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O.C. house prices seen rising 2% in a year
September 29th, 2009, 10:00 am · 56 Comments · posted by Jon Lansner
Veros, specialists in automated real estate valuations, says their housing model shows Orange County housing values for their benchmark — “single-family residential mid-price tier properties” — rising 2% in the year ended Sept. 1, 2010.
Says Eric Fox of Veros: “Coastal California markets are forecast to wake up as well and begin appreciating.”
Veros’ quarterly report (HERE) also shows it’s guesstimate of the strongest U.S. markets in the same period …
1. Beaumont / Port Arthur, TX +5%
2. Boulder, CO +5%
3. Amarillo, TX +5%
4. San Diego +4%
5. Charleston, WV +4%
And the weakest …
1. Reno, NV -12%
2. Las Vegas, -11%
3. Palm Bay / Melbourne / Titusville, FL -10%
4. Port St. Lucie / Fort Pierce, FL -9%
5. Miami / Ft. Lauderdale / Miami Beach, FL -9%
Fox adds a “glimmer of hope” — “Extreme price drops, such as 20 or 25 percent, in these weakened markets are no longer expected.”
Outlooks:
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Jon
The Fed’s are spending more than a trillion $’s to keep interest rates low. Obama is using every trick in the book to keep homes from falling into foreclosure and being added to the supply. The government is giving people $8,000 to buy a home and still we see a 4.5% YOY price drop. How do you spin this as being good.
I do pity the gullible.
yeah….seriously, all these so call experts keep saying we are in a recovery, but what about the trillion $ defict that Obama have dug the US into? i have NOT seen a single headline on OC Register that report this.
Once again Diana Olick is telling the whole truth about the housing market
http://www.cnbc.com/id/33073167
I wish the OC Register did this type of analysis.
2% is probably a reasonable normal growth rate, but with all of the interventionist policies slowly expiring and defaults rising, I think there will be serious headwinds facing the housing market.
http://www.beyondthemargin.net/2009/09/keynesian-economics.html
Serious headwinds. Like one in 15 people in OC is simply not paying his mortgage and is now more than 90 days past due. Yeah, that might be a headwind. And the pick-a-pay resets. That could be a problem, too.
The pain is just beginning folks. This summer “fake recovery” is the result of supply kept off the market by banks who have been bailed out and now are taking their time foreclosing on people who would rather spend their money than give it to the banks in rent.
2011 bottom at the earliest.EARLIEST. And yes, this was my call in 2006 on this very wonderful blog, when the RE bulls were mocking in response.
Look for the bottom a year or so after the 90 day past due rates start to fall. As it is, they just keep on rising.
I’ll buy myself at that time, so that should add some support to the market! LOL!
We are the USA. Intervention is a given, and why not if the cost is low and austerity can be minimized. The day will come when we can no longer intervene and have to take the bitter medications (like Argentina, S. Korea, Thailand,…, had to when they ran into crises), but that day is not here yet.
thanks, Obama
how much real estate ad revenue does the register require to stay
afloat? does that revenue actually keep lansner employed? enquiring
minds want to know why dont we ever get any real hard hitting
journalistic insight from the register?
http://market-ticker.org/
and even as i express how fully disappointed i am
with the type of reporting provided by the register
i will still continue to hover around it and cling to it
like a swarm of flies hovering around a pile of dog poo
Mini-Rants was actually funny and not just profane for once.
But, but, but…………he said “poo”.
I actually know somebody who lets their dog poo on The Register — in the room they lock the dog in when they leave their house, so they can’t cancel the paper. So there!
Rants, For God’s sake, would you please get over the OC Register revenue thing. Ridiculous.
Chuckling…
I am guessing Veros is the Veros Risk Management Software company located in Santa Ana, Ca. I would love to hear more about the exact data they are using. As we learned from our current crisis in real estate data can be skewed to say whatever you want.
Remember it was data over common sense that had Lehman Brothers leveraged 50 to 1 in CDO and Commercial Buildings just 3 months before they went bankrupt. This sounds like the old saying of 2005 “Real Estate never loses value so go ahead and get yourself a subprime loan you will be fine”.
Shame on you OC Register for basically acting as a marketing tool for a company trying to sell there software to the real estate industry in OC. You should be a newspaper not a pawn.
