Market watcher Steve Thomas at Re/Max Real Estate Services‘ latest report raises a question about the durability of the spring’s buying spurt. Thomas says that shoppers’ demand for O.C. housing, measured by the MLS tally of homes placed in pending escrows in the prior month, fell last week for the first time in 2008.
Demand was 3,006 on Thursday — triple the start of ‘08 but down 54 from two weeks earlier. Now, two weeks earlier was the highest number of new escrows since September 2005. By the way, the latest inventory count of 14,840 is 4.4% lower than the last report of 2007.
Thomas blends these reports into “market time,” a benchmark of 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 Thomas logic, it would take 4.94 months for buyers to gobble up all homes listed for sale at the current pace of deals vs. 4.86 months two weeks earlier and vs. 9.11 months a year ago.
And Thomas notes:
“Where is this demand coming from? Essentially, the lower ranges, all homes below $500,000, where the pressure from distressed homes has been greatest and eroded prices to a level where affordability has radically improved. With lower interest rates and a significant drop in prices, a bit over 20% in the prior two years, a wave of first time home buyer activity has unfolded before our collective eyes.”
Data by the slice as of last Thursday for homes listed on market; pending deals, Thomas’ market time, in months; and market time two weeks ago and a year ago:
| Slice | Listed | Deals | Months | 2 wk. ago | Yr. ago |
|---|---|---|---|---|---|
| All O.C. | 14,840 | 3,006 | 4.94 | 4.86 | 9.11 |
| $0-$500k | 7,183 | 1760 | 4.08 | 4.05 | 9.50 |
| $500-750k | 3,095 | 761 | 4.07 | 4.14 | 8.79 |
| $750k-1m | 1,650 | 265 | 6.23 | 5.99 | 7.24 |
| $1-1.5m | 1,274 | 138 | 9.23 | 8.33 | 8.76 |
| $1.5-2m | 676 | 51 | 13.25 | 11.80 | 12.38 |
| $2-4m | 821 | 41 | 20.02 | 17.74 | 14.83 |
| $4m+ | 343 | 13 | 26.38 | 33.80 | 20.77 |
(Note: k=thousand; m=million)
Other homeselling trends …
“report raises a question about the durability of the spring’s buying spurt. Thomas says that shoppers’ demand for O.C. housing, measured by the MLS tally of homes placed in pending escrows in the prior month, fell last week for the first time in 2008.”
That was a dead cat bounce and shouldn’t come as a surprise. There is only a finite number of qualified buyers out there that didn’t buy during the speculative bull phase in the housing market. Sure there is still plenty of demand, just not at the current listing prices.
We’re at a standstill.
Sellers continue to believe their homes are worth fantasy prices, but until the lenders facilitate fantasy mortgages again, they either sit on the MLS or they remain in “Pent Up Supply”.
The banks are now the market makers, as they set the price with Comp Killers all over Orange County.
where is Sighburdud when we need him?
We need somebody to spin these numbers really fast
…………… this guy must be hard at work………. in his garage……. next to his time machine project….. and x-ray vision project………… plugging a way on his fischer price computer…… trying to come up with a new model to show that we are at bottom……..
Steven Thomas is not a credible data source to quote. The spin he uses is to further his agenda, a real estate broker trying to save his sinking brokerage.
What happened to all the first-time buyers who have been out in droves?
what happened to all those $750K homes that now sell for under $500K….. LMFAO….
bahahhahahha
Steve is now as discredited as Pat “TIC” Veiling!
LMAO!!!
woooooh. Wait a minute. What happened to the posts containing excerpts from Thomas’ report that were made by the local bulls a few days before each of his last three reports?
I mean, is there any reason not to announce this one early as well and in an uncut format?
Talk about only wanting to discuss what you like to read.
The worse part about it is that quite a few people will use Thomas’ report as a tool to further propogate the idea bottom has been hit for a while now. I guess they won’t be able to do much with this one.
Just remember - you buy RE, don’t complain about further price loss.
I think that interest rates are going to continue to go up on mortgages. This kinda dooms any hope of the housing bubble from stopping.
