Orange County Register

“Can’t believe 2,808 (either really good bargains or really dumb people)people bought houses during this time period.”

At least a house as an investment, as expensive as they are, will be around when you are retired. US citizens are losing faith in intangible investments.

The Money Pit says:

Prices are getting closer to rents so I wouldn’t say people are crazy to buy now. I would think that next year would be a better deal, but you don’t have to buy at the bottom to do well.

The problem for the economy is that at these prices the home ATM is closed and that means we have entered the Second Great Depression = spending only what we as Americans earn.

No, wait, the government can still borrow a few trillion a year and give it away!

NationalBubble.com says:

poneeboy53 Says: “either really good bargains or really dumb people”

I vote for the latter

DonS says:

“really dumb people”…with money. You only half qualify.

NationalBubble.com says:

The Money Pit Says: “Prices are getting closer to rents so I wouldn’t say people are crazy to buy now. ”

I’ve got news for you, rents are coming down as well.
As Clinton would say: “it’s the economy, stupid”
I would recommend for you renters out there to ask your landlord to lower your rent or start looking for another apartment. There are plenty of apartments for rent. You have the power, not them.

When people are losing jobs and losing their retirement plans, landlords have to lower rents or keep apartments vacant.
The stock market always looks ahead and it is telling you that we are going into the worst recession in the last 40 years. Ignore at your own risk.

Or you can listen to Mulliganville or Jimmy2 and believe that everything is okay and people are just overreacting. LOL

NationalBubble.com says:

hey Jimmy, some interesting numbers here.
>b>
Community Zip Median Change Sales Change

Corona del Mar 92625 $1,650,000 -5.0% 9 -30.8%
Newport Beach 92660 $1,190,000 -20.7% 21 -25.0%
Newport Beach 92661 $635,000 -69.2% 1 -75.0%
Newport Beach 92662 $1,800,000 -25.0% 3 200.0%
Newport Beach 92663 $1,150,000 -16.1% 19 35.7%
Newport Coast 92657 $1,625,000 -43.4% 10 -44.4%

I thought prices in the “beach communities” would never go down.
I’ve telling you guys that I’ve seen a lot of home sitting vacant here in NB and it was just a matter of time.

NationalBubble.com says:

hey Jimmy, some interesting numbers here.

Community Zip Median Change Sales Change

Corona del Mar 92625 $1,650,000 -5.0% 9 -30.8%
Newport Beach 92660 $1,190,000 -20.7% 21 -25.0%
Newport Beach 92661 $635,000 -69.2% 1 -75.0%
Newport Beach 92662 $1,800,000 -25.0% 3 200.0%
Newport Beach 92663 $1,150,000 -16.1% 19 35.7%
Newport Coast 92657 $1,625,000 -43.4% 10 -44.4%

I thought prices in the “beach communities” would never go down.
I’ve telling you guys that I’ve seen a lot of home sitting vacant here in NB and it was just a matter of time.

Sure says:

Day Traders/Speculators - Do you think the Stock Market is a buy now? Well, it’s still crashing! In front of your eyes and you’re still buying. What does that make you? A knifecatcher? Talk about dumb. You just lost 40% of your money which could have been 10% of your down for a home. Keep speculating! Keep gambling! You will be farther and farther away from the nice neighborhoods where people
are peacefully living in their homes.

Again, the last thing you should worry about is the home market!

Orange Cream Soda says:

BS. Does FOX News own this paper?

Liar Loan says:

Right or wrong, the perception among these buyers is that now is a good time to buy. They aren’t market timers that care about reaching bottom, they are people ready to own and see home ownership within their reach for first time ever.

I have three different acquaintances in my life that are buying for the first time. One has already closed, and the other two are in escrow to close this month. I’ve advised them to wait longer for an even better deal, but there’s no stopping their collective desire to own right now.

It’s emotional, not logical, but illustrates what’s driving the market right now. Also, financing does not seem to be a problem for any of them. The credit crunch hasn’t tightened mortgage lending much in the past year, as most of the tightening already occured after the big lenders collapsed in ‘07. Rates are still low for mortgages.

Mick says:

Hey, does anyone realize the NOD’s have skyrocketed? How do you get around that one? How is the RE market going to recover anytime soon from increasing foreclosures?