Fun project - pull up all of lansners old “palm reading of the market” predictions on how great the market is/will be and see if how often he has been right.
buy low, sell high
Automated valuations don’t mean crap. I am a commercial appraiser and Real Estate investment consultant with decades of experience. Automated valuations is not a specialty, its a racket.
I am sure their “statistical model” takes into account the influx of new bank owned inventory in the pipeline right now resulting from the 11/08 to 2/09 moratorium the DEMS imposed on the banks.
I love to see the media slant lean positive but based on real professional analysis is more reassuring.
I believe that there is an investment strategy for each market and now is a great time to buy low, sell reasonable for certain individuals.
http://www.thenewinvestorforum.com code “2008″
Love the link rants, especially the smilley face that turns into a screaming loon.LOL
Be optimistic.I am buying a house.Just doing my part.
Jon do you even read what you post on this site or do you just copy and paste these stories? WTH! Do us all a favor and post the winning lotto numbers. Maybe you will get that right.
It’s All Make Believe!
End the Fed. End the market manipulation, the disasters that are Fannie and Freddie, and the nanny state. These bubbles and busts are all created by your federal government under the guise of protecting you. If you aren’t mad, you aren’t paying attention.
“MASSIVE HOUSING OVERHANG WILL SWAMP THE MARKET”
from Amherst Securities: the number of delinquent mortgages that have yet to be liquidated– a number that Amherst puts at a shocking 7 million (135% of the number of houses sold in a year right now).
Eventually the houses attached to these loans have to hit the market. When they do, expect them to go at a firesale.
http://www.businessinsider.com/chart-of-the-day-housing-overhang-2009-9
Bogey,
The chart on that is a little misleading. going back to the peak is hardly giving a historical perspective. It would be nice to see it go back to about 1970 so we could see the corrections from ‘73, ‘83. ‘93. There should have been a correction in 2003 as well.
Anyhow, I think Matt had a chart that showed a truly historical graph from th 90s I think that showed that prices can go up as foreclosures rise.
Not that I think prices should go up at all. Just that there may not be a massive sell off.
diana olick is one of the few main stream media journalists
who wont spin away the truth.. thank god
http://www.cnbc.com/id/33073167
Rants is so convinced of the correctness of Rants (on matters most smart peole recognize have a great deal of uncertainty), she literally can’t tolerate an opposing view without discounting it as biased, self-interested or just plain idiocy. Rants never bothers to examine her own bias and motivation and its role in making her so unable to honestly consider legitimate opposing views.
good now we can sell and get the heck outta dodge.
I hate to say it, but Lasner (and the OC Register) has become a public relations writer/editor for the National Association of Realtors.
Obama has postponed the home pricing correction, but it still must come for the marketplace to be truly balanced among, supply, demand, and incomes. Now Lasner needs to balance his reporting to reflect the many issues — unemployment, foreclosures, end of trillion-dollar government support — that the real estate market must overcome in the next year.
How can they honestly believe they can model these unprecedented times?
How does she gauge the increase? Is it based off the median? The median is useless. Everybody knows that.
“Cept for those folks who find solace in it. — those who expect redemption for their mistakes.
Anyone on this board could do Lansners’ job - whether you are a bull or bear. He does not do meaningful analysis. Simple stories, just post them and let others fill in the blanks. Kind of like some people who on this board who say that people want something (pay) for nothing (no substance, just copy and past and provide analysis of others who actually do analysis)…. But what else would you expect from OCR - not a real newspaper with actual journalists who do a good job, just a regional wannabe paper that has BK issues, and for good reason.
What ever happened to the per sq ft analysis? Oh, I forgot - that requires some work so the OCR hacks won’t / can’t do it, or it would hurt the propaganda of CAR/NAR (OCR sponsors).
So how does the Fed’s stance on raising rates quickly help LA/OC prices? All of the artificial intervention today is just trying to soften the blow of reality tomorrow.
“To prevent inflation from taking off, the Federal Reserve will need to start boosting interest rates quickly and aggressively once the U.S. economy is back on firmer footing, a Fed official warned Tuesday.
“I expect that when it comes time to tighten monetary policy, my colleagues and I will move with an alacrity that, if needed, will be equal in speed and intensity” to when the Fed was slashing rates to battle the recession and the financial crisis, said Richard Fisher, president of the Federal Reserve Bank of Dallas.”
