Early October home-selling stats from DataQuick show the credit crunch’s grip on the market. Difficulties getting mortgages meant sales activity was down 41% vs. a year ago for the 22 business days ended Oct. 12. If that holds, it’ll mean that O.C.’s losing streak will hit 25 straight months where the buying pace failed to meet last year’s activity levels. (ZIP-by-ZIP chart HERE)
Pricing was also weak. The overall median selling price, down 8.8% in a year, held at the 31-month low ($570,000) hit last month. Here’s a look at the rest of the market, by key slices:
| Slice | Price | Vs. ‘06 | Sales | Vs. ‘06 |
|---|---|---|---|---|
| House | $655,000 | -3.0% | 1,012 | -48.1% |
| Condo | $416,250 | -6.5% | 429 | -43.5% |
| New* | $521,000 | -27.4% | 335 | +10.2% |
| All | $570,000 | -8.8% | 1,776 | -41.1% |
* Includes single-family homes, condos and recently converted apartments
COMPARE: See how other indexes see O.C. home values: CLICK HERE
Per DataQuick, Single Family Median Home Price:
2007
6/26 = $735,000
6/30 = $734,000
7/12 = $725,000
7/17 = $725,000
7/25 = $720,000
7/31 = $718,000
8/07 = $719,000
8/15 = $712,750
8/22 = $710,000
8/30 = $710,000
9/11 = $700,000
9/14 = $689,000
9/21 = $675,000
9/26 = $670,000
9/30 = $655,000
10/12= $655,000
Here’s last years comparable figures from DataQuick on a Single Family Home:
2006
7/18 = $685,000
7/25 = $699,000
7/31 = $699,000
8/07 = $695,000
8/10 = $695,000
8/28 = $690,000
8/30 = $685,000
9/07 = $685,000
9/13 = $689,000
9/19 = $690,000
9/30 = $680,000
10/05 = $679,000
10/12 = $675,000
Lee,
Thank you for posting these numbers. It is clear that we are seeing a downward shift in home values. It will be interesting t see if the volume of sales decreases over the holiday months. It is hard to imagine that in a county as large as Orange, fewer homes could sell.
I would assume that we are in the early stages of this downward trend. I think by this time next year we will see the same trend with prices heading even lower.
A report from Harborveiw NB (over priced 40 year old boxes).
At this time we have over 30 homes for sale in the HB subdivision.
From what I here this is an all time high for tjhis area. Prices seem to be
holding ok, to slightly down so far.
The medium family income is around 145,000 per house hold. Homes range in cost 1.2 million to 4 million.
We have many folks that rely on Real Estate for the good life here.
Most house holds have one income earner. Stay at home moms are the norm. Also a big liability, no skill sets, no income, no Harborview.
Does any one else see a train wreck in process……..
Recession….
Lowering income levels…..
Out of wack home price to income levels……
So this is also the start of the slow season correct? So seasonal changes in lack of sales not surprising, I think that the Spring/Summer stats will show the true problems. I also think the other shoe is going to drop in December, when the retail sales show just how bad we are with respect to people buying plastic crap for the kids.
Jon:
Welcome back to your “normal” job. You really provided a perspective on the fires that no other reporter could quite duplicate. We’re all happy you and your family pulled through okay. A big sigh of relief from everyone here.
Now let’s get back to the matter of OC RE. Game on!
Hey Lee, if I remember correctly just a few months ago you were begging Jon not to post the median anymore because the data is skewed. Your cut and paste of the median SFR clearly points out the credit crunch on Jumbos.
Shockg:
Thanks for pointing out the continued hypocrisy on Lee’s part. He blasted the use of the median repeatedly for good reason when it did not support his opinion (and current market conditions) but has apparently become enamored with it now. I again ask Lee, why is it okay to use the median as a measure of value and market trends now when it wasn’t okay several months ago?
Before I get posts questioning my intelligence (world’s biggest dumbo, isn’t it Bill?) in thinking that prices aren’t going down, let me say AGAIN that I think they have been in decline and will continue to decline. My error in projecting market conditions was in the timing–I thought the beginning of the correction would have happened several years before it did. But, I also underestimated the frenzied behavior of consumers and the lunacy of the financial institutions in providing loans based upon one’s ability to fog a mirror with one’s breath.
