patrick.net

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

As I wrote on the other thread, condos have officially double dipped according to Jan. C/S SF Bay Area Condo Index.

Mr.Fantastic says

I think SubOink’s crown molding might have been overpriced.

Definitely!

I think crown molding prices will crash.

:)

SubOink says

You guys are a funny bunch. Show me the post where I am saying that nothing is overpriced…

This one: http://patrick.net/?p=545652#comment-726836

SubOink says

So there is no such thing as an objective “overpriced” level.

gameisrigged says

SubOink says

So there is no such thing as an objective “overpriced” level.

That's very different than saying nothing is overpriced. Duh!

I am saying that you cannot determine that something is overpriced as its subjective, not OBJECTIVE.

gameisrigged says

SubOink says

You guys are a funny bunch. Show me the post where I am saying that nothing is overpriced…

This one: http://patrick.net/?p=545652#comment-726836

Thanks for posting this...LOL

Please read again, Oil is overpriced, bottled water etc etc etc...

Funny!

That's just confusing items that have high profit margins with "overpriced".

Mr. A (seller) thinks his nice house for sale is worth $1M is subjective.
Mr. B (buyer) thinks Mr. A's house is too expensive is subjective.
Mr. C (market observer) can objectively say $1M is overpriced if it is observed that it can't sell at that price.

SubOink says

I am saying that you cannot determine that something is overpriced as its subjective, not OBJECTIVE.

You can come up with ways to make predictions on the value of the house and then compare the prediction to the eventual selling price. Add up the cost of the materials and multiply by some number that you think represents the way houses rise in value for a given area etc, etc. Then you decide how objective your method is by how well you make predictions. Do that again and again until you have a method that allows you to take information on a house and predict its selling price.

That sounds like science, but in this case the laws are different than the one that allows us to accurately predict when a ball of known size dropped from a known height will hit the ground.

The charts of past history are interesting, but there is no reason to believe that the future will follow that chart behavior. There are reasons for this. One reason is that since our economy in California was so heavily dependent on 1. spending home equity 2. construction 3. selling loans, houses, etc. This entire part of California's economy is vastly reduced or gone. The millions of low wage illegal aliens will tend to depress wages. If you are looking at houses in places where there are high tech and biotech (Bay Area), entertainment (LA), defense, high tech, etc. (San Diego), things could start to improve IF things improve economically. There is an interesting problem with the whole economy. Since the world needs the American consumer so much, once the American consumer is AFRAID to borrow/spend his money, the global economy slows down. The emerging countries were growing by selling to the Americans who were spending real estate bubble wealth. From now on, Americans will have to produce again to create true wealth. A lot of people are trying to stop it. Taxing energy production is one example. Letting gasoline become expensive because we cannot get our own oil is another. I fear that in many places we will have economic stagnation, with pockets of affluence and very little upward mobility.

Hey! I didn't do that!

Didn't do what? The double comment? Not a problem, I deleted one copy.

Or was it not you who wrote it?

The double post, thanks for fixing it. (assuming someone notices).

Double Dips assumes, that the TAX credit was considered a uptick, when if you asked me, all that was, is a kin to the OPENING of a Parachute. from the free fall we had, now the first chute is being cut away, we fall faster for while (In Bay Area Ca. I am ALWAYS talking, East Bay even) then in 2013 we will have the back chute deploy. Leaving the MOST expensive homes in Brentwood for example no higher then 399,999 in the next two years, and most will be 279,999 299,999 and the Preserve Areas and Apple hill areas in the 329,999-399,999 and those are homes that sold in 2007 for 900-1.2m of course I am talking Track homes, not one off with acreage

SubOink says

gameisrigged says

SubOink says
So there is no such thing as an objective “overpriced” level.

That’s very different than saying nothing is overpriced. Duh!
I am saying that you cannot determine that something is overpriced as its subjective, not OBJECTIVE.

I think everyone here EXCEPT you is speaking objectively, so your distinction between "objective" and "subjective" is irrelevant. They are saying that it IS objective. And no, it's not funny.

gameisrigged says

SubOink says

gameisrigged says

SubOink says

So there is no such thing as an objective “overpriced” level.

That’s very different than saying nothing is overpriced. Duh!

I am saying that you cannot determine that something is overpriced as its subjective, not OBJECTIVE.

I think everyone here EXCEPT you is speaking objectively, so your distinction between “objective” and “subjective” is irrelevant. They are saying that it IS objective. And no, it’s not funny.

You are indeed very funny.

