Here's recent history of the Fed’s policy committee and its Fed Funds rate. Next Fed decision is June 24/25.
Early July’s house-buying burst is best since Sept. ‘05
July 25th, 2008, 3:38 am · 80 Comments · posted by Jon Lansner/O.C. Register columnist
Remember September 2005? That was the last time Orange County saw single-family house sales running above the year-ago level. But after 33 months of declines, has the slump run out of gas, so to speak?
DataQuick’s first glance at July homebuying shows 1,857 house purchases made in the 22 business days ended July 9 — that’s 5.2% above the year-ago total. If that trend held for the month, July will have been the first year-to-year winner in 34 months. (Note: Overall homebuying was just 48 sales (1.7%) below the year-ago total. Total sales, too, have not beat a year-ago pace since September ‘05!)
This recent buying burst meant that 41 of O.C.’s 83 ZIPs had sales gains vs. the year-ago period. (CLICK HERE for sortable ZIP code chart.)
Of course, sellers paid a price with the median price falling to $477,000 — that 26.6% below the year ago level. Here’s a look at the market, for the 22 business days ended July 9, by key slices …
| Slice | Price | Vs. ‘07 | Sales | Vs. ‘07 |
|---|---|---|---|---|
| Houses | $530,000 | -27.4% | 1,857 | +5.2% |
| Condos | $335,000 | -27.2% | 659 | -1.8% |
| New | $609,000 | -6.3% | 181 | -41.4% |
| All | $477,000 | -26.6% | 2,697 | -1.7% |
- Realtors put O.C. home supply at 2-year low
- Homebuyers’ deposits refunded at stalled seaside project
- Tell us ‘Can housing’s bottom be far away?’
- Century 21 boss talks of ‘tremendous’ opportunities
- O.C. builders drop house prices, raise condos
- Huntington/Seal Beach ranked O.C.’s top housing market
- Gov. Arnold says Calif. will ‘grow out’ of housing ills by ‘09
- Re/Max: Demand for O.C. homes highest since Sept. ‘05
- Football star Carson Palmer lists Laguna home at $2.95 million
July 25th, 2008 at 4:35 am
WOW THE MEDIAN SALE PRICE OF A NEW HOME 477K THATS ANOTHER 18K LOSS FROM THE PREVIOUS AVG. OF 495K ISNT IT……….
WELL THERES UR FIRST DEAD CAT BOUNCE OF HOME BUYING……
BUT IS THAT GOOD IF U BOUGHT A HOME A MONTH AGO OR 2 MONTHS AGO AT THE MEDIAN PRICE OF 495K AND NOW ITS 477K
ISNT THAT A LOSS OF 18 K……….HMMMMMMMMMM
IM NOT SURE HOUSING LOOKS LIKE A GREAT BUY TO ME
SEEMS ALMOST LIKE PEOPLE BUYING ENRON STOCK WHEN IT WAS GOING DOWN THINKING ITS 30 PERCENT OFF THE AVG PRICE IT CANT GO ANY LOWER THAN THIS AND YES IT CAN GO LOWER MUCH…………LOLL
DONT GET FOOLED LIKE A MULLIGAN HEAD WOULD
THERE IS NO MULLIGANS WHEN BUYING A HOUSE U DONT GET TO DO OVER LIKE GOLF………LOLLLLLLLLLLL
DO NOT GET SUCKERED INTO THIS DEAD CAT BOUNCE IN VOLUME
July 25th, 2008 at 6:03 am
Per DataQuick, Single Family Median Home Price:
2006 ~ Month End
$690,000 = Feb ~ Watts 15% “In The Bag” for SFH
$695,000 = Mar
$705,000 = Apr
$705,000 = May
$700,000 = Jun
$699,000 = Jul ~ Watts revises forecast to 11%
$685,000 = Aug
$680,000 = Sep
$665,000 = Oct
$660,000 = Nov
$665,000 = Dec
2007 ~ Month End
$675,000 = Jan ~ Watts forecast 7% SFH
$675,000 = Feb
$695,000 = Mar
$720,000 = Apr
$695,000 = May
$734,000 = Jun ~ Peak of O.C. Housing Bubble
$718,000 = Jul
$710,000 = Aug
$655,000 = Sep
$650,000 = Oct
$655,000 = Nov
$600,000 = Dec
2008 ~ Weekly ~ Month End
$583,250 = Jan ~ Watts declares “Pent up Demand”
$575.000 = Feb
$570,000 = Mar ~ Thoughtful declares “bottom”
$555,000 = Apr
$537,000 = May
$550,000 = Jun ~ Watts apologizes “I Got it Wrong”
$530,000 = 07/09 ~ NEW LOW
Per DataQuick, this loss represents a $204,000 decline in single family home prices from the June 2007 high. And the beat goes on … and on … and on!
