Steve Thomas at Re/Max Real Estate Services in Aliso Viejo in his latest biweekly market report notes: “Demand, the number of homes placed into escrow within the prior month, increased by 49% over the past month from 1,219 to 1,820 escrows. We have not seen demand at this level in six months, since just before the beginning of the credit crunch in mid-August. ”
Thomas watches a “market time” benchmark that calculates how many months it theoretically takes to sell all the O.C. inventory in local brokers’ MLS for-sale listings at the current pace of pending deals being made. By this Thomas logic, it would take 8.46 months for buyers to gobble up all homes listed for sale last Thursday at the current pace of deals vs. 9.73 months two weeks earlier and vs. 4.59 months a year ago. Market time was 15.6 months at New Year’s.
A key reason behind the changes: the latest count of deals in escrow of 1,820 is up 82% vs. Jan. 19’s wintertime low. Also, since Dec. 27, while the number of distressed homes on the market has grown 1,108 … the non-distressed supply shrank by 1,231. (Read more about supply of distressed homes HERE!)
Here’s a look at the market by key slices …
| Slice | Listed | Deals | Months | 2 wk. ago | Yr. ago |
|---|---|---|---|---|---|
| All O.C. | 15,392 | 1,820 | 8.46 | 9.73 | 4.59 |
| •$0-$500k | 6,745 | 917 | 7.36 | 8.38 | 4.14 |
| •$500-750k | 4,342 | 529 | 8.21 | 10.04 | 3.97 |
| •$750k-1m | 1,778 | 185 | 9.61 | 9.77 | 5.25 |
| •$1-1.5m | 1,171 | 109 | 10.74 | 12.67 | 5.12 |
| •$1.5-2m | 623 | 54 | 11.54 | 13.62 | 6.18 |
| •$2-4m | 759 | 48 | 15.81 | 19.03 | 9.76 |
| •$4m+ | 243 | 13 | 18.69 | 34.29 | 25.33 |
(Note: k=thousand; m=million)
OMG! The bottom is here! Now is the time to buy! Better hurry, before all the people who listened to truthi et al. and shockg/Pat Veling (thanks Bill, I have thought the same thing for a year now), price everyone out forever!
Ut roh… wait, here are the distressed property stats…
Home market watcher Steve Thomas at Re/Max Real Estate Services in Aliso Viejo reports that the number of O.C. distressed properties for sale (homes listed by agents as foreclosures or short sales) was 4,859 last week, up 422 vs. two weeks earlier or a +9.5% change. As a percent of all listed homes for sale, distressed properties were 31.6% of the market last week vs. 29.1% two weeks earlier. Since Dec. 27, the number of distressed homes on the market has grown 1,108 while the “non-distressed” supply is 1,231 lower.
Hey, I thought Steve Thomas was on Pat’s/shockg’s team here, and all those foreclosures are double counted and in bad areas? Mmmm… so as the NODs keep increasing, does that mean the distressed properties will increase? I wonder how Pat’s inventory numbers look now? Does he have the guts to show us how bad it has become, and how wrong he was? Come on Pat, suck it up and show us how your inventory looks. I told you the chart would show an awful trend, and you knew it. Oh… let me guess you won’t respond because I won’t use my real name. Geez, that says a lot about someone who boasts about their stats doesn’t it. Oops, not really, not when they were wrong.
Have we learned NOTHING? How were the recent purchases funded & how qualified are the purchasers to actually pay back their borrowings? Personally, I’ll withhold applause until we learn how many of the recent borrowers will walk away from their present homes & loans once they are “in” these lower priced homes & loans.
This is where bloggers could help make sense of numbers that seem odd. Look at just the number of escrows. It went up 50% according to this article. That seems like a very large increase. I would like some ideas as to what would account for such an increase.
Unless this is a normal seasonal pattern it does not make sense. If loans suddenly became more available that might do it. But that has not happened yet. So forgetting the time to market and gobbling up all the properties, I wonder what would account for such an increase in escrows. Curious readers want to know!
The Sun will come out
Tomorrow
Bet your bottom dollar that
Tomorrow
There’ll be Sun
Tomorrow, Tomorrow
I love Ya
Tomorrow
Your only a Day Away.
DEAD CAT BOUNCE
There will be at least one every spring unti the bottom somewhere around 2011, if the Boomers decide to rust in place.
If not, there isn’t a bottom.
Some of you here sound like Pubah and KoKo contemplating the “Short Sharp Shock”. Oh and by the way the Case Shiller Deal Killer index is due out this Tuesday, so I would direct your attention to the OFEHO website to read the January 30th Working Paper on the inefficenies of the C/S index as a predictor of the direction of the Housing Market. Tah
INFLATION.
Jon
The real story is that 2008 is even worse than 2007. One year ago at this time it took 4.59 months to sell a house and now it takes 8.46 months. Last year was a very bad year for R.E. and so far this year looks even worse. It doesn’t take much for bulls to cheer nowadays.
“read the January 30th Working Paper on the inefficenies of the C/S index” that’s really exciting and informative.
(grabs big dead fish) whack! as I slap Lasner across the face. This drivel belongs on the opinion page. Newspapers are supposed to be free of bias and all I get from this page is bull market real estate drivel when it’s clearly the opposite. I have personally fired two agents working for me now because of this same type of attitude.
Story from today’s Register paints a picture of the obvious.
Here’s how it goes:
“Trent Charlton knew the risks when he borrowed $10,000 from his 401-k and cut his retirement savings in half.”
“But Charlton, a 40-year-old account executive at an Irvine trucking company, said he had little choice because he and his wife could not keep up with monthly expenses after American Express reduced the limits on three credit cards.”
Here’s a 40 year old home debtor from Irvine, who had a measly $20,000 in 401k savings, and was dependent on a an expansing of debt from AMEX just to pay his monthly expenses. This has become the Orange County culture … people pretending to be wealthy, relying on DEBT. Now our local economy is gonna pay a hefty price because of this nonsense.
More senseless dribble from the foolish home debtor (WTF was this guy thinking?):
“Charlton and his wife used the retirement money and $7,000 from savings to pay down their credit card debt. They also cut monthly expenses by pawning a diamond ring and selling camera equipment he owed money on. And he’s looking for someone to take over his $550 monthly payment on a gray BMW 335i he leased last April.”
Do these numbers include foreclosed homes that the banks are buying back at their own auctions?
I have noticed more homes “taking backup offers” in my local area but is also hard to tell what that means until the deals actually close.
Blue skies coming! See? All you have to do is wait awhile and things always turn around. Poor Bill, he hates good news HA HA HA
Oh my, what if lower prices actually led to increased sales? (I vaguely recall something about that in Econ 101) Oh my, what if prices won’t drop 50 percent? No one ever listened to me until my predications (which I started making in 1999) of the imminent real estate market collapse started to come true. Who will listen to me now? What will I do with myself?
If an improving real estate market, or even the thought of an improving market is causing these feelings of hopelessness, anger, and despair, there is help. Call 1-800-get-a-life.
This is great. This is what sends loser bears to the nut house. They can”t stand even a glimmer of positive news. It doesn’t fit their their downer personalities. They missed out on buying a home and now wait to take advantage of folks going into foreclosure. Vultures always hate to see their prey get up and run.
Some agent posted this news two weeks ago on this blog and got blasted for it, he said escrows were at the highest levels since July, guess he wasn’t full of sh__. I Need more than one month of this to convince me. Uptick in activity is normal for the season, combined with the horrific levels of sales Nov and Dec, looks like some fence sitters are taking advantage of the new loan limits and this was just a carryover of pent-up demand from the previous few months of catastrophic sales. Let’s not hang our hat on one month’s activity, even with this much activity, sales are still below the historical average.
Haha, Damage control. Graphix, when you have nothing you resort to sarcasm. Sad.
Pent-up demand.
I have an anecdote that does not bode well for any of you that hope for a market bottom any time soon. My neighbor has decided to give his house back to the bank. Sure — this sounds like one more statistic among many. But what is interesting to me is that he doesn’t need to give his house back to the bank. He has a good job and makes enough money to pay his mortgage. But he bought in 2005 with nothing down and is upside down to the tune of about 300K. Since he has no skin in the game (ie no down payment) he figures, why not let the bank eat that loss?
That is bad news for home prices on my street, but you know what? I don’t blame him one bit. This is a perfectly rational, and in my mind, saavy deal on his part. He should get also get a year’s free rent while it sells too. As more people wake up to this reality, foreclosures may continue to sky rocket EVEN WITHOUT JOB LOSSES.
Hey Permabulls:
Here’s the part of this report that Jon left out. From Matt Padilla of Mortgage insider:
“Home market watcher Steve Thomas at Re/Max Real Estate Services in Aliso Viejo reports that the number of O.C. distressed properties for sale (homes listed by agents as foreclosures or short sales) was 4,859 last week, up 422 vs. two weeks earlier or a +9.5% change.”
And
“As a percent of all listed homes for sale, distressed properties were 31.6% of the market last week vs. 29.1% two weeks earlier.”
Demand at 6month High:
Not that I am optomistic about 2008 or……Nor do I think we hit bottom however,
Two condos in my aliso complex sold in Januarry.
I do see agents and activity in the area which I have not seen for 6 months.
I still wont make a move for at least….. 1 more year.
Californians are impatient by nature, I want it and I want it now,this is how they got into the whole ARM nothing down, buy now pay later mess.
