patrick.net

dunnross says

There has never been a genuine bull market carried by speculator-only buying. That’s what we are seeing now in housing, and very soon, all these speculators will find out that there will be no people willing to live in their newly acquired investment.

much agreed.

tatupu70 says

You bears have a pretty solid record of gloating long before the verdict is in.

That's because - just speaking for myself - this was all expected, and it was pretty easy to approximate how far off prices were at the market's peak, and that the interruption in declines was driven by govt manipulation, breeding a false sense of recovery. I actually feel bad for the people that jumped in based on it, though they're much better off than those who bought in 2005-2007.

I am putting in crown moldings in my bull trap this weekend - very exciting!

klarek says

tatupu70 says

You bears have a pretty solid record of gloating long before the verdict is in.

That’s because - just speaking for myself - this was all expected, and it was pretty easy to approximate how far off prices were at the market’s peak, and that the interruption in declines was driven by govt manipulation, breeding a false sense of recovery. I actually feel bad for the people that jumped in based on it, though they’re much better off than those who bought in 2005-2007.

I think you missed my point. You are interpreting the data in the way that conforms to your expected result, rather than looking at it objectively.

Mr.Fantastic says

SubOink says

I am putting in crown moldings in my bull trap this weekend - very exciting!

Your life must be markedly unexciting.

Hater...:)

dunnross says

Look at the graph. The spring bounce is lower than it was last year and the year before. Bounces are getting smaller and smaller, while drops are getting bigger and bigger

Spring started less than a week ago and you're declaring the spring bounce over? Otherwise how do you know if it will be larger or smaller than last year?

tatupu70 says

dunnross says

Look at the graph. The spring bounce is lower than it was last year and the year before. Bounces are getting smaller and smaller, while drops are getting bigger and bigger

Spring started less than a week ago and you’re declaring the spring bounce over? Otherwise how do you know if it will be larger or smaller than last year?

1. Last year's bounce was smaller than the year before.
2. Last year's bounce was pretty much over by April, much earlier than 2009 which was over in June. I predict that this year's bounce will be even more fleeting.
3. Regardless of how long it will be, it should not break overhead resistance which is the 2009 low. This is because all those so called "cash investors" who bought in March, 2009, hoping to flip it for a quick profit, somehow got stuck with it, and want to unload at a break-even point.

dunnross says

I predict that this year’s bounce will be even more fleeting

That's fine. It's your opinion. The graph doesn't show it, you just think it will be the case. Just wanted to clarify.

tatupu70 says

I think you missed my point. You are interpreting the data in the way that conforms to your expected result, rather than looking at it objectively.

My view has been that housing was overpriced and that the "bottom" formed in 2009 was the result of the tax credit. which after its expiration prices will continue declining. People who have been adamantly denying that this was the case have a pretty hard time explaining the data. Something is not conforming to someone's expectations, but that's on your guys' end, not mine.

dunnross says

Why is it that I can get 100×1 price/rent ratio for commercial property in San Jose,

We can learn a lot more from individual people's anecdotes on a forum like this than about macro trends which are open to everyone's individual interpretations.

Dunross, please us how things are going with your commercial properties in San Jose.

dunnross says

Price is 100x of monthly rent. I can buy a 3000sqft commercial office in San Jose today for $300K which rents for $1/sqft.
Does anyone have numbers of commercial vs. residential vacancy rates for Santa Clara County.

Read several articles per San Jose Mercury regarding former R&D/Mfg space pinned between 20-25% vacancy. Milpitas having the highest at 25%. What was once R&D/Mfg are now Churchs and other off the wall small retail business. Seen couple other commercial locations are being converted to residential/condos/TH. I expect to see more of this.

klarek says

tatupu70 says

I think you missed my point. You are interpreting the data in the way that conforms to your expected result, rather than looking at it objectively.

My view has been that housing was overpriced and that the “bottom” formed in 2009 was the result of the tax credit. which after its expiration prices will continue declining. People who have been adamantly denying that this was the case have a pretty hard time explaining the data. Something is not conforming to someone’s expectations, but that’s on your guys’ end, not mine.

Nope--it's conforming to my views as well. I said that the credit expiring pulled ahead demand for a few months. Then we're into winter. If sales/prices continue to fall through summer, then I'll agree with you.

dunnross says

Completely ignorant comment showing a complete misunderstanding of market psychology and basic econ-101 fundamentals.

