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Tell us ‘Is $27 million sale sign of housing bottom?’
May 13th, 2008, 6:19 pm · 61 Comments · posted by Jon Lansner/O.C. Register columnist
No press release will officially decree when the O.C. housing market’s revival begins. As a public service, we’ve dug up certain bits of fresh evidence (click the blue links for more details on each trend) that hints that a bottom might be close. That’s “bottom,” as in end of the relentless downturn, not a return to the go-go days. So let’s go bottom fishin’ by grading the chances that the market’s tumble is over. Review our recent catch of trend-hinting news …
- O.C. price record set for off-water home: $27 million
- Late April’s homebuying dip smallest since July
- Demand for O.C. homes nears ‘06 levels
- Industrial property still hot in O.C.
- O.C. home market at ‘absolute worst’
What do you think …
O.C. near turnaround?
May 13th, 2008 at 6:33 pm
We are WAY far away, see below:
Housing Prices Tumble in Two-Thirds of U.S. Cities
http://tinyurl.com/52×5az
Survey: 1 in 10 boomers borrowing for everyday expenses
http://tinyurl.com/3hkx5r
May 13th, 2008 at 6:48 pm
People who buy homes for $27 million dollars don’t need a loan from a bank. Thus, it’s an irrelevant question. But, just for fun…
In California, a home is around 10 x income. Let’s do some math.
$27 million x 10 = $270,000,000. I have a Prediction:
When anyone on this board is worth $270 million dollars…
They won’t be coming to this board anymore, they won’t give a ratsass about the OC home market, and they won’t be reading Jon Lansner.
May 13th, 2008 at 7:17 pm
The median statewide SFR (NOT overall property) is a tad over $400,000. The median income in the state is $64,563. The statewide ratio of the two is 6.19. Your figure is overstated by over 60%.
Par for the course here.
May 13th, 2008 at 7:18 pm
I thought the Nick Cage property was the bottom……
Evidently not.
I’m sure this one is the ACTUAL bottom, the other was just a fake.
May 13th, 2008 at 7:21 pm
I still can’t get over people being able to pay $600,000.00 cash for a REO. But they are doing it. By the way, I circulate in a small world of professionals. In the last three months six of them have bought houses. Five of them were less than forty years old.
May 13th, 2008 at 7:30 pm
Thanks for the real life info, Bruce.
May 13th, 2008 at 7:33 pm
Bruce…tons of cash on the sidelines here itching to get in the game…everyone is so worked up over timing the bottom. You cannot do it…but you will know when it passed you by, and then those folks can join the fray and select more with the masses as people are sheeple.
May 13th, 2008 at 7:39 pm
Wow, Lansner in rare faux-bull form!!
There may soon be a lot of bears with caviar on their snouts.
May 13th, 2008 at 7:51 pm
VOR…i keep seeing the bears say we are calling the bottom, yet i never see you, myself, thoughtful, etc. implying such. What a bunch of mambi pambis.
May 13th, 2008 at 7:53 pm
Bulldung!! You can time the bottom!! I personally called the top. When Katrina hit, I said, “That’s it. That’s the top of the housing market.” In retrospect late 05 was probably the top. Same thing in 2000 with internet stocks. March was clearly the top and I called it.
This is just psychology. Bubbles this big take the same form over and over throughout history. You CAN call the bottom. It is when the level of despair reaches the same intensity that the level of euphoria reached in 05. Compare the bottom of the stock market in 02. When the S&P 500 was down 50% at 760, you just knew that was it.
The despair is building, but we are not there yet. What is required is CATHARSIS. Then we will be at the bottom, and I, Mr. Mulligan, will call it for you. You are welcome.
May 13th, 2008 at 7:56 pm
Mulliganville Says:
May 13th, 2008 at 7:33 pm
“Bruce…tons of cash on the sidelines here itching to get in the game…everyone is so worked up over timing the bottom. You cannot do it…but you will know when it passed you by”
You mean the momentum of prices will turn on a dime like stocks do?
