!)? More boring stagnation and or gentle price declines? A "black swan" event?

skibum,

Welcome to the doldrums. It is hard to say, we can be fairly well assured foreclosures will continue to ramp up during the summer months. I don't see any stopping that.

rob-not-in the hood Says:

> I don’t see any dip where I’m looking. I’ve been renting
> for 4 years after selling a house in Oakland for 100%
> profit.

Prices were still going up for two of the past 4 years but not for the last two years. The Chronicle today an article about the huge spike in NODs in the Bay Area (including Alameda County).

> Well it kept going up and still is. I’ve been looking at houses
> in the better parts of Oakland and Berkeley and there is a
> shortage of inventory and prices are still going up. In other
> places there are distinct declines and/or huge inventory.
> Can anyone explain this? And I don’t buy the broad based
> declines, improvement to homes type arguements to explain
> that there really is a decline - I have seen many of the very
> same houses for sale 2 or 3 times each time at a higher price,
> each time sold in weeks.

If you don’t “buy” the fact that buying a home in a “better part” of Oakland or Berkeley and renovating it will increase the value you should do a little reading (and maybe you will also learn how to spell “argument”). How about posting the address of just one of the “many” homes that have sold 2 to 3 times at higher prices…

"we can be fairly well assured foreclosures will continue to ramp up during the summer months. I don’t see any stopping that."

I believe these forclosures will be needed to bring housing back in line. But don't you think that gov will do everything possible to decrease forclosures? Moratoriums, rate cuts, disaster relief, Aid to Famlies with Dependent Bankers, etc.

Notice that in some articles we are seeing where even Realtor types are admitting a housing crunch. But look closer and notice that this admission has the purpose of trying to convince the Fed to lower rates o prevent the looming "crisis."

One of these days we should do a thread on opportunity cost and leverage, to answer RE bulls who trot out their tired argument about how it's okay to sit through a RE slump if you can pay the mortgage.

I don't know who created this, but I'm pretty sure it's a Patrick.net regular (wait for the credits):

http://www.youtube.com/watch?v=-rLYph0J7vc

Excellent job!

Hot off the presses, the latest numbers for the S&P/Case-Shiller® Home Price Indices. These are the March numbers before the subprime implosion. Brace yourself, though, as there were upticks in the Bay Area (smallest measurable change), Seattle, and even "Stumptown" went up (way to time the market DinOR -- well maybe we should wait for the May numbers :-) )

Robert Shiller continues to spread sunshine:
“The fall of the National Index into negative territory, after more than 15 years of positive annual growth, is a reaffirmation of the pullback in the U.S. residential real estate market,” says Robert J. Shiller, Chief Economist at MacroMarkets LLC. “The National Index was yielding solid returns as
recently as a year ago. Q1 2006 growth rates were up 11.5% vs. Q1 2005, a sharp contrast to the returns we are seeing today.”

It depends which part of the park the roller coaster is in. I see Evergreen inventory shooting over 400. It did not reach there in 2005 and 2006. But I still see Cupertino prices holding very nicely.

Even then, I do no see panic setting in till next year in the fringe areas. That is if things remain similar. Foreclosures are going up very slowly.

Given that job market appears to remain solid, the only thing that will help us bubble-sitters is increased mortgage rates. The 10yr is till below 5.

So in a nutshell, unless interest rates change, very slow change in BA.

Hmmm... just to be clear, that are many "bearish highlights " in the latest S&P/Case-Shiller® Home Price Indices. Here are a few:
Miami has posted the highest Index numbers of all the cities that are tracked. The Miami Index finally went negative (quite definitively with a -1.0% month to month loss). They will be interesting to watch.
LA has two months of consecutive -.8% losses. At that rate you could lose a 10% downpayment in one year.
Continued unspeakable carnage in San Diego. Down 1.0% last month and -6% for the year.
Detroit is down over 8% for the year.

Did anyone try out the google street view yet? Pretty amazing. Glad that they are not quite down here in South Bay yet, hope some senior Google people in our neighborhood will stop their engineers from publishing the street data down here. But I am happy to see the street view of all other neighborhoods :-)

@Marty,

Perhaps you missed the "[sic]" right after the intentional mis-spelling "looser", but obviously Randy was self-consciously using Serin-speak here.

Any misspelling hear is intentional. :)

Maybe this was discussed already.

http://www.sanjoseproperty.com/newsletter.html

Now has the April report. Santa Clara Country has sales down not just YOY but also MOM. So April has less sales than March.

I am a sic [sic] looser [sic].

What depresses me the most is that whenever I see a "bad news" article about the Bay Area, it's not about the Penn/South Bay.

Like this one:

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/05/29/BUGCGQ1S9V1.DTL

I get my hopes up, thinking that it will be about a crash here in Fortress - but instead it's about Vallejo, Antioch, Pittsburgh - all parts of the Bay Area that I've never even been to.

I get my hopes up, thinking that it will be about a crash here in Fortress - but instead it’s about Vallejo, Antioch, Pittsburgh - all parts of the Bay Area that I’ve never even been to.

Are those cities / towns even part of the "Bay Area Proper" ?

No, I am not one of the snobs who look down upon any place that requires paying a toll to come from "there" to the "Bay Area Proper" ;-)

But places around 101 (Only south till San Jose)/280/880 are to me BA. Gilroy / Morgan Hill are not Bay Area to me. If you travel on 680 and go to Pleasanton/Danville etc you are so far away form the bay - there is a clear range of hills separating them from the bay. I like those towns, but they are neither Silicon Valley, nor Bay Area to me.

I might want to buy there for specifically that reason. Not Bay Area :-)