Here's recent history of the Fed’s policy committee and its Fed Funds rate. Next Fed decision is June 24/25.
Demand for O.C. homes nears ‘06 levels
May 5th, 2008, 12:01 am · 136 Comments · posted by Jon Lansner/O.C. Register columnist
The math of Steve Thomas at Re/Max Real Estate Services in Aliso Viejo says demand for O.C. housing continues to grow. As of last Thursday, 2,540 existing homes and condos had been placed into escrow in the past 30 days, a 677 gain vs. a year ago and just 161 homes short of this late April reading in 2006. It’s a strong hint that when these deals-in-the-works are completed in the next two months we’ll see an end of the county’s homebuying losing streak — per DataQuick’s tracking of closed deals — that’s run 31 months back to September 2005.
Also, Thomas calculates a “market time” benchmark tracking how many months it theoretically takes to sell all the inventory in the local MLS for-sale listings at the current pace of pending deals being made.
By this logic, it would take 6.08 months for buyers to gobble up all homes for sale at the current pace vs. 6.55 months two weeks earlier and below 8.33 months a year ago.
Thomas notes: “What changed? The answer is quite simple: the significant drop in prices has allowed buyers that have been sitting on the fence to finally afford to buy once again. After being priced out of the market with rampant appreciation earlier this decade, affordability is finally improving and inviting buyers that have been waiting a long time to finally purchase. Properties priced below $500,000 account for 47% of the entire active inventory and 56% of demand.” Here’s a look at the market by key price slices in terms of listings for sale; pending deals made in past 30 days; and market time in months. Note that by Thomas’ math, the “hottest” markets (based on least time to sell) are Aliso Viejo and Mission Viejo.
| Slice | Listings | Pending | Time (mos.) | 2 wks. ago | 1 yr. ago |
|---|---|---|---|---|---|
| All O.C. | 15,437 | 2,540 | 6.08 | 6.55 | 8.33 |
| •$0-$500k | 7,230 | 1431 | 5.05 | 5.59 | 8.17 |
| •$500k-$750k | 3,551 | 675 | 5.26 | 5.62 | 8.35 |
| •$750k-$1m | 1,762 | 229 | 7.69 | 7.90 | 7.65 |
| •$1m-$1.5m | 1,286 | 127 | 10.13 | 10.89 | 7.88 |
| •$1.5m-$2m | 739 | 55 | 13.44 | 13.07 | 8.01 |
| •$2m-4m | 799 | 50 | 15.98 | 15.78 | 12.88 |
| •$4m+ | 306 | 10 | 30.60 | 21.92 | 13.05 |
(Note: k=thousand; m=million)
Related links:
- O.C. distressed-home listings creep up
- March home sales rise in just 2 O.C. ZIPs
- Builders’ home pricing at ‘02 levels in mid-April
- LA/OC home prices fall 19.4% in Feb.
- The rich pass on real estate. A good call?
May 5th, 2008 at 1:59 am
Just wondering when someone might finally update this page, and why the updating of this page seems to lag behind these days?
http://www.ocregister.com/articles/housing-dataquick-sales-2018451-prices-median
May 5th, 2008 at 5:01 am
“O.C. home selling price
For 22 business days ending April 14 …
DataQuick’s median: $505,000
Vs. year ago: -19.8%”
…and where is the chart for this?
I recall when housing prices were going up, we had a new chart every week. Now we get one every five or six weeks.
What gives?
May 5th, 2008 at 5:17 am
This just in lot’s of potential buyers want ponies too.
Desire plus ability to finance equals demand, not just a willingness to plunk down a deposit.
The hot slices are also the least economically savvy demographically. Is this the REIC still up to their predatory tricks?
May 5th, 2008 at 5:18 am
I am not buying this at all. Bubble Tracking had a very good post on distressed properties not being listed. Read this post, it puts Mr Thomas’s work in question.
http://tinyurl.com/6hh5zh
“Despite having 9 NOD filings within a week in the 92127 zipcode, only two of these homes are on the MLS. This fits with what we are seeing with our foreclosure/pre-foreclosure tracking data as well as our inventory tracking data. In short, the distress is increasing, but the distressed owners are not listing.
Market psychology is a very important factor. Here we have 7 out of 9 distressed homeowners simply giving up and just letting the clock run its course, what does that say about the seller psychology? More impressively, of the 5 homes owned by REALTORS®, only 2 out of 5 are bothering with a listing. If even the cheerleaders are tossing away their pom poms, oh boy…”
May 5th, 2008 at 5:47 am
Geez you guys all remind me of King Fredrick of Norway who thought he could hold back the tide by Royal Decree. He damed near drown and from then on was known as Fredrick the Unready or Unready Freddie. IF things do start to bottom or turn, none of your little talking points will stop it. Get use to it.