This is just another crop of foreclosures coming up to bat. What you buy today will be worth less tomorrow, prices are going to drop until 2011(it’s 2008 fyi) this is a unsavy time to buy financially , and a even dumber time to sell………no Patience, live and learn children.
Lee & Mr. Rabbit:
Good posts:
Those are solid indicators that we have just begun.
I believe Lansner has previously posted sales numbers by month for OC in the past (don’t have time to look it up). If I remember correctly, those numbers showed March-May are the the highest sale months and Dec-Jan are the lowest.
50% sounds a bit high for a change in pendings this time of year, but I would bet going from the traditionally slowest to fastest moving time of year will result in a 25%+ rise.
“One data point doth not a trend make”. PT Barnum said a sucker is born everyday (I would update that to “every millisecond”).
My experience is that NOBODY I talk to believes me when I tell them that OC real estate will drop 50 percent. It just seems unfathomable to them. It’s never happened in the past they reply in disbelief. The whole concept seems obserd. But none of these people have seen the statistical facts that the people on this blog and myself have seen. And none of these people have a conceptual understanding of how the toxic loans conspired to create this bubble. Let the suckers buy. They will silently regret it later.
Buy now or be locked out for………..
Nah, you’ll be able to buy for less a year from now, and a year later, and a year later…………………
So Steve Thomas says escrows are up, by 50%. Hmm-m-m-m, what should I do? What should I do? Think I will just wait. Yea, just wait … a bit longer. Yea, like another two or three years as prices continue to fall. Yup, this is fun. Just waiting and watching as prices fall, and fall, and fall.
Once again, Mr. Thomas’ is desperately trying to make it look as though demand is “up” for OC housing when smart buyers are just saying ‘no’ in light of the fact that the market is poised for another 25% drop per the smart guys at Chapman University. Mr. Thomas is obviously a desperate realtor trying to drum up business, and the Register just keeps on publishing Mr. Thomas’ numbers without doing any checking whatsoever. So much for credible reporting.
I too believe we are headed for a melt down. Why? not because I’ve seen the numbers, but becuase I’ve experience what this season in loan tightening has done personally. I tried to get a loan last week to see if i could buy a condo and was told I don’t qualify. Now get this. I’m not some joe who works at McDonalds. I make 90K a year and have a FICO of over 770 and i DONT QUALIFY!! seems that unless you really do have 20% to put down these days you are just out of luck. So let me ask…who in the world could possibly afford to buy a home? Nobody it would seem. No wonder there are no sales going on. The market is tanking all right. Let it tank!!
I still would like someone besides the triple-troll to explain this. A 50% jump in sales is very interesting. why would 50% more people decide to buy vs a month ago. Or at least go into escrow. This really needs explanation. Like this figure could be a mistake. Or maybe people have just got the itch to buy. Or something else. It would seem it would be a reporters job to dig a bit more. But I guess people can just speculate until next month.
Now that OC real estate has dropped 20 percent from the price peak I can understand the psychology of why people might be starting to buy again. They have been mentally conditioned throughout their lives to recognize that a 20 percent drop, just like 20 percent discounts in sales at the shopping malls or Walmart is about all one can ever realistical expect to receive. Somehow, they think that it’s time to buy when discounts reach around 20 percent or thereabouts.
However, the real estate economics and shopping mall economics aren’t intimately related. The downturn in real estate prices will last until paychecks and home prices come back into fundimental equalibrium. The past 300 percent increases in real estate left the lesser increases in salaries in the dust. An updated set of beliefs will be created in people’s minds when this real estate downturn is over.
I see. When it’s positive news it’s a mistake. When it is crappy news it’s gospel. Bear logic. Go figure.
Calm down:
You are delusional. Do you realize that any credible expert is predicting another 25% price drop in OC over the next 2-years? Yet you think every bear here is some negative bottom-feeder. We are realists. We’re sorry that you’re probably losing most of your net worth by this process, but the real estate market, and the economy as a whole will not start the recovery process until a larger chunk of middle-class America can buy an affordable home. You should be happy about the correction, because things won’t begin to turn around until prices do fall another 25% in OC. So unless you’d like to see a long-drawn out recession, you better hope prices fall and fall fast. Wake up and smell the coffee!
My friend’s family owns a very nice restaurant chain in Southern California. He is a manager at one of the restaurants and he also DJs in his free time for a 2nd income since his 3rd child is coming soon. He’s got a small place in South OC somewhere and his mortgage payment is about $5,000 a month. The other night while eating at his restaurant he told me that the last fire just about burned his place down. He says that he wished it had, so that he could have gotten insurance money and gotten out of his payment and moved. That just gives you an idea of what is going through the mind of recent buyers who bought during the peaks of the market. They are slowly realizing that in 2-years, they’ll be able to get the same place with a payment of $3,000 or less instead of the $5,000.
calm down disappears for months then one supposedly good
news article appears and hes back pooh poohing the market
again lloolll @ribsplitter dude just change your name to
UPSIDE DOWN
Oh great, just what we needed, a another prediction that it really is getting better out there in the real estate sales game…….now all of the fence sitters that were thinking it was time to bale out and sell their homes will list homes…..driving inventory through the roof.
This will only cause the buyers out there to wait even longer.
Definition of a “credible expert”: Someone who agrees with me.
Testify, Crystal Balls.
For those wondering why a bump in sales, you have to realize there is still a significant percentage of people out there that want to buy a home and are clueless without a realtor guiding them through every step, including telling them exactly what to pay. The enlightened bull/ bear bloggers can make educated price decisions, but just pull a random shopper out of WalMart, hand him off to a smooth talking realtor, and I’d bet he could be convinced this is a great time to buy. Of course, it might be a double-wide…
I still would like to hear an explanation of this amazing increase. Maybe if we close our eyes and click our heels together Pat Veling will come back under his real name and help us to interpret this amazing pop.
So lets close our eyes and repeat after me
(Please come back Pat and help us with these figures.)
There is no time like now to buy a home……
There is no time like now to buy a home…..
There is no time like now to buy a home…..
( Our we in Kansas I mean OC yet?)
Explanation:
There are many uneducated people in OC with a lot of money. Therefore people are still buying right now.
So, all of the experts are forecasting big price drops. You call them credible? If so, where was their forecasts forcasting 500% gains in the beach cities in the mid 1990s? How can someone who missed on a 500% price gain forecast be an expert on a 10% price drop forecast?
Well said David Poggi.
Bulls need to get off this blog and go find their buyer. before its too late.
the bulls are out in force today!
The NAR found another village idiot…..sort of like OC’s own PV……..
…….”Lawrence Yun, chief economist for the Realtors, said he believed the housing market may be on the verge of bottoming out with a rebound expected to start toward the end of this year.”…….
There are many uneducated people in OC with a lot of money that don’t know there are not many uneducated people in OC with a lot of money.
Thank heavens. Soon my listings will all have multiple offers and they will be outbidding each other and all I have to do is wait a few days and the sales price will be way higher than the asking price. Happy day! I knew I could make it through the tough times, but glad its finally over.
What is denial?
Being unwilling to face problems on either a conscious or subconscious level. Acting as if there are no problems to face. A defensive response; protection from pain, hurt, or suffering. A mask to hide feelings or emotions behind. A way to avoid conflict, disagreements, or disapproval from others. A way to avoid facing the negative consequences of reality. A way of retaining our sanity when experiencing unbearable pain. A way to repress the truth of our loss, a way to continue to function in a “normally.” A pattern of life for individuals who are compulsively driven to “look good.” A way to avoid the risk of change as a result of problems or loss.
Good post Jeff,
Man is it hard to sort through the crap here today - - our resident troll in all his/her multiple names is out of control.
Back to the topic –
This seems significant:
“Also, since Dec. 27, while the number of distressed homes on the market has grown 1,108 … the non-distressed supply shrank by 1,231″
There are some desperate situations out there. A year from now, whether those picking up some of these distress sales will look like they did the right thing is yet to be seen.
There appears to be another important factor that is being ignored — the massive auctions. These are generating new escrows, but does this indicate demand?
This from the actual report is interesting, but wasn’t brought out:
(Don’t forget last year was VERY slow and there were no auctions)
“Last year at this time there were 12,194 homes on the market, demand was at 2,654 escrows and the market time was at 4.59 months. Two years ago, there were 9,038 homes on the market, demand was at 2,892 escrows and the market time was at 3.13 months.”
So……………last year was terrible but we are starting off with ONLY 31% LESS DEMAND than last year, yet inventory is WAY up and prices are way down and properties are being sold at auction.
Where’s the bright side in any of this?
Hey Calm Down, you’re only supposed to comment when the arrow is green. Are you just desperate for any excuse to post?
Definition of a “Troll”: Anyone who doesn’t agree with me.
meooooooooow …
….. raaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaah
THUD!
It looks like they have asked Lanser to stop the negative spin and start
a new positive spin on housing ! I knew that they are toying with us all along. Now it’s been decided by the big boys that the spin on housing should be positive ! Look out, here comes the new highs within the next 6 to 9 months. This was probably the best buying opportunity of the last decade !! I hate to admit .
Jake, you can’t see the increased demand because you don’t want to see it. People from all over want to own a home in OC. You included. Once they can work out the financing they will buy and hold. You on the other hand seem to think it’s your birthright to be given a cheap home in a desireable area. Good luck with that strategy.
David Poggi Says: ” The other night while eating at his restaurant he told me that the last fire just about burned his place down. He says that he wished it had, so that he could have gotten insurance money and gotten out of his payment and moved. ”
How can a house fire helps the homeowner, or let him get out of his payment? He still need to sell his old place at a loss. I am confused.