July 25th, 2008 at 6:29 am
In the increase of sales shown in this article, what percent of the sales were bank owned properties, foreclosures, short sales? I read quite a bit of articles across the nation about housing, the increase in sales for most of the areas are 50% + foreclosed or bank owned properties that had to sell. This article does not distinguished between sales in distress vs normal sales patterns.
July 25th, 2008 at 6:35 am
-28% change, still not low enough, awaiting the next batch of foreclosures.
July 25th, 2008 at 6:42 am
hwood, that was a dumb post. sorry.
July 25th, 2008 at 6:44 am
This is a pretty good interview with Richard Bitner, the author of the book about the subprime mortgage mess.
July 25th, 2008 at 7:22 am
Actually hwood, it’s more like a loss of $50k if you had to sell today after buying 2 months ago. Don’t forget those nice realtor fees.
July 25th, 2008 at 7:30 am
HWOOD….. can we get you to do an insiders Q&A with Jon?……..
July 25th, 2008 at 7:37 am
What do you call the median price in OC at $477,000?
A good start….
July 25th, 2008 at 7:41 am
i wonder if this will bring thoughtful back.
July 25th, 2008 at 7:54 am
2,700 sales…..not bad. There’s Steve Thomas’ 3000 pendings. let the excuses fly.
July 25th, 2008 at 8:05 am
……. toga party at steve thomas’ REO office tonight to celebrate the great news…………… TOGA TOGA………….
………. come on…….. FEEL GOOD !………
July 25th, 2008 at 8:08 am
Lower prices, more buying. No surprise there.
Prices aren’t goin’ up so take your time buyers. You don’t need to rush, there’s still plenty out there.
July 25th, 2008 at 8:12 am
Impressive.
July 25th, 2008 at 8:18 am
Thank you Lee for posting those stats.
July 25th, 2008 at 8:21 am
thoughtful,
how are those numbers impressive?
July 25th, 2008 at 8:23 am
The spell is broken. Only the lack of new homes is holding the number down. It’s crystal clear that Thomas has the goods.
July 25th, 2008 at 8:24 am
……. i’m so impressed…….. i’m ready to dump my pile of hard earned cash into a house that will drop another 20-30% in value……….
July 25th, 2008 at 8:26 am
Nice call on the Steve Thomas numbers. You will see more RE pros give out honest numbers. After all,, you do have too build up some kind of credibility if you wanna stay in the biz in the future. You can no longer make up fictional stories and numbers when you’re competing with the internet.
We still need more volume in order to keep prices from continuing downward. Still in free-fall. Weeeeeeeeeeeeeee
July 25th, 2008 at 8:27 am
I went to Palm Springs yesterday and the traffic coming into Orange County was literally 100 to 1 against the traffic going out. Not to mention it was 102 degrees when I left there. We have the jobs, the climate and the lifestyle. The future is secure.
July 25th, 2008 at 8:32 am
hey folks, Downey Savings is down another 5% today to $1.70
I hope you guys didn’t own the stock
July 25th, 2008 at 8:36 am
As the bulls kept saying when they shrugged off price declines…look where the bulk of the sales are. See which ZIP codes have increased numbers of sales and where properties are moving.
Here is a sample:
Sales up in Anaheim;Garden Grove; Santa Ana; Laguna Hills; Lake Forest; Stanton; Buena Park.
Now look at some of the areas with sales drops: Aliso Viejo; CdM; HB; Irvine; Laguna Beach; San Clemente; Coto.
