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Here's recent history of the Fed’s policy committee and its Fed Funds rate. Next Fed decision is June 24/25.
Builders’ home pricing at ‘02 levels in mid-April
May 2nd, 2008, 6:42 am · 128 Comments · posted by Jon Lansner/ocregister.com
Fresh DataQuick stats show how hard O.C. developers are working to sell homes: Median selling prices for the 22 business days ended April 14 of $499,500 is 42% below the new home market’s February 2005 peak. ($864,000, ouch!) If such low pricing holds for the entire month, it would mark the second cheapest builder pricing since June 2002; and only the second time under a half-million bucks since then. (Prices briefly dipped to $469,000 in January ‘06.)
Sadly, builders’ steep price cuts were seemingly not enough: Only 156 new homes sold, a stunning 60.5% below a year ago. (And one economist doesn’t think harsh prices cuts means a quick recovery. READ HERE!)
The rest of the O.C. market in the same period fared not much better, with weak sales and soft pricing. Overall, just five O.C. ZIPs out of 83 had sales gains vs. ‘07; only 10 had higher prices. (Read MORE HERE!) Here’s how it broke out by key slice:
| Slice | Price | Vs. ‘07 | Sales | Vs. ‘07 |
|---|---|---|---|---|
| House | $565,000 | -20.5% | 1,220 | -35.0% |
| Condo | $374,000 | -18.7% | 450 | -46.7% |
| New | $499,500 | -21.2% | 156 | -60.5% |
| All | $505,000 | -19.8% | 1,826 | -41.4% |
COMPARE: How do six other index value local homes? CLICK HERE!
May 2nd, 2008 at 6:48 am
I’ve changed the chart up a little. Notice the slight price strength for 2006 & 2007 started in April. With all the talk of pent-up home sales now in escrow, I wonder if this April will also show seasonal price strength … so far it looks like it will.
Per DataQuick, Single Family Median Home Price:
2006 ~ Monthly
Feb = $690,000
Mar = $695,000
Apr = $705,000
May = $705,000
Jun = $700,000
Jul = $699,000
Aug = $685,000
Sep = $680,000
Oct = $665,000
Nov = $660,000
Dec = $665,000
2007 ~ Monthly
Jan = $675,000
Feb = $675,000
Mar = $695,000
Apr = $720,000 ~ New Century Bankruptcy
May = $695,000
Jun = $734,000 ~ Peak of Great O.C. Housing Bubble
Jul = $718,000
Aug = $710,000
Sep = $655,000
Oct = $650,000
Nov = $655,000
Dec = $600,000
2008 ~ Weekly ~ Monthly
01/07= $600,000
01/15= $595,000
01/23= $595,000
Jan = $583,250
02/07= $585,000
02/13= $575,000
02/22= $575,000
Feb = $575.000
03/07= $580,000
03/14= $575,000
03/20= $567,000
03/26= $570,000
Mar = $570,000
04/08= $553,750
04/14= $565,000
Per DataQuick, this loss represents a $169,000 reduction in single family home prices from the June 2007 high.
May 2nd, 2008 at 7:00 am
It’s known as schadenfreude. Call me a prick, but I love this. I don’t care if people are ruined. I was seriously considering buying 5 years ago, I could swing it, etc. However, I didn’t have a traditional down payment, I was only 22, and I was still in college. I thought I’d wait until I could actually afford it traditionally. Then I watched as all of these morons who were in the same position as they bought million dollar homes. Well, the yolks on you. I’m just now finishing my MBA and have much more saved. However, the market ain’t seeing a bottom for another couple of years at least. I’ll just keep saving.
May 2nd, 2008 at 7:02 am
If people don’t want to buy new homes at these prices what are they gonna buy?
May 2nd, 2008 at 7:02 am
Well, it looks like we are getting there, but you have to wonder what the mix of condos and SFR’s is in these numbers. Is this accurate? A 42% decline in price from peak to 499K would put the new home price peak at 833K. Did we get a big shift from SFR’s to condos in sales or what?
The median price on SFR’s is only down 25% or so, so what is going on here?
May 2nd, 2008 at 7:04 am
That’s impossible. We were breathlessly told by a totally accurate source earlier this week that the average of medians of new home prices based on a tiny self-reported sample was only down -3.8%. Who am I going to believe?