May 5th, 2008 at 6:18 am
What good is this report if the distressed inventory, which appears to be Substantial, is not showing up on the MLS?? This is not a normal market, we have an increasing wave of NOD’s and foreclosures hitting the market right now. The pendings are falling out due to credit constraints and actual home prices are falling. This report is the classic definition of “putting lipstick on a pig”. Those aren’t talking points it’s just the data and facts.
May 5th, 2008 at 6:26 am
Larry
That pretty much describes your last date too.
May 5th, 2008 at 6:34 am
“Properties priced below $500,000 account for 47% of the entire active inventory and 56% of demand.” ~ Steve Thomas
Priceless! We still have a major disconnect between buyers and wishful thinking sellers.
May 5th, 2008 at 6:51 am
This piece in Calculated Risk is also priceless.
This home was plastered on the front page of the OC Register right under the bold figures $603,000. The home actually sold for $600,000.
But Oh No … the glamor, the phony wealth, and shine has suddenly gone away … something went seriously wrong here.
http://calculatedrisk.blogspot.com/2008/05/repeat-from-front-page-to-short-sale.html
Now this once $600,000 home is available for $439,000. Oh My … will the OC Register revisit this story and plaster it on the front page?
http://www.redfin.com/CA/Costa-Mesa/484-Traverse-Dr-92626/home/4547031
May 5th, 2008 at 6:57 am
Either Steve Thomas is wrong or Dataquick is wrong.
I think I understand how Steve is getting his numbers to do what he’s got them to do, but come on. He’s totally got to hold his nose and bury his head in the sand (making himself totally obilvious to what is really going on around him) to get there.
His “forward thinking numbers” should show a leg up here for March. And they don’t. Therefore, he’s just fooling himself and his clients.
Then again, without Steve, Truthiness would end it all. Did you see that Turtle Rock home on IHB that is a $500,000 loss after one year listed this morning? Seek help girl.
May 5th, 2008 at 7:12 am
I’m willing to believe there are more transactions, given the seasonality, and recent rapid price capitulations by sellers in the face of a foreclosure onslaught. We’ll see how much of that escrow pipeline actually closes.
That we are in the midst of a selloff doesn’t mean it’s time to buy, though, unless you like knife-catching. Wait for price stabilization.
May 5th, 2008 at 7:15 am
What do they pay you geeks to hawk Redfin?
May 5th, 2008 at 7:44 am
Ha! For every wishful “there are some houses missing”, there are two “pending short sales that show as active”.
There’s sooooo much more in the full report, including:
“With steadily increasing demand and a stable active inventory, the expected market time has dropped like a rock.”
“The active listing inventory has remained steady in 2008. In the prior two weeks, the active inventory has dropped by 119 homes to 15,437. We started the year with 14,724 homes, 713 fewer than today, but that was after shedding 1,050 homes in December 2007 with sellers pulling their homes off the market for the holidays. Still, that only represents a 5% increase so far this year compared to a 37% increase in the inventory last year. Two years ago there were 3,481 fewer homes on the market; however, the inventory was growing at an extremely rapid rate in 2006.”
Did anyone promising a deluge of inventory offer to put up real money?
May 5th, 2008 at 7:50 am
Are you still pinning your hopes on Traverse Drive? The house has been on the market for 8 days, and had a “price reduction” of $120,000 after 5 days. The games people play. The things people believe.
May 5th, 2008 at 7:54 am
Green arrows and blue skies. Ah yes, the smell of success in the real estate market. Poor bears HATE it when good news comes. The worst is over and it’s time for people to start looking for a home.The bitter renter beats can now put up or shut up about buing a house. But we all they won’t buy, doomed to be renters forever.
May 5th, 2008 at 7:58 am
THIS is priceless!
lee in irvine Says:
May 5th, 2008 at 6:34 am
“Properties priced below $500,000 account for 47% of the entire active inventory and 56% of demand.” ~ Steve Thomas
“Priceless! We still have a major disconnect between buyers and wishful thinking sellers.”
Talk about wishful thinking! Lee, there is more than one level of home on the MLS. Lee thinks 56% of all homes should be priced under $500,000, ’cause that’s what buyers want. ‘Nuff said.