“and then those folks can join the fray and select more with the masses as people are sheeple.”
You mean rush towards another bubble?
May 13th, 2008 at 7:57 pm
Darn Mulligan. When we are down 50% and the bears finally say, “This is it.” You and VOR will say, we agreed with you all along. Then how can you call yourself a bull? If you think a 50% decline is coming, YOU ARE A BEAR IN BULL’s CLOTHING!!!
May 13th, 2008 at 7:59 pm
You can “call it ” all right. Profiting from it is another matter altogether. Most of THAT wil likely pass you by.
May 13th, 2008 at 8:19 pm
Actually, Thoughtless called bottom as January 2008.
May 13th, 2008 at 8:27 pm
Was this question a joke?
When we have stats like this occurring any talk of the bottom is incredibly premature.
http://tinyurl.com/5n467r
May 13th, 2008 at 8:31 pm
Couple of things: the last bust here was due to aerospace leaving the area…mass job exodus. I am talking droves…nothing like the piddly numbers we are seeing today. If you couple that with the fact that there was TONS of land here back then, it is not too hard to see why it took so long to get over the flatness…lots of new choices!
This time? Where is the plethora of building? Nowhere. SFR existing is what you get. BTW, OC population is expected to increase 9% by 2020 with no new homes to accomodate these people…hmmmm, where will they all go I wonder?
May 13th, 2008 at 8:35 pm
Ah, the old “they aren’t making any more land” argument. Heard that before. No offense Mulli, but, Next!
May 13th, 2008 at 8:37 pm
“Actually, Thoughtless called bottom as January 2008.”
Uh, on March 24th. I stand by it today. The turning of the year will have made a profound difference.
May 13th, 2008 at 8:39 pm
Every year the remaining land becomes more and more…and more valuable. And this is why we’re all here.
May 13th, 2008 at 8:43 pm
NO problem yogi…its simple supply and demand…like pricing now…low demand = low sales…enjoy while the getting is good…or wait…like i mentioned, i do not care if you buy or not…its a personal decision. But, the reason pricing continues to escalate quicker here than other places is due to the fact that THERE IS NO MORE LAND LEFT. Sorry bearsoup…it is what it is.
May 13th, 2008 at 9:00 pm
In the end, it’s all about incomes. Unless they rise considereably here in O.C., prices will continue to free-fall, buildable land or not.
May 13th, 2008 at 9:04 pm
Mulliganville Says:
May 13th, 2008 at 8:43 pm
“its simple supply and demand…like pricing now…low demand = low sales…enjoy while the getting is good…or wait…like i mentioned, i do not care if you buy or not…its a personal decision. But, the reason pricing continues to escalate quicker here than other places is due to the fact that THERE IS NO MORE LAND LEFT. Sorry bearsoup…it is what it is.”
As long as the combination of high inventory and low affordability is a major player, I’m confident that “lack of land” will remain a weak component. That argument certainly did not stop the RE debacle. What I do see is existing land being redeveloped into RE (i.e. shopping centers turning into neighborhoods).
May 13th, 2008 at 9:11 pm
In parts of the OC i agree with you yogi…
May 13th, 2008 at 9:21 pm
hey folks,
I just changed my mind. I think that everybody should buy real estate. The economy in California is booming.
Take a look at this article to get an idea of great the economy is.
http://www.latimes.com/news/local/la-me-budget14-2008may14,0,4865683.story
Imagine all the extra money californians will have to spend on housing. I think this is the bottom.
May 13th, 2008 at 9:22 pm
idk price…maybe that happens in 2015-2020.
May 13th, 2008 at 9:37 pm
Mulliganville thinks when we run out of land prices have to go up.
Let’s take London England for instance, which has run out of land a couple of hundred years ahead of OC.