May 2nd, 2008 at 7:11 am
That’s right Kris, and you might want to consider that America needs 15 million barrels of oil a day and doesn’t have enough exports to pay for it at current prices. Right now the Chinese and Saudis are loaning us the money (600 billion a year) at 3.5 percent.
This will not last, as to pay off a foreign inebtedness you have to run a trade surplus and with the price of oil, that is not happening anytime soon. I.e. we are a credit risk, and credit risks rarely are able to borrow at 3.5% for long.
The interest rates charged by our foreign creditors could and probably will rise significantly as foreigners fear we will inflate away our debts. That will crush housing, just imagine this market only with 10% jumbo rates. Ugly.
When first posted that housing could fall 75% people laughed on this blog. Now it seems that a 50% decline is in the bag. A rise in interest rates could push us even further. So, while 2009 might seem like a good time to buy (I’m thinking about it) be careful.
May 2nd, 2008 at 7:13 am
Kris:
OK. You ARE a prick. To write that you do not care if people are ruined, when many of them are victimized by circumstance beyond their control (being forced to sell due to health issues, divorce, relocation, etc.), is the height of prickdom.
I am simply following your instructions.
May 2nd, 2008 at 7:21 am
Like Kris, I actually enjoying this housing crisis home by home. Every foreclosure I see gets me high. These nuts/investors bought home they know they can’t pay and drove up the prices.
I think it will go down 20-30 percent before it will level out. Enjoy the show.
May 2nd, 2008 at 7:30 am
good post Kris
keep saving, be an american contrarian LOL
i’m with you 100%……….. the debtors have their day of reckoning and they deserve it
May 2nd, 2008 at 7:31 am
good post Kris
keep saving, be an american contrarian LOL
i’m with you 100%……….. the debtors have their day of reckoning and they deserve what is coming to them
May 2nd, 2008 at 7:35 am
Of course it’s the mix, ponzi. Luckily we know that from seeing the Hanley Woods data. Don’t look know, but we had a rise in the SFR median from last week! Quick, let’s jump to some more conclusions! It’s hard to see progress when these Dataquick reports come out every 7 days, but it’s there. Excellent point on the new homes (as a whole) median never having been $833,000, that kind of critical thinking sets you apart from your peers.
May 2nd, 2008 at 7:39 am
“It’s hard to see progress when these Dataquick reports come out every 7 days”
LMAO……… it’s hard to see progress period……. any kind of progress you are seeing is just relative to record low activity
7 days, 1 day…….. 1 month….. LOL…… the good news for you is at least there are still some knife catchers out there…. it’s not zero….. now that would be bad
May 2nd, 2008 at 7:41 am
Oh no, it’s thoughful and her righteous comments coming to set everyone straight again!
May 2nd, 2008 at 7:42 am
“that kind of critical thinking sets you apart from your peers”
So you’re saying that everyone else is a moron? And that you have the ability to judge this?
Niiice.
May 2nd, 2008 at 7:46 am
Thoughtful, please explain to me why you’re so against prices going much lower? Affordable housing has always been a key to a healthy economy. It seems to me these massive price cuts are going to be a boon for future growth, the same principle that applies to pruning an over-grown tree. I am a homeowner, and although I don’t look forward to further equity drain, I do realize the benefit these reductions will bring. A healthy capitalistic system requires the ebb and flow of boom/bust cycles - the bust is just as essential as the boom.
May 2nd, 2008 at 8:05 am
If prices come down to match lending and income people will start buying like crazy. Why don’t agents want the proces to come down? They would make money again.
May 2nd, 2008 at 8:05 am
No, mick I didn’t say everyone else is a moron, nor do I think that. I DO think that the type of catch that ponzi made shows much more integrity than most of you bears display though. Is it intellectual ability or simply bias? I say bias. Here’s an interesting post from an uberbear from last year that any impartial observer would have to respect:
“graphrix Says:
September 26th, 2007 at 2:08 am
Ugh here we go again about the median price. Look if you had the data that John Karevoll and Hanley Wood have and like them see that the median is being skewed then it is. These people have 20+ years of experience in data collection and they say that the median is being skewed by the lack of low end sales. They both have said that the lower end sales have dropped higher than anything else.
I have taken the data from Irvine and you can clearly see that the median is skewed by the lack of low end sales. They have virtually disappeared. Yes the median works somewhat well for a large data set but when the data set is cut in half and the lower end is dropped and the upper end is now lower it changes. You can talk about statistics 101 all you want but without the data the conversation is meaningless. Make the data easily available and we can talk but without it we are all just wasting space.”
