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Sunday, December 13, 1981

Wednesday Open Thread

This is your open thread for today. Please post random links and off-topic discussions here.

12 comments:

CRichard said...

Looking just at interest rates (for other than sub-prime), it is a great time to buy. They are stupid-low, even by recent standards. However, if interest rates were my only consideration, I would be rather frustrated in my home buying search because A) it is near the holidays and I would rather be doing other things and, B) the current selection of houses in my area is so poor that I wouldn’t want to live in most of these homes if they were half their current price.

Are sellers going to lose out on the opportunity to snare a buyer because the low interest rates are confounded by the time of year?

Also, if interest rates remain low into the beginning of the buying season, could it be enough to rekindle that all important irrational exuberance in local buyers that got us into this mess in the first place?

Anonymous said...

Hey guys,

Awhile back I asked for advice for a TV interview, and got some great thoughts here. The interview went OK, but I'm definitely better at writing than speaking.

So the local TV station did a story on the construction slowdown. They mentioned my video and played a clip of me talking about 5 problems with the housing market (except I forgot one in my nervousness and only mentioned 4.. oh, well).

Just picture this: The president of the Montana real estate association is quoted, followed by a 20-something guy with no direct RE experience who investigates the market by riding around new subdivisions on an old mountain bike. It's a funny image. I'm very grateful to the TV station (Q2) for adding a little balance to the story!

I also got a letter to the editor printed calling out our local paper on a slanted front-page housing article ("No Bubble in Billings"). Most Realtors in town admit that there's a slowdown, but the ones quoted in the article did not even mention it. On-line comments to the original article were overwhelmingly negative, while comments to my letter were all positive. Many people in town are aware of the problem.

Just trying to spread the word out here! Many people ask why I've done so much work (the webpage, the videos). Fact is that it started as personal finance.. investigating for myself to see what drives a housing market so I could eventually know when and where to buy. Over time, I've really lost interest in buying (even if prices were rational). The fact is that Realtors who do not acknowledge the possibility of a bust do a real disservice. And the ones who will suffer are my generation. Young people who know that they'll be stretching to buy a house, but are afraid of missing out and are reassured by some Realtors that prices will go up forever. If I can warn a few about the possibilities of overextending at the top of the market, then that is enough.

My December market update video is up now too:

Billings Housing Market

I think Seattle and Montana markets are similar. Neither had price run-ups near the magnitude of Southwestern states. But each is still irrational in light of incomes and price/rent ratios. Both seem to be on the trailing edge of the downturn, but it will come. If I had to guess, I'd say that Billings peaked this summer or fall. It's so hard to say here because real-time RE stats are so hard to come by.

By the way, Tim.. I don't comment here much, but your blog is the most fact-based and down-to-earth housing blog out there. And I like that respectful debate can (usually) be found.

E-sidedave said...

Great video Doug!

Alan said...

The house around the corner from the house we are renting was put up for sale a few months ago. It was listed at around $700k. My wife and I thought it was insane and were looking forward to watching it sit on the market for a long time. It didn't. It sold in less than a month. We were amazed. Who was paying that much for that house when there were much nicer houses in the city for that price? Are we just completely out of touch with realty reality? How do people afford that?

Last week we saw the house listed for rent online. It was purchased by an investor.

blog said...

Rent vs. own comparison in WSJ today -

http://online.wsj.com/article/SB116597804852548551.html?mod=todays_us_personal_journal

Peter Taylor said...

crichard said:

Looking just at interest rates (for other than sub-prime), it is a great time to buy. They are stupid-low, even by recent standards.

It is actually pretty interesting to look at what's happened with mortgage rates in relation to house prices - have a look here at what's been happening with mortgages over the past 10 years. As expected, 1 year ARM rates are at their lowest during the unprecedented run-up in home prices. Interesting, no? And have a look here at what's been happening for the past three months. Yes, all rates are trending down again.

So, when you ask if interest rates reamin low into the beginning of the buying season, could it be enough to rekindle irrational exhuberance?

I think that with the recent 'hold steady' on interest rates, that's a very real possibility. Mortgage rates have been trending down on all of the last two 'hold steadies', the Fed is printing more money, and while we're seeing some jitters in the subprime market there is still no panic.

Looks like the status quo will reign for a while a longer.

Alan said...

This is an old (but interesting) article about the world diamond cartel. Pages five and six talk about a bubble that threatened the cartel and what the cartel did to stop the bubble before it caused too much damage.

http://www.theatlantic.com/doc/198202/diamond

Anonymous said...

Today’s FREE report on Miami has been released! Tomorrow I’ll release both the Las Vegas & San Diego reports. They will joins prior Q3:2006 reports on Boston, Bakersfield, Chicago, Denver, San Francisco, Seattle & Los Angeles.
thebubblebuster.com

BizNiz said...
This comment has been removed by a blog administrator.
BizNiz said...

Nice article from San Diego.

SAN DIEGO – San Diego County housing prices slipped 6.9 percent last month, the biggest year-over-year drop on record...

La Jolla down 22%
Ocean Beach down 19%
Mission Hills/Hillcrest down 15%

link

redmondjp said...

Well, Aubrey Cohen's at it again over at the PI, with this story on the RE market during this season.

Here's my favorite part:

"Agents kind of give up," agreed Mary Gibson, a Windermere associate."I still have plenty of buyers, though," she said. "If something's great, I'm going to drag you out at 6 o'clock at night in the rain."

In other words, the slowdown this time of year is partly due to the RE agents taking a break--not the lack of available buyers.

Wow. So you read it, RE agents, get out there now and find those willing buyers now! Those CC bills bloated from Christmas shopping will be showing up before you know it.

Richard said...

Interesting, the Bad weather is to blame for Washington's sharp increase in unemployment claims.