With half of all mortgages in the USA under water by 2011, how in the hell can you have an improvement next year in their valuations? I’m not a quant, but somebody has been smoking some of their own home grown…
Looking at the ever-expanding issues of unemployment, foreclosures & default rates currently @ 7.58% and growing, increasing record rate of USA bankruptcies, declining income rates that have fallen to 1997 figures, zero jobs growth, not to mention a lack of business ethics, and on and on…
Factors that could have had a strong bearing on the above study include:
(1) An internet statistical study which gathered data from small business owners who are being more aggressive and believe that things are getting better…
(2) The expanding California home purchases by the Chinese
(3) Disneyland’s continuing expansion of California Adventure
aint gonna happen
These realtors here are jumping thinking that their investments wil increase again, and like the end of a movie “A happy ending”
Hey Meat-Ball be happy now you will be able to pay your property taxes, your mortgage , and the association were you live.
Exclusive: How Did She Come Up with Seven Million?
http://multifamilyinvestor.com/exclusive-how-did-she-come-up-with-seven-million/ (September 29, 2009)
17-page analysis report:
Housing Overhang/Shadow Inventory = Enormous Problem
Thanks for the shout out, Tex.
Here’s an example of a poorly written report, with questionable assumptions, from Goldman.
According to this report: ““We give a greater than 50 percent probability of a federal tax credit extension which should allay fears of a ‘double dip’ in housing.”
Allay fears of a double dip recession? Here are 3 reasons why NOT:
1) Unemployment – Joblessness is kissing 10% right now. I don’t see any credible economists arguing that that number is dropping anytime soon. While a case can be made for a “jobless recovery,” no one is saying that people are getting back to work. The so- called underemployment rate — which includes part-time workers who’d prefer a full-time position and people who want work but have given up looking — reached a record 16.8 percent. With a growing number of unemployed people, a smaller pool of people have the money to buy homes.
2) Shadow housing inventory coming to market – By one estimate, seven million housing units are scheduled to come online. In a perfect world, it would take almost a year and a half to sell just those units. How is a troubled market supposed to both absorb several million units, and push the units already in the market out the door? An $8,000 tax credit?
3) Already known distressed assets – The cherry on this sundae (and you know the main ingredient of this sundae) is that half of all residential mortgages will be underwater by 2011. If more people lose their jobs, have increasingly negative equity in their homes, and some lenders/servicers take their sweet time before foreclosing, why wouldn’t more people throw their keys to the bank?
For Goldman’s sake, I hope the money Goldman is investing on this bet does not come from the Goldman Executive Bailout Fund.
http://multifamilyinvestor.com/exclusive-we-didnt-find-what-goldman-was-smoking-but-we-discovered-their-housing-report/
Microsoft’s Recruiting Gold: We’ll Buy Your House At Pre-Crash Prices So You Can Move To Redmond (MSFT)
Dan Frommer Sep. 29, 2009
http://www.businessinsider.com/microsofts-recruiting-gold-well-buy-your-house-at-pre-crash-prices-so-you-can-move-to-redmond-2009-9
(excerpt): But this one’s more interesting: Microsoft spent $4.1 million to relocate Stephen Elop, the former Juniper Networks COO who joined Microsoft to run its Business Division.
Whoa, $4.1 million to move? It gets better.
Not only did Elop get travel expenses and temporary housing, but Microsoft bought his house at pre-crash pricing.
Where can we sign up?!
WHY DOESNT EVERYONE TAKE ONE DAY OFF OF BLOGGING ..
CALL IT A MINI BLOG VACATION LETS SEE IF ANY OF YOU CAN DO IT
THE OFFICIAL DAY TO TAKE OFF IS OCTOBER 1ST
CAN U DO IT…LOLLLL
HWOOD, Do you promise to give your aliases the day off to? Rants, Bogey and what was the new name you started using?
The other name was JC. Ask brain about it. He/She caught JC & Rants in a near parroting of each other in syntax, verbiage, etc. It was a classic!
