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!
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.
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.
If people don’t want to buy new homes at these prices what are they gonna buy?
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?
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?
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.
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.
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.
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
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
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.
“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
Oh no, it’s thoughful and her righteous comments coming to set everyone straight again!
“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.
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.
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.
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.
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.
“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.
The Dataquick stats ARE old news. They are CLOSINGS from 3-7 weeks ago, which OPENED 7-12 weeks ago.
“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.
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?
“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.
“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.
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.
DEBT
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.
I stand corrected, that would be worse!
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.
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.
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!
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.
Nonsense. A house is both a home and part of an asset mix.
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.
“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.
So, Shannon, people should saddle their kids with student loans to accomodate you?
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.
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).
“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……
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?
“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.
Now we know where Nano gets his information– NPR–Media central for limousine liberals who can’t stomach Air Anti-America.
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.
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).
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.
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.
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.
“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?
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
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.
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
“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.
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 figure out investing in nanotechnology is in their own interest.
“It assumes that with time, the third group will join one of the first two groups”
Then their assumption would be wrong, at least for this man.
Crystal,
Nanotech needs funding the same as big oil gets subsidies. The gubment is giving away free money to them aka our tax dollars.
Off topic, but did you all catch the 60 Minutes piece on nanotechnology and cancer? Riveting stuff. It sounds like they could be on the road to a cure.
Nanotechnology is in its earliest phases now…..it provides a re framing of old questions……………….how would you do this or that. The reason that Nanotech needs government funding is that at this time most of the work being done is pre-competitive……….the real positive impact of nanotechnology to our economy won’t be for another 25 to 50 years. This time frame is outside of most companies horizon.
Our economy will survive in this competitive world only if we are at the cuttuing edge of new an useful technologies.
However, I do understand that people don’t want to fund Nanotech, just like any other gov’t funded projects.
What Kris doesn’t realize is that he will be the best educated worker at Del Taco because all of his other asswipe MBA buddies decided to invent toxic loans and spread them around the world.
It makes more sense than sending humans to Mars.
OK thoughtful, we agree on something…….
I do give a presentation on the nanotechnology revolution and I talk about teletransportation. There are 10 to the 24 cubic nanomters in your average human. If we can figure out how do code the contents and location of the cubes, we could potentially send humans to mars with electromagnetic radiation. Of course there is the problem of reconstruction, theoretically it is possible.
Ooooh, radical! Every single thing aired on cartoons in the sixites is coming true. LOL!
It is sort of hard to believe that there are credible researchers around the world working towards making these types of ideas work……………….think about the time from the invention of the electron to the implementation of the internet.
NanoWest Says:
May 2nd, 2008 at 10:53 am
“I do give a presentation on the nanotechnology revolution and I talk about teletransportation. There are 10 to the 24 cubic nanomters in your average human. If we can figure out how do code the contents and location of the cubes, we could potentially send humans to mars with electromagnetic radiation. Of course there is the problem of reconstruction, theoretically it is possible.”
Was this the same theory that Chrichton mentioned in his time traveling novel “Timeline”? I agree that nantotech is a good investment that, if fruitful, would maintain America’s economic and scientific lead. RE does not have that kind of potential.
Thus, there is no need for government funding. Government funds based on politics not merit.
I guess all this nanotech talk is in the wrong place……..OK
Home prices are going down…………..
come on…. I call BS…… OC real estate has huge productivity benefits….
as long as you buy a house….. you can keep taking out a HELOC salary…….
at some point you can quit your job and your house will support you….. that’s what’s going to keep America on top of the world…… houses…. specially OC Real Estate…..
Mav,
Great point, I now understand why we all need to buy homes so we have a future.
median price number for new homes is too broad. Like others have said what is the mix of SFR vs. condos? no doubt though that prices are coming down, I doubt the 42% number though, at least for now…
NanoWest,
Now that I know a home is supposed to pay for your childs college education………. I’m going to run out and buy today !