“Spam protection: Sum of 1 + 6 ? Says:
February 25th, 2008 at 11:45 am
David Poggi Says: ” The other night while eating at his restaurant he told me that the last fire just about burned his place down. He says that he wished it had, so that he could have gotten insurance money and gotten out of his payment and moved. ”
How can a house fire helps the homeowner, or let him get out of his payment? He still need to sell his old place at a loss. I am confused.”
No need to be confused. Dave poopoo and his many names is full of poo poo.
BTW, who cares about the demand if the supply outnumbers the demand? More than 3K new listing, and only 2k go into escrow.
I think alot of people are misunderstanding the oppurtunities available right now. Prices have dropped & Interest rates are still hovering around 5%, I don’t think that will last too long.
Do the math on current home prices @ 5.5%.
Good time for qualified buyers with good credit and a 10% down payment.
Crystal Balls:
You can disagree every day if you want to.
That doesn’t make you right.
If you like making comments on a public blog that prove you ignorant and uneducated about the real estate reality in OC today, then by all means, please continue! I find it very entertaining and I hope nobody here is stupid enough to go buy any time soon. But there are plenty of stupid people in OC as we all can tell by this article.
My last comment is for Tools as well, and any other idiot trying to convince people that now is a good time to buy. You should be ashamed of yourself. You clearly have an agenda here. Are you selling a home? Are you a realtor? Nobody in their right mind thinks now is a good time to buy. You have a been proven wrong month after month after month. Do us all a favor and spread your garbage somewhere else.
David Poggi Says:
February 25th, 2008 at 12:06 pm
My last comment is for Tools as well, and any other idiot trying to convince people that now is a good time to buy. You should be ashamed of yourself. You clearly have an agenda here. Are you selling a home? Are you a realtor? Nobody in their right mind thinks now is a good time to buy. You have a been proven wrong month after month after month. Do us all a favor and spread your garbage somewhere else.
David PooPoo, you are the one who should be ashamed of yourself. You appear to be selling something on this blog to help line your pockets. Fear. Let it go already. The numbers clearly show that people want to own a home here. Just like you do. Get off your high horse and do something productive with your life.
hey tools, aren’t interest rates actually around 6% now?
Not to get sidetracked, but Bill’s contention that our resident troll and Pat V might well be one and the same got me remembering that I had had a similar suspicion some time back. I went back to Pat’s appearence here (about Feb 13th, I think) and found the exchange that got me thinking —– and then went on to find this December exchange that leaves me baffled as to why I wasn’t convinced back then. We all know the troll posts under numerous names and Truthiness and shockg are one and the same — and there is this pattern of the troll posting and then with a name switch congratulaing itself and/or supporting the comment…..I found the following (and the responses to it - below) very interesting in that it is almost verbatim the line schockg has been throwing out non-stop, and also the charges about the mud-slinging and name calling. Probably the biggest tell was in Februaury Pat was chastising any and all for not posting under their real names…and you’ll see shockg use the same bit below.
–
Real estate consultant Pat Veling, Real Data Strategies:
“Buyers seem to think that if they wait long enough, sellers — many of whom have hundreds of thousands of dollars in equity — will eventually be forced to give their homes away. Those buyers will be disappointed. Sellers, on the other hand, think buyers will eventually come around to the fact that the market correction is slight and comprised primarily of media hype.”
—
# rs Says:
December 11th, 2007 at 3:48 pm
Pat Veling = Truthiness???
—
# Truthiness Says:
December 11th, 2007 at 4:44 pm
Figures Pat’s completely even-handed comments would be trashed.
—–
usedtoreadtheregister Says:
December 11th, 2007 at 4:57 pm
I think the bears will be very surprised to find out that alot of sellers agree with Pat V.
——
# rants Says:
December 11th, 2007 at 6:10 pm
pats company is called “real data strategies” lloolll
what real data you were so far off on your calls you
should be embarrassed to even post here– figures
truthi would agree with him that just confirms what Ive
known from day one theyre both clueless and liars to boot
———-
# Pat Veling Says:
December 11th, 2007 at 6:15 pm
BTD wrote: “I must add that ANYONE who listens to Pat Velling’s ridiculous projections is totally out of touch with reality.”
Who made a projection? I was very careful in my comments to Jon. What I said was “…after its over-correction resulting in so few sales currently and in the near future.”
Have I called a bottom? No. Have I projected WHEN the market would hit bottom? No. But I DO believe the market will over-correct.
The question on everybody’s minds is how far it will go. Bears think it’s got a very long way to go. Bulls think it has less of a distance to go. I think it’s safe to say that everybody here — bull or bear or in-between — agrees the market continues to move in a correcting direction.
Do NOT credit or blame me with projections I have not made.
And now back to the normal mudslinging, name calling, and general mayhem to which this blog has been reduced.
———
# Truthiness Says:
December 11th, 2007 at 6:18 pm
You’re the man, Pat!
———
# Truthiness Says:
December 11th, 2007 at 6:21 pm
Mr. Lansner, please make this your subtitle:
Bringing you mudslinging, name calling, and general mayhem since 2007.
LOL!
——–
# mbagrad Says:
December 11th, 2007 at 6:23 pm
Pat, see above.
You CLEARLY made several biased statements that suggest something other than what you’re saying now.
Be a man and own up to your opinions, at least!
——–
# Truthiness Says:
December 11th, 2007 at 6:33 pm
mbagrad, I disagree with every single statement you made, with the possible exception of his use of the phrase “seem to think”. And for your information, Mr. Velig knows precisely how much equity people have. He has more data than you can imagine. Your statements are biased, ignorant and paranoid. And stop with the troll bullsh*t..
——–
# Truthiness Says:
December 11th, 2007 at 9:20 pm
What a pathetic conversation this has been. Maybe the non-end of the world believers should rip a new one for all the other interviewees. Slamming Mr. Veling because he’s not PC enough for you all is a load of bullsh*t. There are plenty of people who disagree with the bears visions of grandeur. That list includes hedge fund managers, economists, consultants of every stripe, sovereign fund managers, private equity investors, miscellaneous multi-billionaires and many more. You all are just a bunch of windbags. Give it a break with your endless trashing of anyone who isn’t sufficiently negative to suit you. Enjoy your fantasies. Spring will be here to crush them soon enough.
——-
# shockg Says:
December 11th, 2007 at 11:19 pm
Why don’t you idiotic greedy vulture self-serving speculators go on the record with your real names and make your outlandish end of the world predictions and see what kind of responses you get. Grow up and stop trying to talk down the market for your personal gain. And don’t pull the “poor first-time buyer” crap because none of you are.
——–
Truthiness Says:
December 12th, 2007 at 10:10 am
I know this is going to break some hearts, but I am annoucing my semi-retirement from the blog. I know, I know. But you will get over it with time. I may pop up now and then, so don’t be too sad. I have to make a living, so I can afford my resetting ARM. Sniff.
———
# Bill Says:
December 11th, 2007 at 8:32 pm
mbagrad,
I also agree with your statement.
The subtle innuendoes you caught Pat throwing out only remind me a little too much of our resident bull blogger truthi.
A little too close for comfort maybe?
——
# pdu Says:
December 12th, 2007 at 5:21 pm
Hey Bill,
I liked your post above.
I had the exact same thought…..the similarities are too creepy. Might even explain the “retirement” :) :)
Dutchtrader expects a new name….man she already has so many….. but it won’t work. A leopard can’t change his spots.
Why am I feeling like the sun is starting to shine?
___
National Association of Realtors and Lawrence Yun, chief economist, said he believed the housing market may be on the verge of bottoming out with a rebound expected to start toward the end of this year.
“Subprime loans and other risky mortgage products have virtually disappeared from the marketplace, and over the past five months, this has been reflected in soft but fairly stable home sales,” he said.
Jon
NAR reported that home resales were at their lowest level in a decade
They have figured out a way to make seasonal adjustments. Is this something that is beyond the ability of Steve Thomas are does he just want to con us.
I repeat…
Home market watcher Steve Thomas at Re/Max Real Estate Services in Aliso Viejo reports that the number of O.C. distressed properties for sale (homes listed by agents as foreclosures or short sales) was 4,859 last week, up 422 vs. two weeks earlier or a +9.5% change. As a percent of all listed homes for sale, distressed properties were 31.6% of the market last week vs. 29.1% two weeks earlier. Since Dec. 27, the number of distressed homes on the market has grown 1,108 while the “non-distressed” supply is 1,231 lower.
I can’t believe that we have spent all this time debating what this guy Steve Thomas said in his newsletter. Don’t you realize that this guy is a REALTOR? What do you expect him to say?
This guy has been calling the bottom in the housing market for the past 2 years. Someday he will be right but not until 2010.
Read his newsletter, he’s been saying the same thing every month for the past year “do NOT wait for the bottom of the market. Nobody is going to ring a bell to signal the point at which we reach that bottom.”
You can go back to his previous postings in 2007 and you’ll see he never tells buyers that it is a great time to buy. Anybody who followed his advice early last year, it is now “under water”
Ummm…. yeah, my mom used to give me my castor oil soaked through a spoon full of sugar when I was a kid. Sugar coated, it was still nasty.
Been an appraiser and a RE Broker here for 25 years now. You can tickle the numbers anyway you want. We’re still roughly about 1/2 the way through this. If you look at the re-set mortgage numbers, they’ll run negative for a solid two years, and this month, February, happens to be the “pinnacle point” for negatives in that span.
