patrick.net

they end up losing far more money by being stingy with too-small, incremental price reductions, often doing nothing more than following down a dropping market. At this point they are still practicing need-based pricing and STILL not being realistic.

That whole scenario is being played out by sellers of a Dublin townhouse I have been watching. On the market in April...didn't sell for 2+ months....dropped price, uh, a BIG $2,000....recently took it off the market. Perhaps they were just sniffing around to see what numbers would come in. Perhaps not.

BayQT~

October could well be the beginning of the end for some areas, and actually show a surge for others. (IMHO as they say)

I wouldn't be surprised. Some might see a flattening/drop as the "low" and buy. Possibly old news, but reminds me of the conversation overheard "London RE is low--time to buy is now!"

Or is it that you just like the way “October” looks in print Peter P?

I just have a weird feeling about October.

Jack,

Actually it is a current thread. The last post (today) is from the flipper, making his final decision:

"Looking at this situation from a business perspective, I have decided to keep the [house] on the market empty until the end of Labor Day Weekend. If I don't get an offer by then, I will go forward with renting out the house and refinancing the loan at a better rate."

In previous posts he also said he was "losing about 2K a month" in interest ALONE. He also said that the most he could get in rent was $1200-1500/month.

Wow, with a "business perspective" like that, he should be working for Worldcom.

Probably some of everything will happen, everywhere. (How’s that for a cover-my-ass prediction?)
Well, at least you're have no responsibility in this scenario, so your CYA has "equity." ;)

The slowness is going to be excruciatingly painful, now matter HOW it plays out.
Yes, I agree people will generally "chase the market all the way down." Gloating all the way up = whining all the way down? I can see the IJ headlines now...

Just got a visit from some former neighbors down in the DC burbs. They are waiting until their son graduates next spring to sell.

They were very curious about why I had sold in such a rush, etcetera.

I then noted that the inventory in Fairfax VA was up about 25%+ relative to July 04. I then felt bad. I don't gloat, generally. I just do my happy dance by myself in the bedroom with the lights out. But I felt like I had just inadvertently stuck it to them.

They are retiring and movign to a bed and breakfast in Viriginia - the real Virginia. They both had a hint of fear on their faces. Then they reassured themselves - "oh the market will still be good in the spring."

Yeah, maybe, maybe not. For folks like them, who are selling out for the last time, coming in 18 months after the peak can make the difference between steak or burgers once a week for the rest of their lives.

Anyway -
Hey Praet, good to hear from you you English guy!
It is sad.
People already talking about "rebuilding" New Orleans. How about, it's time to go? I like the idea of chicks boobs out everywhere, and all that, but moving is a huge pain I only want to do once again. Rebuild? No thanks.

Gloating all the way up = whining all the way down

I am so surprised that flippers/sellers are whining already. It is like someone complaining about water being too warm in a cannibal's pot, not knowing what is going to happen next.

Rates do not need to hit 7%... people are already stetching themselves thin with 1% NAAVLPs.

Jack, now that MP is gone, are you more of a bull or a bear? Or an optimistic bear? Or a cautious bull?

Agreed - higher rates would certainly accelerate the pace of price corrections, but at this point, people are already stretched so thin (especially in CA, FL, MA, etc.), it's not even a necessary catalyst. Prices will plateau and fall when enough people realize that the "20%/year forever" era is over.

Another distinction worth noting: Only fixed-rate mortgages are based on the 10-year bond rates, and these are becoming rarer every day. ARMs, and option-ARMs (neg-ams) will begin adjusting upwards right after the "teaser" rate period ends (usually 1 year). Greenspan's 2.5% of hikes are AREADY making a difference for many people.

I am so surprised that flippers/sellers are whining already. It is like someone complaining about water being too warm in a cannibal’s pot, not knowing what is going to happen next.

But didn't they see the guy/gal across the signing table with the bone through their nose?? :lol: Ok...that was bad. (slap on the hand) Bad, QT!