I’m essentially with Kris: if people made poor financial decisions like betting on appreciation or overleveraging, then I’m glad to see the market clean them out. Ever heard of Ayn Rand? I bet Kris has. Too many people not taking responsibility for their own decisions, and I’m glad to see it all play out. If people stuck to buying homes for shelter, and not as an investment, they would not be in the mess they are in. How about 20% down and no more than 2.5 times your gross income? And that’s only after saving a year’s pay as a safety net. Bottom line is many people don’t understand risk & leverage, and I have no issues benefiting greatly from their ignorance (and greed, and herd mentality, etc.). Go Kris. Go John Galt.
Home prices are still falling.
Home building is still in decline.
Foreclosures are still climbing.
Mortgage problems are spreading beyond the residential market.
Consumers are falling behind on credit card debt.
Unemployment is rising. Gas and Food Prices are up, up, and up.
The financial system is far from healed.
Taxes are high.
That’s a bogus theory. People have used ARMs for many decades without issues, then overnight they became deathtraps when the secondary market collapsed. Your story is a gross over-simplification of reality. I guess it makes you feel better though.
Mix up, that was for Tom. I’ll check out that movie, RealtorDaveE, sounds great. Thanks for the review.
How about 20% down and no more than 2.5 times your gross income?
And don’t forget the Dalorian to take you back to 1955.
Does anyone like the NY Times?
Price: my position on gov’t assisted bailout for the housing economy in this country: I would support the gov’t only assisting those who have a stake in their PRIMARY home (say 10% minimum), and securing their mortgage rates at the current level, so no adjustment premiums. I do not support help with investment properties and those who carried and 80/20 piggyback with nothing invested from the beginning.
It is the people who bought their primary residences that could truly use the assistance in my opinion. This would be a smaller group of people, less burden on taxpayers, and it would provide a safety net by easing the foreclosure crisis in some areas.
Nano…OT
“There are 10 to the 24 cubic nanomters in your average human. If we can figure out how do code the contents and location of the cubes, we could potentially send humans to mars with electromagnetic radiation. Of course there is the problem of reconstruction, theoretically it is possible.
There’s a another problem…the proteins in cells are constantly moving or being replaced or destroyed. How would you deal with the motion of blood in this theory?
More likely would be to send frozen cells across the galaxy that could then be grown ex vivo into a human being that along with robot caregivers could be provided an education, stimulation and development al a mom and dad. Would make for interesting scifi book.
Mulli,
I thing the problem with your suggestion is that the governemnt only cares about the banks….. and bailing out joe banker…… all the guys the government drinks whisky with and smokes cigars with
so the government is most likely to do exactly the opposite of what you suggest…..
afterall if someone has 10% in their home they are less likely to walk away (although we will still see plenty of this)…………… it’s the 80/20s that will put the keys in an evenvelope…. put the return address as the banks address and not even put a stamp on the envelope…..
Just had a moment during lunch to read what’s up:
nanotechnology opens many doors previously locked tight - solutions to current problems that don’t have ‘em - my alma mater opened a NSF Nanoscale Science and Engineering Center funded completely by federal, corporate and alumni money several years back. Its incubator center has millions in investor dollars thrown at it every year.
Almost every university that offers advanced technical degrees in science and engineering have had research programs in place for some time now. Crystal ball - You have any idea where the original technology for most of what you enjoy came from? It was born out of the work of graduate students at our universities (under the direction of doctoral commitees and professors) - then developed for consumption through incubator centers and corporations
“Oh - how we scorn that which we know little about” - Crystal Ball - ever go to college?
imagine being able to control materials and devices at the molecular level - the applications potentially cross all industries.
Nanowest - right on!!!
“If people don’t want to buy new homes at these prices what are they gonna buy?” - Mick
Uh…they are going to rent and laugh to the bank.
This is great! Schadenfruede is the right word to describe my delight at the distress the fools who bought at the top of the market are in. Bring on the foreclosures, and bring the value of Orange County housing down to realistic levels. These greedy and/or stupid people made Orange County homes unaffordable to the serious and smart. We considered buying in 2004, and were smart enough to pick up and move to the Puget Sound region of Washington. We bought a great house (3636 square feet) made to our order with every imaginable option for $380,000. Living is slower and more civilized here, and, oh yes, there’s no state income tax. Now all overbuilt Orange County needs is a water shortage during this summer’s heat wave, and we’ll be laughing at you all the way.