NationalBubble.com says:

“I’ve advised them to wait longer for an even better deal, but there’s no stopping their collective desire to own right now”

well, when they come back to you next year crying that lost 15% of their equity, just tell them: “I told you so”
these were the same people who were buying Cisco shares back in late 2000 thinking they were getting a great deal and now, 8 years later, they are still underwater.

Buying a house (the largest investment for most people) should never ever be a emotional thing.

jeff says:

Why is it that it is always the same five negative people here? You guys must be unemployed lol! To much time on your hands?

hwood says:

LIAR LOAN

OK HERES THE PICKS IN STOCK MARKET U WANNA GO LONG RIGHT NOW BUY
GS BOUGHT AT 85.50
UYG BOUGHT 8.06
MS BOUGHT 7.94

GO LONG BOUNCE IS COMING
U HEARD IT HERE FIRST

Liar Loan says:

Bubble-

If any of them do come crying, I will tell them.

With one of them, I even created a chart in Excel tracking the momentum of our price declines using these dataquick numbers. It’s a straight line heading down with no signs of flattening. I also mentioned price/income and price/rent ratios. The response I got was silence and glazed over eyes.

Emotion is very powerful force that can neutralize all judgement.

not buying it says:

Anyone using an adjustable loan product to buy in OC had better have plenty of cash for weathering the risks.

Prices here have a ways to go before they bottom

Slowing down the foreclosure process is only going to build a backlog

Defaults are rising - not falling

Keep in mind that many of these purchases are people that are attempting to get into a lower priced home and foreclose on the original. Seeing that the foreclosure process is now more costlier and takes longer, the opportunities for such spineless moves are growing, not shrinking.

Talk to a local agent if you know any personally that you can trust. This is the talk around town lately in the back office.

Liar Loan says:

HWOOD-

In other words, buy financials. I have a few financials already, although not Morgan or Goldman.

The only bank in my arsenal is AIB, currently trading at a P/E of 1.83 with a 14.8% divie that was just raised. Also, the Irish govt is guaranteeing 100% of deposits. This led to a flood of Europeans moving their money to Irish banks recently.

hwood says:

LIAR LOAN
I AM SPECIFIC IN WHAT I SAID ONLY THOSE THREE I JUST MENTIONED WATCH AND SEE WHO KNOWS WHATS UP
IDO FOLLOW ME TO THE BANK…..
LIAR BUY ALL THREE OF THESE ITS IN THE BAG .BOUNCE IS COMING TO UPSIDE

Jimmy2 says:

Wow. CdG ( Corona Del Gold ), down -5.0%. Such a problem.

As far as sales streaking to 96 levels, no one should be suprised. Anyone who has money and job are running down to the local real estate agent.

Those who don’t have money or a below average job are crying a river in this blog.

SonOfJimmy says:

Jimmy2,

Don’t fool yourself, we are all going to take a hit on this economy. The only group that will be untouched are the poor and the homeless.

NationalBubble.com says:

Jimmy2 Says: “Wow. CdG ( Corona Del Gold ), down -5.0%. Such a problem. ”

But Jimmy my old friend, I thought you said CdM prices will NEVER go down because the old people there don’t need to sell. By the way, does anybody under the age of 40 live in CdM?

Roger Rabbit says:

NB Said: “The stock market always looks ahead and it is telling you that we are going into the worst recession in the last 40 years. Ignore at your own risk. ”

Thats the dumbest thing I’ve ever read. So the stock market was looking ahead a year ago when it was at 14000. SO last year it was irrational, but now its a crystal ball.

Explain that dumb-dumb.

pdu says:

# jeff Says:
“Why is it that it is always the same five negative people here? You guys must be unemployed lol! To much time on your hands?”

–

Hey jeff,
I resemble that remark.

But you have it backwards. I’m not negative. I’m positive and was postive over three years ago.

Positive that the market was going to drop.

OC Mom says:

Lake they say “there is an idiot born every minute”.
Guess the flood gates opened.

I am assuming they think that the taxpayers will baili them out.