Kudos to Graphrix for not being a hypocrite by commenting on today’s medians.
May 2nd, 2008 at 8:08 am
It’s hard to see progress when these Dataquick reports come out every 7 days
Yes it is, because they blow up the progress thesis every time they come out.
Weren’t you people complaining about how “old” the Dataquick data was. Oh, Dataquick says meltdown but that’s “old news”–it’s much better in the last 7 days since Dataslow got their data.
May 2nd, 2008 at 8:09 am
“Thoughtful, please explain to me why you’re so against prices going much lower?”
Could it be that for every new person helped, more are devastated? I guess all of the empathy is used up on first time homebuyers.
May 2nd, 2008 at 8:12 am
The Dataquick stats ARE old news. They are CLOSINGS from 3-7 weeks ago, which OPENED 7-12 weeks ago.
May 2nd, 2008 at 8:28 am
“Could it be that for every new person helped, more are devastated?”
I would have expected better, Thoughtful
Haven’t you been arguing that the foreclosure problem is being over-reported and exaggerated, and that 98 or 99% or whatever of homeowners are fine?
If people can make the payments on their mortgage, then they shouldn’t be affected. As you have said, the vast majority of people are fine - so price corrections shouldn’t matter to most people. The worst thing that happens is they can’t move up for an extra couple years as this thing plays out.
May 2nd, 2008 at 8:47 am
Another day arrives with the usual post of grim news about this market with the usual desperate attempt at spins by t-less and her minions. Look above, t-less says it is must be condos that caused these numbers, it couldn’t be homes cuz thoughtless has some resets that are looming.
but if the numbers were good, t-less would be trumpeting them at the top of her lungs. what is the problem with our resident blog clowns: when will they stop fighting with reality?
May 2nd, 2008 at 8:47 am
“Could it be that for every new person helped, more are devastated? I guess all of the empathy is used up on first time homebuyers.”
Please explain. If people bought what they could afford, how is it they would be devastated? Unless you’re suggesting that people bought what they could not afford and were counting on future equity gains to finance their way of living. If that’s the case, people who made such a foolish mistake deserve no sympathy.
May 2nd, 2008 at 8:47 am
“If people can make the payments on their mortgage, then they shouldn’t be affected. As you have said, the vast majority of people are fine - so price corrections shouldn’t matter to most people. The worst thing that happens is they can’t move up for an extra couple years as this thing plays out.”
No, the worse thing that happens is they have to tell their kid they can’t pay for their eduation or they can’t start that business or they are bankrupted by the first illness that comes along.
May 2nd, 2008 at 8:51 am
On the radio(NPR) I heard an interesting idea…….our society may be dividing into two separate groups…..those that can afford their dept and those that are so far in over their head that they will never recover.
May 2nd, 2008 at 8:52 am
DEBT
May 2nd, 2008 at 8:53 am
No thoughtful, you are wrong. The worst thing tha could happen is they could die. I would think your critical thinking skills would lead you to this deduction.
May 2nd, 2008 at 8:55 am
I stand corrected, that would be worse!
May 2nd, 2008 at 8:58 am
There is a must-read article on M A R K E T W A T C H on the C A S E S H I L L E R I N D E X today. The blog is eating up the links and references.
May 2nd, 2008 at 8:58 am
More joblosses in 2008 and continue to be a problem. Builders and Sellers are unrealistic and greedy. They should drop the price last year. Now it is too late.
There is very few potential Buyers and they are not buying. Wait until you see a Housing Bubble Busts in California.
May 2nd, 2008 at 9:00 am
Thoughtful said:
“No, the worse thing that happens is they have to tell their kid they can’t pay for their eduation or they can’t start that business or they are bankrupted by the first illness that comes along.”
This is the key reason why affordability is important, an issue severely scoffed at by our bullish friends here. If you would be “bankrupted by the first illness that comes along” then you don’t have your financial house in order. It is the mentality that one can pay for a kid’s education or start a new business from their home equity that is what got us into this mess. Hopefully, others will learn from your mistakes. Hey folks…Do not buy a house you cannot afford!
May 2nd, 2008 at 9:05 am
House Flippers were gone. Unqualified Buyers could not obtain a toxic loans.