Technical analysis is pretty roundly discredited in Econ textbooks.

tatupu70 says

dunnross says

Completely ignorant comment showing a complete misunderstanding of market psychology and basic econ-101 fundamentals.

Technical analysis is pretty roundly discredited in Econ textbooks.

Another ignorant comment by Tatapu. Show me 1 Econ textbook which discredits technical analysis. Support and resistance lines are basic patterns of human psychology. How many times did you buy a stock, just to see the price fall, giving yourself the word that you will sell the day the stock gets back to your buying (break even) price. This is exactly why the price bounces, but only as far as the resistance. The same thing holds in reverse for support.

dunnross says

tatupu70 says

dunnross says

Completely ignorant comment showing a complete misunderstanding of market psychology and basic econ-101 fundamentals.

Technical analysis is pretty roundly discredited in Econ textbooks.

Another ignorant comment by Tatapu. Show me 1 Econ textbook which discredits technical analysis. Support and resistance lines are basic patterns of human psychology. How many times did you buy a stock, just to see the price fall, giving yourself the word that you will sell the day the stock gets back to your buying (break even) price. This is exactly why the price bounces, but only as far as the resistance. The same thing holds in reverse for support.

Me--never. I'm more of a buy and hold guy.

Applying technical analysis to housing is beyond ridiculous. Each house is different, the data is usually 2-3 months old before it's even available, and as others are so fond of pointing out, it's more than an investment. Your theory is that people follow the median price history charts and sell their house if they see a head and shoulders pattern?

tatupu70 says

Applying technical analysis to housing is beyond ridiculous. Each house is different, the data is usually 2-3 months old before it’s even available, and as others are so fond of pointing out, it’s more than an investment. Your theory is that people follow the median price history charts and sell their house if they see a head and shoulders pattern?

Most people don't follow technical analysis for stocks either, because they don't understand it. But, regardless of whether most people follow it, or not, markets always follow technical analysis patterns, because technical analysis is a psychological indicator. Claiming that real estate doesn't follow technical analysis is as akin to saying that the housing market doesn't follow basic laws of supply and demand.

klarek says

tatupu70 says
My view has been that housing was overpriced and that the “bottom” formed in 2009 was the result of the tax credit. which after its expiration prices will continue declining. People who have been adamantly denying that this was the case have a pretty hard time explaining the data. Something is not conforming to someone’s expectations, but that’s on your guys’ end, not mine.
Nope–it’s conforming to my views as well. I said that the credit expiring pulled ahead demand for a few months. Then we’re into winter. If sales/prices continue to fall through summer, then I’ll agree with you.
So I’m not molding reality to fit my views? Sweet.
BTW “a few” is a nice euphemism for several. Sales are still in the shitter.

No--you are still ignoring the parts that don't conform to your views. Like the verbage on the last couple of clear capital reports which clearly state that traffic is increasing and the housing market appears to be turning.

And a few means a few. Did you miss where I said it led right into winter? As you know, sales are usually down in winter.

dunnross says

Most people don’t follow technical analysis for stocks either, because they don’t understand it

No--most people understand it. They just know that it doesn't work.

dunnross says

All those comments which you make about technical analysis not applicable to the housing market really expose your ignorance and completely destroy your reputation.

That ship sailed a long time ago.

We're going sideways for a while...which means if you are in the market of buying, you gain nothing by waiting...except if you need a little time to save more downpay. It's not a bad situation. Nobody is in a rush, but if you have a job and have the money, you might as well buy now before you waste more money in rent.

And if this market drops 20% from here all over the US - trust me, you won't be buying then either because its going to be UGLY at that point. You probably won't have a job and things will be as bleak as they can be. Be careful what you wish for perma bears. Don't think you are safe when you're renting. Get ready to move, and move and move...

As most deals are cash offers these days, it sounds more like we are in the stealth phase than any other phase - LOL. Smart money is coming in the market. Institutional investors next...then the public and all you bears too. Right now there is public in the game so its hardly a Mania phase. You wouldn't have a crash forum in a mania phase because there would be no audience for it in a mania phase.

Just saying, not sure if those theoretical graphs are always 100% of the picture - but what do I know.

Have a great Sunday everybody!

klarek says

tatupu70 says
No–you are still ignoring the parts that don’t conform to your views. Like the verbage on the last couple of clear capital reports which clearly state that traffic is increasing and the housing market appears to be turning.
The irony of your remark is hilarious. Here are the last THREE Clear Capital reports:
* 03/10/2011
U.S. Home Prices Continue Slight Decline as West Region Drags Nation Down
* 02/03/2011
Clear Capitalâ„¢ Reports U.S. Quarterly Home Prices Still Down, But Showing Life in 2011
* 01/06/2011
Record Setting Volatility in 2010: U.S. Home Prices Down; Additional Drop Forecasted for 2011
Perhaps you’re due for a little bit of self-reflection.