Heck,
It may even doom the housing bailout bill. The sooner we get on with the crash, the sooner things will start to recover. The worst is not over yet but I am sure that it will be over within the next 5 years.
how about the next 13 years….
I think Mr. Thomas is heading for well-traveled ground here. Mr. Watts etc have tried this one before. Oh, I forgot he didn’t see the Wall Street Sub-prime coming! I guess that wasn’t in his software? He like so many real estate managers make it obvious that they aren’t objective in their data. I sat thru too many of those weekly meetings (Mr., Thomas included) where the hypsters talked about numbers from CAR & NAR. All while they require the realtor associate to pay those ridicules annual dues, for CAR/NAR doing nothing but hyping!
I don’t trust the insider Broker software systems at all…Self study of the MLS first hand is a good start while balancing in outside possibilities like State deficit spending, anti-biz climate in Calif, current interest rates, how many pre-foreclosures & REO’s on Realty Trac etc. Then, you may, get close to some kind of true perspective…
It’s a long way to the bottom from here!
I don’t believe inventory count (new market) matters anymore than median price in this changed market. Past data gets thrown out quickly!
In my opinion, in the long term, there are two driving factors:
1) Inflation
2) Jobs
So far, inflation appears to be headed up, and OC still posts a jobless figure in the 4% range, which is considered full employment. I have great difficulty grasping the “world as we know it is ending” theory. I am waiting, cash ready, for a good deal in CdM. Where are the listings showing these fire sale bargains? Contrary to the hammering of negative data in the media, I can’t pinpoint a single fire sale bargain in CdM. These are the facts.
Actually, according to the OC Register, unemployment rate in OC is 4.8%
No the end of the world but most experts don’t consider 4.8% full employment.
Gas prices at almost 5 bucks is a huge tax on the OC consumer because we depend more on driving that most other metro areas.
Also you would try to spin these facts and say that things are just fine.
Only Jimmy would try to spin these facts and say that things are just fine.
1) Inflation
2) Jobs
These are small factors where the NB (no effect?), CDM & LB markets are effected. Much like REO’s don’t effect those areas. They are always lagging behind other factors of their own. I’d be carefull thinking that the “Rich” won’t later be effected too? This is a new experience this time around!
I lived in all 3 of those communities in the past 35 yrs…
Interesting world we live in.
Many claim a recession is and has been under way for a long time. But still, not a single negative GDP has been released.
Many claim OC has a job problem, but latest unemployment report shows full employment.
Many claim all OC housing is being dumped at fire sale prices, but not a single deal in CdM.
The only item observed is higher inflation. Much higher. This usually translates into higher hard asset prices. Real estate is a hard asset. But, everyone tells me it is different this time. When we start hearing this story “it is different this time”, it usually turns out not to be the case.
This country is suffering from having it for so good for so long, it is unable to tell the difference between a slowdown and bad times.
Bad times is 10% unemployment. Bad times is home values falling everywhere. Bad times is negative GDP. So far, we are suffering from hysteria.
NBI — I don’t know about my years of experience. I’m probably not as smart as I think I am :)
I know that there is no 1 data point that is sufficient. I meant to say that the MOST significant piece of the puzzle to me was the DIRECTION of inventory. The trendline of inventory (TO ME anyway) takes in to account the VOLUME of purchases and matches it to the VOLUME of listings. Of course there is seasonality to it which must be considered as well as a host of other factors.
Still, to me the trend of rising transactions and decreasing inventory (both very modest) show an improving market. However, the market is still heading down and these positive trends can easily be reversed to the downside.
That is why it makes sense to be a bear right now. The positive trends can easily be reversed, while the negative trends are very likely to continue.
Jimmy,
I agree with the GDP/no recession yet, things you site. However, they don’t run parallel to the inordinate historical run-up we saw this time in the real estate cycle. There were altogether new forces at work this time!
Today’s Local News reports from California. “Ray Ellis, owner of Escondido Coin and Loan pawnshop, is used to customers coming in with rare or collectible coins for one of the four-month loans that is the industry standard. Recently, customers have been seeking larger amounts, up to $50,000, Ellis said. He said one gentleman came in with a sack of gold coins in order to pay off debts on his investment properties in Orange County.”