I am not bullish on the housing market and will actually receive substantial financial gain while the housing market is in decline, but I think hypocritcal behavior should be pointed out for what it is.
the truth is how you want to see it. i think lee’s behavior fall into that category. also the herd mentality is alive and well here. so if you have the money and the income to do so, now is a good time to buy. i see a lot of desperate sellers out there.
Well there is only one problem
I dont have the money
Have to continue to save :)
Hey Chicken Little,
We have not even begun to see desperate sellers……this down turn is just getting started. When people are desperate they lower prices, a lot. Also, you will see a lot of people walk from their homes……..leave the key in the mail box, load the car, drive away.
I think the days of seeing a home for $350K in OC are long gone. I just think most of us want a home we can AFFORD!! Yes, prices will come down and I’m sure interest rates will rise, so it’s yet another wash. All we can do is save for a rainy day.
Why is that Kim? Because supply and demand don’t dictate that, there is plenty of supply and no demand currently. Because the values are out of line as in a bubble jumps in value, where as those houses would be 350k with out that bubble leap in pricing? I mean what is your thinking behind this, because half a million is a reasonable price for a starter home? The incomes around here are so pervasive and high that there is a ton of people in line with traditional non-toxic ARM liar loans? Seriously, what makes you believe that most families are going to be able to put out 5k a month in mortgage payments and not even touch food, car, insurance, clothes, utils, etc?
Kim, Well said Kim.
oops, only meant to say Kim 1 time.
What a difference a couple of weeks makes. Now all on the blog agree that prces are in for a prolonged downward period. While I agree, I miss the bantering of the permabulls. Maybe we can take turns acting like prices are going up just so we can make for better reading.
Kim,
Are you vietnamese? I see a picture of a realtor that listed this house in fountain valley. Every day I drive by there so one day I decided to take a flyer and it was listed for well over $800K. Needless to say, nobody’s lived in it for over a year and etc…
Yes! House prices will go down to $300k’s. We just have to accept it and time will help with that.
You know what’s long gone? GETTING PROFIT’s out of flipping houses.
Amen to that. Flippers are lowest of the low life scum in real estate. I hope they get so burned by this that they end up begging on the street. ….Well, that’s a little harsh but those damn greedy bastards better damn well know that I mad as hell and I’m not going to take it anymore.
Ok…
Patricio and rickhunter:
NO I am not Vietnamese?? What the heck would give you that idea??
Anyway, Patricio I think you are confused. There is a hell of alot of demand for home. The PROBLEM is no one can afford them. I agree that no one can afford a $5K mtg payment, hench thats why I do not own. So why are you bashing me?? All I am saying is that regardless of price, homes need to be AFFORDABLE. I think this is your arguement…Affordability is different for everyone. I am not expecting to buy a home for $250K, but I am not going to fork out $650K. When I find a home I CAN AFFORD, I will buy it. Regardless of where the hell the market is headed. If I can afford it who cares!!
I think you are twisting my words. I never said a $500K for a starter home was reasonable…Dont know where your thinking is.
why … why would anyone buy a home right?
I have to say that I disagree with now being a “good time to buy”.
I recognize that there are a number of sellers that need to sell, and they’re willing to move off of their asking prices, but the prices are still incredibly out of line with historic norms. CA, and especially cities areas closer to the ocean, have always been desirable and commanded a premium. I doubt anybody will dispute that assertion. That being said, it’s a fact (and I do mean fact) that this run-up in prices was in large part credit driven. The pool of buyers was larger than it has historically been due to subprime lending (giving loans to people that couldn’t even pay a phone bill on time), and the verification of income/assets was lax at best by many outfits, and the debt/income ratios have become out of the world. The verification / loose underwriting also applied to the Alt-A and Prime borrowers…it’s just that they historically paid their utilities on time. Pardon my sarcasm, but big whoopdie doo. Paying $300 of utilities on time on a monthly basis (and maybe a car payment) != being able to make a $3,500 mortgage payment on time.