May 5th, 2008 at 8:05 am
my friends look in another direction other than RE should you still be looking for gains on your investment. RE is dead for years to come. RE is a home, not a stock. No hurry to buy, prices will remain flat or in a downward trend for at least another year or two or five…look at history to validate this theory..our down cycle started in June of 07, much too short of a period for the real bottom to occur after a 12 yr bull run…the up trend was so long that rookies in this market feel that RE does nothing but move up. OC incomes cannot afford the pricing…so prices will come down
May 5th, 2008 at 8:16 am
“Pendings” are not closed sales. Transactions stay pending far longer and fall out more often than at any time being compared. Talk about the bottom line Steve; closed sales.
May 5th, 2008 at 8:20 am
The banks are finally giving in to all those short sales and admitting that prices are going much lower so they are cutting their losses now.
May 5th, 2008 at 8:23 am
Thoughtless … the only thing that really matters is there are comp killers in every neighborhood in Orange County now … including yours! No one neighborhood is excluded from the greatest ponzi scheme in Orange County history.
And to think, someone actually paid $600,000 for a Costa Mesa box (Traverse Drive) that backed up to the 405 freeway. WTF were they thinking?
May 5th, 2008 at 8:25 am
Calm Down Says:
May 5th, 2008 at 7:54 am
“Green arrows and blue skies. Ah yes, the smell of success in the real estate market. Poor bears HATE it when good news comes. The worst is over and it’s time for people to start looking for a home.The bitter renter beats can now put up or shut up about buing a house. But we all they won’t buy, doomed to be renters forever.”
Welcome back to Earth, Calm Down. So be sure to update your pre-written monologue: the red arrow means prices are still coming down.
Yes, it is good news when the momentum of prices is slowly but surely moving into the range of first time buyers.
May 5th, 2008 at 8:28 am
Lee, South Coast Metro is in transition. That area will see massive redevelopment. Stick to something you almost know, like Irvine.
May 5th, 2008 at 8:31 am
“Green arrows and blue skies. Ah yes, the smell of success in the real estate market”.The arrow is red, pointed straight down, and dropping like a rock. If thats success we don’t want to see failure.
May 5th, 2008 at 8:34 am
All depends on the location. I work in real estate and have been in the market for a house in the $800-$1mm range in Mission Viejo/Aliso Viejo/Laguna Niguel/Dana Point area for the past year.
After seeing homes languish on the market and prices fall at a steady clip for the better part of that year, the last 3 months I have seen more and more places scooped up within a couple of weeks of being listed at or near their asking prices.
I have been waiting to buy until the market hit bottom, and although I am not sure we are there yet, at least in that price range in those areas, we might be getting close.
May 5th, 2008 at 8:34 am
UsuallyRight … you’re right about the banks. They are starting to become more flexible. The brokers that sale these REOs are doing everything possible to discount these homes when they submit the BPO to the asset managers.
The PermaBulls in this venue actually believe all these “pent-up home sales” in escrow show demand for wishful sellers who are caught in 2004 or 2005. Those prices are gone … as in toast … Poof!
To all the wishful sellers out there. If you’re serious about being rid of that house, you’re now competing with the banks. You should price the home at 90% of the most recent comps, then drop the price 5-7% every two weeks. You should sale the home within 30-45 days. Think wholesale!
May 5th, 2008 at 8:36 am
The first time buyer part of the bear army has gone AWOL and joined the ranks of happy homeowners. Such a shame.
May 5th, 2008 at 8:40 am
UH OH !!!
Looks like Bank of America is having second thoughts about Countrywide:
From Forbes.com
Countrywide (CFC) sank 11% in morning trading Monday after an analyst said Bank of America (BAC) should walk away from its $4 billion deal to buy Countrywide, due to rising credit costs and souring loans at the troubled mortgage lender. Analyst Paul Miller at Friedman Billings Ramsey downgraded Countrywide to underperform from market perform and cut his price target to $2 from $7, saying Bank of America could face writedowns of $30 billion or more when it closes the Countrywide deal. He says BofA’s statement Thursday that it won’t guarantee Countrywide debt “is most likely the first step in renegotiating the entire deal.”
Miller estimates that Bank of America has a $22 billion cushion to absorb writedowns of Countrywide’s loan book. While that sounds like a big number, the analyst lays out a worst-case scenario that could see Bank of America taking $17 billion in writedowns on Countrywide’s home equity and second mortgage portfolio alone. The analyst says writedowns could reach $11 billion on Countrywide’s portfolio of option adjustable-rate mortgages (ARMs) and $5 billion on hybrid ARMs and other loans. Writedowns of that size could easily swamp the cushion Bank of America set aside when it agreed back in January to buy Countrywide for $7 or so in BofA stock.