I bet their prices will never drop!
http://www.bloomberg.com/apps/news?pid=20601102&sid=a2RaQXGlFl9o&refer=uk
May 13th, 2008 at 9:45 pm
Bill, LOL, what about Tokyo? The island of Japan? they had that nasty lost decade of depreciating asset prices….LMAO….. realtor BS…..”run out land”…LOL….do you people live in the US? anyone ever fly over this country?……maybe you have looked out the window of a trans domestic flight……. i’m thinking 3020 we will run out of land, but by then robots will run the earth and they won’t need houses
May 13th, 2008 at 10:07 pm
Not to pick on Mulli because he is a little saner then the other realtors in here.
But a couple of days ago he did state that credit scores were dead in the mortgage industry. They’re not used for qualifications anymore.
Then this little gem falls into my lap;
“Credit scores matter more than they used to,” says Jack Guttentag, founder of the Mortgage Professor website and professor of finance emeritus at the Wharton School. “Everything matters more than it used to”
http://finance.yahoo.com/loans/article/105044/The-New-Mortgage-Rate-Calculus
Will the B.S. in here ever end ?
May 13th, 2008 at 10:23 pm
Thoughtless, you will continue to make a complete fool of yourself on this blog until the absolute bottom is reached.
I made money on tech on the way up and made money shorting tech on the way down. I made money in RE on the way up and will make even more on the way down. You are just another idiot who hasn’t studied history, knows nothing, and is now massively underwater on a piece o’ garbage that isn’t worth the $400 a square foot you paid for it.
We are right and you are wrong. Now please go away!!
May 13th, 2008 at 10:30 pm
Mulli, you are too bearish on price. The crash is happening faster than we could have imagined. The foreclosures now will crash the market and the bottom will be 2012 at the latest. Then we’ll get inflation gains at least.
See, you really are a bear. But I think that other parts of the country are fungible with OC, I mean the incomes here aren’t that great apart from the high end.
In Houston, you can buy a 2500 s.f. home for $150,000. Arbitrage doesn’t require everyone to move, just enough people so that everything evens out.
May 13th, 2008 at 10:38 pm
DRI just posted NODs for April for most California counties, & it looks like REO inventory will keep rising at least through fall (See “So Cal April Foreclosure Data Just In“).
It’s hard to see a price bottom any earlier than this coming winter, but sales volume has already bottomed. (See “Snapshot from the front lines: One bottom, maybe two.”)
May 13th, 2008 at 10:43 pm
Bill, I never quoted anything regarding credit to my recollection. Perhaps you have me confused with someone else.
May 14th, 2008 at 12:03 am
please note how the permarealterds avoid
this article like truthi avoids reading a book…
http://mortgage.freedomblogging.com/2008/05/13/banks-offer-20-off-foreclosed-homes-in-oc/
May 14th, 2008 at 12:09 am
a sure sign of the bottom 1000 foreclosures
per day in california– PER DAY
yep the bottoms here LMFAO
http://latimesblogs.latimes.com/laland/2008/05/foreclosure-flo.html
May 14th, 2008 at 12:42 am
please tell me how the “credit crisis” is over
when theres a full blown tsunami of foreclosres
hitting the balance sheets of hundreds of
investment banks and mortgage holders
from new york to bejing…. yep the bottoms
here allright dude any retard with an iq larger
than their shoe size can see where this is headed
in the words of john fogerty…
hope youve got your things together
hope you are quite prepared to die
looks like were in for nasty weather
theres a bad moon on the rise…
A THOUSAND FORECLOSURES PER DAY
IN CALIFORNIA ALONE… THE MAJOR BANKS
ARE LYING WHEN THEY SAY THE CREDIT PROBLEM
IS OVER ITS NO WHERE NEAR OVER NO WAY
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aozdYkg4RG3A
May 14th, 2008 at 1:58 am
A thousand foreclosures per day. That’s simply amazing. And a literal Tsunami of foreclosures still headed our way with tens of thousands of NOD’s racking up in April alone.