Regardless of whether Mozillo & other firms negotiate looser terms with existing borrowers that are being squeezed, I think it’s safe to say that most (but not all) lending outfits are taking a harder look at their underwriting guidelines. This will inevitably result in the need for the potential new borrower to truly qualify for the amount of the loan that they are seeking. The net result is the pool of buyers that can buy a $790k home in Tustin that sold for $200k in 1999 will be much lower. Even if the “demand” (meaning people on the sidelines wanting to buy) is there, the capacity to actually qualify for the loan at these high dollars won’t be there.
Sorry for my long-winded reply, but I just don’t see it being a good time to buy until the new credit/underwriting guidelines have worked through the system, and the existing sellers have gotten the message that the engineer down the street making $65k a year can’t qualify for a $750k loan.
As soon as those no-doc, jumbo, option-ARM’s, with the 1% teaser rates come back for people with under 600 FICO’s, everything will be back to normal……
…what, they aren’t coming back?….ever….are you sure?……
….oh…well THAT may lower demand a bit……
Don’t mind Kim the Ho, she’s just another angry , unwanted single mother looking for her next cash daddy.
Newport renter:
I see we have joined the discussion. You’ve been in hiding for awhile. Are your feelings still hurt??
I have way more self-respect and class to argue with an ignorant, disrespectful asshole like yourself.
Have a great day :)
The interesting thing about this blog, is if you ask a question of a bull to support their position you are “rude” or “bashing” them. It really is a simple question and why I asked it, because I find it an interesting position to take in the face of all the counter facts.
Anyway, good luck with that POV.
rants,
Classic… Also, if you read the headline to the right it says, “Housing’s blow to the midsection”
Patricio,
I do not consider myself a bull. Why would you think that? Because I think house prices are going to drop 30%…
[...] Lansner reported on the most recent moves in median sales prices: Early October home-selling stats from DataQuick show the credit crunch’s grip on the market. [...]
please stop with the insult.
i for once like to hear a different pov.
i bought a house 7 months ago. my payment is 200% of my rent.
and i can afford the monthly mortgage payment. 20% of net income.
i got a lot more living space. i don’t have to put up with a crazy neighbor. i got a tax break.
so for me, it make sense. for other, i think they should wait.
That is not a beer belly it is just the wind blowing his shirt,
making it appear that he indulges a bit too much.
i am probably the exception here. not the rule.
Here is a “criticism” (if you want to call it that) of that GS report.
It is possible that the overall CA median price went up because of a disproportionate percentage rise in prices in “cheap” areas (i.e. Inland Empire, Central CA, Antelope Valley) with a LOT of homes. This would artificially push the CA median up since the values of a LARGE number of homes rose significantly. I don’t know whether that is the case or not, but I think it is.
The overall CA median may decline 30-40% as the report states, but that may play out with declines of 50-60% in those “cheap” areas with a large number of homes, and only 10-20% declines in higher-end areas (West LA, OC, Bay area).
There probably won’t be declines of 30-40% everywhere in CA.
“I have way more self-respect and class to argue with an ignorant, disrespectful asshole like yourself.”
Wow… with statements like that it’s no wonder Kim has become the new punching bag for the blog. BTW, is Pebbles retired? The number of blog comments has dropped by a lot.
CFC
17.30
+4.23 (32.36%)
Oct 26 - Close
by the way i never think those ninja loan make any sense.
i applied for a 30 years fixed conforming mortgage with octfcu.
Sorry JohnF you are wrong those loans are not gone forever they are just being re-worked. Right now you can get an option arm (worded different of course) with a 1% or less Interest Only payment… I am in the mortgage business and will not say the company who is doing it but it is available right now. That’s right $250 mortgage payment on a $400k loan. And you can get cash out and pay the payment for 5 years in advance. Cash out 15k pay it back and No Mortgage Payment due for 5 years! Anyone have ideas on what this will do to the market???
Well Kim, so you don’t think that a house will sell for 350k again in OC, but you are not a bull.
Ok, makes sense.
Hey Patricio you bloated, sweaty bottem feeder, leave Kim alone her opinion is every bit as valid as yours. Go back under your rock
Ok Mom, whatever you say, as long as you stay at home inside the house.
I know I am way out of line by asking her about what she typed, what was I thinking?
Thanks, for your opinion it means so much to me, and is so well thought out and logical.