“The credit crunch and economic turmoil is sending bigger fish their way. ‘We’re seeing lots of people that we wouldn’t have seen before,’ said Mike Robinson, treasurer of the Collateral Loan & Secondhand Dealers Association (CLSDA) and owner of Crown Jewelry and Loan in San Diego. ‘We’re definitely seeing more affluent people coming through because I’m seeing bigger diamonds.’”
“Irene Longoria, store manager of the Oceanside Gems N’ Loans, estimates that about 30 percent of her customers are new this year. She said they’re coming from Del Mar, Solana Beach and other upscale residential areas.”
“‘We’ve had people come in with sandwich bags of jewelry. This recession is hitting everybody,’ Longoria said.”
“New customers are finding out a lot more than they bargained for at their local pawnshop. John Martin, a jewelry professional at Gems N’ Loans, which has locations in Vista and Escondido, said a woman recently expected hundreds if not thousands of dollars for the diamond ring she received as a gift, only to find out it was zirconium.”
“‘She said, ‘It’s a diamond,’ and I said, ‘It’s not,’ Martin recalled. ‘Then she said, ‘That son of a b… !’”
Hummm - people taking gold coins and large diamond rings to a pawnshop to get .30 on $1 value. Not sure exactly how affluent these people are, but they are definitely not smart. It is difficult to extract value from jewelry, but they would have been better off at a reserved auction. This sounds more like want-to-be rich with one or two nice pieces and no idea how to move it.
Oh my, when Steve says the numbers are up regarding pendings, you all call him the devil. When he says numbers are down, he must still be the devil. Hi renters blog…how are you all today! So transparent it is comical.
“The only item observed is higher inflation. Much higher. This usually translates into higher hard asset prices. Real estate is a hard asset. But, everyone tells me it is different this time. When we start hearing this story “it is different this time”, it usually turns out not to be the case.”
What you are seeing is a bout of Stagflation. We do have inflation but we also have stagnate wage growth. In a true inflationary environment wages increase and that supports the rise in hard assets such as Real Estate. That ain’t happening here. We have an unwinding of a housing bubble that will take years to correct, we have the deleveraging of the credit crisis that will take years to correct. IMO the inflation will begin to fade as the year goes on and we will experience a pretty significant domestic recession which will be followed by a global recession. It is the fact that housing and credit take years to correct that will make this a long hard slog. IMO we could fast forward to July 09 and this board and we will still be talking about falling home prices and stagnate sales. It is becoming clearer with each passing day that housing (especially California) is becoming, in the words of Bill Gross, “aJapanese-style property deflation”.
except nobody from foreign nations wanted or wants to purchase Japanese real estate…unless you are a corporate tycoon looking for a branded hotel.
Have any of you gone home shopping? it doesn’t sound like it. I am a current home shopper. And do you know what is out there in HB and NB? A LOTTA JUNK.
I do not see for sale signs at ever other house in these two cities.
So, i read all the babble here of the market is crashing but try to go buy something. THERE IS NOTHING OUT THERE that is good, it is all junk. When something good comes available it is sold in 7 days. I even tried the good areas of Long Beach and BAMM, you have to run to a good home as those are sold quick too.
So, I read the reports and again real estate is all about LOCATION. Explain why i can’t get a decent home? And even the junk sells.
Also, the 20 cities all the news says is their index is Orange County on this list? If so I do not see any prices falling much.
I have 600 thousand to spend, I see a few homes at that price but under high power electric lines and who wants that. Or new condos in HB in a crappy area off gothard and garfield. Then I go look at condos in good area and they are priced at current comps in market.
So not many of you complainers make any sense to be and it looks like you guys are not out trying to buy something. Go hit the streets and see what it is like. I went into a 1 bedroom open house yesterday in HB at Beach and Adams and there were 6 people in this place looking. And I thought this was 2008 where nobody is out shopping.
makes no sense
Jimmy2 = Tr oll?
Just for curiosity’s sake, I looked up listings in CdM and just by cursory glance, saw that there were about 40 or so price drops on listings for CdM properties in June alone…. for June I only counted 2 properties that had raised their listing price.
