patrick.net

I've seen a few rounds of price drops in the markets I watch lately.

Probably the sellers trying to unload properties during the selling season.

We'll see.

Home sales are in the gutter where I'm at but prices aren't moving too much, just inching downwards.

Around -4% so far YoY in Laguna Hills according to Zillow.

I don't think sales will increase hardly anywhere this year at all. Unemployment and under employment are still at or near peak levels in most states while wages are still stagnant or dropping. At the same time we're seeing prices on gas rise to higher levels which will spook most, and if sustained at such prices will push us back into a recession.

No one sane or sensible should be expecting a real sustained housing recovery of any sort until unemployment drops quite a bit and wages rise. That seems to be years away at very best. IIRC the Fed has already said they expect jobs won't recover to pre bust peak until 6 years or so from now, and that is assuming we don't double dip.

I'd also agree the general trend is downward in many markets, at least in California(from dataquick):

http://www.dqnews.com/Charts/Monthly-Charts/CA-City-Charts/ZIPCAR.aspx

For instance, Santa Clara county has been a mixed bag, with huge drops in some communities but slight upticks in others(data from Feb 2011; % Y-o-Y):

Santa Clara County 1148 $432,500 $460,000 -5.98%
ALVISO 2 $392,750 n/a n/a
CAMPBELL 16 $589,000 $562,500 4.71%
CUPERTINO 38 $717,500 $695,000 3.24%
GILROY 50 $350,000 $385,000 -9.09%
LOS ALTOS 24 $1,632,500 $1,612,000 1.27%
LOS GATOS 33 $975,000 $893,750 9.09%
MILPITAS 42 $385,000 $399,250 -3.57%
MORGAN HILL 22 $475,500 $612,500 -22.37%
MOUNTAIN VIEW 40 $610,000 $645,000 -5.43%
PALO ALTO 25 $1,200,000 $1,434,000 -16.32%
SAN JOSE 689 $370,000 $420,000 -11.90%
SAN MARTIN 3 $520,000 $855,000 -39.18%
SANTA CLARA 69 $463,000 $512,000 -9.57%
SARATOGA 17 $1,135,000 $1,450,000 -21.72%
SUNNYVALE 67 $550,000 $609,500 -9.76%

Nothing particularly special about Santa Clara county, just one market I follow. These numbers are a little out of date too. The most recent report for the Bay Area (April 14, 2011) is here:

Sales up, Prices Down for Bay Area Housing Market
http://www.dqnews.com/Articles/2011/News/California/Bay-Area/RRBay110414.aspx

Sales Volume Median Price
All homes Mar-10 Mar-11 %Chng Mar-10 Mar-11 %Chng
Alameda 1,506 1,400 -7.0% $360,000 $341,000 -5.3%
Contra Costa 1,412 1,414 0.1% $275,000 $245,000 -10.90%
Marin 225 249 10.7% $640,000 $668,250 4.4%
Napa 136 128 -5.9% $327,500 $308,000 -6.0%
Santa Clara 1,602 1,665 3.9% $500,000 $460,000 -8.0%
San Francisco 500 495 -1.0% $675,000 $650,000 -3.7%
San Mateo 533 579 8.6% $615,000 $555,000 -9.8%
Solano 660 608 -7.9% $215,000 $190,000 -11.60%
Sonoma 466 513 10.1% $318,000 $285,000 -10.40%
Bay Area 7,040 7,051 0.2% $380,000 $360,000 -5.3%

Still, I expect something of a weak upswing for prices this spring/summer in many markets before a bigger drop this fall. But I could be wrong...

joshuatrio says

I’ve seen a few rounds of price drops in the markets I watch lately.
Probably the sellers trying to unload properties during the selling season.
We’ll see.

I'm looking in the Bay Area. What market are you in Josh? These REO's are being priced so low that the listing agent does not need to host an open house. Any buyer agent that goes in with a client will result in a few more potential buyers piggybacking them in. It's nuts how the buyers w/out buyer agents with them are like vultures just stalking the property until someone opens the door. I guess these low prices always induced bidding wars that took the prices over $500k in my area (list price $415k or so). But lately, nobody is overbidding by alot unless there is something very special about the property.

Higher fuel prices may just drive demand higher for properties with good public transit and access. At these prices, some of those unemployed can settle for lower paying jobs and be able to purchase. We'll see what happens this spring. It will be interesting. What I see in my area are 3 desirable properties priced extremely low, and probably >50 interested parties of which none of them will overbid by much.

Here are 2 of the 3 I'm talking about. I already am in contract with the 3rd :)

http://www.redfin.com/CA/Daly-City/32-Christopher-Ct-94015/home/578094

http://www.redfin.com/CA/Daly-City/679-Saint-Francis-Blvd-94015/home/2026036
^^ I actually offered on this one when it was a short sale, and it was approved for $475k. At that time, the price was a steal. This was back in November. The 2nd lien killed the deal though. My old short sale approval letter showed that the bank would net $403k from the sale; it went to auction at the court house for $403k, and no takers. From the looks of this listing, the bank would net ~$403k after paying commissions. Very persistent in getting $403k for this property.

Edit: Here's a 4th, but it's considerably smaller.
http://www.redfin.com/CA/Daly-City/684-Higate-Dr-94015/home/1889582

vain says

What market are you in Josh?

South of you. Monterey area.

Sacramento is headed downward.

Who wants to catch a falling knife? Most people still think that housing has bottomed but the mainstream media already pulled the plug on the housing market. We see nothing but bad news in housing now and people are beginning to wait on the sidelines.

no. not at all. My GF is looking to buy a 3+ unit place and she's gotten significantly out bid with CASH offers 3 times. And her offers were strong.

this is in SF.

I want to know WTF is going on.

I think it's euro investors coming in with a discount thanks to the difference in currency.

These are good areas, around Dolores park, though.

I think the element of organized crime is more prevalent than generally recognized. For example, consider properties listed for sale in Richmond, CA. You can find many now boarded-up houses for sale for $70,000 or less that show a history of trading at $500,000 - 600,000. Can anyone doubt that there never was a genuine buyer at these levels? The money was simply stolen. Yet, nothing is done about it.

I still think housing price will come down even here in the SF bay area and more so in other parts of the country. One facet of the housing market I don't see too much written about is all the baby boomers that are starting to retire. Will they be wanting to down size? Sell of 2 homes? Maybe condo sales or townhouse sales will increase do to this.

Just my observations of still over heated market. Following the home price line from the 1800's to the present, homes are still way over priced.

Happy sitting on the side lines.

It's interesting to read this after I just did an analysis of sale prices of condos per quarter for one particular zip code. This is obviously a small sample size so I did not know how much weight to put on it.

Here is some of the most recent data I got from the multiple listing service:

Sale Price per Square Foot:
2010 Q1: $279
2010 Q2: $287
2010 Q3: $260
2010 Q4: $261
2011 Q1: $234

Just as "vain" noted, there is a precipitous drop in the most recent quarter from the previous quarter as well as from the same quarter a year earlier. Note, however, that there were only 19 sales in 2011 Q1, so the data can easily be skewed. I was going to wait until the end of the next quarter to see if this is an anomaly or a trend. After reading "vain's" post, I'm starting to think this is a trend and not just an anomaly. This may be a delayed result of the ending of the home-buyer credit.

Other observations from my data:
1) Average Days on Market has increased to 98. The same quarter a year earlier was 70 days.
2) The number of units sold is about the same as last year's but significantly lower than 2005-2008. (I did not check data from before 2005, but I may research it later.)

I'm seeing condos getting hammered in the bay area. The ones built around the peak are losing their loan eligibility one by one. This link from patrick's front page partially explains the situation:

http://www.sfgate.com/cgi-bin/article.cgi?source=patrick.net&f=/c/a/2011/04/10/BUHC1IRH7P.DTL&tsp=1

It seems like they're going from FHA eligible to cash only... and then the value plummets like whoa. It's a similar situation to cash only foreclosures that the OP mentioned. I wonder what the dinner party conversation is like in those buildings.

There are foreigners coming in and buying in California. The local working guys can't afford the houses until the prices drop some more. Some numbers may be instructive: quarterly growth in the USA since 1947 has been 3.3%, while the population grew from 143,000,000 to 300,000,000+ today. If the population of people making a enough money to buy outragously priced houses is dropping, and there is a gigantic shadow inventory of millions of houses that are underwater and going into foreclosure, how will prices go up? You know what is going up? Apple, Caterpillar, Deere, Monsanto, Samsung, Pfizer, Potash, ADM, Verizon, Toyota, Ford, Universal, Fox, Walmart because they sell stuff that people around the world buy and will continue to buy. Some of these companies are even given corporate welfare or bribes to make stuff that isn't even wanted (e.g. GE, windmills, solar). Ask yourself: have you seen a bunch of people sleeping on the sidewalk waiting to buy that house for cash? They do that for iPads.