Jeronimo says:

With the rising fixed interest rates, unless the prices fall a lot more, we are going to see the buying come to a screaching holt again. Because, the price of housing is still to high in OC.

pdu says:

Not to butt in Roger, but some people were buying houses a year ago too. There is no market if there aren’t opposing beliefs.

One clue to your question is the reality that the financial turmoil we are seeing was not anticipated by many - certainly not the extent, or the degree to which it is as widespread as it is.

Yes, the market (equity markets) is based on forward expectations.

……………I don’t think “dumb-dumb” applies to NB.

NationalBubble.com says:

Roger Rabbit Says: “Explain that dumb-dumb.”

You got it all wrong dude. I don’t have to explain anything to you. I’m not your professor. Go get a book and learn and then you may come back and talk to me.

honky says:

BY THE TIME YOU GUYS CAN CALL THE MARKET BOTTOM.
IT IS ALREADY HISTORY.
THAT IS HOW IT ALWAYS WORKS.
HINDSIGHT IS 20/20.

not buying it says:

http://biz.yahoo.com/ap/081010/bank_accounting.html

Jimmy2: “. Anyone who has money and job are running down to the local real estate agent”

Jimmy - sorry to tell you, everyone that has money and a job ALREADY OWNS A HOME FROM YEARS AGO!!!

Those that have money now and are renting ARE SITTING ON THAT CASH BECUASE THEY ARE NOT STUPID!!! Wait a month - get a better deal. Wait a bit longer, and the deals keep getting better. You, nor anyone else, not even the most articulate and side-talking RE agent out there - READ THESE WORDS - PRICES ARE STILL FALLING.

Man - logic and reasoning is simply lost on you, isn’t it?

Patricio says:

October 10, 2008 at 1 pm

Dead cat bounce - we saw this in the markets and we will see it in RE. Just like what you see in the Dow you will see in the markets there is no avoiding it and those getting in now because they think it is cheap….wake up call coming with a bad hangover.

NationalBubble.com says:

October 10, 2008 at 1 pm

wake me up whe home prices stop going down…..

Liar Loan says:

October 10, 2008 at 1 pm

It was just a two days ago when mav said “If suspending mark-to-market would help, don’t you think they would have done it by now.” Lee was correct in predicting they would suspend it by the end of this week. Technically, they didn’t suspend the rule, but provided “clarification”. Same difference.

From the article: “Under the change, when an active market for a security doesn’t exist, companies will be allowed to use their managers’ estimates of value, taking into account expected future cash flows and risk discount rates.”

Hmm…. Sounds a lot like what I was advocating two days ago.

lee in irvine says:

Mr. Roger Rabbit,

Of all the fools that ventured into this venue the last year, I remember you being the biggest DUMB-DUMB! I don’t even think it’s questionable … you take the prize. Your blind, foolish remarks, have proven you are not qualified to even give an opinion on this subject.

“Here is a case that the decline is DECELERATING. Look at Lee’s (self-admitted) deceptive posting of the median SFR’s. Prices have been stable for a month. Foreclosure activity has been flat for a couple of months.” ~ Roger Rabbit, November 9, 2007

Wrong, Wrong … and more wrong!

lee in irvine says:

In fact, I’m going to add Roger Rabbit’s stupid statement to my weekly DataQuick chart, starting right now!

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%” for SFH
$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 ~ Roger Rabbit “decline is DECELERATING”
$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”
$515,000 = Jul
$500,000 = Aug
$515,000 = Sept 8
$500,000 = Sept 15
$495,000 = Sept 19 ~ NEW LOW

Per DataQuick, this loss represents a $239,000 decline in single family home prices from the June 2007 high. And the beat goes on … and on … and on!

mav says:

LiarLoan,

In case you haven’t realized, over the past 6 months the government has tried just about everything to artificially inflate capital requirements………

………at some point you will realize…..
… we are at the start of a deflationary death spiral that is going to last about 3 years….

…. after that we might see some pretty sick inflation…..
….. but you are going to see 1930s type deflation over the next few years, doesn’t really matter what the goverment does….

here is the problem in a nut shell….
banks used to only be able to leverage 12 to 1 …..
….. what happened during the bubble?
banks were able to leverage 40 to 1….
….. what did they leverage on?…..
…. JUNK assets……
…. there is not a damn thing you can do to prevent the deleveraging process….. the deflationary death spiral process…..

mav says:

…. also Liar Loan….
…. in case you forget, i never said it would not happen…
… i simply said it would not work….