Now, I don’t know what price range you’re in the market for, or how much discount you hope to get, but when there are that many properties sitting for that many months, and that many price drops, that’s a far cry from there not being a “single deal” in CdM. Either you’re not looking hard enough, or there is some other agenda in your posts. RE Agent?
In case you’re not Tr oll and you are being sincere, take heart, last summer the situation was much the same in HB and FV, both solidly middle class areas and people said “it won’t happen here’… Fast forward to winter, when sellers finally capitulated as people ran out of HELOC money. Prices have dropped like a rock. CdM and NB aren’t far behind from the foreclosure activity that’s started.
Are people letting their homes get foreclosed just out of “hysteria”?
It’s funny you know…we all make our own reality. In my neighborhood, three homes went into escrow this week. Not shorts or distressed, just good property commanding about 300-325 per foot.
If you cannot tell that activity is up, you are blind. It is up…way up.
Here is another good idea.
Let’s remove Santa Ana, Garden Grove, and Anaheim and all the Condo complex’s in Laguna Niguel and Laguna HIlls from Orange County. Give it to Los Angeles County and all our real estate trouble is resolved. Then we have the REAL OC. All the sub primers and those walking from homes are in these areas.
I can’t tell you how many solicitations I got from RE agents in the last 1-2 months, using STEVE THOMAS’S Reports and quotes therefrom, all trying to convince me that this is IT, the bottom is here, and if I wait the prices will skyrocket right back up and I will be priced out of my target neighborhood forever….! LOL
I am sure those ads DID get some people to buy though, just before the spring bounce ended and as we are entering the slower season. Caveat Emptor and all that, but some people still seem to think that a “buyer’s agent” is obligated to tell them the truth about things…
Mulliganville:
“It’s funny you know…we all make our own reality. In my neighborhood, three homes went into escrow this week. Not shorts or distressed, just good property commanding about 300-325 per foot.”
MLS numbers please??
I know of at least 3 friends who where buying REO’s in OC and the deals fell through for one reason or another. I only know 1 that had any success so that 1 out of 4.
I dont buy the 4.86 months to sell. I see tons of homes that have been on the market longer than 5 months. Does the 4.86 months include the escrow time? With the REO’s it seems that is taking 3 months or more.
I have seen other reports that put the market at over 9 months to sell. I guess it depends on how you calculate it. At the rate Thomas he will be in negative numbers soon. People will be buying your house before you even know you want to sell it.
The bottom line for me is this;
1. Prices are still falling.
2. Homes come on the market all the time.
3. Oil is still going up with no end in site.
4. The stock market is off 17%+ over last year.
5. There are tons of layoffs everywhere.
6. Consumer confidence it at at least a 26 year low.
7. etc…etc…etc.
There is little reason to buy if you dont have to. If you find a place you love and can afford it go for it….just realize it will probably drop in value before it goes up again. Just be sure that you can afford it at the salary you are at right now. I dont need instant equity. I just want a nice home, that I can afford and enjoy life.
It still is and always will be about affordability (which is improving)
Got them, I think. These weren’t necessarily in the last week.
S532929, now pending at a list price of $1,099,000 (4200 sq ft = $261/sq ft). Initial listing at $1.25 million, price reduction of 12%. Bought on 10/4/06 for $1.475 million. Loss of $376,000, or 25.5% in less than 2 years.
U7004763, now pending at a list price of $649,000 (1937 sq ft = $335/sq. ft.). Initial listing at $749,000, price reduction of 13.4%. Bought on 2/11/04 for $635,000. Call that one breakeven in 4+ years.
P637620, now pending at a list price of $695,000 (2105 sq ft = $330/sq ft). Initial listing at same price. Bought on 6/7/1996 for $233,000. About 9% growth/year.
Are these the correct ones? If so, the market isn’t looking too great.
Mulliganville Says: “It’s funny you know…we all make our own reality. In my neighborhood, three homes went into escrow this week. Not shorts or distressed, just good property commanding about 300-325 per foot. ”
Where do you live? for 300 per foot you must live in some homely area like lake forest or Tustin.