Hmm. really? So, I say read the verbage of the report, and you quote the headlines? That's a little disingenious, wouldn't you say? Even so, you still prove my point. The Feb report headline says "showing life in 2011".

klarek says

but the YoY declines show that the credit didn’t just pull forward sales by a few months

How do you figure that? All the first time buyers were gone because they already bought before the credit ended. Is there a formula that tells you what the YoY decline should have been under that scenario? If so, please share it.

SubOink says

And if this market drops 20% from here all over the US - trust me, you won’t be buying then either because its going to be UGLY at that point. You probably won’t have a job and things will be as bleak as they can be. Be careful what you wish for perma bears. Don’t think you are safe when you’re renting. Get ready to move, and move and move…

Heard the same bullshit from 2005-2008 about how the market wouldn't drop 20% and if it did we'd be living in caves while eating our own feces. All that will happen is banks will get socked and the cost of living will be cheaper.

tatupu70 says

Hmm. really? So, I say read the verbage of the report, and you quote the headlines?

I should have copy/pasted the entire reports which you've presumably read into this thread, that makes much more sense.

tatupu70 says

How do you figure that? All the first time buyers were gone because they already bought before the credit ended. Is there a formula that tells you what the YoY decline should have been under that scenario? If so, please share it.

You can start by comparing it to every other year during this season and see that somehow buyers appear elusive, despite the belief amongst some that housing bottomed two years ago which would have stirred up confidence.

Mr.Fantastic says

Yeah, seriously. Is this a joke? tatupu once called St. Louis a high class community. Then we all saw the videos of his wife. That was comical.

It's a lot easier to score a laugh at somebody when he accuses others of warping their ingestion of data to suit their beliefs when he himself is trying to whitewash the tanking home prices. As for his wife being fat, I have no idea nor could I care.

klarek says

Heard the same bullshit from 2005-2008 about how the market wouldn’t drop 20% and if it did we’d be living in caves while eating our own feces

You're right, I forgot - everything has been perfectly fine in the last few years, the real estate market drop did not have any impact on EVERYTHING. You live on earth?

SubOink says

You’re right, I forgot - everything has been perfectly fine in the last few years, the real estate market drop did not have any impact on EVERYTHING. You live on earth?

It didn't impact everything, not at all. Markets moved, people got foreclosed upon, and dummies saw a 30% drop on houses that were doubly overpriced as a "deal" and have been trying every day since then to convince themselves they didn't catch a falling knife. I have my expectations of the market. I won't be renting if prices are 20% lower than they are today. You might be strategically defaulting though.

klarek says

It’s a lot easier to score a laugh at somebody when he accuses others of warping their ingestion of data to suit their beliefs when he himself is trying to whitewash the tanking home prices

Klarek--try to stay on topic. We weren't talking about whether prices tanked. I think "tanked" is overstating it, but prices have definitely fallen from last summer. Just like you and I both agreed they would. The discussion is about where they will go from here.

Please don't misrepresent my views.

klarek says

SubOink says

You’re right, I forgot - everything has been perfectly fine in the last few years, the real estate market drop did not have any impact on EVERYTHING. You live on earth?

It didn’t impact everything, not at all. Markets moved, people got foreclosed upon, and dummies saw a 30% drop on houses that were doubly overpriced as a “deal” and have been trying every day since then to convince themselves they didn’t catch a falling knife. I have my expectations of the market. I won’t be renting if prices are 20% lower than they are today. You might be strategically defaulting though.

Okay, so if it didn't impact anything at all, why would real estate drop another 20%?? - According to you, everything is great.

APOCALYPSEFUCK says

When Cannibal Anarchy strikes, a 240 lb will be a treasure of priceless value as she will feed a family of six for a month.

Now, this is real possibility. :)

So, just in today's headlines:

Pending home sales up
Pesonal incomes up
Rents rising

I know, I know. Housing prices are tanking. The double dip is well underway. Next stop 1975 prices.

Real estate: U.S. pending home sales rise in February
By Derek Kravitz

Associated Press
Posted: 03/28/2011 08:31:41 AM PDT
Updated: 03/28/2011 08:41:16 AM PDT

New-home sales plunged in February to record low
Are buyers turning away from new homes in weak markets?