BayQT~

But didn’t they see the guy/gal across the signing table with the bone through their nose?? Ok…that was bad. (slap on the hand) Bad, QT!

They are thinking those bones are from the veal chops...

Dinner after "spa" ? :twisted:

B. R. A. C.

I must be more stupid because I don't know that acronym.

I’ll even do it for you 1700*2=3400.

Looks like it is beyond greed... it is stupid greed simmered in the emotion of pride.

B. R. A. C.
I must be more stupid because I don’t know that acronym.

DoD's Base Realignment And Closure 2005
www.defenselink.mil/brac/

Oh how I can’t wait to do the crazy miner dance.

When the time comes, we're going to have to organize a "crazy miner" square dance, so we can all do it together.

When the time comes, we’re going to have to organize a “crazy miner” square dance, so we can all do it together.

How about November 1, 2005? ;)

4) $3.00/gallon ahahahahahahahahahhahaha

How about

"$6.99/gallon HAHAHAHA"

I have already paid $3.19 a gallon already... $3 is nothing new. :(

When asked if they were worried about having a mortgage where their payments could increase while the vaule of their house was going down almost all of them said they will refi if rates start to go up (they said this after the obligatory “real estate never goes down” response).

When asked if they were worried about falling house prices almost all of them said they will sell if the market drops. ;)

These people are delusional. The point is that they do not want to bear the pain (sell/refi). Instead, they hope for a quick turnaound.

Every time a hurricane roles through it will knock down the partially built condos so the supply won’t be able to catch up to the demand, driving prices higer.

LOL :lol:

Her “expert opinion”: the more hurricanes the higer the price of condos. Every time a hurricane roles through it will knock down the partially built condos so the supply won’t be able to catch up to the demand, driving prices higer. One of my favorite bubble interviews thus far.

I wonder how long it took her to come up with THAT ridiculous statement.

BayQT~

I’m not sure I like the TONE of that question! (What would you like me to be?)

Relax, Jack. I like you just the way you are. Just curious. :)

It was like watching Fox news– you eventually burn out from the constant “sameness” of it all.

But... but we all care about that poor girl who is missing in Aruba, right?

I meant; ‘Blog BULL its a tough job but somebody has to do it’

Jack, I know you have a tough job. That's why I admire you so much. ;)

RE the BRAC list, if we're talking about CA, the list I saw showed the state losing about 2000 jobs total, including military and civilian combined. I'm not sure if that number is accurate given the recent announced changes to the proposed list, but 2000 doesn't seem to be enough to make much impact when it's spread across the entire state. Is there something I'm overlooking?

Seems like CA had a much bigger loss during the previous BRAC.

Or if we're talking about the nation overall, I couldn't find anything that showed the number of total jobs lost or gained nationwide. I doubt it's a a significant number though, with so many thousands of troops being moved from German bases back to US ones. But I guess it could be that some local areas will feel a bigger financial impact, and I could see BRAC being one of many factors that cause a downturn in some bubbly markets.

I actually might be able to get some unique info/insight into the base closures. My father-in-law is a General in the Air Guard, in fact he's the head of the Air Guard in Ca. He was drafted into the military during Vietnam so he's been around awhile and probably has some good insight. He's in Germany right now, but I'll ask him when he gets back.

California has one of the largest economies in the world, so a lot of people should be concerned about a RE bust in Ca because it'll affect people who don't even live here. It goes without saying that a lot of jobs in RE, mortgages and construction are going to get cut. I also think businesses like Home Depo and Lowes are going to see a major loss of revenue. After the obvious, I'm not sure. Let me think....

Let's see, what do people do when they refinance? They buy cars, so the auto industry is going to take a hit. And interest rates are going to affect the auto dealers big time because they won't be able to offer the 0% interest rate deals (yeah right) anymore. (My dad's in the business, and all he has to say about the 0% interest specials is that car dealers never lose money on a deal, they just find different ways of taking it out of your pocket.)
What else do people buy? Vacations, so the travel industry may be affected too.
Still thinking.