Here in NB nothing is selling. Prices are still high but nothing is selling. I see the same For Sale houses week after week.
the only homes that are selling are those with aggressively low prices per the range for the neighborhood or when the listing prices are dropping at a descent rate- close or below comps.
here is an example mls S486890 sitting at $320 sq ft for over 6 months, but started out on 5/5/07 for a lot more…
then there is MLS U8000439 that started at 684k Jan 08 and now is pending a sale “listed at” 794k in NB… who knows what the final price and if it goes through.
correction mls MLS U8000439 that started at 984k Jan 08 now listed at 794k
Samson…….
“There is little reason to buy if you dont have to. If you find a place you love and can afford it go for it….just realize it will probably drop in value before it goes up again. Just be sure that you can afford it at the salary you are at right now.”
……….. it’s more complicated than that………… if you buy now, you better have cash reserves equal to one years salary (in addition to your down payment)…….. you better be able to afford the house under one income in case your spouse gets laid off……….. these are not exactly ideal times to be highly leveraged……… people who are not confident in their companies……. and fear potential lay offs are not going to buy a house no matter how high their salary is……….. the pool of available buyers willing to take on these risk is evaporating quickly………. the days of people leveraging 60% of their income to buy an OC house are fading fast…….. that is not logical in this environment………… the down side risk will continue for at least 5 years…….
Jimmy,
You always deny that the Coastal OC Coastal Real Estate market will also adjust. It hasn’t depreciated much *yet* and that is mostly due to lack of sales volume. What all the Real Estate clowns don’t tell you is that the Real Estate market in Coastal OC areas is changing. The increase in NOD activity from Capo Beach to Corona del Mar is significant. Is it the end of the world? Absolutely not, but it’s the changes in momentum that should be observed. Santa Ana also had “insignificant” NOD activity in 2006 - but if you would have taken an objective look at the data one would have realized that the changes in NOD market momentum are significant. Turns out that data and other variables that supported significant market changes was right on…
Here I’m sharing some numbers with you. Corona Del Mar had 10 NOD from March - May of 2008, compared to 5 in the same period of 2007 and only 1 for the same time frame in 2006. Is 10 impacting the entire Corona del Mar Real Estate market negatively? Absolutely not. I’m not arguing that. But what will negatively affect home values is what has yet to come…a momentum graph can indicate that.
Want broader Coastal OC NOD stats? From January through the end of May of 2008, there were 212 NOD’s recorded in the Coastal area ranging from Capo Beach to Corona Del mar. Compare that to 85 for the same period in 2007 and only 32 in 2006. Now if you study the ratio of NOD that become NTS, the data indicates that the situation is much worse than those naked NOD numbers indicate. In the previous years the homeowner fell behind on payment and received a a NOD could more easily refinance or sell the property. That is changing.
Again, I’m taking a thorough look at the Coastal and other areas. I do my homework and can tell you that the Coast hasn’t experienced much home price depreciation yet, but it should be noted that the various market momentum data I collect from very reliable sources (e.g. DQ, etc.) is indicating that Q4 and 2009 will be the first double digit home price depreciation year for the Coastal OC regions.
And for the record, I’m not a Perma-Bear. I look at data objectively and in Q1 of 2003 I encouraged others to buy Real Estate.
This is helpful data–the start of the normal summer slowdown, which DataSlow will report in 2-3 months when these sales close.
It’s one of 3 reasons I’ve been saying the earliest possible bottom in this coming winter. BTW, I think the following winter is more likely.
Hey, as long as the country’s going to heck in a handbasket, I think I’ll take Congress’s lead & take the whole week off instead of just one day for the 4th!
# Jimmy2 Says:
In my opinion, in the long term, there are two driving factors:
1) Inflation
2) Jobs
“So far, inflation appears to be headed up, and OC still posts a jobless figure in the 4% range, which is considered full employment……….. I am waiting, cash ready, for a good deal in CdM…………..”
__
By your own actions you show us you believe CdM is overpriced. If you believed otherwise you would be buying.
You are now acting like everybody else.
Sales are slower than slow in CdM.
Is this starting to make sense to you Jimmy?
Priced too high — People don’t buy.
There is only ONE way out of this stalemate, Jimmy. My goodness, even you must surely see that.