“The issue of fair value marks was a significant part of the reason that National City (NCC) failed to find an acquirer,” Miller writes, referring to the Cleveland-based bank, which has taken large mortgage-related losses. “If fair value marks sufficiently exceed BAC’s projections at the time of its due diligence, we believe the deal price for the purchase of CFC could be renegotiated lower, or BAC could (and should) decide to walk away.”
http://dailybriefing.blogs.fortune.cnn.com/2008/05/05/analyst-says-bofa-should-ditch-countrywide/
May 5th, 2008 at 8:42 am
Thoughtful Says:
May 5th, 2008 at 8:36 am
“The first time buyer part of the bear army has gone AWOL and joined the ranks of happy homeowners. Such a shame.”
In other words, you think that a downpayment in the neighborhood of $60K is what first time buyers will have to dish out from now on?
May 5th, 2008 at 8:44 am
II hope Steve is correct. To me it’s not personal I don’t have to be right. I’m an observer of data! Being a homeowner we all want to see things turn somewhere. However Steve is using the current situation like it draws a long-term picture. Markets are made up of consecutive qrts. Appraisers use past comps for that reason. If Short-sales & REO’s continue to close they’ll only lower the comps more. Currently (not addressed by Steve) there are 9900 plus preforclosures & 3000 plus foreclosures (& increasing daily). Anyone who uses median price is discredited in my mind (agenda). You won’t find the term used in any appraisers report (no agenda just facts)…No bottom can be claimed until at least 3 qrts are proving it out…If even then? It’s like turning a charging Elephant
May 5th, 2008 at 8:48 am
It should not be a surprise that volume is picking up. There are some very good deals on entry level housing in South Orange County, with pricing on some condos at close to 50% off peak. I don’t expect any quick turn around, but I can’t see those prices dropping much further, as mortgage payments and rents are essentially merged, without even considering tax benefits.
May 5th, 2008 at 8:48 am
I knew it,
Lee you’re a schmuck, you got a big stake in the market falling don’t you? What, you work for a phoney REO company? How do you know about the brokers submitting BPO’s to the Banks? Are you one of those jerks that’s been submitting the phoney 10% a month declines in price to the banks just to hang on to the listing? I hope the market turns big time and runs eh wholes like you outta town.
May 5th, 2008 at 8:48 am
There are many low down programs available, bad tider. Quit your scare tactics, they OBVIOUSLY aren’t working!
May 5th, 2008 at 8:51 am
They ALL have a stake! Remember, 90% of these freaks bet their own home on it!
May 5th, 2008 at 9:04 am
NewToTheArea
Very interesting comments about Countrywide. Since they\\\’re reported to hold 1 of 7 motgages in the US & 50% of Calif mortg. Most of the $22 Bil writedowns mentioned are REO\’s they hold in another Trust name (hiding from CEO qrt reports). When they do come to market, (hopefully not fast) then we may see a bottom. They aren\\\’t alone holding REO Trustee Titles in another name either! Some are held-off-shore!
May 5th, 2008 at 9:04 am
UH OH !!!
Looks like Bank of America is having second thoughts about Countrywide:
From Forbes.com
Countrywide (CFC) sank 11% in morning trading Monday after an analyst said Bank of America (BAC) should walk away from its $4 billion deal to buy Countrywide, due to rising credit costs and souring loans at the troubled mortgage lender. Analyst Paul Miller at Friedman Billings Ramsey downgraded Countrywide to underperform from market perform and cut his price target to $2 from $7, saying Bank of America could face writedowns of $30 billion or more when it closes the Countrywide deal. He says BofA’s statement Thursday that it won’t guarantee Countrywide debt “is most likely the first step in renegotiating the entire deal.”
Miller estimates that Bank of America has a $22 billion cushion to absorb writedowns of Countrywide’s loan book. While that sounds like a big number, the analyst lays out a worst-case scenario that could see Bank of America taking $17 billion in writedowns on Countrywide’s home equity and second mortgage portfolio alone. The analyst says writedowns could reach $11 billion on Countrywide’s portfolio of option adjustable-rate mortgages (ARMs) and $5 billion on hybrid ARMs and other loans. Writedowns of that size could easily swamp the cushion Bank of America set aside when it agreed back in January to buy Countrywide for $7 or so in BofA stock.