Thoughtful: “People have used ARMs for many decades without issues, then overnight they became deathtraps when the secondary market collapsed”
I like this. But if you think about it, why did the secondary market collapse? Aren’t you putting the cart before the horse?
It just didn’t collapse because investors said one day “Oh, I think I’ll stop buying these MBS’s”
people made money on the rise and they made money on the fall - those who made money on the fall were labeled as morons until the truth was known - too many folks used mortgage products as affordability products - loan programs that are usually intended as cash flow products on investments. Now - if fixed rates were sky high at the time - then I can see some reasoning for what you state - but that was simply not the case - at least that is my opinion. These people were using ARMs to buy homes at inflated prices at a time when fixed rate products were at 40 year lows. When and how would these people eventually pay off their homes? I mean - people do eventually want to own a home - correct? The opportunity to leverage the low fixed rates came and they passed it up instead for what was once primarily used by investors - who can simply walk away when problems arise - its not their primary home.
Just ask every RE investor that has been doing this for some time - most own their home outright or are using fixed products - they use the adjustables and IO for the investments to make them cash positive - its called managing risk without putting blinders on.
When over 80% of all home purchases in 2006 were made with ARM’s or other non-fixed product - I knew it was time for me to liquidate my OC investment properties - it was so clear I can’t even begin to explain it. Do I regret it? Now I think everyone can answer that for me. These were rental properties - not my primary home. And the equity has appreciated enough to pay for my youngest daughters education when she eventually goes to college. Not one will be taking out a loan for schooling and I want this market to correct.
OUCH!
That’s going to leave a bruise…………………
We’ve had this debate many times, nbi. There is some common ground between your opinion and mine. I DO NOT believe, however, that it was the use of ARMs that caused the secondary market to collapse. Vanilla delinquencies on subprime loans were the main precursor to it. I will say, however, that 2 year subprime ARMs were a recipe for failure.
Thoughtful, you are a very bored chick. For you to respond so many times means you have nothing better to do. GET A LIFE you loudmouth b*tch. Nobody would marry someone like yourself because you argue and say way too much.
realist, you are everything everyone hates about blogs. You also don’t know what I do, what my gender or marital status is or anything else about me. All you know is that you fear me.
Eat it in the OC Says:
May 2nd, 2008 at 12:18 pm
“More likely would be to send frozen cells across the galaxy that could then be grown ex vivo into a human being that along with robot caregivers could be provided an education, stimulation and development al a mom and dad. Would make for interesting scifi book.”
Indeed there was a book about that. Check out Arthur C. Clarke’s “Songs of Distant Earth”.
Does your wife wear a burka too?
Or a prairie dress and braids?
I went to college and then to law school. I saw a lot of young minds polluted by liberal arts scientists. I also noted an enormous amount of free market support in the university system for meritorious research projects. I do believe in public support of education, but it is a vastly wasteful system that should be reformed to involve as much free market as possible. It’s sort of like military spending. We have to spend on the military but the goverment role means it is inevitably enormously wasteful.
Mulliganville Says:
May 2nd, 2008 at 12:13 pm
“Does anyone like the NY Times?”
To paraphrase O’Reilley, Hannity, Limbaugh, or Savage, only liberals, left-wing lunies, and everyone who hates America!
“Price: my position on gov’t assisted bailout for the housing economy in this country: I would support the gov’t only assisting those who have a stake in their PRIMARY home (say 10% minimum), and securing their mortgage rates at the current level, so no adjustment premiums. I do not support help with investment properties and those who carried and 80/20 piggyback with nothing invested from the beginning”
What the government is looking to do is bail out the corporations.
My suggestion is to give those in troubled homeowners counseling and advice. I don’t advocate paying their mortgage or forcibly changing the terms of their contracts.
“I went to college and then to law school. I saw a lot of young minds polluted by liberal arts scientists.”
The pollution otherwise known as the “dirty truth” about the American way of life…about how much we consume compared to average earthling or how energy Americans use per capita compare to everyone else..these truths are shocking to say the least. Or how about our influence via corporations..read about Central America and the giant agribusinesses. Our government doesn’t work for us..it works for our corporations. This is apparent even today. Label someone a liberal is NOT a slight..it is a badge of honor to care enough to about EVERYONE on the planet not just my rich buddies or just the legal citizens of the US. To question authority without justification is anarchy but to question that same authority that reveals itself to hypocritical and mendacious is patriotic.
Crystal Balls said:
“but [public education] is a vastly wasteful system that should be reformed to involve as much free market as possible. It’s sort of like military spending. We have to spend on the military but the goverment role means it is inevitably enormously wasteful.”
Here’s my solution towards reforming public education: get the parents to take responsibility for their kids’ education! A free market educational system isn’t going to convince kids to study nor is it going to be available to everyone who wants it.
Thanks Eat it. I rest my case.
NIce rebutal Crystal. Apparently your Balls are crystal (or just missing). Just think, the conservatives have been largely in charge of the country for 7 years and look at what is gotten us. Go on take a GOOD look. Name ONE aspect of this nation’s problems that has been improved by the party that is in power.
# mav Says:
“Now that I know a home is supposed to pay for your childs college education………. I’m going to run out and buy today !”
Be safe. Buy three or four. There might be son kids running around out there you don’t know about yet:)
some.
RealtorDaveE Says:
“Hmm–about 20 posts on technology. Interesting stuff, and not really unrelated. If nanotechnology bails out OC with high paying jobs, prices do eventually go up. . . .”
—
Gotta love realtors.
….surprised he didn’t send us to a link:)
oooooohhhh man, I missed it.
He DID :) :) :)
“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.”
who the hell cares? it’s a free market. if people didn’t recognize they were potentially buying into one of the all-time historical bubbles they were incredibly naive. if they thought taking money out of the home ATM machine every time billy needed a new pair of sneakers was OK, they were incredibly stupid. a free economy dictates every time somebody wins, somebody has to lose. if there were no winners and losers than we’d all break even.
and with those losers come the winners that will eventually buy them at historical levels with traditional financing. GOOD FOR THEM… Fyi there is an “m - e” in “them”
The free market is exactly why we are in the housing mess we are in. Greed and little oversight is what got us here. The selfishness of it all is overwhelming. So many people love to think that the Freemarketer is out for what is good for the common. For the most part they may be true, but all it takes is a few greedy soul stealers that will take the shoes from a homeless man if he could sell them for a dollar to ruin the free market system.
I say this often Laws are made for A$$ holes. Any new law that comes about is because some loser did something to someone else that is flat out wrong….so it will likely be with the Real Estate and Lending trades.
The so called free market has now led to the worst kind of welfare…corporate welfare. So instead of feeding the homeless or providing medical insurance to the poor….we bail banks out on borrowed money from China whose interest our children’s children will be paying for long past our time here on earth.
You must balance a free market with good common sense and what is best for society as a whole. This trickle down voodoo economics (Dubya Seniors line) just doesnt work anymore. There are not enough tricklers and too many trickleees for this to work. All it does is put a larger divided between the class and slowly push more and more out of the middle class and into the lower class.
Look at consumer spending it has only gone up because prices have. Inflation is surpassing incomes so the ability for your average family to survive is diminishing.
Unless you want a system of survival of the fittest and want to see those (the working class) that really run this country start to die off, you must accept a system that includes all classes of society.
As it ties into housing…the more affordable housing is, the better it is for society. It frees up disposable income to keep the economy liquid. Anytime one part of a families budget is dominated to such an extent that it puts insurmountable strains on all others there is a problem.
I agree buy what you can afford….but it just isnt that simple.
Eat it, trying to educate you is pointless. You stopped really thinking years ago, if you ever did. You are just repeating the same blather you were spoon fed in college. It is the same garbage spewed by Reverend Wright in his sermons. Great joke about me not having any balls–Could you humor be any less clever? You practically ooze with resentment over your “rich buddies.” Instead of complaining, I suggest you make something of your life, so some silly fool can resent you.