My distinction between objective and subjective is not based on my opinion but on the definition of the terms. I hate to break it to you, but it is what it is.

ob·jec·tive
-not influenced by personal feelings, interpretations, or prejudice; based on facts; unbiased: an objective opinion.

sub·jec·tive
-existing in the mind; belonging to the thinking subject rather than to the object of thought ( opposed to objective)

But you probably don't care about that - people in this forum say it's objective so it must be. Screw the dictionary! For all I know, the dictionary is a realtor!!

:)

Me: "Your distinction between objective and subjective is irrelevant"

You: "My distinction is not based on my opinion but on the definition of the terms"

Whaaa?

Nice non sequitur - got anything else?

Love the dictionary definitions, though. Figure out how to use a search engine all by yourself, did you?

The U.S. housing market, overall, is between 20% and 50% overpriced, in today's dollars. Anyone who mentions fundamentals, but doesn't mention energy costs, does not understand fundamentals.

There will be zero 'real' growth in the U.S. economy with continuously rising energy costs. Credit will continue to contract in a no growth, and even negative growth, environment. You all need to seriously catch up on peak oil, and your global politics.

I can see cities like Phoenix easily losing half a million people over the next 20 years (Unless of course the tax payers throw money down a solar panel rat hole, or some such program) The only areas that may hold their value from this point, are those in and around historic economic and military strategic locations, with a resilient web of jobs, waterways, rail, and sufficient rainfall.

The only things I see that can save the market are a change in government to socialism or fascism, a miracle energy technology, or the U.S. blowing up the rest of the world leading to a large influx of people. Most suburbs built in recent years are going to get decimated.

Cvoc13 says

A idiot could have bought, To say what you are saying is to believe that OVER PAYING is impossible, and it is NOT… to be sure.

Reminds me of a conversation with my father a couple of years ago. His neighbor was trying to sell his house at a ridiculous price compared to the comps. He didn't see why it wouldn't sell for close to the listing price, and after explaining how delusional the seller was, he asked "Does that mean nobody would pay that amount?" I said sure, somebody COULD. There's an idiot born every minute. Somebody from overseas with a lot of money and little interest in comparables might find something uniquely appealing and purchase the house outright without a care in the world as to its "value" to somebody else. But that one person's opinion alone isn't enough to fundamentally make the house "worth" what he's paying.

Cvoc13 says

What is wrong with you? Are you kidding? Oh just because it moves does not mean it was priced right, A idiot could have bought, To say what you are saying is to believe that OVER PAYING is impossible, and it is NOT… to be sure.

I think the old saying that something is worth whatever someone will pay for it is right. You might say that in your opinion something is overpriced, but if it sells, then it wasn't. Someone else placed a higher value on it then you did. There is no "fundamental" price of a house.

Just because the value falls in the future doesn't mean it was overpriced.

tatupu70 says

There is no “fundamental” price of a house.

I disagree, because for houses, there is an alternative to compare to: you can rent the same thing and live the same lifestyle in the same neighborhood.

The owner may well have a provable and measurable financial loss compared to the renter.

That loss is money that was burned just to get a warm feeling.

I disagree, because for houses, there is an alternative to compare to: you can rent the same thing and live the same lifestyle in the same neighborhood.
The owner may well have a provable and measurable financial loss compared to the renter.
That loss is money that was burned just to get a warm feeling.

I agree with what you are saying. And for you(and me too)--there is no value to that warm fuzzy feeling. But, to someone else, that warm fuzzy feeling may be worth it. Or maybe owning carries other aspects that someone values.

Someone felt that house was worth the amount they paid. Whether you agree isn't important.

eg--I don't like Big Macs. I wouldn't pay $.50 for one. Does that mean they are overpriced at $3.00?

tatupu70 says

Cvoc13 says

What is wrong with you? Are you kidding? Oh just because it moves does not mean it was priced right, A idiot could have bought, To say what you are saying is to believe that OVER PAYING is impossible, and it is NOT… to be sure.

I think the old saying that something is worth whatever someone will pay for it is right. You might say that in your opinion something is overpriced, but if it sells, then it wasn’t. Someone else placed a higher value on it then you did. There is no “fundamental” price of a house.
Just because the value falls in the future doesn’t mean it was overpriced.

the argument that there is no fundamental value is offered by those that do not understand statistics.

Syphilis says

tatupu70 says

Cvoc13 says

What is wrong with you? Are you kidding? Oh just because it moves does not mean it was priced right, A idiot could have bought, To say what you are saying is to believe that OVER PAYING is impossible, and it is NOT… to be sure.

I think the old saying that something is worth whatever someone will pay for it is right. You might say that in your opinion something is overpriced, but if it sells, then it wasn’t. Someone else placed a higher value on it then you did. There is no “fundamental” price of a house.
Just because the value falls in the future doesn’t mean it was overpriced.

the argument that there is no fundamental value is offered by those that do not understand statistics.

try again.