Hmmm…
July 25th, 2008 at 8:37 am
Interesting to see that the only desirable areas in OC are doing really bad (all negative numbers) with a couple of exceptions.
Community Zip Median Change Sales Change
Corona del Mar 92625 $1,515,000 -10.9% 13 -48.0%
Huntington Beach 92646 $510,500 -12.0% 45 -11.8%
Huntington Beach 92647 $520,000 -16.9% 28 -3.4%
Huntington Beach 92648 $835,000 -3.6% 54 -8.5%
Huntington Beach 92649 $677,500 -12.5% 37 -19.6%
Irvine 92602 $614,500 -18.1% 28 3.7%
Irvine 92603 $825,000 -17.4% 29 -25.6%
Irvine 92604 $532,500 -14.8% 17 -32.0%
Irvine 92606 $520,000 -11.7% 17 -39.3%
Irvine 92612 $535,000 -20.5% 17 -59.5%
Irvine 92614 $525,000 -5.4% 16 -23.8%
Irvine 92618 $626,000 -32.5% 23 27.8%
Irvine 92620 $770,000 2.3% 36 -18.2%
Laguna Beach 92651 $1,705,000 -8.5% 21 -40.0%
Newport Beach 92660 $1,262,500 -20.1% 28 -15.2%
Newport Beach 92661 $1,875,000 -25.0% 5 -44.4%
Newport Beach 92662 $4,154,500 299.1% 2 0.0%
Newport Beach 92663 $1,325,000 -1.9% 27 8.0%
Newport Coast 92657 $2,700,000 15.4% 17 -34.6%
I guess the only areas that are selling are Santa Ana and Garden Grove. You guys go live there if you want. I’ll stay here by the beach.
July 25th, 2008 at 8:38 am
Hwood: ahhh, nevermind. Words cannot describe your ineptness. Tell the Zetas hello for me.
Lee: while your chart is pretty and all and I am sure you find some humor in it, prices were actually higher in the summer of 2006 vs. your peak of 2007. Yes, the median was higher then, but that was due to the bulk of activity on the upper end…remember? Now, we are seeing the bulk on the lower end…so what does that tell you? It tells me that the median, especially since 2005, is as inept as Hwood at a remedial English class. What would be better Lee: a p.p.s.f chart in the same format. Why don’t you put that together and let’s compare. It would be interesting to say the least…
July 25th, 2008 at 8:40 am
So Mully how do you see it? Median is worthless since many lower-end sales, I get that. So is the number of sales worthless since it includes many sales in lower-end areas?
July 25th, 2008 at 8:43 am
Then let’s back out that inventory as well. Not only will the total inventory fall through the floor, but the distressed percentage will be a fraction of what it is today.
July 25th, 2008 at 8:57 am
Cali: I see it as the median is not the most reliable form of value measurement. When the median declines 20%, and last summer sales were concentrated in higher priced neighborhoods, that is where the skew comes in IMHO. This is why I like ppsf better…it depicts a more accurate measure…it is also more difficult to amass. I understand the ease of the median and the “shock” value of reporting its rise or decline. Volume is probably the best indicator of all Cali. When volume returns to 80% of normal levels…we will have turned the final corner in this gigantic lap of correction.
July 25th, 2008 at 9:05 am
MULLIGANBOY
THATS UR LAST MULLIGAN BLOG YOU ARE ONLY ALLOWED SO MANY
SO QUIT CRYING MULLI
ITS LIKE CRYING WOLF
AFTER AWHILE (AND TRUST ME ITS BEEN ALONG TIME ALREADY) NO ONE LISTENS TO YOU
P.S. GO BUY HOME OR SOMETHING
July 25th, 2008 at 9:06 am
provider Says:
July 25th, 2008 at 8:43 am
“Then let’s back out that inventory as well. Not only will the total inventory fall through the floor, but the distressed percentage will be a fraction of what it is today.”
I agree. The only question is how long will that take?
July 25th, 2008 at 9:24 am
whats ppsf?
July 25th, 2008 at 9:45 am
price per square foot
July 25th, 2008 at 9:46 am
I like price per square foot. I like to look at the plots of ppsf versus time; a very negative slope … and getting steeper.