“The issue of fair value marks was a significant part of the reason that National City (NCC) failed to find an acquirer,” Miller writes, referring to the Cleveland-based bank, which has taken large mortgage-related losses. “If fair value marks sufficiently exceed BAC’s projections at the time of its due diligence, we believe the deal price for the purchase of CFC could be renegotiated lower, or BAC could (and should) decide to walk away.”
http://dailybriefing.blogs.fortune.cnn.com/2008/05/05/analyst-says-bofa-should-ditch-countrywide/
May 5th, 2008 at 9:12 am
I think the stress level of the bulls here is going through the roof. Any time a FACT challenges they’re pie in the sky thinking they resort to name calling. Very childish I might add.
May 5th, 2008 at 9:15 am
The bulls are on an angry rampage this morning.
Are they all that way by coincidence — or are they all one and the same?
Interesting they should all be so ugly at the same time.
May 5th, 2008 at 9:17 am
Caloshua……nice to see I’m not the only one noticing and offended.
May 5th, 2008 at 9:21 am
caloshua Says:
May 5th, 2008 at 9:12 am
I think the stress level of the bulls here is going through the roof. Any time a FACT challenges they’re pie in the sky thinking they resort to name calling. Very childish I might add.
Good god! Newsflash: Pending sales are going through the roof! That’s GOOD news! Denial: more than a river in Egypt.
May 5th, 2008 at 9:34 am
Best not to acknowledge them! One-note sambas. Not credible due to a weird agenda???
May 5th, 2008 at 9:37 am
Hey Pretty Darn Usless and Cal o Sh#t,
Kizmyaz
May 5th, 2008 at 9:40 am
Same old posers (uh, posters) here as in another lame housing blog. It’s gonna happen fellas, things will turn around…and you still won’t own property. Please, just keep your opinions to yourself, pay your rent on time and I’ll be happy….all the way to the bank.
May 5th, 2008 at 9:49 am
LOL,
Thoughtful says pending sales are going through the roof…..
LMAO, OMG……… take a look at historic spring bumps….. this is pathetic….. even when you add in Steve’s fuzzy recycled escrows……..
i don’t blame Steve Thomas, this guy has to rally his troops…….. depressed sales people who are jumping off the roofs of hotels make really bad sales people
May 5th, 2008 at 9:49 am
Thoughtful Says:
May 5th, 2008 at 8:48 am
“There are many low down programs available, bad tider. Quit your scare tactics, they OBVIOUSLY aren’t working!”
You mean a traditional 20% downpayment is a scare tactic but a ridiculous bubble pricetag of $300K for a starter home is not? I am trying to remain civilized and logical, but you’re getting irritating.
May 5th, 2008 at 9:50 am
I don’t see housing getting better. My brokerage does a lot of broker price opinions (BPO) all over central/north county O.C. and listing prices are dropping 2-3% a month in Santa Ana, Garden Grove, Anaheim, Fountain Valley, etc. People are walking away from their distressed homes in droves. Short sales now constitute more than 1/2 of my comparables. With new short sales coming to market monthly at ever lower prices.
It shocks me that bank’s don’t realize how much equity prospective buyers lose between the time they open escrow and the time escrow closes 45 days later! Imagine that, buyers put 20% down in April and when they close on the house in May, well, 3% of it is gone. Silly Banks, behind the curve yet again.
May 5th, 2008 at 9:57 am
realtors are resorting to all kinds of chicanary
to make the market “appear” to be turning….
DONT FALL FOR IT I ride my moutain bike
past for sale sign after for sale sign that has
an “in escrow” sticker on it… the thing is those
signs are still up and the houses are mysteriously
still on the market… months after the in escrow
sticker was put on it… these are nothing more
than cheap tricks to make it appear homes are
“selling” llooolll not to mention all the vacant
houses and foreclosures that arent even being listed
to keep the “inventory” numbers low… this market
aint turning — it cant –its still WAY OVER-PRICED- and
all the perma-realtors on this blog know it shame on you
for trying to mislead …. bad karma is your reward for what
youve done enjoy it
May 5th, 2008 at 9:58 am
Warren Buffet says we still have two more down years in the real estate market. Who do I beleive, the Oracle of Omaha or an Orange County real estate agent?
I have had an agent call me every 3 months in the last two years saying ” By now- prices are not going down”,” buy now- prices are leveling off “, and of course “buy now- prices area the their best in the last few years”. Sorry guys, I am in the building industry and no one is thinking this is the bottom yet, even in existing homes.
May 5th, 2008 at 9:59 am
In the real world an executive would be fired and possibly arrested for reporting pending transactions and then pretending that they had anything to do with actual sales.