How many of us can afford $499,500 house in Orange County?
Living within your mean, a good old American way. Do not be sucker and mortgage slavery for the banks and builders for the next 30 years.
May 2nd, 2008 at 9:08 am
Nonsense. A house is both a home and part of an asset mix.
May 2nd, 2008 at 9:12 am
Thoughful,
TGIL, above said:
“Affordable housing has always been a key to a healthy economy.”
–
You choose to ignore a basic truth.
Sorry your bad timing is hurting you, but most who timed their purchases wrong were chasing a rising bubble hoping to profit from, “Prices never drop in California”…………..
The actions of those chasing and causing the rising prices actually were “devastating” the market and “devastating ” the chances for other families hoping to be able to find a home in which to raise their families.
Most adults learned long ago that there is no free lunch, and some are still learning that there is no free equity. It comes at a price. Time. Time during which one pays down their mortgage. It shouldn’t come as a result of rampant speculation by those buying what they couldn’t afford.
It’s time for a return to normalcy, and time for some to learn, so these mistakes are not repeated anytime soon.
Your stubborn insistence that those that “bought” have a special entitlement overlooks the fact that for something to have a value there has to be a demand. Price is a factor in the demand ratio. You ought to know something as basic as that — it is being clearly illustrated in the market today.
May 2nd, 2008 at 9:19 am
“No, the worse thing that happens is they have to tell their kid they can’t pay for their eduation or they can’t start that business or they are bankrupted by the first illness that comes along.’
Oh Please,
1. Junior College transfer to a university get student loans
2. Keep working for the man
3. Make sure you have medical insurance. If your company doesn’t provide it buy it yourself.
It is called taking responsibility for whatever life throws your way.
May 2nd, 2008 at 9:22 am
So, Shannon, people should saddle their kids with student loans to accomodate you?
May 2nd, 2008 at 9:22 am
Dear Reader: this blog has been hijacked by shrill permabulls who need to cover their resets. Please ignore their shrieks, their howls, and their cries as this market continues to implode.
May 2nd, 2008 at 9:28 am
Thoughtful said:
“Could it be that for every new person helped, more are devastated? I guess all of the empathy is used up on first time homebuyers.”
Over time, first time buyers will far outnumber the number of owners devastated by this bubble. For the RE industry to flourish, new blood is needed.
“No, the worse thing that happens is they have to tell their kid they can’t pay for their eduation or they can’t start that business or they are bankrupted by the first illness that comes along.”
And the kids could ask their parents why the latter’s generation made it so difficult to buy a house (in addition to sticking them with bigger debts and higher inflation).
May 2nd, 2008 at 9:33 am
“So, Shannon, people should saddle their kids with student loans to accomodate you?”
I love the level of debt that just exudes out of each and every one of Thoughtful’s post………
it’s smells like freshly baked cookies from Steve Thomas’ english muffins bakery……
May 2nd, 2008 at 9:37 am
I just had to repost this from another thread because it’s just too awesome..
4 Limoges
Newport Coast, CA 92657
Price: $1,288,000
Beds: 3
Baths: 3
Sq. Ft.: 1,913
$/Sq. Ft.: $673
Lot Size: -
Property Type: Single Family Residence
Great starter home in the gated enclave of St. Michel. Light and bright with high ceilings. Special owner financing options available which makes this an attractive option for the buyer who has little down or credit issues.
Great starter home? for a buyer with credit issues? ..or maybe you could use that Special owner financing, I suppose it is a great way to launder money? What year is this? 2005?
May 2nd, 2008 at 9:41 am
“No, the worse thing that happens is they have to tell their kid they can’t pay for their eduation or they can’t start that business or they are bankrupted by the first illness that comes along.”
Ahhh, now I’m beginning to see. You, like many others today, fail to understand a little word called “saving”. No worries, tomorrow’s economy will teach you the importance of the word.
May 2nd, 2008 at 9:53 am
Now we know where Nano gets his information– NPR–Media central for limousine liberals who can’t stomach Air Anti-America.
May 2nd, 2008 at 9:57 am
Did anyone read the M-watch (crazy software) report on the CS Index? It explains in great detail the problems with the major indices. I was expecting comments on it, but I can see why its being ignored. That reminds me: I haven’t seen a post from bubble on the jobs numbers being 5 times better than feared. I know he’s happy in his heart(?) that the unemployment number is still low.