It’s all simply unprecedented in the modern history of homeownership. And the worst of it has yet to hit us. Check back in September when it’s gotten much worse.
May 14th, 2008 at 5:39 am
For your reading pleasure
http://moneynews.newsmax.com/money/archives/st/2008/5/12/153115.cfm?s=st
May 14th, 2008 at 5:50 am
Maybe sighburrdud should have done his homework before buying a property that’s set to lose hundreds of thousands.
US foreclosure filings surge 65 percent in April
“The April data show nearly half of the properties received an initial notice of default, suggesting many homes were new entrants to the foreclosure process”
More than 1 million home foreclosures are forecast for 2008.
“It doesn’t look like the volume is going to slow down any time soon,” Sharga said.
More than 54,500 properties were repossessed by lenders nationwide in April
The number of properties with a filing jumped 95 percent
California had the most properties facing foreclosure at 64,683, an increase of 112 percent from April 2007.
http://news.yahoo.com/s/ap/20080514/ap_on_bi_ge/foreclosure_rates
May 14th, 2008 at 6:24 am
Bill,
Foreclosures in Kentucky have little to nothing to do with SoCal.
May 14th, 2008 at 6:26 am
VOR,
enjoy:
http://calculatedrisk.blogspot.com/2008/05/1000-foreclosures-per-day-in-california.html
don’t worry though, none are in SoCal….
May 14th, 2008 at 6:31 am
It appears there is discention in the Bear Ranks. Karl Case of Case/Shiller fame says were at the Bottom.
http://moneynews.newsmax.com/money/archives/st/2008/5/12/153115.cfm?s=st
May 14th, 2008 at 6:39 am
Bill,
I do not care how many foreclosures are in riverside or chino…or stockton or sacramento…or any other poster child for “hideous weather and over-speculation.”
Show me the % of foreclosures in South county…if you take Anaheim, Garbage Grove, and Santa Ana out of the mix…our over-speculation areas here in OC, you are left with paltry numbers of foreclosures for the county as a whole. Are their more than historical trends? Of course…there has to be as volume for a few years obliterated those same trends…it has to happen. Posting statewide and national figures is meaningless as noted by OC pricing which has not corrected to near the lengths it has in aforementioned locations.
Go sell the doom and gloom and crazy somewhere else.
May 14th, 2008 at 6:41 am
My apologies for the improper use of “their”…the brain is waking up.
May 14th, 2008 at 6:46 am
thanks, I feel better now.
May 14th, 2008 at 6:48 am
How long do you think realty-trac has been “tracking” foreclosures? If you guessed 3 years…you are correct. Gee, do you think the year over year numbers will increase? What a genius organization.
Hey national number gurus…since you all post the daylights out of national figures: less than 2% of all homes in the country are in foreclosure…and CA you ask? 1 out of 140. According to CNBC and aforementioned realty-trac.
May 14th, 2008 at 6:58 am
Mulli, you are right, as usual. Foreclosures are negligable in most good areas. Didn’t we hear just yesterday from someone who has numerous friends who have bought in South County since the beginning of the year? Like I have ALWAYS said: there will be a great divide, a flight to quality. It’s also clear since we saw NO SPRING INVENTORY JUMP, that most decent cities will see their inventory dropping like a rock from here on out. They could have 5 years of inventory in Anaheim, and it won’t amount to a hill of beans elsewhere. Alfalfa, your story made my day!
May 14th, 2008 at 7:26 am
It deoesn’t require every home to be foreclosed on for the price to crash. It only requires a supply demand imbalance. There is very little demand relative to the supply that is coming on. That will be sufficient to push prices much lower.
May 14th, 2008 at 7:30 am
Demand in the two cheapest categories is right around six months.