Of course Orange County real estate is not the real world. Steve Thomas is a broker that is probably running out of money and most likely trying to figure out how to keep is shrinking business open. You would expect him to try and do anything to make things look better than they are.
Maybe Steve should report how many people worked for him in 2005, 2006, 2007. Maybe Steve should report what he will do if we are not at a bottom, what are his plans for 2009 if sales remain bellow 2000 per month for the rest of this year.
May 5th, 2008 at 9:59 am
I still think it’s funny that Mr. Thomas refuses to sub-divide his “chunks” of pending deals. Fully 40% of the deals listed are in one chunk under $500,000, with the rest distributed above.
More realtor boosterism - Hey Steve, if you don’t show data that doesn’t mean it doesn’t exist!
May 5th, 2008 at 10:02 am
Sheesh — all of the perma’s on this site on both sides really get their knickers in a twist over Mr. Thomas’s postings. Data is just data. You need to look at it in an objective manner. Everybody that wants to question Mr. Thomas’s numbers — you’re being silly. The accuracy of the numbers isn’t the point — its the TREND that matters! The trend showed major pain and suffering in the market last fall — and the trend forshadowed that pain and suffering last spring.
What is the trend saying now? THINGS ARE LESS BAD than they were last winter. that is not the same as saying that things are good!.
I am ready to admit that even though I was a bear as far back as 2004 — things progressed FAR WORSE than I expected. At some point I expect that many uber-bears will have to admit that things ended LESS BAD than they expected — we’ll have to wait and see. It is bad to be a perma-anything. Look for Peter Schiff to be the Gary Watts of the next decade. Right once and laughed at for years when he misses the change in the tide.
May 5th, 2008 at 10:07 am
I like any information that pushes the median price lower, and according to Thomas’s report, the median price for homes in escrow is now under $500,000.00. Just in time for the 800 - 1,000 foreclosed homes that will be coming on the market every month through the rest of the year! Keep up the good work! At this pace, we will have the median below $440,000.00 by Christmas!
Don’t let me down now!!
May 5th, 2008 at 10:09 am
Great post, Roger Rabbit. Good luck with using “the median” to tell you diddly squat, unless you LIKE Santa Ana.
May 5th, 2008 at 10:17 am
notice the posts that thoughtless calls “great”
always support her view of things you dear
girl have no shame none
May 5th, 2008 at 10:21 am
Okay, so what do you expert “bulls” say that the median price of a home in OC will be in 2010?
May 5th, 2008 at 10:23 am
She’s a freak and a geek and a name-caller. Not me though. I don’t resort to such immaturity like that freak.
May 5th, 2008 at 10:51 am
When do we see the pull through to DQ numbers? It has been awhile for this elevated activity yet no pull through to sales.
May 5th, 2008 at 10:54 am
Only rant’s (and company) could look at Roger Rabbit’s post and say it wasn’t both balanced and realistic. I rest my case.
May 5th, 2008 at 10:54 am
Well, heres the problem:
“Properties priced below $500,000 account for 47% of the entire active inventory and 56% of demand.” ~ Steve Thomas”
Is someone insane, properties priced below $500,000 should be 100% of the active inventory and demand….I have a buddy who put his house up for sale $699K..I looked at him and thougth WTF is he doing…Is his realtor honestly working for him!! He’s had several bids for $550K, but guess what, he still lives there……
I think the bulls get upset because only percentage #’s are being given out and there is nothing to compare or correlate them…Kinda like saying, you are 1/2 of the person you were yesterday. Well, many people can take that in different ways…When you talking about the realtors and mortgage bankers, that means they are losing 1/2 less of their bull##$ to feed us……..Happy trails to you!!!!!!!!!!!!!!
May 5th, 2008 at 10:57 am
It’s been 42 days (March 24th) since the first claim of increased pendings.
May 5th, 2008 at 11:00 am
The homes that I have observed selling are those with prices that are approaching rental equilibrium, especially in the condo market. If you assume that we are in an inflationary period over the next few years, these deals are starting to make more sense even for investors. This seems to be more prevalent in the <500k range, areas where rents are fairly strong.
May 5th, 2008 at 11:02 am
And it’s been 31 months since the last increase in closings. A trend may be beginning, but until we see these pendings actually close it’s nothing more than statistical noise.
May 5th, 2008 at 11:02 am
Don’t tell that to the people who say they can still rent for “half” Aw hell, make it a “quarter”.
May 5th, 2008 at 11:05 am
Lee you’re a schmuck, you got a big stake in the market falling don’t you?