SactoQt, I think most businesses will be affected. Foreign oil companies may be exceptions because they have pricing power beyond strong demand... especially when many US operations are offline. Just a guess.

(at least that typical American who is 7,200 dollars in credit card debt…not to even speak about those who have multi-thousand invested in a bloated real estate market).

The scary part is that lavish spenders are in serious revolving debt while many "frugal investors" are in housing debt, thinking that they are ahead. Either type will not fare so well.

Hi all, I just found this site (by googling "real estate bubble", of course!) & have really enjoyed the commentary .
Current market data is difficult to find, but below is a pretty good site that shows homes currently on the market, pending sales, & closed sales...but only for south-ish San Jose neighborhoods. It also shows current ask prices...and if a price has been reduced, it shows the reduced price in red font...this I think is quite valuable! It seems the data is contributed by local agents. I'm quite sure it doesn't show ALL list price reductions...but there are some that can be seen...especially in higher-end neighborhoods.
Anyways, just thought I'd share this source of almost-real-time data. Oh, and the data is updated several times a day, as well (time stamps are EDT).

http://www.southsanjose.com/realty.php

Enjoy!

My husband was telling me today that the people who bought his friend's house and are negative cash flow on that are considering buying another investment property. :!:

I don't know if they're high or stupid.. or both. The market in this county is down 16% from last year, most people I talk to figure the writing is on the wall and are leery about the prospect of buying right now. But these guys are still merrily buying figuring that the party is still going. Talk about the greater fool. I will not feel bad when they crash and burn because I know they have been told the risks and they choose to ignore them.
Greed is bad.

SJ_Jim, thanks for the information. I am watching South and East Bay closely because I believe the decline will start there.

BTW, I have been running casual searches and it seems that inventory in South and East Bay has been climbing steadily while inventory in North Bay is quite stable. Are you happy, Jack?

No problem...yeah, at least one recent article mentioned San Jose as primed for bust.
My story...got outbid on a 1bd/1ba condo in early May (386.5 beat my 365 on 359 LP)...I decided that was the best I could do, & that there was a lack of sanity among the crazed bidders, & so I just had to wait and hope for a change since rent is cheap & not going anywhere. Time'll tell, huh?

Time’ll tell, huh?

Yes. Time will ...

Inevitably
Inexcorably
Indelibly

... tell.

SJ_Jim,

The total lack of correlation right now between PITI and rents/cash-flows for equivalent units is the biggest red flag that something is SERIOUSLY out of whack here, with the incomes-to-price disparity coming in a close second. You may want to trawl some of our blog archives for more in-depth material on this (the regulars here have already covered this ground before).

I especially recommend “I See Debt People” (July 12th, 2005) & "Too Big to Fail?" (July 9th, 2005) patrick.net/wp/index.php?paged=4 and Housing Bubble Glossary (August 12th, 2005) patrick.net/wp/index.php?paged=2.

Actually, I understand there is quite a slowdown here too.

"Dead"--looks that way to me. Just yesterday, I noticed a home in Kentfield that included approved design plans as part of the deal. I'm guessing a flipper saw the market and decided to bail. $1.1M for an old house on a 8200 sqft lot ("prime central location").

Regarding Sonoma...I think that county will be hurt worse than Marin: growing inventory of homes, higher incidence of foreclosure (already). Sebastopol is one of the higher in greater BA.

Naples has almost 20% of its housing stock "for sale."

http://www.marketwatch.com/news/story.asp?page=2&param=archive&guid={72B37618-A32C-4715-BEFF-B565FF3F7732}&siteid=google

Las Vegas is in almost as bad a shape, with over 5% on the market, which is huge for a Western city.

I think the areas that are going to get hit the worst are those regions most dependent on construction in the local economy. So outlying suburbs, like Riverside and Vacaville will be hit the hardest. I think Las Vegas is in for a ride, too.

Less hurt will be diversified urban economies, who never depended on construction or real estate for as many jobs in the first place.

Still predicting no recession, though if oil keeps going up, we will have one.