If you believed the tripe you try to convince others — If you believe inflation is here and we’re at full employment and if you believed beach prices were immune from the downturn and nobody was bailing on CdM property then the only logical thing to do would be for you to buy something you like. It’s just got to go up, right?
Stop standing there trying to convince us of your beliefs. Act on them.
what happened to thoughtful?
# Jason Says: “what happened to thoughtful?”
thoughtful is Jimmy2 now.
I don’t get the title here, there are over 3,000 new escrows, which is much higher than 2007 and 2006.
Nope. Here’s Thoughtful..now as provider.
Hey, Thoughts the real question is how much lower is this versus the historical norm? Last year sucked and even 06 wasn’t great.
Jon-
My questions are:
How many escrows were for non-distressed listings in May?
This market doesn’t turn until non-distressed listings sell.
Without this information this article is meaningless.
How come you don’t require more diligence from the “pros” you quote?
We backed out of 2 offers that initially looked good but, later we found serious issues after going through inspections.
I had an in-law back out of one offer after inspections uncovered serious issues.
Just think how many other people are backing out of what they initially thought was a good deal or get cold feet last second or don’t get financing.
We are able to afford the median these days. I should change my handle from “cantaffordtobuy” to “renterfortimebeing”?
How many other renters who could buy but still find that renting is cheaper per month?
sincerly,
your second class citizens - aka renter
Cantafford: “How many other renters who could buy but still find that renting is cheaper per month?”
Dude!! Renting will be cheaper for a while. I’m not saying that there are a few sales each month whereby the buyer could not rent out to break even if they put down the substantial downpayment - but those kinds of sales are not yet available in South OC or coastal OC - at least not to someone who does not have the network to get a hold of that deal.
Its quite simple to do the calcs. Remember this - the tax write benefit is dependent on that individual’s income and tax bracket and current write-offs.
I laughed one day when I read someone bought a $600K home with only a $100K a year income, with just 5% down - all because of the tax benefit. He was quite alarmed when he had the actual calcs explained to him and he realized he could not even leverage the full tax benefit of all that interest since he did not make enough.
You have to at least be paying that amount in income taxes in order to see the full benefit of all that interest paid out.
Even if Jimmy2 is Thoughtful…
I think this site has become enjoyable to read & in-put occasionally now that “The Taming-of-the-Shrew” (Thoughtful) has occurred…
I now keep a little pad of paper on my desk with the current aliases for Thoughtful. It helps me remember who I’m reading when I look for Thoughtful’s response to the latest batch of lousy statistics.
I suggest other folks do the same, as the names Thoughtful uses are changing more and more quickly as the reality sinks in deeper and deeper. It’s still a great blog though! Hilarious stuff here!
The “reality” is much different than whatever slop Troy is serving.
What’s it like being a blind man? Who’s celebrating over 3,000 deals being made as a bad sign?
3,000 of what?
Exactly what is that 3,000 comprised of?
How many REOs are in that 3,000?
Until we have 3,000 deals that are 90% non-distressed sales, there is nothing to celebrate.
That’s because buyers aren’t touching the non-distressed listings with a 10-foot pole.
Until non-distressed listings fall in line with distressed prices, 3,000 deals is meaningless. No turnaround until buyers want to buy from someone other than a bank.
Says who?
40% distressed
pricing at 2004 levels
3000 “deals”, only roughly 80% appear to actually close
closed deals at historic lows
inventory is trending up again at a fast pace
NODs sky rocketing
credit getting even tighter
someone get T-full a walking stick……….
in other news June’s drop in the DOW and S&P500 were the greatest since the Great Depression……….
What you are describing, marc, is a healed market, not a healing one. Are you saying that removing the 40% of inventory that is distressed would be meaningless?
OC REAL ESTATE LANGUAGE LESSON
LONG BEACH means gang bang in Spanglish
SANTA ANA means drive by shooting
Garden Grove means white trash
From a recent inventory report: 48.8% of demand is either a short sale or a foreclosure. I believe that means over half of homes being sold are not distressed, despite your ten foot pole rumor.
………….. the other 50% either have to move for work………… or have some cash to burn…………. burn baby burn !
Well I see I woke up Thoughtful with my previous comment about “The Taming-of-the-Shrew”? Better to let sleeping-dogs lie I guess?