July 25th, 2008 at 9:52 am
Mulli - Thanks for the response. I would also like to see ppsf figures (I heard from a RE broker a number of months ago that Aliso Viejo ppsf numbers were down 15-20%, but that was a while ago), but there are of course problems like remodels and other changes that throw the numbers off if the square footage is different but not properly noted.
I guess the bottom line is that nothing is perfect. All we can do is wait and see what happens. I have heard from a RE agent that they are seeing more buyer activity, but the difference this time is these are all buyers with lots of $ down.
July 25th, 2008 at 9:53 am
# mav Says:
July 25th, 2008 at 7:30 am
HWOOD….. can we get you to do an insiders Q&A with Jon?……..
MAV
I AM TO INEPT TO DO A Q AND A ACCORDING TO MULLIGANHEAD PLUS IM TO BUSY TAPPING KEGS AT MY COLLEGE PARTIES……
AS U KNOW HES THE ONE(MULLIGAN HEAD) ID REALLY LIKE TO SEE DO A Q AND A
BUT OF COURSE THAT WOULD BE HIM AND BOZO THE CLOWN
I WONDER WHO WOULD LOOK BETTER OR SHOULD I SAY FUNNIER
P.S. LONG LIVE THE OC
July 25th, 2008 at 9:57 am
wow, have you guys seen interest rates recently? They are exploding on the way up. This unfortunately will put even more pressure on the housing market and it explains why nothing over 700K is selling.
http://bankrate.com/brm/news/mtga/July2408_mortgage_analysis_a1.asp
July 25th, 2008 at 9:58 am
Hwood: when you get a college degree, we’ll chat.
Cali: There are certainly more buyers out today than the bulk of the last year or so. The problem is financing. The big banks are leveraged to the hilt. I have a few good lenders who deal with individual investors only. They do not rely on LEH or GS to get things done for them. If anyone is looking for a lender who utilizes individual investors over big banks, shoot me an email at mulliganville@gmail.com and I will be more than happy to send you their information.
Many communities are seeing 15-20% from peak prices today. Personally, I think the median overshoots the correction numbers as a whole. Of course there are isolated deals of 40% from last sale etc. But these are not the bulk of homes on the market.
July 25th, 2008 at 9:59 am
“too busy” I rest my case.
July 25th, 2008 at 10:09 am
I have personallly seen the effects of REO on market traffic…a detached condo with a view around the corner are asking $276/sqft and people have been coming and going for days. The traffic is at the low end for a reason people…1) lending obviously, 2) pricing in further declines. You definitely want to protect yourself in the short term for at least another 10% decline but if you can get what you want with a fixed then fine. But if you buy on margin, forget it. I have no intention of buying a home in the market however…as I do not want to stuck in that overpriced home for the next 10 years. I’ll wait for that 80% of normal market trafffic like Mulli but that will take another 15-20% price declines.
July 25th, 2008 at 10:11 am
ANYBODY HAVE DIRECTIONS TO THAT TOGA PARTY THAT STEVE THOMAS AND MULLIGAN HEAD ARE HAVING.
I KNOW ITS SOMEWHERE AROUND CAMPUS…..LOLL
TOGA TOGA TOGA………………….
IM TELLING U THEY ARE THE 2 OF THE SAME STEVE AND MULLI ………. GOOFBALLS
July 25th, 2008 at 10:12 am
Long term interest rates rising - this will dampen any upward trend.
July 25th, 2008 at 10:13 am
Steve Thomas for president!!!
July 25th, 2008 at 10:28 am
Maybe I can sell my house and buy a tank of gas with the 10 year profit.
July 25th, 2008 at 10:34 am
The prices will go down another 50% from here. The best time to buy is spring 2020.
July 25th, 2008 at 10:48 am
Yes Shane…we all plan out home purchases 12 years out.
July 25th, 2008 at 11:05 am
OBAMA WILL WIN!
Obama supports unions
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http://blog.aflcio.org/2008/06/23/cwa-endorses-obama-for-president
Workers in telecommunications, broadcasting, journalism, newspapers and broadcast stations are all union employees. The media is bias, and the media will win.