May 14th, 2008 at 7:33 am
MP–if you are wanting to own in Laguna Niguel, are you worried about foreclosure activity in GG or anaheim? The two are irrelevant to one another.
May 14th, 2008 at 7:52 am
test
May 14th, 2008 at 8:00 am
Questions to regular posters on here:
Is thoughtful and mulliganville the same person? What other aliases does he use?
May 14th, 2008 at 8:15 am
sharpster
that is an old, tired, argument circulated by the more radical blog busters here. It’s ridiculous.
May 14th, 2008 at 8:20 am
What’s it to you, dullster? Are my facts less valid if I’m the man with a thousand faces? Will you pay even less attention to my many contributions here? Sounds like an extremely feeble attempt to get people to dismiss my facts and insights. You sound afraid that people might appreciate my well-supported point of view.
May 14th, 2008 at 8:54 am
Thoughtful,
Does any of this sound familiar to you:
http://www.youtube.com/watch?v=pmeBSWI9sF8&feature=related
Dear readers please watch this video.
You will learn all about the pending Alt-A disaster that Thoughtful doesn’t want you to know about.
Buy now and you will lose big time ! Don’t say I didn’t tell you.
TA TA and best wishes
May 14th, 2008 at 9:27 am
mav, you know what that guy’s main “point” was? His whole point is that in the state of California, the average ALT-A CLTV at origination was 89%. Know what Orange County’s average ALT-A CLTV at origination was? For all loans it was 76%, for the cashout subgroup it was 68%. Oops! I bet you didn’t know that. Better wash that egg off, it gets sticky when it dries.
May 14th, 2008 at 9:28 am
First, I knew that was going to be good when he opened with “California is sinking into the ocean”. Of course it’s familiar, I already analyzed that EXACT data for Orange County in great detail! Maybe you forgot, but our numbers were quite healthy. I also love his “reasoning” that wealthy people will “walk because they have the credit scores to do so”. Huh? WTF? Thanks for the entertainment!
May 14th, 2008 at 10:32 am
Thoughful, I asked that because after exchanging posts with you a few times, I realized how incredibly insincere and dishonest you are. You like to tell people how much you appreciate their “real life experience” until their views contradict your fairy tales, then you turn on them…. or you’d go to your little corner and say, “that’s not true in my neck of the woods”.
I suppose “voiceofreason” believes you and I’m still doubting. You and mulligan often appear at the same time, talking and complementing each other… good lord, it seems so obvious to me, but then I can be wrong I suppose.
May 14th, 2008 at 10:46 am
You are clearly referring to Socal78, since that’s the only time I have been accused of something like that. My one and only point about him was he had plenty of traffic, and even offers. I WAS displeased that he gave answers out of both sides of his mouth on his future plans. The bears wanted to believe that he was firm about renting for years to come, when he was originally more flexible. Then we saw just yesterday him again sounding open-minded and expressing not wanting be stuck in lease break situation. WHO’S dishonest now?
May 14th, 2008 at 11:41 am
It’s another record in the real estate market, and it’s not a good one.
RealtyTrac, the online foreclosure sale site, which has also been tracking foreclosure activity since the beginning of 2005, reports the single largest one-month volume of foreclosure activity it’s ever seen.
Any realtor in here should be able to look up any city in OC and find short sales, foreclosures and other property falling apart on owners who thought greed wouldn’t come back to bite them.
http://biz.yahoo.com/cnbc/080514/24615625.html
May 15th, 2008 at 11:15 am
You can bet that the only people who voted “It’s Here” and “Very Near” were realtors. Realtors are unethical scoundrels!
May 20th, 2008 at 7:35 am
[…] Mid-county ZIP codes — Santa Ana, Anaheim, etc. — had 534 sales last month, a drop of just 1% from a year ago. What likely got shoppers buying was bargain hunting. In these mid-county 24 ZIPs, last month’s median price change was off 25.0% vs. a year ago. (Do you see a bottom? VOTE HERE!) […]