SeekingAlpha … I’ve been call a lot of names in here, but never a “schmuck”. Of course I have a stake in this ponzi scheme blowing up. I will say this … I am a “bitter renter” by choice. However, I am also a homeowner (more than 1). Think about that! LoL And posting in this venue is my hobby … it’s kinda like sticking my finger in the Realtors eyes.
What, you work for a phoney REO company?
No
How do you know about the brokers submitting BPO’s to the Banks?
Well, I have friends in high places … lots of them. As I’ve said in the past, my business is indirectly associated with the RE business. I know a whole lot of people that work in all parts of the real estate business. Not just retail carnival barkers (RE Agents), who tell people what they want to hear.
I hope the market turns big time and runs eh wholes like you outta town.
Well bozo … I’ve lived in Orange County almost my entire life. This is my home town … I’m not leaving, but I do enjoy watching this ponzi scheme blowing up.
May 5th, 2008 at 11:14 am
The stock market panic seems to be over. Given that it is a forward looking mechanism, it is healing faster than the economy, and predicting that the economy will heal up. Kind of sounds like the same signal coming from the Thomas data– the elevator may go down some more, but the extreme thrill ride is over. Dare I say it? Rust not bust. Still, the credit markets remain sick, and that is restraining the upper end sales that will someday bring the tortured median up. Volume on the bottom end is good news for stability. And who hates stability?
May 5th, 2008 at 11:16 am
another day, the usual pathetic spins by thoughtless and her minions regarding this bubble implosion: Exhibit A, the Costa Mesa home that was front page news at 600K in 2005 is now offered up at 439K. Oh, but T-less says that “south coast metro is in transition” so no need to worry, everything is fine in fantasy land.
May 5th, 2008 at 11:22 am
Lee, BS!!! Some of these flybynight REO Brokers are telling the banks what they want to hear too. You can make as much money cheating people out of their house as you can over pricing them too, a commison is a commision. And don’t give me that “I have friends in High places” routine. I think you and some of the others are doing the dirty work for some of these brokers that they can’t do cause they caught it in the neck from the DRE for misuse of MLS informnation. I think you’re a flat out crook.
May 5th, 2008 at 11:27 am
I’m glad to see activity picking up especially since that activity is centered around distressed sales and the realistic sellers who have tons of equity but don’t want to have their house sit on the market forever. I have been watching the new listings carefully for months and noticed a dramatic trend in lowering the listing prices to 2004 prices and below. The RE market is not an ON/OFF switch, we will gradually move into more sales seasonally even as the median moves downward. However, there are still many more people who need to sell than there are people willing to pay the WTF prices. The approach to equilibrium will slow during the next 3-4 months (less prices drops) but evitably those prices are coming down to the levels supported by the fundamentals. If you deny that…then you deny that you need air to breathe.
May 5th, 2008 at 11:27 am
Truthi’s increasing shrillness here is sure insight into her situation: She’s fighting a losing war.
When I bought my first house in 1982 there were no blogs. Real estate hawkers had the only audible voice. If she could bring back those days maybe her posts would sound credible.
Pity the fool who buys LA / SD / OC real estate now, as if the 2009 tidal wave of resets of loans sub-prime / stated income / option ARM / Alt A will have no effect whatsoever on the market. The vast majority of foreclosures we are seeing now are pathetic souls who either couldn’t even afford the teaser rate payments or can’t afford the initial adjustments away from the teaser rates.
RE bubbles NEVER EVER correct so quickly. And those who reaped easy money will be the last to predict the bottom. Guarantee: In the absence of all the nonsense in lending, housing prices will again fall to where wages will support mortgage debt. And those debtors will be paying unheard of prices for household commodities and gasoline too. Speculation is soooo dead in this market for years to come.
Look for last year’s median prices to come back around the year 2025 according to projections from DataQuick based on census bureau data for Irvine. On the other hand, California Association of Reators estimates project the good old days prices to return a few years earlier. (from 4.4% historical appreciation year over year basis of estimate)
BOTTOM LINE 2008-2009: the pain we are seeing this year is NOTHING compared to what is coming in 2009! The fed can’t do anything to stop it.
WHEN TO BUY: There will be a time, probably in 2011 where price correction actually overshoots the basic value of the real estate and homes actually sell for less than the real worth based on GRM estimates. (gross rent multiplier)
IN THE MEAN TIME: have compassion for the poor devils, but don’t listen to them.
May 5th, 2008 at 11:30 am
Sales have bottomed out so prices will follow. However, that will be two years from now since sales changes lead prices by that much. So we can call the market bottom for 2010.