Communications Workers of America
Communications Workers of America represents 740,000 workers in telecommunications, broadcasting, journalism and other fields. The union’s members work for companies such as AT&T, General Electric and many of the nation’s top newspapers and broadcast stations. The union lobbies on a number of workplace issues, including health benefits, social security and prescription drug coverage. The union has also been a strong supporter of proposals to lift federal regulations and allow regional telephone companies to enter the long-distance market and offer high-speed Internet access.
http://www.opensecrets.org/orgs/summary.php?id=D000000075
July 25th, 2008 at 11:48 am
All I know is that prices are still falling and there is still alot of homes on the market. Also, from what I understand there are many resets still pending. With rates going up, this can only spell disaster. So that only means more foreclosures, more ineventory on the market and even lower prices.
So regardless of interest rates by waiting at least another 6 months it seems that many will be able to get a nice condo for around 350K that was once 500K in 2007. Sounds like smart investing to me.
It is funny though…some of here cheerleading the rise in sales….to me that is like a doctor trying to cheer up patient whos leg he just cut off that he still has another so all is well.
July 25th, 2008 at 12:02 pm
Unless YOU are the patient with no legs…then the brother with one is in an enviable position.
July 25th, 2008 at 12:03 pm
Resets? Dropping? Pshaw. That’s so 2007.
July 25th, 2008 at 12:20 pm
Data is fun because you can often spin it any way you like, which is why I so enjoy reading this blog.
Having said that – I decided to do a quick month-to-month analysis of what is going on at the very top of the market with respect to volume (highest volume), and what is going on at the very bottom (fewest transactions) and was somewhat surprised by my findings.
If you look at the 4-zips with the most transactions in July the median price as compared to June is actually a wash (one zip did see a $50k bump).
If you look at the 4-zips with the lowest number of transactions (I threw out NB 92661 for statistical reasons - had only 1-transaction in June) and all of them have seen a month-to-month median price increase in July.
I am not trying to call a bottom, but this should be very interesting for those of us looking to buy.
July 25th, 2008 at 12:29 pm
Active Buyer says:
“If you look at the 4-zips with the lowest number of transactions (I threw out NB 92661 for statistical reasons - had only 1-transaction in June) and all of them have seen a month-to-month median price increase in July.
I am not trying to call a bottom, but this should be very interesting for those of us looking to buy.”
So the moral of the lesson is, don’t buy in the month of July?
July 25th, 2008 at 12:49 pm
Ok - yes - as we enter summer and move into winter prices will go down. No reason to expect that the current economy will change that historical fact.
I think if you look at little deeper you might get my concern. A house sells when the people with the means who want to live in that area can afford to make the purchase, not when people who do not currently have the means can afford to buy them. On both the low end and the high end, with respect to current volume, my quick analysis is showing that for those areas the critical price point is very close to current asking price for the target buyer - median price is leveling or increasing in both groupings.
July 25th, 2008 at 12:57 pm
……… looks like Chrysler is cancelling the leasing program for it’s cars……
……….. you can’t make this stuff up…………
……… the de-leveraging of our country continues………
………… cash is king……… you better start saving……..
July 25th, 2008 at 1:11 pm
provider Says:
July 25th, 2008 at 12:03 pm
Resets? Dropping? Pshaw. That’s so 2007.
Is that like your prediction that the bottom was in Feb. 08?
http://www.realtor.org/GAPublic.nsf/Pages/armresets?OpenDocument
Even the NAR shows a large amount of resets between now and Oct. 08….so there is still alot of movement in the market.
With rates climbing now one will be able to refi when they are upside down.
July 25th, 2008 at 1:15 pm
………. the massive option ARM resets in the OC over the next 6 - 12 months are going to be horrendous………. these are resets to fully amoritizing loans due to negam limit caps………. YIKES……….. you already see it in your daily lives, the people you know who drank the kool aid….. but it’s going to get even worse….
July 25th, 2008 at 1:16 pm
They didn’t cut financing, just leases. They don’t want to be taking back gas-guzzling cars and trucks that are difficult to value 3 years out. Leave it to our regulars to morph it into something unrecognizable.
Samson, rate adjustments are a given. The conversation has turned to slashing balances. All upside-down loans will be modified one way or another.
July 25th, 2008 at 1:18 pm
…….. why the hell do you think people leased them?…..