JohnF,
There already has been over a 10% decline in OC. Look at the asking prices of the homes on the market. They are asking 15%+ off the peak and they are on the market for beyond 90 days. Since when does a median home price decline last for just 1 or 2 years. The 90’s was a very minor correction and it went on for over 5 years. Certain factors always work themself out. One of the major factors is the link between median income to median home prices. We are about double the highs of the past. when the fundamentals are so far out of wack you are not very wise to say that we have to ignore basic fundamentals. The bottom line is that fear will drive this downtum further than it should and greed with drive it back up again faster than it should.
rick hunter, home speculation has been around for a long time. it began with the birthplace of orange county way back in the 1800. housing speculation is just part of the capitalist society.
rick hunter i know what house in fv you are talking about. that house is now in repo. the realtor no longer has the listing.
i think she paid 750k for that house in 2006.
I think this is absolutely ironic. After driving off any posters who are even remotely optimistic about the market, the bears are now left to argue with each other about who is more bearish. Apparently, Kim’s opinion that prices will fall only 30% labels her as bullish in this “new blog order.”
Patricio
I am glad we understand each other. By the way your sarcasm is cute, childlike and meaningless but cute just the same.
I wonder how it feels to live in your world always hoping for negativity it must be a trip
Hello all, can you answer a question for me?
When a house is foreclosed on, does it count as a ’sale’? The reason I ask is I look at zillow, ziprealty, redfin, etc. and there are homes that have clearly been repoed, and it will show the ‘last sale date’ as being the date when it got repoed.
If this is true, and ’sales’ are being tallied that are actually foreclosures, then aren’t the true ’sales’ numbers even far more tragic?
Can somebody in the know enlighten us?
rick hunter the biggest and most successful housing speculator in fv is this guy named tim olivadoti.
http://www.timolivadoti.com
Hey Rants/Lester, If that was you in the photo your combover would’ve gotten all messed up in the wind.
Liar loan,
I was commenting on newport renters disrespectful comment that has no place here, and I have every right to attack when attacked.
If you dont agree with my opinion, great…move on. Why does everyone argue with who is going to be right. Just wait 5 years and we’ll all come back here and claim the ranks!
Stay at home mom has nothing better to do than attack everyone. Again, she makes no opinion on the topic or anything, she comes out of the blue and blasts everyone.
Patricio:
Just because I think home prices will fall 30% does not make me a bull. I think if its affordable, then buy. What do I care! Do what fits within your means. Why is that so hard for you to grasp. The market will always rebound in CA, its were everyone wants to live…it just takes time.
Everyone take a breath and relax!!
Damn…where’s ROC and Scott when you need um…
What if I told you all that in 2008 of July home prices would start to rise again, believe me they will for at least 3 months after the dramatic price declines leading up to that summer, Now that I see anger in you for my prediction I know tell you that prices will drop more sharply for 18-30 months after that and steadily increase for the next 12 years.
Would you call me crazy….Probably but why do I know this will happen, I don’t it’s completely hypathetical.
I’m looking at what my grandfather and great grandfather told me. Buy your real estate that you can afford now and your children will benefit from it later.
So if you take greed out of the equation and buy real estate that you can afford for your families future, in an area you like that seems safe and you will enjoy living then all these nonsense just disappears.
I know many think they can’t afford it, but I don’t think that’s so true, you just have to be more content with something not so lavish.
The real estate professional thrives on greed. I wish there was a better way of buying real estate and enjoying where you live, but this is the system in place maybe online sales will help shape things in the future.
Chiken little has the right approach. he bought just 7 months ago and has no remorse because his house is home of choice for many years.
Forget flipping it’s an ugly term. So if you want to buy a house do it if you want to speculate about the market and try to turn a profit then remove the greed from you heart for you have made this market what it is today.
…like most bears Patricio, you don’t just ask a question, you thrown in pejorative statements like “I mean what is your thinking behind this, because half a million is a reasonable price for a starter home?”. Just ask a simple question like an adult rather than the adolescent you appear to be (see, I can do it too). One thing I’d like the bears who predict a $350K median to do is answer the question, since the median was approx. $205K in 1988, why is only a 2% rate of increase since 1988 “correct” appreciation given the still low interest rates, inflation certainly higher than 2% a year and a local economy that is still not in economic collapse mode? And in 1988, Orange County was the most expensive real estate market surpassing Honolulu…why suddenly are we supposed to fall to the middle of the pack(and if you think Orange County is such a poor place to live why do you want to live here?)
Frankly, any bear thinking Orange County will see a $350K median is either too angry to think straight…too poor to buy a house under any condition…or lacking clear common sense. The fact is, not everyone who is struggling will fail, not everyone refinanced, not all of those who did refinance took cash outs they couldn’t afford (majority like me just refi’d to get a lower rate which means our mortgage will be paid off quicker), plus 20% of OC residents have no mortgage and an additional 70% or so bought their house prior to the run up of 2004-2006.
And funny, Patricio, how everyone who disagrees with a $350K median is now a bull. That is the type of opinion based, nonsensical arguing that certainly impresses your inexperienced grad school friends but also pretty much defines you as intellectually vacuous in the real world as well as too rigidly close minded.
Rants,
That was a rib-splitter. lol
Common Sense:
There will be declines. All I am saying is that the declines may not be even (30-40% everywhere) throughout California.
An overall 40% decline in the median California price could occur if coastal areas go down 20% and inland areas go down 60% as long as there are more homes declining in the inland areas.
This may happen, as I said in my initial post, if the percentage increase was more pronounced in the inland areas.
As an aside, the 10% decline you mentioned includes new construction that is being dumped at 40% discounts by the builders. The resale values haven’t declined nearly as much - actually hardly at all given all that is happening. So far there is a disconnect between the resale prices and the new home prices.
Finally, I think there are plenty of people that think a 10% decline is a bargain and are jumping all over these new “cheap” houses thinking that the 20% annual increases are going to start up again. I don’t think that is going to happen but there are a LOT of people that do and are buying these homes because they appear to be cheap. That will slow price declines in the near term. I am amazed that sales volume has only dropped 50%, I would have thought it would go down 99% given the high prices of resale homes.
Kim,
This is like flogging a dead horse, so I will drop it and we will just move on…you say houses wont go to 350k…
Kim Says:
October 26th, 2007 at 10:25 am
I think the days of seeing a home for $350K in OC are long gone.
But 370k is doable and backed with an article, that is fine whatever, we will see 370k again but never 350k, I understand now. Did you know that 1 in 3 people are on some type of medication? Just a fun fact, that helps you understand the hard to understand things in life.
Chicken Little-
You’re right about Tim Olivadoti. He’s a realtor that also rehabs and flips houses on the side. Used to be a neighbor of my dads during one of his rehabs. He gives the whole neighborhood a free pie every Thanksgiving to promote his realtor business.
Kimmy-
Your comment was just as disrespectful, yet in the same sentence you talk about class. Whatever…
it is ok to disagree as long as we can do so in a civil manner.
Hey lets keep the hostility where it belongs, directed towards the profiteers of the housing bubble, agents and brokers of houses and loans, the pig men of wall street and other assorted vermin.
Again…to all if you dont agree with my opinion, move on. Thank you for discrediting me for standing up for myself. Next time I will just stand in a corner and shut my mouth. Thanks Liar loan. Just because I am an opinionated woman does not mean I dont have class.
Patricio:
I DO NOT THINK HOUSE’S WILL BE $350k!!! Deal with it. We dont agree and I dont agree with the poster so what.
i don’t want to see this forum to turn into another racist forum on ocr.
Homes going down to $350k depends on:
1. Whether the government and banks are able to take the majority of resetting loans and work out a way for the homeowner to keep the
house.
and
2. There are a massive amount of people that cannot qualify for jumbo loans.
If neither can occur, then look for the market to take an immediate substantial hit. If people are not paying the outrageous prices and a ton of foreclosures hit the market, it is going to be like Detroit was over the summer. The banks, etc. cannot keep homes on their books and their bottom line will be better something than nothing. So they will take way less than what people believe the homes are worth.
Bank of America is phasing out using mortgage brokers and I believe it is going to start a trend with other banks. They are streamlining their processes and most importantly, they are asking for appraisals where the appraiser is not using market research of what homes went for in a database but what the appraiser see when it goes to view the home. That by itself is going to change pricing.
Things are changing for the better. Even if you have the money and can afford it, why buy now if you can get a better deal in a couple of months. Even if you buy right now and have some equity, if prices plunge, the likelihood of your equity plunging would be pretty high.