Good night all…
Maybe Gilligan is picking and choosing his comps in his neighborhood, or he is just making stuff up, because that is what a good agent does.
One on Glenwood went back to the bank last week for $846k, in which they paid $905k in May of 2004. Then there was a comp on Glenwood from last month that closed at $795k or $274 a sqft. Close to $300, but not really. There are bunch more scheduled for the foreclosure auction in Gilligan’s “immune” neighborhood. I will try to remember to keep an eye on them and give some real updates here on what is really going on.
Step 1: Remove head from sand.
Sorry Graph…I have never claimed immunity for my neighborhood. I state the facts that the BULK of distressed property is in the Big 3…you know who they are.
Troy,
Near as I can recall it all started as ROC (any priors you know of?) and then there was the pronouncement that she was changing to Pebbles…….after which she very quickly broke into her multi-personality madness.
Provider: Wouldn’t it make more sense to to look at which homes are selling to see what buyers are buying? Looking at the entire inventory doesn’t show what buyers are buying.
What is the % of homes SOLD that are distressed?
I’d bet $ its higher than 40%. Do you? How about 50%?
Then we could safely say that more than 1 in 2 buyers are buying distressed properties.
The worse part about this? The actual percentage is definitely above 50%, significantly. Exactly what it is? I don’t know.
Every home listed for sale is distressed……. one way or the other and I’d imagine nearly every sale involves distress.
REOs,Lender sales, foreclosures, pre-foreclosure, auctions, heck even the high-end listings at yesteryears prices are distressing the sellers with asking prices lower than they had hoped for and no offers month after month.
The normal-appearing sales that are occurring involve seller concessions — none of this would be happening without distressed sellers.
it is misleading pdu to claim every home listed is distressed. By that same logic, if you missed selling GOOG at 740, you are a distressed stock seller, since you missed the peak. The bulk of sales, however, are distressed. I think we agree on that. Due to CA property tax structure, most do not move once they make a purchase. There are plenty of homes selling involving sellers who have owned their homes for many years and they are still in enviable positions in the grand scheme of things. :)
Date Houses Total Houses 500k to 750k
6-30 14,840 3,095
6- 14,880 3,163
6-2 15,270 3,316
5-5 15,437 3,551
4-21 15,562 3,692
Hey perma-bears! I think we have a pattern.
Let’s see. Inventory falls by 722. Escrows fall by 597. Yeah, that’s a real pattern forming there.
So Provider, according to you, 48% of sales as distressed is a positive thing? You’re even darker than some of the darkest bears on this blog!
You can find SFR/homes in my area of LF and MV for under $400K and some other decent areas as well. These homes were selling for over 600k at peak.
I know two families who recently decided to sell and will get 2003 pricing but will still make money on the deal and move on with life. Most of us still have plenty of equity to deal just not as much as we did two years ago but enough to still make a profit and maybe move up.
The upper end is falling fast and pushing hard on the med. causing the low end to tank.
Things are correcting nicely and sales are picking up because of these types of drops in price.
The real story, price it wrong and it will sit all year with the rest, price it at 2003 pricing and you might sell it.
Real demand for the under 500k, because thats where most homes should be priced. That’s why it will be stickey for the next couple of years, sellers hate the new rules and the bank wont buy their own crap.
We sold our 2500 sq ft home in Anaheim Hills in Aug 2005 for $795K. I just saw a listing up the street for $674K. That part of the neighborhood would usually sell for $40K-$50K more than ours would. So I estimate our old home would now be in the $620K-$650K range.
We bought in 2002 for $401K, but dumped $125K into it (it was a mess!).
By 2009, prices will probably be back to where we would’ve bought had our place been fixed up: $525K. That will mean approx $270K off our price in 2005 and close to $320K off peak.
Maybe they get back to 2002, maybe not. But that’s a whole lotta cash to be pretending it doesn’t count.
after the ravages of the great recession
prices will settle back to 1998 levels
Hi
I think he could make new question in this time and I think he make earliar this.
But with inflation it will be 2000 levels, or heaven help us this will be a bloodbath and all the major banks in the country will be insolvent.
Time for the helicopter money, Ben.