THE FIRST TIME, HOME BUYERS GOT TAKEN BY THEIR OWN GREED AND STUPIDITY. THE SECOND TIME THEY WILL BE TAKEN BY LANSNER AND THE ORANGE COUNTY REGISTER. MY FRIENDS PRICES WILL NEVER RECOVER TO WHAT YOU PURCHASED THAT HOME ON THE NEXT 20 YRS. IT ONLY APPRECIATED 100K ON 40YRS AND 400K ON ONE MONTH. DO THE MATH. DON’T FOLLOW LANSNER!!!!
Wow! The bear/haters are just soooo angry that OC RE is not going their way. The fact that most of them know zero about it just makes it all the more amusing. It’s just hilarious to watch!! HAHAHAHAHAHA!
Are you kidding? We are seeing more and more sales going to 2003 prices. Seems like a nice trend to me…. I love it when fools lose their money so that smarter people can make money off of them.
i think we’ve already been to 2003 prices, and now we’re going to 2004 prices.
Maybe not with ~1/3 of all sales currently being foreclosures, and most who avoid foreclosures, ending up there anyway…, and considering places like CA are at the top of that list, not much traction for prices, especially when the Fed (as announced yesterday) intends to be very aggressive with increasing interest rates in the near future. That would make it very hard for prices to sustain their pop - classic bear market pattern….
WASHINGTON (AP) — Lenders are ramping up efforts to avoid home foreclosures, but a report by bank regulators says more than half of borrowers who get help fall behind again.
More than 50 percent of homeowners with loans modified in the first half of last year had missed at least two months of payments a year later, the federal Office of the Comptroller of the Currency and the Office of Thrift Supervision said Thursday.
You’re a simpleton?
“Banks hold record delinquent mortgages”
http://mortgage.freedomblogging.com/2009/09/29/homeowners-stop-paying-bank-in-record-numbers/18491/
If this isn’t going the bears way, I don’t know what is!
Bill,
Don’t fall for her crap. It’s not about bulls and bears, who’s right and who’s wrong…………you know that.
It’s all about Mr. Market. Mr. Market has a mind of his own, and realizes when the masses have over-reached and arrived at the point where prices are unsustainable.
Doesn’t matter which market. Tulips, Florida real estate, stocks, bonds, dot.coms, oil, art, collectible cars, ….it makes no difference, they all are subject to the cycles of greed and fear, opportunity and the last greater fool.
The fools are trying every trick in the book to deny Mr. Market his just due.
Futility. Interesting, fun to observe, but utter futility.
Poor Bill !!!
You have to run against the wind every day :) I don’t envy you !!
Delinquencies don’t necessarily end up in foreclosure. Some will be cured, some will be bailed out, some will be postponed, some will be given back to the bank, some will actually be foreclosed. They will be absorbed into the market. Your doomsday headlines don’t mean jack. You should have learned at least one thing from your buddy sir rants a lot: News providers need to grab your attention, and they do that by blasting shocking headlines.
As OC RE values increase, so will the financial job sector. It’s a yin/yang. The tide has turned. Still some lag in some areas, but your beloved full-on armmageddon isn’t going down.
If I were a simpleton, I’d subscribe to your narrow minded POV.
More than half do.
Yeah Shane, Bill isn’t the sharpest tool in the shed. He is greedy and persistant I’ll give him that.
I sure missed you guys. Glad I’m back!
11% decline per sq ft YTD 2009. 36.5% decline from peak (ouch - home debtors taking a severe beating with a bag of oranges but they put on a good fake face - after all, this is LA/OC… )
Year: Avg. $/sf*
1988: $122
1989: $149
1990: $151
1991: $146
1992: $141
1993: $131
1994: $127
1995: $123
1996: $122
1997: $126
1998: $142
1999: $156
2000: $174
2001: $193
2002: $224
2003: $267
2004: $346
2005: $404
2006: $433
2007: $402
2008: $310
09-YTD: $275
Source: DataQuick
*Average price per square foot for existing single-family homes. Numbers are inexact since DataQuick does not have updated square footages for remodeled homes.
So, for example, if you have a 1M house, your income kicks you into AMT, which precludes deduction of property tax. Assuming 1.1% property tax (11k), the so called 2% increase results in a net gain of only 9k (excluding insurance, repairs, HOAs/maint, etc.), with huge downside price risk, especially at that price range. Then add in the 5% RE commission, you’re still down 41k. No thanks…