We have a long way to go before even the “super enthusiasts” can pull this one out of their hope chests …..
I should’ve said:
“you’ll see he ALWAYS tells buyers that it is a great time to buy”
No question about it. Steve is a typical realtor.
Also, he’s trying to scare buyers by saying “A change in interest rates to more historical norms will seriously erode a buyer’s purchasing power and will result in much higher payments. Any advantage gained by waiting for prices to reach a “bottom” will be lost in much higher long term monthly payments.”
You know, the typical line “buy now or be priced out of the market forever”
Well, guess what…if interest rates go up, home prices will come down. If people can’t afford homes, demand goes down, prices go down too.
I’m a realtor and mortgage broker and I’m telling all my clients to just watch the market drift down. Whenever prices fall in line with incomes, that will be the bottom. We’re not even close yet. In some cases, my clients are finding homes that are priced below market and then it makes sense to buy. But that is the rare exception to the rule.
The prices have to return to levels where the fundamentals are in line. Period. Straight-up economic theory.
Poggi,
I don’t recall who I’m stealing this from, but you truly come to a battle of wits unarmed. I don’t comment that much on this blog and I certainly don’t claim to be a real estate guru. I am smart enough to know that no one can reliably predict what will happen to this real estate market. I can modestly claim that makes me a hell of a lot smarter than you.
What is the brouhaha about?
Aren’t sales numbers supposed to be up after holidays? This is a normal trend.
However compared to last year and year before that these sales (actually these are only escrows) are still very pathetic.
Also keep in mind that we have sales number decline for nearly 27 to 28 months. Sooner or later sales number will not be able to register further declines. That is just not practical. However note that prices will continue to go down for a year or two after sales number bottom. This is what the historical trends show.
Hey National Bubble,
In the above listed Jon Lansner interview, Steve Thomas merely presents statisical data, rather than providing a real estate agent point of view. I appreciate his data and express thanks for providing it. He doesn’t have to share his hard work with the public for free. We should all be a bit more appreciative of the people Jon Lansner interviews. I also appreciate the data that you provide on your website. Thank you also.
Crystal, I work in the industry, and the fact that you think nobody can predict a further value decline is hilarious. I feel sorry for you. I guess if you worked in the industry for the last decade + like I have and spent a few hours a day researching the issue like I do, you’d be a little more informed. Because you are not educated, please don’t assume that nobody else is.
Poggi - didn’t you used to work for xtend, you are in the real estate biz now?
Has it crossed anybody’s mind that conforming rates were super low 30 or so days ago, and heloc rates low too, so even in OC someone could get a decent mortgage payment with a rate on a 5 yr arm @ 4.75% or lower, no points, and piggy back a heloc at 6% IO no closing costs, plus seller incentives, realtors taking less commissions… etc etc, etc
I want ot give my house back too, anyone want it
hey wheres Roger Habib these days?
Shock:
I assumed that putting out opinions based on thousands of facts and market research is doing something productive. But I guess in your world, acting like a 3rd grader with your petty insults and putting out outright lies and opinions based on you not wanting to lose anymore equity would be considered productive. That is the difference between us. I’m sorry about the $100,000+ more equity you’re going to lose over the next couple years because you didn’t time your purchase smartly.
yes weren’t you working for that laptop battery company 7 - 8 yrs ago Pogi? 10 yrs in the biz, huh?
tinymouth, I was just wondering where roger has been also…
and good observation on connecting those low low rates to possibly increasing the escrows… over the longer term life of a loan there could be big savings at those low rates, even if values drop 5 or 6% more…it could make sense…let’s all give tinymouth a big hand.
NationalBubble.com Says:
“we are not even close to a bottom. Numbers don’t lie.”
The link you provided with that statement is offering data from the Northeast - numbers from there are irrelevant to numbers from South Orange County, where I live. So, while those numbers may not be lies, they don’t apply here.
There are some great buys in So. O.C. housing right now - being snapped up by PRUDENT buyers. Three months ago, on Larry King Live, Donald Trump stated emphatically that NOW is a GREAT time to be negotiating on real estate.
Should I believe him or you. DUH! Just what is YOUR hidden agenda? Perhaps it isn’t so hidden. Are you charging people for your tiresome doom & gloom? What will happen to all your doom BS when the bottom really does come? Who will you pontificate to, then?
For your information, Mr. Misinformed, Steven Thomas’ newsletter of 14 months ago, predicted pretty much what really happened - here in Orange County.
In addition to more buyer activity - meaning escrows opening at a brisker pace, and open houses being busier, and more escrows closing, there are 4 important factors pointing to why NOW is a good time to buy a house in South Orange County.
First, good buys ARE being snapped up, and their replacements are priced higher, and more firmly, for the most part. Second, interest rates are starting to nudge upward - over the past 3 weeks. Third, lenders faced with foreclosing on a property are much more frequently working with the troubled borrowers to resolve the matter - renogotiating the rates or terms. ( That will result in FAR fewer foreclosures coming on the market in the months to come.)
Fourth, and possibly most important, the stimulous package will provide a BRIEF buying window for those truly qualified buyers who have been sitting on the fence, who unlike the majority of negative-news bloggers here, who are probably mostly renters, actually have more than 20% down for one of the new higher amount conforming loans, with lower rates and better terms. ( It will ALSO provide a bail-out window of opportunity for some existing homeowners with troublesome loans, giving them an ability to refinance at better rates and terms, avoiding foreclosure.)
Unlike the Bear-renters who are hoping that prices come down another 25% over the next 3 years, these PRUDENT qualified buyers see this as an opportunity to buy at the REAL bottom - NOW - as opposed to a fictional one suggested by someone really not in the least qualified to make such predictions. ( Just because you happened to be correct for a year or two, YOUR bubble of doom is about to burst.)
So, keep right on predicting doom & gloom, while some of US are out looking for great buys right now. I’m looking for bread & butter 3 and 4 bedroom houses, in South O.C., to buy with 25% down to turn into POSITIVE cash-flow rentals. Perhaps some of you negative Bear-Blogers will need a new place to rent when your present landlord raises your rent again - every year - for the rest of your lives.
You probably won’t be able to afford one of my rentals though - you might look in Stockton or Sacramento, where the VAST majority of California foreclosures is happening. ( Again, how relevant to South O.C. is THAT? Give me a break.)
It’s almost time to start looking for a place to hibernate, Bear.
This is interesting. K. Hovnanian has abandoned a SFR development called “Coastline at Pacifica San Juan” in south OC. These were ocean view homes to be priced in the $1M price range. My husband and I went to looky-loo at the models today and found that they were closed. A call to their office confirmed that they are selling the three models and calling it quits.
I am a happy renter in Irvine paying under $1,000 a month while I prepare to purchase at the market bottom like all intelligent people do. Buying during a market decline is bad. Buying in the most overpriced state in the whole USA is worse, buying at the top of the greatest bubble market in the history of the world = PRICELESS.
Most of these escrow are probably from the “new idea” auction sales
and the lenders are taking months to approve the short sales, if at all
david pogi
how do you find an apartment in irvine for 1k a month?
1k a month will get me an apartment in the ghetto of santa ana not irvine.
30 or so days ago
Conf 5 yr fixed IO - 4.75% NO POINTS, piggy back Heloc 6% IO
seller incentives, RE agents cutting their commission…
10% downpayment =
$3000/month or less $600K home
National Bubble.com predicted a market crash back in year 2000. The market almost tripled after their prediction ! That’s not a reliable/objective source. Look at their name, it tells you the whole story. How can an entity go against its own name?
Joe - you can easily get under $1k a month in a nice area by sharing a place with roommates.
David Poggi had this to say: ” I work in the industry, and the fact that you think nobody can predict a further value decline is hilarious.”
Oh, REALLY? Just what industry is that? Stocks & bonds? ( I’m SURE you accurately predicted that melt-down in the early 90’s, right? ) The rental industry? The car biz? What industry do you so mysteriously allude to?
AND, if it’s the housing industry, were you being a bullish contributor to this blog up until late 2005?
The fact is, NOBODY can accurately predict the housing market, the stock market, the horse races, OR the lotto, although many of us try our best.
If you have made BILLIONS with your seemingly accurate foresight, I’m sure you have some way to prove that - being on Forbes annual list, or something like that.
If not, and I suspect this is truly the case, you’re just guessing along with the rest of us. MY best guess, based on being a property buyer/owner in South Orange County, for the past 35+ years, is that we are - right now - at the bottom of this present cycle.
Kinda funny that THE most accurate predictor of real estate values over the past 20 years in South O.C., Gary Watts, who DOES have a degree of economics, and a proven record - he gets a lot of flak ( for being somewhat wrong, the past TWO years, on blogs like this, by FAR less qualified pompous know-it-alls who happen to be right for a year or two.
When you’ve been right for 20, heck, even 10 straight years, THEN tell me about your qualifications, OK? Until then, happy guessing, Mr. Negativity.
David Poggi says: “I am a happy renter in Irvine paying under $1,000 a month”
OMG! I rest my case. You, sir, are an unqualified blow-hard!
Show me the “expert” who warned of this downturn and then we’ll have an “expert” worth listening to.
I don’t recall saying I live in an apartment or that I live alone. I’m very young compared to most of you here and I’m not married and have no children. I live in a 4-bedroom townhouse by a lake in Irvine with 3 friends. It’s bacially a very nice bachelor pad.