Crystal Balls Says: ” ”
to be fair to eat it; he asked a valid question which you have not rebutted:
“WHICH aspect of this nation’s problems that has been improved by the party that is in power.?”
Do not feed the t r o l l in any of its handle forms.
With all due respect Price, counseling and advice is too little too late. Yes, the govt is wanting to assist corporations…and you have to start at the bottom…the current bagholder: the consumer paying for the mortgage. Otherwise, your foreclosure situation will get worse and more banks and financial institutions will succumb to the pressure. Help out the current homeowner by freezing their payments and you probably have 33% fewer foreclosures hitting the market.
Crystal Balls Says:
May 2nd, 2008 at 4:40 pm
“You are just repeating the same blather you were spoon fed in college. It is the same garbage spewed by Reverend Wright in his sermons.”
We should all hate the radicalism of preachers. The garbage spewed by Falwell, Robertson, Hagee, Haggard, and Dobson is simply hateful. And those radical teachers Hannity, Limbaugh, Savage, Ingraham, and O’Reilley are simply despicable.
My guess is, the builders are still making about 100 percent profit per house at $500K sale price. The Irvine Co is making even more since they’ve owned the land forever.
2002 was already bubble territory, with crazy pricing. Look at the pricing now, and it won’t take you too long to call it crazy.
Thank God I Left — you are the only thing Left about Orange County!!
Buy Houses Now!, I see you’re still smarting from the last time you got spanked. Loser.
Crystal Balls said:
“but [public education] is a vastly wasteful system that should be reformed to involve as much free market as possible.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
This person has NEVER worked for a big corporation, or taken a stroll through the executive suite! (Yeah, make the government run like a corporation — Enron.) I am just amazed a person with such an eduation who can still cling to the “free market” fairy tale. It is more like a government controlled fixed market. Communist China has a free market, compared to the United States.
Thoughtful: I do agree that the “first strike” from subrime caused some to wake up - this is the problem - the reactions of many differ greatly - and predicting that is what makes great investors rich and others sour.
Now you see where I stand, exactly.
Thanks, not buying it, there are many things we agree on.
There is no middle class anymore. Free market is a myth. Nano tech and biomedical research are industries which should be invested in. Has anyone noticed some missing troll(s)?
Have a nice weekend.
According to Steve Thomas’s “Houses in Escrow” report, the median is already below $500k on pending closes. Given the softness of new home sales, the brunt of the drop is going to come in the Resale Home category.
Any guesses as to when that number drops below $500,000.00?
I’ll go first - July ‘08 closes.
Anyone else?
No one cares about the median, it’s been thoroughly debunked.
Wow..only 25 separate posts from Thoughtful on this thread
Is THAT all?
Seemed much more than that!!! ….You damn idiot!! Don’t you even know how to count, you simpleton???
There……..now you’ve been attacked - - and she doesn’t have to do it :)
Eat it in the OC
“Just think, the conservatives have been largely in charge of the country for 7 years and look at what is gotten us.”
Conservatives? What conservatives?
This administration is one of the most liberal administrations in history (from No Child Left Behind to Department of Homeland Security).
Kris, you said “Well, the yolks on you. I’m just now finishing my MBA”
While I agree with everything you said above about how these people do not deserve any sympathy, that really is a dumbass quote you just made. MBA’s are essentially worthless. So while you may not be in over your head with a house, you did just pay way too much for a degree that no employer is looking for.
[...] Builders’ home pricing at ‘02 levels in mid-April [...]
[...] numbers provide more insight into the latest DataQuick figures that showed declining new-home prices, confirming that the declines aren’t due merely to a [...]
[...] Emblem of O.C. boom now a short sale 2. O.C. record price set for near-ocean home 3. Builders pricing O.C. homes at ‘02 levels 4. Newport bayfront mansion listed at $38.5 million 5. Smaller O.C. homes take harshest price [...]