May 5th, 2008 at 11:33 am
I said Truthi, I meant Thoughtful; actually they may be the same person.
May 5th, 2008 at 11:36 am
This could reignite some problems in the credit markets…
http://dailybriefing.blogs.fortune.cnn.com/2008/05/05/analyst-says-bofa-should-ditch-countrywide/
May 5th, 2008 at 11:52 am
suckers rally
May 5th, 2008 at 11:55 am
So there’s an uptick. That doesn’t mean it will continue and it is highly unlikey that prices will quit declining.
May 5th, 2008 at 11:56 am
Thoughtful said: “It’s been 42 days (March 24th) since the first claim of increased pendings.”
Yes and he was talking about the previous 30 days before that. So median 57 days later.. where’s the beef?
May 5th, 2008 at 11:58 am
I know you’ve all been waiting for it, so here is Steven Thomas’ latest market report, with continued GOOD news for Orange County real estate:
Market Time Report, May 1, 2008: The First Time Wave is Growing
Compared to last year, demand is stronger, there are fewer homes on the market and the expected market time is much lower. The first time home buyer wave continues to grow and plant the seeds to an eventual recovery.
The reports from the streets of Orange County are unanimous: first time home buyers are fueling a surge in activity that continues to flourish and has been steadily growing since the middle of February. Multiple offers in the lower ranges, homes priced below $500,000, are now quite common throughout Orange County. The numbers illustrate how demand has not only surged past the 2007 level, but is quickly approaching the 2006 level. Until just four weeks ago, year over year demand had not been stronger than the prior year since September 2005, the beginning signs of the current slow cycle. Demand, a snapshot of the prior 30 days of escrow activity, has climbed by an additional 166 escrows in the past two weeks to 2,540. Last year at this time, demand was at 1,863 escrows, 677 fewer than today. Two years ago it was at 2,701, or 161 additional escrows.
The active listing inventory has remained steady in 2008. In the prior two weeks, the active inventory has dropped by 119 homes to 15,437. We started the year with 14,724 homes, 713 fewer than today, but that was after shedding 1,050 homes in December 2007 with sellers pulling their homes off the market for the holidays. Still, that only represents a 5% increase so far this year compared to a 37% increase in the inventory last year. Two years ago there were 3,481 fewer homes on the market; however, the inventory was growing at an extremely rapid rate in 2006. The inventory had already increased by 65% to this point and it continued to grow by another 34% until reaching its peak of 16,006 homes back in August 2006. Today, the active inventory has steadily remained just under 16,000 homes and appears as if it will continue along that path.
With steadily increasing demand and a stable active inventory, the expected market time has dropped like a rock. Starting this year with a market time of 15.6 months, a deep buyers market, the market time has improved to its lowest mark of the year to date at 6.08 months, a 61% drop. Last year the market time was at 8.33 months and climbing at an alarming rate that would spook any buyer considering purchasing. Two years ago the market time was at 4.43 months and climbing. By the end of June 2006, the market time had blossomed to 6.33 months.
So, it is safe to say that the Orange County housing market has definitely changed gears this year. The lower ranges and the flood of first time buyers are entirely responsible for this change. What changed? The answer is quite simple: the significant drop in prices has allowed buyers that have been sitting on the fence to finally afford to buy once again. After being priced out of the market with rampant appreciation earlier this decade, affordability is finally improving and inviting buyers that have been waiting a long time to finally purchase.
Properties priced below $500,000 account for 47% of the entire active inventory and 56% of demand. Last year, this same range accounted for only 26% of the active inventory and demand. Detached homes below $750,000 are actually experiencing a slight sellers market, below the five month mark. The volume of distressed homes in the lower ranges has provided the fuel for the decline in pricing. 77% of all distressed properties are priced below $500,000 and 94% are priced below $750,000. Short sales and foreclosures now make up 36% of the current active inventory versus 35% two weeks ago. There are now 5,576 distressed properties on the market. The overwhelming majority, 81%, are short sales, sellers with loan balances that exceed the current market value and are “subject to lender approval.” For short sales, there are currently 4,504 active listings and demand is at 544 escrows. The expected market time is at 8.28 months, dropping from 9.86 months two weeks ago.
But, this statistic is extremely misleading, just ask a buyer searching for a home. A large portion of the 4,504 active listings already have secured an offer on the property signed by both the buyer and seller, yet they remain active on the market. The reason is that there is also a signed short sale agreement that allows the seller to continue to actively market their home until formal lender approval occurs. This process takes anywhere from a