WASHINGTON -- More Americans signed contracts to buy homes in February, but sales were uneven across the country and not enough to signal a rebound in the housing market.

Sales agreements for homes rose 2.1 percent last month to a reading of 90.8, according to the National Association of Realtors' pending home sales index released Monday. Sales rose in every region but the Northeast.

Signings were 19.6 percent above June's index reading, the low point since the housing bust. Still, the index is below 100, which is considered a healthy level. The last time it reached that point was in April, the final month people could qualify for a home-buying tax credit.

Contract signings are usually a good indicator of where the housing market is heading. That's because there's usually a one- to two-month lag between a sales contract and a completed deal.

But the Realtors group also noted "a measurable level of contract cancellations" that also occurred in February. Many buyers canceled after appraisals showed the properties were valued much lower than their initial bids.

A sale is not final until a mortgage is closed.

"Therefore, the latest pickup in pending home sales and mortgage applications might not necessarily end up in a measurable pickup in mortgage closings and translate into an increase in existing home sales," said Yelena Shulyatyeva, an analyst at BNP Paribas.
The pace of sales varied from region to region.

Lets read that again...

"But the Realtors group also noted “a measurable level of contract cancellations” that also occurred in February. Many buyers canceled after appraisals showed the properties were valued much lower than their initial bids."

????

SubOink says

Okay, so if it didn’t impact anything at all, why would real estate drop another 20%?? - According to you, everything is great.

It would drop 20% if that's how much it's still overpriced. Whether things are great or terrible as a result is irrelevant.

klarek says

SubOink says

Okay, so if it didn’t impact anything at all, why would real estate drop another 20%?? - According to you, everything is great.

It would drop 20% if that’s how much it’s still overpriced. Whether things are great or terrible as a result is irrelevant.

LOL! Ok, then...

select * from MLS-DB where distance &lt 50mi and city == 'San Francisco' or city == 'Los Angeles' or city == 'San Diego' or city == 'Washington' or city == 'New York' or city == 'Boston'

select * from MLS-DB where distance < 50mi and city == ‘San Francisco’ or city == ‘Los Angeles’ or city == ‘San Diego’ or city == ‘Washington’ or city == ‘New York’ or city == ‘Boston’

SubOink says

OIL…it costs $8 to get a barrel of oil out of the ground - well, the price is 105 now…and has been for a long time. Even at 50 it was overpriced. It has not crashed somehow.

It also costs about $20M to to pay for the smallest possible oil well before you can even start taking it out of the ground. And, that assumes that you own the land, in the first place.

dunnross says

SubOink says

OIL…it costs $8 to get a barrel of oil out of the ground - well, the price is 105 now…and has been for a long time. Even at 50 it was overpriced. It has not crashed somehow.

It also costs about $20M to to pay for the smallest possible oil well before you can even start taking it out of the ground. And, that assumes that you own the land, in the first place.

Are you considering drilling in your backyard? :)

SubOink says

OIL…it costs $8 to get a barrel of oil out of the ground - well, the price is 105 now…and has been for a long time. Even at 50 it was overpriced. It has not crashed someho

I was told by an oil industry person that the "lift cost" of oil is highly dependent on the site. She pointed out that for some (deep water?) wells the lift cost was in excess of $40 per barrel, and that "it hasn't been so long that oil was $14 per barrel", explaining why the industry had been reluctant to rapidly expand production into higher priced areas. Of course this is the production cost of a marginal barrel of oil -- not taking into account the capital investment of developing / acquiring the site. So are there some people making a killing on wells with an $8 per barrel lift cost? Probably so...but that incremental 1% of production (oil sands?) almost certainly have a total (amortized) cost much closer to $100/ barrel. So the supply curve is somewhat steep, which accounts for some of the difference between the "$8 per barrel production cost" and what the market price is.

I think sales volume is a good indicator. Right now sales volume is still just around '07 levels, and we know what direction prices moved since then.

tatupu70 says

So, just in today’s headlines:
Pending home sales up

Pesonal incomes up

Rents rising
I know, I know. Housing prices are tanking. The double dip is well underway. Next stop 1975 prices.

So incomes increased... but where is the part where you show how X% increase in income is enough to halt a Y% decline trend in housing?

DQNews on Bay Area

http://www.dqnews.com/Articles/2011/News/California/Bay-Area/RRBay110317.aspx