I’m just very happy that I did not buy in the past cycle when I could have. I’m paying off my bills and building my fico. I’ll be in perfect shape to buy when the future bottom comes and I’m smart enough to wait for it. If you bought during the past 5-years I can only say that I feel bad for you. Don’t be offended by my comments. A very large portion of OC believed all the industry hype that you must “get in now or you’ll be priced out of the market forever.” I just knew better because this is already my second cycle since I’ve worked in the industry.
Sighburrdood’s looking for someone to listen to….why not do the research for yourself? Gary Watts was correct for a while, but NOT for the reasons he says. He was correct in showing correlation, not cause. The boom was fueled by non-existant underwriting, not because of any other reasons he cited. Gary Watts was, in effect, ACCIDENTALLY correct.
pdu, this was all very predictable and I did not buy over the past 7-years because I knew this would happen. For anyone who’s worked in loans like I have, and understands how Neg am loans work and what effect they had on driving prices in OC to these crazy levels, it was clear exactly what what going on. These people took out the option ARM loan to afford a house that was priced 200%+ higher than what they really qualified for. They paid the minimum payment and added $1,000+ per month of the deferred interest onto their principal balance, because they could not afford even the interest only payment. So while values are going down a few thousand a month on these homes, their loan balance is going up at the same time. The recast will hit anywhere between 110 and 125% of the starting loan balance and there you have it, a 200+% increase on their minimum mortgage payment. Foreclosure city, either that or tell your wife to go work 80-hours a week.
We’ve been waiting a long time to see these irresponsible, undisciplined, impatient, self-entitled and self-absorbed people get what they deserve. While they were basking in the glow of achieving their CLEARLY UNAFFORDABLE American dream, we were evicted from our beloved rental home (which it had taken us 6 YEARS of searching to find) and were given an abrupt 30-day notice (despite consistently early rental pmts and perfect credit with no debt) simply because the owner decided to move his son into the home. While this was certainly his perogative, we had to put our emotional devastation on the back burner and take care of business. In order to be out by his designated deadline, we moved into a hellhole until we found a place and location which we don’t like but are tolerating which is, of course, renting for MUCH more money….not to mention the thousands of $$ in security deposits we lost along the way. During this time, we could’ve EASILY picked up a beautiful home which we could NOT afford, but this was never even an option in our minds. We did everything RIGHT and still lost our home. You eagerly and willingly GOT YOURSELF into the mess you’re in so SHUT UP AND QUIT WHINING. QUIT TRYING TO CAST BLAME ON THE MORTGAGE COMPANIES. YOU HAVE NO ONE, REPEAT: “NO ONE TO BLAME” EXCEPT YOURSELF for your predicament. GROW UP AND ACCEPT RESPONSIBILITY FOR YOUR MISTAKES. By the way, it’s very refreshing to see that the overwhelming majority of comments posted here share the same opinion
Signburhood said this:
David Poggi had this to say: ” I work in the industry, and the fact that you think nobody can predict a further value decline is hilarious.”
Oh, REALLY? Just what industry is that? Stocks & bonds? ( I’m SURE you accurately predicted that melt-down in the early 90’s, right? ) The rental industry? The car biz? What industry do you so mysteriously allude to?
AND, if it’s the housing industry, were you being a bullish contributor to this blog up until late 2005?
The fact is, NOBODY can accurately predict the housing market, the stock market, the horse races, OR the lotto, although many of us try our best.
If you have made BILLIONS with your seemingly accurate foresight, I’m sure you have some way to prove that - being on Forbes annual list, or something like that.
If not, and I suspect this is truly the case, you’re just guessing along with the rest of us. MY best guess, based on being a property buyer/owner in South Orange County, for the past 35+ years, is that we are - right now - at the bottom of this present cycle.
Kinda funny that THE most accurate predictor of real estate values over the past 20 years in South O.C., Gary Watts, who DOES have a degree of economics, and a proven record - he gets a lot of flak ( for being somewhat wrong, the past TWO years, on blogs like this, by FAR less qualified pompous know-it-alls who happen to be right for a year or two.
When you’ve been right for 20, heck, even 10 straight years, THEN tell me about your qualifications, OK? Until then, happy guessing, Mr. Negativity.
Point 1: I work for a company that makes real estate related software and I speak to industry experts on the phone for 40-hours a week. I did mortgages back in the mid-late 90’s.
Point 2: I was not on this blog until this year since I had no interest in buying a property in a horrible bubble market that I knew was about to bust, and it did.
Point 3: You are wrong sir, this crash was very predictable and I have not purchased for the past 7-years because of it.
Point 4: I never said I made any money from this very predictable bubble, and I did not say I’m in investments at all other than your typical 401K etc.
Point 5: If you think I’m negative, that’s your opinion and you’re entitled to it, however mislead you might be. This is a good thing values are going down, and until affordability for a much greater portion of OC becomes a reality, values will continue to fall. There are no more 100% financing stated income loan and no more easy option arms. If you had been in loans like I have, you would understand what impact financing plays on values in OC. These loans are gone and therefore you just cut the number of qualified buyers in OC from the tens of thousands to a few hundred a month. But I guess since you’ve been buying and selling for so long, you should know all that… How come you don’t? If you think we’re at the bottom right now, please go buy some homes, and see where you end up. I’m trying to help people by giving them accurate advice. If you think that’s wrong then God help you.
Sighburr,
I thought that lots of Trump’s projects were being postponed b/c of the slowdown, in Miami, etc. So, talk about someone who has an agenda.
And how does being a homeowner in OC qualify you as being a better predictor of the market as opposed to someone who isn’t? To me its like saying you are a world class chef because you happen to eat a lot of steaks.
Investors have bought some of the properties and put for rent signs on some as well. Many are still empty. Banks have also pulled dozens of listings off the market. They didn’t get the offers they wanted. They may end up on the auction block.
Some agents simultaneously raised their listing prices. They must have had a conference call.
The numbers of homes in SC went from 750 for sale to 1200 for sale in one week. There is some strange manipulating going on.
Jimmy,
You said “Inflation” and in an older post I remember you said that Real Estate is a good hedge against inflation.
Please explain to me how overpriced Real Estate is a hedge against inflation, especially in a stagflation environment? How will raising energy prices and growing prices for all those consumer goods we import help Real Estate prices?
The USD seems to be on it’s next move down into the low 70s. But we have to remember that we are paid in USD here in the States and with the USD losing its power as the World Reserve Currency countries will be looking elsewhere for their investments. With those that finance us going elsewhere, where will the prices of Real Estate heading next?
“Fourth, and possibly most important, the stimulous package will provide a BRIEF buying window for those truly qualified buyers who have been sitting on the fence…”
So why is the window so brief one might wonder? Because the stimulus package is going to artificially and temporarily increase the number of people who can qualify to purchase a home. Thereafter, the tight lending standards will resume, fewer people will qualify, volumes and prices, if the change at all, will drop to the pre-stimulus level.
So, I guess the message here is this: Purchase a home your essentially unqualified to buy while the government manipulates the free market. Afteward, you and all the other buyers won’t be able to qualify on merit. So get it over your head while you have your chance.
“Second, interest rates are starting to nudge upward - over the past 3 weeks.”
Right. Which increases the payment of the house, necessitating a reduction in price to reach lenders’ affordability requirements.
“Third, lenders faced with foreclosing on a property are much more frequently working with the troubled borrowers to resolve the matter - renogotiating the rates or terms.”
Which is precisely why the number and proportion of distressed properties coming on the market is surging and why there is nearly 5,000 of them on the market at the moment.
I mean, I understand that the RE market is a transaction-volume-driven business and that owners and agents are hurting, but certainly you all can do better than this “logic” to convince the bigger fool it’s time to make his move.
ROFL! Anyone who thinks Gary Watts has any idea of econ 101, has to put the pipe down, because freebasing the Kool-Aid will kill you.
sunsetbeachguy - was that “rust in place”… or “rest in peace”? LOL.
David Poggi, the renter, had this to say: “this crash was very predictable and I have not purchased for the past 7-years because of it.”
So, in other words, you missed out on over 100% appreciation that occurred between 2001 and 2005, because you knew the bubble was going to erode prices by 10-15%, right?
And you call THAT helping people, by giving them accurate advice? The fact is, you couldn’t afford to buy in 2001, when prices were about 80% less than they are now, SO, you’re HOPING that prices come back down near those levels, so you MIGHT then be able to buy a house.
Your math is as fuzzy as your logic. You MIGHT consider looking into buying BEFORE prices go up, next time. If you wait until the “bottom” has passed, you’ll be stuck chasing prices - again - and competing with multiple buyers on one property, just like you would have in 02, 03, or 04.
The time to buy, is now - this next 3 or 4 months. If you don’t agree, rent for another 10-20 years, and see if your rents ever hit an affordable “bottom”.
BestOne had this to say: “Gary Watts was correct for a while,”
Uhh, Gary Watts was correct in predicting the downturn in the early 90’s, and up until 2 years ago, was uncannily accurate. That run, that you label as “accidental” lasted over 16 years - and accurately predicted both downward, and upward, over that time.
Meanwhile, NationalBubbleHead was wrong from 2000 to 2005, and has now been right for 2 years, by default. His correct run is about to end - also by default, because a natural bottom is now forming, in OUR area - the ONLY area that should be relevant to anyone reading here.
Even Jon Lansner, early in 2002 was 3 years ahead of his time, when he predicted the bubble was about to burst - back then, in 02.
The truth is this - read my lips. NOBODY can accurately predict the housing market, the stock market, the bond market, OR the horse races, for a prolonged period of time. Occasionally each player will get lucky, for a while.