Patricio-
I don’t believe the OC median will reach $350k (although some SFR’s may). Mo’s mom brings up a good point. The conforming loan limit is $417k. If you figure that to be 80% of somebody’s purchase price, than the home would go for $521k. It’s going to be difficult for home prices to continue falling once they start to approach the conforming loan threshhold. I think a lot of buyers currently sitting on the sidelines will make their move at that point. The absolute lowest I see the median reaching is 10% above the conforming limit, whatever that happens to be in 2-3 years.
Mo’s Mom,
It amazes me that people have the attitude like; “I don’t care what the maket is doing, I will buy when I can afford the house”. All indicators are saying that there is a major correction on the way. Dataquick is saying it and a major firm like GS is saying a 40% correction. If you can save $200k why wouldn’t you wait. Who could afford to give away $200k. The problem is that most people consider this funny money. The reality is that you do have to pay off the entire mortgage, even the $200k that you overpaid. That is real money and when one matures they will see that for what it is and that is a gift for the patient.
JohnF,
The problem with your theory about the Inland going down 60% and that making a difference is that it really doesn’t make much of an impact becasue of the already low cost. I challenge you to look at homes that were bought in 2005 & 2006 that are currently on the market. You will notice a major price reduction in their listing price, let alone what they really sell it for in the future. I am talking about $1-3M homes, not Inland. Consider this, the entire market doubled in value over the past 5-6 years. I am talking about Newport Beach, Irvine, Corona, Riverside. It all went up and it will all go back down. The percentage going down will be close to the same by the end of this downturn.
Liar Loan,
Agreed, the median will not go to 350k, however I do believe that the starter homes in OC will see 300-350k again. In this county if the median went to 350k we would have to get a super scooper to drive through the streets and pick up all the bodies from all the mass panic suicides. So, I hope it doesn’t get to that point in the future.
Have a good weekend!
Liar Loan,
This assumes we don’t have a terrible recession and with high unemployment. If we do all bets are off.
Uh Patricio:
Weren’t you just argueing with me saying it’s going to go to $370K?? Do you have a straight answer. Now your saying you dont think it will go to that….then why the hell are you argueing with me.
Yeah 1 out of 3 people are on the same meds because there bi-polar….ring a bell.
Re: the conforming (or even FHA) loan limits as a floor, keep in mind that those products have very strict debt-to-income ratios. $417,000 of debt at 6.5% still means a monthly payment of about $2,700. At a 36% mortgage-debt-to-gross-income ratio, that means the borrower needs to make $90,000 per year.
Are there enough six-figure-income households in OC to soak up the inventory that keeps increasing? And how many $90,000 incomes are going to be able to save anywhere near 20% down on a $500,000 house? (A hundred grand?!!? It would take me several years to save that much, even living a modest lifestyle on a substantially higher income.)
I see the median price going into the 400Ks, easy. And that’s without a recession.
The funny thing is that all of you are attempting to apply logic to the bottom of this downturn. Once everyone is saying how bad it is, very few will be buying out of fear; in the same way it didn’t make any sense why so many people bought after 2003. You will see in a few years and will be wiser next time you see a bubble in Gold, Tech Stocks, etc… Apply logic to understand where you are and how far outside of the fundamentals you are at this point. Really spend time reading that GS report. They are talking fundamentals. I was laughing in 1999 when people really belived Yahoo and others were worth $500/share. They departed from the fundamentals and said that this is a whole new era. I guess you have to say something crazy like that to depart from the fundamentals.
Common Sense,
Yes fundamentals…………………….+/- 10 %
Rants - I vote for Ron Jeremy for President!
stillwaitingfingerscrossed: I didn’t read ll the posts but none of the ones I did appeared to have addressed your question.
I’m not employed in the RE or finance sector but have come to the conclusion from some cursory research that what you are seeing is the bank taking possession of the property as a recorded sale. This occurs usually if the home is not sold at auction or just not sold period, for the price the lender wants. So they take over the property, and record the sale at the price they deem the property to be worth.