July 25th, 2008 at 1:20 pm
A. they did not have the cash to purchase
B. the lease was less than the finance option
C. they did not want to deal with the resale value
or
D. all of the above………..
……… face it provider…….. people who based their lives on credit are SCREWED……
July 25th, 2008 at 1:23 pm
ALL upside down loans? All of them? Wow, and I suppose helicopters will just appear over the horizon and just start dropping money from the sky for everybody? Get real. Wait until those mortgage fraudsters start coming in front of BK judge or have to deal with new fed regulations..pshaw on your modifications…oh, wait, now I get it….you meant one way they will modified is through foreclosure auction back to the bank!
July 25th, 2008 at 1:23 pm
Active Buyer: what is the relevance of your findings to the prediction of a bottom?
I would prefer to see that you remove the word wash and replace with actual numbers. As a matter of fact, you did the math, why did you not just post the actual results and ranges and zips?
Moreover, in order to see a bottom you must first use that same math and apply it the previous year or so the trend can be clearly identified in actual numbers.
You will need to include sales numbers as well.
Focus on demand and supply, and future demand and supply given real fundamentals.
How many homes are in the pipeline? How many loans are going to reset in the next two to three years? What is the employment outlook in the sectors with higher paying salaries? Look at the trend in school enrollments. Point being - who in their right mind can actually call a bottom without clearly doing their due diligence?
You have any idea how many people called bottom and have already been proven wrong? Moreover, do you have an idea as to how many of those that did that have no realization they should no longer be throwing around their projections since their past mistakes are well documented? Thomas has good data and sometimes comes too close to the prediction realm - which is why many investors will use his data but ignore the remaining “conclusions” he attempts to draw from them and instead acquire other data to generate their own projections. Thomas or any other data source is not a one stop shop - at least not for those who know what the hell they are doing.
There are quite a few trends that are still alarming (equivalent rents still way off on most listed properties, short term rates have immense pressure due to inflation, local inflation is higher than national, higher paid jobs are reducing in numbers - not gaining, loss of young educated families and their school children as exemplified by a reduction (14% in 2007) of college educated residents in OC and school enrollments are down, job projections in the tech sector are poor at best, and we are not even going into the commercial sector, etc.) - and only those I find to be bullish will be quick to discount many factors with purely speculative comments such as “well, the government will prevent the foreclosures from now on so those numbers will drop severely,” or “rates should not go that much higher because the Fed will fix them,” and so forth. Investors don’t go off such information because its not info - its purely a far reaching speculative opinion and until a trend is locked in to prove that direction is being realized - its all the same talk just as much as those bearish comments predicting that GD2 is around the corner.
What is wrong with being scientifically objective when dealing with finances? Most professional investors do it here everyday. Just seems that this blog is not frequented by them.
Note that I am not supplying numbers simply for the fact that I am part of an organization that pays for the research and have agreements on what I am allowed to publicly share. Unbeknownst to you guys, my partners know who I am and who I post as. A few have no desire for me to take a bearish stance on any blog.
July 25th, 2008 at 1:25 pm
Provider:”All upside-down loans will be modified one way or another.”
Want to bet that there is no way in hell that ALL will be modified?
Just pointing out facts.
Anyone else agree that ALL will be modified?
Or are we in favor of extremes and subjective, worthless reading material.
July 25th, 2008 at 1:29 pm
provider you are insane if you think banks are going to modify all the loans…….. especially the variety we had in the OC….
July 25th, 2008 at 1:30 pm
Mav, you don’t know the first thing about leasing. First, some leases end up costing more and some end up costing less. Many factors drive the equation. Second, money down is often more in a lease situation, not less. Have you ever leased a car?
July 25th, 2008 at 1:35 pm
mav, people leased them for the same reason I lease…
They like a new car every 3 years…
They like the tax write off of 80% for biz…
The payments are lower than purchasing…
Isn’t that your argument at times? Why buy a depreciating asset?
July 25th, 2008 at 1:39 pm
I think you will see some serious modifying. The alternative is they lose their shorts and are stuck with a depreciating asset or one that is worth substantially less than what they loaned against. Besides, the gubment is going to provide incentives to financial institutions which modify loans.