May 2nd, 2008 at 9:57 am
home owners who are running into foreclosue: the congress is passing a $400B package that will rescue 2 million homes.
So just relax and stop worrying. The prices will stabilize by the end of the summer.
For the rest, stop dreaming that prices will go down to 1996 or 1980 levels. If you dont buy by the end of this summer, then it may be late (again).
May 2nd, 2008 at 10:03 am
4 Limoges
Newport Coast, CA 92657
Price: $1,288,000
Beds: 3
Baths: 3
Sq. Ft.: 1,913
$/Sq. Ft.: $673
Lot Size: -
Property Type: Single Family Residence
Great starter home in the gated enclave of St. Michel. Light and bright with high ceilings. Special owner financing options available which makes this an attractive option for the buyer who has little down or credit issues.
Great starter home? for a buyer with credit issues? ..or maybe you could use that Special owner financing, I suppose it is a great way to launder money? What year is this? 2005?
:sigh: yeah that Realtor blows a lot of smoke up the you know what…
anytime you have to write “live amongst mansions and billionares” is probably a pretty good hint the listing is overpriced.
The owners of 4 Limoges bought in 2006 for $1.2XX, and obviously they want someone to pay for their mistake. So pass on that home, and get aggressive with a motivated owner, an owner has plenty of equity into the home, better negotiating for the buyer.
If you could into this community under $1.0m (which is possible) you’d be buying at 2003 pricing in this development, which for NC is pretty undeard of right now, but certainly doable.
Look passed the bad deals, and go after the good deals.
May 2nd, 2008 at 10:08 am
homeowner Says:
May 2nd, 2008 at 9:57 am
“home owners who are running into foreclosue: the congress is passing a $400B package that will rescue 2 million homes.
So just relax and stop worrying. The prices will stabilize by the end of the summer.”
muhahaha…leave it to Congress to do nothing but flush more taxpayer money down the toilet in a vain attempt to justify their jobs. I hope your comments are sarcastic.
True conservatives (crystal balls and Mully?) should urge Bush to veto this grotesque waste.
May 2nd, 2008 at 10:09 am
Crystal,
I was once called a feudalistic, capitalistic, middle age pig……so you calling me a liberal balances things out. The truth is I will vote anyone that increases funding for Nanotechnology Research.
May 2nd, 2008 at 10:21 am
“On the radio(NPR) I heard an interesting idea…….our society may be dividing into two separate groups…..those that can afford their dept and those that are so far in over their head that they will never recover.”
Uhh, what happened to the third group? Those who have no debt?
May 2nd, 2008 at 10:24 am
what happened to the third group? Those who have no debt?
It assumes that with time, the third group will join one of the first two groups
May 2nd, 2008 at 10:24 am
I’m clearly not in the market for a 1M dollar home, otherwise I wouldn’t be wasting my time here. I just thought is was amazing that someone would advertize a home like that to those with troubled credit. LOL.
Even if Congress passes the package…there will be very little effect on prices here in OC since there is a high demand for REOs and foreclosures that are priced agressively…Houses won’t sit empty long enough for the kind of detrimental effects (vandalism, pool maintence , lawn care, etc) that are seen in other less desirable areas of the country.
May 2nd, 2008 at 10:24 am
earth to thoughtless- along with the CPI
numbers the government lies about the
employment numbers as well- only blind
sheep- such as yourself - believe any numbers
put out by our government its called keep
the sheep believing syndrome
May 2nd, 2008 at 10:30 am
“home owners who are running into foreclosue: the congress is passing a $400B package that will rescue 2 million homes.
So just relax and stop worrying. The prices will stabilize by the end of the summer.”
Homeowner, do you think you really want that? Do you think that congress just waives a magic little wand a 400B appears? Please people, wake up! You’ll be heavily taxed on this either directly, or indirectly by continued suicidal monetary inflation. You think 4 dollar a gallon gas is bad now, or paying 6 bucks for a gallon of milk, just wait if proposals like that are passed. Sure, prices might be salvaged, but who will really care? Housing will be the last thing on peoples minds.
May 2nd, 2008 at 10:31 am
Nano,
If nanotechnology is so promising, why does it need government funding? You are more of an elitist than a typical liberal. That’s why your answer to my question is likey that most people, including investors, are so short sighted they aren’t smart enough to fig