Here’s another truth - of the 4 types of “investments” above, which one can you live in while you wait for it to go up or down. AND which one - hint, it’s the same one - is worth 20 times more now, than it was 30 years ago? ( The answer is Southern Orange County real estate.)
But you just keep predicting doom & gloom - and keep on renting. We landlords love you. LOL.
Go David Poggi! You tell Tools for all of us. Thank you!
As for the uptick in sales volume, notice it wasn’t an uptick in prices. Since the median fell from $565K in Dec to $520K in January, I’d say an 8% falloff in one month alone would generate some interest. Afterall, the Fed reduced rates by 1.25% in a period of 3 weeks. Rates ticked down and now have bounced back up.
As prices continue to fall, I would expect sales to begin to rise. The fact that 1200 regular listings fell off and were replaced by 1100 in foreclosures means that prices should continue to fall, since the regular listings were by folks who had no intention of selling below asking and banks will always be willing to negotiate below asking.
Just because prices fall and sales volume picks up, it doesn’t mean we’ve hit a bottom. That will happen when all the foreclosures stop increasing into the inventory pool. Once there is a fall-off in foreclosure volume into the MLS, I think then we will have turned the corner, or will be incredibly close to the bottom. Anyone know where we can track that number?
Sighburdood-
Please tell us when you bought and exactly what you are buying this week or this month. What escrow have you opened up? I think the expression, “put up or shut up” comes to mind.
For all the Bulls out there, please, at the beginning of your post, please list the property you now have in escrow, and if not, why are you not buying in this “good time to buy” market that you are so intent on getting everyone else suckered into.
Sighburrdood is a fool.
A simple fool.
One statement from him shows it all:
“The fact is, you couldn’t afford to buy in 2001, when prices were about 80% less than they are now…..”
80% less than now??????
……………..you can buy a decent calculator for just a couple dollars these days, you know?
Let me help;
700K house now.
140K then.
I don’t think so, and I was there……. big problem with you is that you aren’t HERE.
You are way out there in the land of those who have lost it big time.
16 years of Gary predicting?
He called a down and called an up a couple years early.
Missed this down big time.
Denied it. Denied it again. Denied it again. Still denies it.
If someone I cared for listened to him and staked their future on his insight I would be terribly disappointed on the insight of the ones I cared for.
And, no, those I care for are nowhere near that foolish.
Sighburrdood, why do you pretend to know anything about my finances? You said me not affording to buy in 2001 is a fact? And how do you know that? Do you have my bank statements and investment portfolio handy? You are ignorance at it’s finest.
I can purchase a home any time I want to. I just choose to have the freedom, savings, and leverage of renting at this point. I will soon be 100% debt free with a fico of 800+. I’m doing that by renting, living in Irvine with friends, and saving about 80% on monthly housing costs compared with the average owner around my area. All the while I’m not losing $5,000 a month to my net worth. I’m sorry that you feel losing money is a smart thing to do. I hope you get some help for that. And while you’re at it, get your ignorance fixed. You know almost nothing about me. Oh yeah, and learn math too.
You said real estate has gone up 20x in 30-years. My parents bought their OC house in a very desireable location in 77 and by the time values hit the bottom that I KNOW they’re going to, the value of the home will have risen at best 6x. Now 6 compared to 20 is a pretty huge difference. You really own? Wow! You don’t even know basic math skills. You also said values were 80% less a few years ago. That would mean the median was down at about $104,000. Wow indeed!
You have proven that you don’t understand what caused these dramatic price increases to begin with. You don’t know how many people got option arms or stated income loans that no longer exist to finance this bubble. This bubble is not the 90s or any other. This is much worse, and it’s only just begun. Please go purchase a few more homes over the next 3-4 months as you’re foolishly recommending to the public. And as Marcia said, list for us what you buy and at what price. I’ll monitor the values by running comps over the next year and we’ll see who’s correct. I’m ready anytime you are. Put your money where your horrible advice is.
pdu
You wanted to know who predicted the Cali Crash in Real Estate????? Only one guy predicted the CA rise in 97 and the CA crash in 05. That person in Bruce Norris. He wrote the California Comeback in 97 and The California Countdown in 2005. He was a year early on the Crash but pretty much nailed it. I asked him at his seminar “How certain are you about the Crash coming.” He said, “more certain than when i wrote Califonia Comeback.” I wished i listened to him and not bought in 06:(
David Proggi
If “everyone thinks now is not a good time to buy,” wouldn’t that signal a market bottom??????????????????
Definitely a DEAD CAT BOUNCE. A Lot of people that have been waiting years for prices to drop came into the scene in jan/feb. When these buyers deals close, we won’t have many buyers left to soak up remaining inventory. We will see inventory rise again and prices fall. Sorry but Bruce Norris has done the data. Prices rose because low mortgage rates made houses more affordable and now prices will fall because homes are not affordable. Once affordability get to 17% in OC, prices fall. i don’t remember what the affordability needs to get to start a recovery, but all of you should read his book instead of wasting time on this blog (like me).
PS. He told everyone to sell all riverside/sb properties and all marginal OC properties (not ocean views) and go buy in TX for about five years. in 2010, sell all TX properties and come back to California and pick up properties on the cheap.
Just saw a prop in riverside sell for 65K 221 pearwood, corona, ca 92882. $21/sq ft. 3000 sq ft. Talk about positive cash flow!!!! Anyone have more info on that sale?
PDU had this to say: ““The fact is, you couldn’t afford to buy in 2001, when prices were about 80% less than they are now…..”
80% less than now??????”
You are correct in your math - my mistake. What I intended to state is that during that period, prices had gone gone up MORE than 100%. For example, one house I purchased in 2001, for $535k, had gone up to more than a million in value - a 100% increase. It has now backed off by less than 10%, but I was generously claiming 20%. Obviously 20% from 100% would equal 80% - it was just out of proper context.
Not being a math whiz or expert, I apologize for the misstatement. The real number, or value, TODAY is still almost twice what it was in 2001. ( $950k+ vs. $535k.)
PDU had this to misstate: “16 years of Gary predicting?
He called a down and called an up a couple years early.”
He called more than 16 YEARS IN A ROW, correctly, ( Actually, almost conservatively! )
PDU also said this: “Missed this down big time.
Denied it. Denied it again. Denied it again. Still denies it.”
He missed the first year by less than 8%. He missed this last year by less than 8%, for a 2 year total of less than 15%. How is THAT BIG time? ( Especially when numerous doofuss’s on this blog have been predicting decreases of 50-65%. Seems like THEY have missed it BIG time.
David Poggi had this to say: “Sighburrdood, why do you pretend to know anything about my finances? You said me not affording to buy in 2001 is a fact? And how do you know that? Do you have my bank statements and investment portfolio handy?”
David, what I said was this: “you missed out on over 100% appreciation that occurred between 2001 and 2005, because you knew the bubble was going to erode prices by 10-15%, right?
And you call THAT helping people, by giving them accurate advice? The fact is, you couldn’t afford to buy in 2001, when prices were about 80% less ( since corrected to a more accurate 50%.) than they are now, SO, you’re HOPING that prices come back down near those levels, so you MIGHT then be able to buy a house.”
So, by your latest rationale, you COULD have afforded to buy in 2001. Let’s take the house I purchased back then, as an example. I bought in 9/11 a house for $535,000., in South Orange County. It is now worth - if I chose to sell, which I don’t, because my tenant is MORE than making my payments - at LEAST $950,000.
Even if I deducted 7.5% for a 6% commission and closing costs, I would net a profit of $343,750. over and above my purchase price 7 years ago. Even disregarding the tax writeoffs I’ve received, for interest, taxes, etc, I still come out WAY ahead of you, who, at $1000./month, for the past 84 months, are OUT $84,000. that you’ve paid ( frittered away? ) in rent. ( Assuming that your rent hasn’t gone up in 7 years - not too likely.) Adding your rent lost, to my profit gained, I come up with a net gain, over your recommended scenario, of $427,750.
Thanks for making my case for home ownership/acquisition such a no-brainer.
James said this: “I wished i listened to him and not bought in 06:(”
Well, James, the signs were pretty obvious by then, even for a lay-person like me. Yes, it is too bad you didn’t wait until now.
The GOOD news is that real estate in California will continue to be a great long term investment. ( And, in the meantime, you have a nice place to live.) I expect prices to level out this year, and to stay fairly level for a couple of years, before starting to go up again - as they ALWAYS have. They did in the 70’s, they did in the 80’s, and they did in the 97-2005 era. And, they will again.
James had this inquiry: “Just saw a prop in riverside sell for 65K 221 pearwood, corona, ca 92882. $21/sq ft. 3000 sq ft. Talk about positive cash flow!!!! Anyone have more info on that sale?”
According to Zillow, the house is valued at $593,500. The $50,000. “sale” was a inter-family transfer, not an actual sale. The original family member - presumably a mom and dad - bought the house for $435,000., in 6/04. Inter-family transfers are a legal means to transfer property to family members, to avoid tripping off higher taxes.
If you pay attention to bogus transfer like this, and get excited thinking it could happen for you, you’ve got another think coming. You can waste of lot of time & energy chasing foreclosure/auction pipedreams, but in the end, you’ll STILL end up paying pretty close to retail.
The lenders who ARE foreclosing and selling their REO’s, are fixing the places up, and pricing their houses just under the spiffy house listed down the street. The auctions are accepting bogus sales which are then turned down by the lender who owns them, for not meeting a required minimum price.