Keep in mind this is my own speculation and I’m sure that some of the people in the biz can comment further/correct my statements/etc. if most of them realize that arguing is futile at this point. I also think that these recorded sales are also appearing in dataquick’s numbers and so forth, which further adds error in the positive direction on their data.
I am hoping that someone who truly knows the exact answer would chime in.
Common Sense-
I read the GS report, but I have to say it was a little disappointing. Goldman is a little out of touch with California’s social changes over the past 25 years. The supply of highly desirable land (i.e. coastal land) has always stayed fixed, while the population of our great state has exploded over the past 22 years. Does anybody honestly believe that the affordability rules of 1985 still apply in 2007? Did the rules change from 1960 to 1985? If not, why aren’t we still using the same metrics? I don’t see people using affordability metrics from 1960, so I think it’s safe to say that paradigms can shift over time.
Golman’s report is based heavily on the assumption that Subprime and Alt-A loans were overused starting in 1Q04. They admit that this essentialy ruins their predictive model for home prices but then go on to say prices are destined to drop 30-40% across California. Seems pretty irresponsible to me considering they already got it wrong once.
Here’s what was missing from their report:
1. A detailed discussion on the future use of Subprime and Alt-A loans. I have news folks… these loans aren’t going away.
2. Not so much as a mention of the push to modify many of the loans that will be resetting and have already hit their reset date.
3. A more objective metric such as rents vs. costs of buying.
Beyond that, I’m not sure it even makes sense to lump California all together in the first place. JohnF alluded to this in his posts. Does it really make sense to lump San Diego together with Eureka? How about Barstow and San Francisco? In my opinion this distorts any findings for a state as diverse as California.
Patricio don’t mind Kim, she’s just angry. Her knees are getting sore, if you know what I mean. Guys won’t commit to a used up old single mother of a worthless kid.
Hmmmmm…..ROC’s usual flood of posts has all but disappeared since graphrix proved him/her a liar, but now magically, we’re seeing more posts from chicken little, Stay at Home Mom, Patricio needs a women, Richard T. Bagley and kim in place of the thousands of ROC comments.
Whoever this weirdo is, he or she is desperately trying to persuade folks to buy at the top of the market with a plan that will benefit him or herself.
With the amount of arrogant realtors, loan officers, flippers, etc. talking even themselves in their own con game, many have entered the “flip that house” thinking they would get rich only to find themselves in a desperate and delusional situation.
A pathological liar is usually defined as someone who lies incessantly to get their way and does so with little concern for others.
Pathological lying is often viewed as coping mechanism developed in early childhood and it is often associated with some other type of mental health disorder. A pathological liar is often goal-oriented (i.e., lying is focused - it is done to get one’s way). Pathological liars have little regard or respect for the rights and feelings of others.
A pathological liar often comes across as being manipulative, cunning and self-centered.
Bill,
It is a little ironic isn’t it? It’s ok though. I am really starting to enjoy the fact that we have entered stage 2. I have a feeling that it will only get worse from here.
BTW have I told you the foreclosure numbers for October on a per day basis are up from last month? I’m sure you probably knew that but it’s good to remind everyone else.
“why suddenly are we supposed to fall to the middle of the pack(and if you think Orange County is such a poor place to live why do you want to live here?) ”
Because they are all hypocrits. Never follow the herd of angry fanatical preachers. These guys are motivated by greed. They need to incite panic to help their cause.
Bill, Funny how you didnt mention all the people who recently bought for reasons other than greed and speculation. Believe it or not people are buying homes they can afford, to live in for a long time. You are the one who is totally obsessed with the greed factor. Take a long look in the mirror.
Shockg,
The only other reason someone would buy in a topped out market would be pure stupidity.
Greed, speculation and stupidity, which category do you fall under?
Bill, I fall under the category that doesn’t need to obssess about timing the bottom of the market so I can make a quick profit. What ever happens short term doesn’t matter to me. I never planned on using my home as a piggy bank. Are you going to call the thousands of people who bought homes in OC in the last year idiots? many of those people bought because of marriage, growing families and job relocation, etc. For those people obssessing about making a quick buck was at the bottom of their priorities. Don’t project your greed and speculation on everyone because you have very different motives than many of those people. Your tirades are getting old so move on.
Wow some of these bulls are off the deep end, they are the ones who cry for civility and they are the worst offenders….I am gonna guess avid Bush supporters as well.
Kim take two pills and get a nap in, you are having difficulty with house prices and median prices.
I think we are past denial and into panic now from these posts, glad I am not stuck like Roc and company.
Bill, I read your post and the simple answer is someone missed their meds.
Bears like Patricio have run out of bulls to argue with so they continue turning on each other. Only in this blog would someone who thinks prices are going down 30%, as Kim has indicated, would they be considered bullish on the housing market.
Out of curiousity, Patricio, how pessimistic does someone have to be to be considered a bear on your bear-o-meter?
The second sentence on my post was somewhat garbled as I am trying to post and watch a football game at the same time.
OC Native, do you selectively read and then come to conclusions based on bits and pieces of information? I have to assume that is how you operate looking at your assessment of the situation between me and the board. That would be a terrible way to go through life, I think you should go back and re-read the English printed on the page.
Or you are just another bitter bull that is angry the fantasy is over and is grasping at straws.
If you don’t think the end of the world is coming, then your a buil on patricio’s misery meter.
Patricio, How does it feel going through life with all this anger and pessimism?
If you are insinuating that I just jumped into the blog, you may notice that I pointed the same thing out earlier in this string. I’ve read this blog for many months and have seen many of your posts. You’ve even added something fairly intelligent once or twice, but those are typical overshadowed by the remainder of your posts.
I think it’s partially due to your lack of attention to reading individual posts that lead you to call Kim a bull; at times I’m guilty of the same, as I was trying to post while watching a football game. I’m not out to protect Kim; from what I’ve seen, she can defend herself very aptly. I’m just pointing out that the prophecies of some of the more intelligent bearish posters have come true. This blog has gotten to the point where those with bullish opinions were so abused that they have moved on and the bears are left to argue with each other about who is more bearish. If someone isn’t negative enough, they are labeled a bull. Sounds a lot like McCarthyism.
Am I a bull? Hardly. I’m back in the REO ga me and will benefit greatly from a depressed market.
Interesting theory “I think it’s partially due to your lack of attention to reading individual posts” where have I heard that before…..oh the post above yours.
Yes all the bears are saying a house in OC will never sell for 350k again. Or would that be a more os a bear thing to say, as in prices will refuse to revert to the mean? Now….stop….take a breath….ok read that again and think. Now ok stop read it one more time and think again….would a bear say that prices would drop or a bull…one more time….bull or bear? Ok, did you read it throughly no skip any of the words, what is your answer?
Now wait, before we get to your answer let’s look at the two definitions of bears vs bulls.
Bear - An investor who acts on the belief that a security or the market is falling or is expected to fall.
Bull - One who expects a rise in prices in a particular security, sector, or the overall market.
Ok now you ready was what she said bearish….or bullish?
Did I ask her how she came to that conclusion and how she could over look some of the fundamentals?
Then she said not 350k but 370k she could see….which is just well ridiculous.
Anyway….bear or bull?
Good luck with the RE biz, I think your timing is impeccable, you should be just making tons of money right now - you really thought this whole things out well!
*These dot connections today brought to you be the words reason and sanity. *
As I’ve posted in this blog several times, I’ve been a Realtor for many years but tired of the insanity the market the past few years and have recently been making a good living in a related field. I enjoyed a phenomenal income during the the bulk of the 1990s via REO and love the financial prospects of this evolving market, especially with the opportunities that have been handed to me.
Since you’ve been so kind to me, Patricio, when I come to your house in the future with the sheriff and the locksmith to evict you, I’ll try to give you a bit more time to move out your possessions if you’ll promise to stop asking me if I want fries with my order everytime I see you. By the way, good luck with that career. If you’re really good, they may move you up to the milkshake machine.
I’d like to say it was fun having dialogue with you, but I’m not very good at lying. It’s time to say good-bye to this blog. Patricio, I hope you and the other bears have a fun time being cannibals and attacking each other. I really would have been interested in knowing how your bear-o-meter works. I’m sure I don’t have your great intellect, but from what my feeble mind could gather, anyone who doesn’t think at least as pessimisticly as Patricio is automatically labeled a bull.
Thanks for heartfelt wishes for my success. If your ignorance wasn’t so great, you’d realize the foolishness of your assessment.