Liar Loan says:

You can minimize the deleveraging by increasing the deposit base. I know you understand this mav.

If you have 40:1 leverage, then double your capital and you’re only leveraged 20:1. Double it again and you’re only leveraged 10:1.

The number of banks leveraged 40:1 is small to begin with and doesn’t include traditional banks, which are still limited at 12:1.

I think deflation can happen on a small scale, but if you keep people deposited in banks, it’s not likely to occur on anything near the scale of 1930’s deflation.

mav says:

LiarLoan, if all that capital does is wipe out bad debt, it didn’t do a damn thing.

This is the problem, just because you print money doesn’t mean that banks will want to lend it.

The US consumer base is already over leveaged.

Roger Rabbit says:

Lee — You know I was looking at the past not predicting the future.

Don’t spin my words you silly little girl.

Mulliganville says:

Bubbs: I know everything is not OK…you seriously cannot be happy about what is happening in today’s economy.

lee in irvine says:

Rabbit … Say whatever you want, but your foolish statement stays on the weekly DataQuick chart.

hwood says:

LIAR LOAN
U CK OUT MY PICKS TODAY DOW DOWN 551 POINTS I CALLED A BOUNCE TO UPSIDE RIGHT ON
BOUGHT GS AT 85.50 CLOSED AT 88.80
BOUGHT MS AT 7.94 CLOSED 9.68
BOUGHT UYG 8.06 CLOSED 9.48

LOOK AT PREVIOUS POST AT 10 AM OR SO…

HEY MULLIGAN HEAD MAYBE U WANNA START FOLLWING A REAL LEADER HERE……LOLLL

hwood says:

hey sure i bought in market today posted in plain sight early in day and i am making money on all three picks and still holding hows that for speculating/day trading u goof ball. im getting closer and closer to buying in newport coast every day when the time is right so stick a knife in ur self

# Sure Says:
October 10th, 2008 at 9:17 am

Day Traders/Speculators - Do you think the Stock Market is a buy now? Well, it’s still crashing! In front of your eyes and you’re still buying. What does that make you? A knifecatcher? Talk about dumb. You just lost 40% of your money which could have been 10% of your down for a home. Keep speculating! Keep gambling! You will be farther and farther away from the nice neighborhoods where people
are peacefully living in their homes.

Again, the last thing you should worry about is the home market!

mav says:

Lee, if i could give you some friendly advice.
I would not be basing investments in banks off of P/E ratio or dividends. (times they are a changing)

Equity holders get wiped out in a bankruptcy. A 14.3% dividend would suggest a high risk for bankruptcy. And in terms of Ireland…. how do you know that whole country will not declare bankruptcy the way California will probably declare bankruptcy….

LiarLoan, BUDs gap on the $70 aquisition price widened today suggesting even more risk in that deal. I wonder if the risk has more to do with financing, deal price, or the ultimate mechanism for the transaction (i.e. transfer to a $70 equivalent of Inbev Shares which could instantaneously plummet in price, before you could cash in)

NationalBubble.com says:

well done Hwood!!!

not buying it says:

Lee has a point here.

We all can say what we want in public, on this blog, in our home, at a seminar, - it does not matter.

What matters here is this: the willingess of a person to state something that is purely speculative indicates their willingness to lose credibility.

There are reasons why many folks here, including myself, will absolutely refuse to “focus on the positive only” while disregarding what currently is reality - the negative. It is absolutely foolish for someone to state, “just look at the positives”

There are plenty of folks here that have made statements that were very speculative, and, most importantly, were not qualified as such.

Credibility means NOT offering speculative statements without qualifying them as such.

When you read through the history on this blog - you can easily draw one conclusion: the statements that were bearish were way more accurate on average (and some were not very accurate at all) than those that were bullish on this local market. One could conclude that anyone that made a bullish prediction about our local RE market for the near term has little to no credibility. For the sole reason, they were willing to lose that credibility at the expense of making a statement that might lead others to buy - NOTE: I am speculating that their motive was to lead someone to buy, why else would they risk losing that much credibility other than they dont care?