These ARE some of the good values available now - with one BIG problem. Would you REALLY want to live there? That is a criteria I use when evaluating a house to buy for use as a rental. If I wouldn’t want to live in that neighborhood, how can I expect a good tenant to?
According to the Register today, between 25 & 30% of today’s available listings are distressed sales. That’s where you should be looking, if you’re ready to buy. There are some excellent buys.
In MY opinion, most of those will be gone by this summer, and then you’ll have to contend with non-distressed sellers, in a “normal” market - probably at much firmer prices than you can find right now.
( And, with somewhat higher interest rates.) More validation of my theory that NOW is a great time to be looking for property to buy - either as a home, or an investment.
Classic troll-new name-same real estate pump-contradicts himself
Sighburrdood Says:
February 25th, 2008 at 9:00 pm
BestOne had this to say: “Gary Watts was correct for a while,”
Uhh, Gary Watts was correct in predicting the downturn in the early 90’s, and up until 2 years ago, was uncannily accurate. That run, that you label as “accidental” lasted over 16 years - and accurately predicted both downward, and upward, over that time.
Meanwhile, NationalBubbleHead was wrong from 2000 to 2005, and has now been right for 2 years, by default. His correct run is about to end - also by default, because a natural bottom is now forming, in OUR area - the ONLY area that should be relevant to anyone reading here.
Even Jon Lansner, early in 2002 was 3 years ahead of his time, when he predicted the bubble was about to burst - back then, in 02.
The truth is this - read my lips. NOBODY can accurately predict the housing market, the stock market, the bond market, OR the horse races, for a prolonged period of time. Occasionally each player will get lucky, for a while.
sighburrdood Says:
February 26th, 2008 at 6:11 am
James said this: “I wished i listened to him and not bought in 06:(”
Well, James, the signs were pretty obvious by then, even for a lay-person like me. Yes, it is too bad you didn’t wait until now.
The GOOD news is that real estate in California will continue to be a great long term investment. ( And, in the meantime, you have a nice place to live.) I expect prices to level out this year, and to stay fairly level for a couple of years, before starting to go up again - as they ALWAYS have. They did in the 70’s, they did in the 80’s, and they did in the 97-2005 era. And, they will again.
“More validation of my theory that NOW is a great time to be looking for property to buy - either as a home, or an investment.”
So sighburrdood, what are you buying? Are you putting your money where your mouth is? Or are you just all talk and no go?
Jake,
There is a wisdom in the equities market somewhere along the lines of;
“Every market has it’s hero.”
Of course the corollary to this is every market has it’s bum. Right Gary?
Make a prediction and you are either right or you are wrong. Not smart, because, as they say, “Mr. Market has a mind of his own.”
Trite stuff, maybe? But a world of wisdom from lessons learned the hard way by many who are more experienced than we.
“In MY opinion, most of those will be gone by this summer, and then you’ll have to contend with non-distressed sellers, in a “normal” market - probably at much firmer prices than you can find right now.”
I guess each of us has the right to his own opinion, but with 3.3 million loans resetting over the next year, I can’t help but believe that there will be a lot more distressed properties on the market this summer than now. And I’d place the probability of the market flusing out the “most” of the distressed properties by this summer at exactly 0%.
And with prices dropping 13.9% YOY “firmer” prices seem like a near impossibility as well.
“David Poggi Says:
February 25th, 2008 at 12:06 pm
My last comment is for Tools as well, and any other idiot trying to convince people that now is a good time to buy. ”
Hey David,
With your attitude you will probably rent forever.
Face reality, you’re in Orange County…
If you can’t handle the thought of RE here than just forget it. Hey, 10 years from now you’ll be paying Double your current rent costs v.s. buying… keep that fixed mtg payment forever.
RE = key to long term wealth.
Sighburrdood…
Since when is 16 years not “a while”? I also noticed that sometimes he “updates” his predictions when they aren’t panning out. He did this in 06 and 07….
I’m just saying that you are just as smart as Gary Watts. Start thinking things through for yourself…
Also, just felt like pointing out….
Poggi says he pays around $900 a month to rent in Irvine. But as outlined in the blog comment I highlighted in my previous post, he skews the information in a misleading fashion. He rents for $900, yes that’s true, but when you realize that those $900 only represent 1/4 of the townhome’s rental price, it begins to become much clearer that Poggi’s situation isn’t as desirable as he would have you believe. If he’s renting with 3 other guys (grown men, I might add - just incase that MIGHT seem like a suspicious living situation for a man in his 30s), his townhome actually costs $3600 per month. That’s pretty damn expensive for a townhome, regardless of location. So not only is Poggi incapable of timing the RE market to make a purchase, even though he’s a self-proclaimed RE expert, he’s also completely incapable of finding a good rental deal. He very easily might’ve been able to find comparable rental housing in the sub-$500/month range if he’d have looked around a bit…and probably could’ve even found a FEMALE roommate or two. Only thing that makes sense is that he’s intentionally paying a rental premium to live with 3 other men, because that’s how he WANTS it.
BestOne had this to say, to me: “Since when is 16 years not “a while”? I also noticed that sometimes he “updates” his predictions when they aren’t panning out. He did this in 06 and 07….”
Perhaps I didn’t make my statement clear enough for you. I stated that I have been watching Gary Watts reports since before 1990. I stated that he accurately predicted the downturn of the early 90’s, as well as the following upturn.
I stated that for AT LEAST16 years in a row - until one and a half, to two years ago - he was uncannily accurate. I agree that he missed things from early 06 on, AND that he has either modified or revised his many reports since.
Part of his revisions were due to things that no one could have foreseen, with accuracy. In early 07, the sub-prime melt-down, and in mid 07, the jumbo loans melt-down. Both of those - now self-correcting themselves - were gross overreactions of the lending markets. ( Yes, there were red flags, which I took notice of, but again, the overreactions couldn’t have been predicted.)
I’ve never said that Gary’s predictions were perfect, but they sure made ME a lot more money and equity than one-note boneheads like National bubble, who completely missed over 100% appreciation by predicting a market decline to start in 2000. Now THERE’S an entity with ZERO credibility.
HB Bear had this to say: “with 3.3 million loans resetting over the next year, I can’t help but believe that there will be a lot more distressed properties on the market this summer than now. And I’d place the probability of the market flusing out the “most” of the distressed properties by this summer at exactly 0%”
First of all, those 3.3 Million loans are NOT in South Orange County.
( which is the area I live in, and am speaking of.)
Second, as I’ve stated elsewhere in this thread, lenders have been working feverishly, for months now, and are trying to work with troubled borrowers to revise the payments and or terms of these resetting loans. The lenders do NOT want to take the properties back.
Third, the new higher rate conforming loans about to be available to help buyers afford more expensive properties, are also available to those same troubled borrowers and may bail out a substantial portion of them. ( And before some idiot on here complains that those loans got us into this trouble in the first place, that isn’t even remotely accurate. The NEW conforming loans require at LEAST 10% down
( or equity, for borrowers.) AND full documentation.
And yes, Virginia, there are plenty of us out there with 10-20-30% down, to take advantage of lower interest rates and better terms.
Bear in mind ( easier for a Bear? ) that I’m talking South O.C., not the Inland Empire, not Stockton, not Sacramento, not even areas of Orange County that many of us moved away from 30 years ago. THOSE areas MAY take another year, or two, or three, to hit bottom, but from MY vantage point, the bottom in South O.C. is forming nicely - right now.
pdu had this to say: “There is a wisdom in the equities market somewhere along the lines of; “Every market has it’s hero. Of course the corollary to this is every market has it’s bum.”
How bout THIS one? Even a broken clock is right twice a day.
awgee asked me this: “So sighburrdood, what are you buying? Are you putting your money where your mouth is? Or are you just all talk and no go?”
I’ve already stated numerous times in the Register’s blogs that I’m looking for bread & butter 3 and 4 bedroom houses, in non-mello/roos areas of South O.C., to buy with 25% down, and have a positive cash flow - renting primarily, I suppose, to Negative Bear Bloggers who will spend the next 10-20 years waiting for sales prices to come down to a level equal to their rental payments.
I learned over 35 years ago, when I bought my FIRST house in South O.C., that such was the elusive pipedream of perpetual tenants. If it was THAT simple, or easy, ALL of you would be homeowners - there wouldn’t be any rental properties.
sigh,
Does that mean that you are buying real estate right now or would recommend to your children (if they’re looking), to buy something in South OC?
k.o. says: “Does that mean that you are buying real estate right now or would recommend to your children (if they’re looking), to buy something in South OC?”
Both
Does anyone have written, published proof that Gary Watts called the crash, and bottom of the 90s? I have been asking for this proof for three years now, and I have never seen any. Why? Because it doesn’t exist. He is a shame, a fake, and anyone who believes him will lose money, just like he is on his 2005 purchase. He has never, ever, been mentioned in any newspaper until late 2004, and if he were such the expert, he would have been published prior to that.
I wonder if sighboorloser has any clue how bad the foreclosures are in South OC?
graphrix had this to say: “Does anyone have written, published proof that Gary Watts called the crash, and bottom of the 90s? I have been asking for this proof for three years now, and I have never seen any. Why? Because it doesn’t exist.”
Gary was speaking in front of PACKED houses of clients ( Like me.)and Realtors, since before 1990. The Realtors in the early 90’s didn’t like his message and labled him as Dr. Doom & Gloom. I personally attended his “state of the market” meetings at least once a year since that time, and for the most part have been amazed by his accuracy.
graphrix ALSO said: “He is a shame, ( Sham? ) a fake, and anyone who believes him will lose money, just like he is on his 2005 purchase. He has never, ever, been mentioned in any newspaper until late 2004, and if he were such the expert, he would have been published prior to that.”
Actually, I had the pleasure to mention Gary’s name to Jon Lansner late in 2002, after Jon made his ridiculous prediction that we were then at the very top of the market. I sent Jon an email telling him about Gary, and that it didn’t SEEM like the market was about to crash.
( which didn’t top off for 3 more years.)
I don’t know if Jon paid attention to MY email, or just got quite a few from enough sources to start to pay attention, but refernces to Gary began to appear in the Register shortly thereafter. ( Oh, by the way? A fake? Gary has a degree in economics - do you? )
You can make ridiculous, unfounded misstatements about Gary all you want, but here’s the truth that I personally experienced. For the past 18 years, Gary was uncannily correct, in both downturns and upturns for 16 straight years, until about 1.5 to 2 years ago.
Since then, he has been a bit off kilter, and has revised his predictions much more frequently than any period in the past, but he STILL hasn’t been as far off in a positive direction, as some of the Bears on this blog have been with their negative nonsense.
Here’s what I attribute that to. Gary’s data is mined from local Orange County sources. In addition, most of his real estate experience over the past 30 years has been in SOUTH O.C.. ( as has mine.) Most of the bears are quoting national ( Ever heard of NationalBubble? ) or statewide information, which really isn’t as relevant to us, as Gary’s has been.
If YOU want to apply info about Detroit, or Stockton, or even the Inland Empire, to make your case, go right ahead - but you’ll sound pretty foolish in the long run.
graphrix ALSO had THIS to say: “I wonder if sighboorloser has any clue how bad the foreclosures are in South OC?”
Is THAT statement directed at me? What givesYOU any right or credibility to call me names? Are you a homeowner? Are you a disgruntled tenant? Are you gainfully employed? As for foreclosures in South OC, it is nowhere near as bad as the areas I mentioned just above.
Tools, err shockg, err signburdood, err John Flowers…. Man I’m running out of time since you have so many names and email addresses. Thank you for your concern.
And thank you for sharing with us that you feel real estate ownership is the key to long-term wealth. While many people are losing thousands per month in equity, I’m taking the extra 80% I “should” be paying on a mortgage and investing it, paying off my debt, and raising my fico. And this summer I’ll be buying my 1st place at 50% below what it sold for just barely over a year ago. No, it’s not in OC, but it’s close enough. Thank God I didn’t listen to any of you that have been saying “buy now” for the past year, in a sad attempt to hold onto your leaking equity.
By the way signburdood, you’re wrong again. You said that there are not many neg ams or other loans of that nature that caused this bubble in the OC. You couldn’t be more incorrect. L.A. and OC are the counties with the 2 highest concentrations of those loans in the whole country. Those loans made up about 1% of purchases in OC prior to the bubble of 2003/2004 and on. And now they make up darn close to 30% of all purchases made between 2003 and now. I love how you just blurt out information like it’s fact, and yet you have no clue what you’re talking about.
For those of you that understand Realty Tracks foreclosure reports and how they worked in the past:
There have been a lot of changes that will give us a more accurate (although still not as good as it could be) picture of the real foreclosure situation in OC. Most notably out of all the paperwork filed last year for foreclosures, only about 10% of those properties actually went to foreclosure and were repossessed. And this year the number has doubled to 20%. And the people at Realty Track said it’s only going to get worse when asked about it. A clear sign that now is not a good time to buy. People at the company tracking all the numbers say that things are going to get worse, and that’s not a prediction, it’s based on data they’re collecting on a daily basis. So you can believe them, or owners like sighburdood who have a vested interest in maintaining their equity for retirement purposes.
Give me proof, any proof, written proof, printed proof, other than the BS packed house of his doom and gloom message. I dare you, I double dare you, because his “insight” has never existed. This info is a myth, a far fetched myth.
Yes, I am a homeowner, a rental property owner, and gawd forbid, a flipper, who renovates properties to add value to resell them. No, the foreclosures are not as bad as the areas you mentioned, but south OC, Mission Viejo and Ladera Ranch in particular are seeing a bloodbath of foreclosures. One today in Ladera, a SFR with a zestimate of over $600k, and a NTS above $600k, went back to the bank for $459k. No one, not even Gary Watts, had the guts to buy a SFR in Ladera for $459k. So, yeah, I am questioning your creditability, because like Gary, you have none, zero, you are a sham (thanks for the spelling correction, maybe you can help your fellow agents with that). Do you really know what you are talking about, or are you filled with the same fluff as Gary? I have more credibility than you or Gary combined. Quit snorting the Kool-Aid powder dude, it is bad for your financial health.
graphrix had this to say, to me: “Give me proof, any proof, written proof, printed proof, other than the BS packed house of his doom and gloom message. I dare you, I double dare you, because his “insight” has never existed. This info is a myth, a far fetched myth.”
Hey, believe what you want. Obviously, you’d prefer to spout off in inflammatory tones, rather than type with a modicum of common sense.
I’ve told you the truth, as I personally experienced it, and you choose to call me a liar. That, of course is your first amendment right, just as it’s perfectly ok and politically acceptable to be misinformed. Believe what you want. Call informed, qualified people who you disagree with, names, or make ridiculous suggestions as to their mental accuity, all you want - HOWEVER, most of your self-obsessed rant does little more than display your own ignorance.
The additional truth is this: Yes, I received a printout when I attended each of Gary’s market update meetings, and I MAY have an old one buried somewhere in my files. Is it worth digging through old files just to appease you. Definitely not.
I DO have some digital copies going back to 1/04 - that was the earliest copy on my computer hard drive. Could I dig deeper to see if I scanned a copy from an earlier date? Sure. Again, is it worth it? Nope.
I’m now of the opinion that even if I DID produce a document from the early 90’s, you would very likely do one of two things. You’d either dismiss it as a something I had fabricated myself - just to prove YOU wrong, OR, you’d go off on a different tangent on a completely different topic, while ignoring the fact that I had proved you wrong. ( Something David Poggi does a lot of.)
So, is it worth trying to carry on an intelligent debate with either you, or David Poggi? Absolutely not! It may just be a matter of principle with me, but I refuse to attempt a battle of wits with an unarmed opponent.
Have a great day - I hear it’s going to be sunny & warm. I, for one, intend to enjoy living the good life in South Orange County - God’s country.
Wow Poggi, I didn’t know you’d get so upset by my comments that you’d bring RELIGION into the discussion on a real estate blog. I’m actually a quite happy soul. I’m happy with the fact that I’m a homeowner, and extremely happy that I’ve committed to a long term investment that will pay off for my children one day. Unlike you, I take no satisfaction in watching others suffer, regardless of the ill-advised decisions they’ve made. I won’t smile at the misfortunes of others, and I will also not make my personal situation out to be anything more than it is. I’m extremely satisfied with the decisions I’ve made, and can rest easy at night knowing that I’ve charted the best course of action for my family.
As for your comment about me using several personas on this blog, please believe whatever you wish, but if you really have to convince yourself that there is only one single person who opposes your opinions, and who creates alter egos to attack your position, then you must also reconsider who the truly sad soul is on this blog. You seem full of spite and anguish at the fact that you haven’t yet been able to use your “market expertise” to your advantage. You said that everything i said about you is wrong….please feel free to elaborate. You say I try to post facts without backing them up, yet I see no such instance in either of my previous two posts. All I said was that your living situation is somewhat pathetic and much less desirable than you were making it seem. By my math, you are at least 30 years old (since you did say you have 10+ years in the RE industry, and I doubt you’ve been at it since you were under 20 years old), and you live with 3 others in a ridiculously priced rental in Irvine. Please point out where I lied in that statement.
Thank you John Flowers.
David,
Your in a tag team bout with the troll!
“jake Says:
February 28th, 2008 at 9:19 am
David,
Your in a tag team bout with the troll!”
When logic fails and resentment is all you have left, I guess this is what it comes down to.
why doesn’t Jon just call Gary Watts and get the handout of his predictions from the 1990’s????
I disagree w/ sighburrdood’s claims about the resiliency of the south OC market, but you gotta admit, he isn’t shockg or thoughtful, VOR. He has an entirely different writing style and he actually substantiates his claims.
I love how Flowers tries to claim the higher moral ground after making fun of a guy who didn’t buy and who rents. Classy.
This statistic is timing everyone, the stimulus package hit the headlines, and people think the bottom is here!!! WRONG!!! Have we all forgotten all the mortgages that are due to reset this year and next year are just beginning???
But, according to the above numbers, yes the stimulus package did work for two weeks, but wait, it is a temporary pop!
Sorry I don’t buy it, keep saving my money, and wait on the side lines!!
waitingforgodot had this to say: “I disagree w/ sighburrdood’s claims about the resiliency of the south OC market, but you gotta admit, he isn’t shockg or thoughtful, VOR. He has an entirely different writing style and he actually substantiates his claims.”
I have NO problem with you disagreeing with me. And thank you for the compliment. Best regards!
I love how these companies are now telling us what
will happen and when .
They love to predict or try to make money telling us what will
happen next .
Each real estate cycle has Winner and Loser.
Its too bad they did not predict what DID happen and when !
I’ selling at a loss, and moving to Costa Rica where my property has triple in the last 3 years.
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