Liar Loan says:

http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021121/default.htm

mav-

I agree that lending will be reduced, that’s why I think a small scale deflation may occur. In your opinion, how will this deflation compare to both 1930’s US and 1990’s Japan?

Here’s a link to Bernanke’s view of Japanese deflation and our ability to fight it in the US:

He says that 90’s Japanese deflation could have been eradicated quickly through Central Bank policy, but politics got in the way.

Liar Loan says:

mav-

I don’t see Irish bankruptcy as a likelihood. Total national debt is around $48 billion last time I checked. Bill Gates could pay that off.

hwood says:

TO NATIONAL BUB
I WILL POST A FEW WINNING PICKS ON HERE IF U WANNA SEE ILL SAY WHEN IM BUYING OR SHORTING AND U CAN SEE THE TIME I POST IT

mav says:

LiarLoan, first off that is Ben Bernanke circa 2002….

Japan had a trade surplus and Japanese consumers had been saving money…. japan was inherently in a much better situation than we are today even though they had a horrendous asset bubble…. what is funny is that Japan did many of the same things Ben Bernanke and Paulson are doing now….

Today we have a huge national debt, a trade imbalane, and consumers have been spending like drunken sailors with no savings…

savings = investment = productivity

Today the US consumer has spent themselves into oblivion using debt.

The US consumer is so far in debt that banks could not even lend money if they had money to lend…. because US consumers could not pay it back.

Take it one step further….. how is a bank going to lend money to a small or large company who had been relying on the US consumer to purchase it’s goods? How can the bank trust that the US consumer is going to have the ability to purchase new cars, new TVs, etc……. when it can’t even pay off it’s current debt?

We have a worse problem now than we had in the 1930s…… in the 1930s the stock market crashed, but we were not in as much debt and we actually had money for a New Deal….. I’m not so sure we will have resources left for a New Deal.

mav says:

LL, have you seen the irish balance sheet, i don’t think it was that pretty even before they took on ALL liabilities of their banks…… can you imagine if CA guaranteed WAMU?

Liar Loan says:

mav-

I agree that CONSUMERS are overleveraged. Not every American is a CONSUMER. Many Americans are conservative and save like crazy, so if banks flood our system with cheap money to loan, those that are savvy will take advantage. If you read the Bernanke paper, you’ll see that the money can be invested to stimy deflation. Asset prices will stabilize if enough new money floods the markets.

I know you won’t change your mind, but the bottom line is the Fed has many “tools” at it’s disposal. Really, all the tools lead back to the printing press.

Well, I’m done for the evening. Have a good weekend mav.

Jimmy2 says:

mav, you missed the main problem in 1990’s Japan problem. In order to grow you economy, an essential component is population growth. This is econ 101. Japan has had no population growth, and that was a main issue behind their lost decade. This is a fact frequently discussed in economics courses, and it also explains why the illegal population growth has benefited SoCal’s economic growth.

Josh says:

Liar Loan:

First of all, banks can’t simply “double their deposits”. That would be a massive increase that many banks would love to do in good times, let alone bad. Even if investors sell all their stocks and close their money market funds and put that money into their bank, they would just pull it out again as soon as the stock market starts to improve, and that would cause lots of problems.

Secondly, deposits are liabilities to a bank, NOT capital. They are borrowing that money from the depositors, and they cannot recapitalize themselves by simply borrowing more money. If that was the case, we wouldn’t be talking about the govt recapitalizing the banks, they would be recapitalizing themselves already by borrowing from the Fed.

Deposits do provide cash to banks and help them meet their reserve requirement, but they do not contribute to capital, as they are simply an asset offset by a liability. To recapitalize most easily, a bank has to raise cash through selling stock. With stock prices so low, about the only option is for the govt to buy special preferred new issues. England has done that, and we will probably see an announcement of widespread purchases by several govts very soon.

Bogey says:

Jimmy2, now I know why you’re known here as “Dimmy”.

NationalBubble.com says:

“and it also explains why the illegal population growth has benefited SoCal’s economic growth.”

yeah, and they are all living in CdM.

lee in irvine says: