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Tuesday, March 23, 1982

03.23.2007 - Friday Open Thread

This is your open thread for Friday, March 23, 2007. You may post random links and off-topic discussions here.

Be sure to also check out the forums, and get your word in the user-driven discussions there!

55 comments:

meshugy said...

Californian's plan exit strategies

In 2004, the Riverside-San Bernardino metropolitan area drew in about 192,000 people, mostly from the coast, according to Internal Revenue Service data compiled by Moody's Econ-omy.com. But the area also lost about 114,000 residents. Many went to other parts of Southern California, but about one-tenth of those who left went to Las Vegas, Phoenix, Seattle, Houston and Portland.

In Seattle, another hot spot for relocating Californians, Realtor Sharilyn Patterson said more than 70 percent of her business in the last year involved people moving from California.

"I had about five people who almost paid cash for what they made in California" from selling their home, said Patterson of Windermere Real Estate.

Sven said...

Is Cali sinking again? Is it going to become North America's Madagascar? What's this talk of "exit strategies"? Do I need one?

It'll be interesting if articles like this continue appearing as the upcoming summer drags on... It'll take time for the new mortgage restrictions to manifest themselves on the market.

synthetik said...

Shug,

You just can't catch a break, can you? I don't think people call you on your BS half the time because it's much too tedious to do so.

I actually read what you posted this time and said to myself "I call BS"

if you click on the link, the first thing the article says is "By DOUGLAS QUAN, LESLIE BERKMAN AND MICHAEL FISHER
The Press-Enterprise

Editor's note: Story was originally published Jan. 22, 2006


Duh. If you've been keeping track of california, house prices are now back to 2004 prices and in some cases 2003 prices.

www.thehousingbubbleblog.com

Let me know when you're ready to put that $1000 to good use.

T,V & Mr.B said...

And Shrug keeps yelling, screaming,trying, searching for anything to grasp.

T,V & Mr.B said...

Keep in mind, also that Pheonix, LV, Portland all have slowing home sales.

Slinky said...

Nice article in the NY Times today about foreclosures in suburbs forcing towns to deal with blighted properties.

http://tinyurl.com/2uewj3

Eleua said...

Shug,

Take your stat about 70% of that RE agent's market being X-Cals with more money than brains...

plus,

The Map of Misery...

plus,

Rising rates and mortgage standards...

and come up with some intelligent conclusion.


The rest of us already have.

meshugy said...

Duh. If you've been keeping track of california, house prices are now back to 2004 prices and in some cases 2003 prices.

Record median Southland home price, declining appreciation

Home prices in Southern California edged up to a new record in February, although they edged up to that record at the slowest pace in almost four years. The number of homes sold was the lowest in five years, a real estate information service reported.

The median price paid for a home in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties was $480,000 last month. That was up 2.3 percent from $469,000 in January and up 12.9 percent from $425,000 for February a year ago, according to DataQuick Information Systems.

The previous record of $479,000 was set in November (and December). Last month's year-over-year price increase of 12.9 percent was the lowest since March 2002 when prices rose 12.7 percent to $257,000 from $228,000 a year earlier.


Wow...they still have double digit YOY appreciation in S.Cal.

confused said...

Has anyone been looking at foreclosures lately? They are up 57% since Feb 26, 2007. They have gone from 698 to 1099. King County has gone from 86 to 167. Does anyone have historical data on this. I know we have to eb at record lows but that is quite a move. Good thing we didn't have any crazy lending or speculators in our market. I mean that could get dicey. I still think Pierce and Thurston will be destroyed.

Deejayoh said...

Shug -

Dude - you have really jumped the shark. The date on your link..

Record median Southland home price, declining appreciation
March 14, 2006


It's 2007 baby. Dataquick report for the state of the State of California as of last week...

California February 2007 Home Sales
March 16, 2007
A total of 31,228 new and resale houses and condos were sold statewide last month. That's down 3.7 percent from 32,425 in January, and down 21.3 percent from 39,676 in February 2006. A sales decline between January and February is not unusual. The year-over-year sales decline peaked last September at 34.5 percent.

Last month's sales made for the slowest February since 1997, when 28,710 homes sold. February sales from 1988 to 2007 range from 22,262 in 1995 to 48,409 in 2004. The average is 33,282.

The median price paid for a home last month was $472,000. That was up 2.2 percent from $462,000 in January and up 3.4 percent from $456,500 for February a year ago. The median peaked at $480,000 last June.


And that's all I have to say about that...

confused said...

shugnite-

Interesting statistic, how about price persquare foot? Much better gauge. I know those are getting harder to find, good job.

I haven't been tracking Cal foreclosures as long but in teh last week they have gone from 17042 to 18311. Not double digit appreciation yet, oh wait, that is for a week. Hold on! That is 387%. Sorry, I thought I was onto sometihing.

The Tim said...

confused,

What source are you using to track foreclosures? Do they have historical data, and if so, how far back does it track?

Chris said...

Let's make a rule. If you're going to cite statistics to make an argument about changes in today's home prices, then you have to take into account today's statistics!. Cribbing data from articles that are over a year old just doesn't cut it.

confused said...

Foeclosre.com

http://www.foreclosure.com/state/WA.html

Everything that I have read about them as far as their source seems to be legite. I remember reading that they use First American Data Solutions but not positive. It was a while ago. Hope that helps. I started tracking foreclosures and Bk's 6 weeks ago, for fun.

Chris said...

FYI, check out this post on foreclosure rates in San Diego:

http://piggington.com/february_defaults

The shit sure is hitting the fan there. I haven't seen a figure like that give me the heebee-jeebees in a long time.

Like The Tim, I'd love to see this kind of data for King Co, as well as some of the other Puget Sound counties. I would think Pierce would be especially interesting.

Lionel said...

Anyone who has been following California closely understands that it's in for a whole lotta pain. In LA right now, the earnigs to debt ratio is .63. I can't even get my mind around that properly. It requires 63% of your income to pay off your mortgage. Normative figures are around .24 or so. Yikes. Another stat that simply boggles is the multiple of income required to purchse a median home. 11.5X! This whole place is going to come tumbling down. That's simply not a sustainable number. And how about this stat? 22% of all subprime mortgages were issued to CA residents. Once this does come crashing down, no more equity, no more equity locusts. My guess is that it's aleady slowed down drastically.

meshugy said...

Sorry...that old article was accidnetly cached by my broswer. Here;s the right one:

Southland home sales slowest in a decade; new price peak

Southern California's housing market sent out more mixed signals last month: Sales fell to a decade low while prices inched up to a new record, a real estate information service reported.

The median price paid for a Southern California home was a record $495,000 last month, up 2.1 percent from $485,000 in January and up 5.3 percent from $470,000 in February last year. The previous record was $490,000, reached in both June and December of last year.

Last month's 5.3 percent annual rise in the median was the highest gain since July 2006, when the $487,000 median rose 5.9 percent.

"February's record Southland median is another indication the housing market, although certainly weaker than last year, is hardly down for the count, as some would suggest," said Marshall Prentice, DataQuick president.


2004 prices...I don't think so.

confused said...

lionel-

That is an amazing statistic. Great find.

WTF said...

A bit off-topic, but can anyone explain away the argument that building material costs are one of the main reasons that prices have gone up so drastically?

Don't material costs remain fairly consistent across the country and, while they may be going up a bit - how does it explain double-digit price increases in some areas but not others?

WTF said...

The Tim,

Can you put links to some of the more interesting graphs/charts somewhere on the site. (ie: historical housing costs adjusted for inflation since 1800, Map of Misery, etc...)

I've seen plenty of great stuff in the posts over the past few months, but now I can't seem to find them.

The Tim said...

WTF,

That's a good suggestion. I'll try to make time to do that this weekend. They'll probably go in the "Statistics" section with the Seattle Bubble Spreadsheet.

Lionel said...

Shug, median statistics are almost completely useless. As the bottom drops out of the market with fewer able to qualify for loans, the median will rise, as wealthier buyers haven't been shut out yet. However, once the bottom of the market collapses, there are no new move-up buyers, and, voila, end of bubble. Watch CA stats through the summer if you don't believe me.

As to the median price being around 500K in So Cal, how can that possibly be sustained long-term by a median income of 51K? Especially when much of the recent job growth in So Cal is related to RE: Brokers, agents, builders. The whole thing will turn into a big positive feedback loop.

confused said...

wtf-

In a word CHINA. They have been consuming the world supply of steel, lumber, copper, platics, petroleum and whatever else goes into construction. All in short supply pushing prices higher. I think India is on teh same pace to a lesser degree.

Here is an example; The US no longer has a single manufacturer of electrical cords in teh US. They ahve all been shipped over seas, mainly to China. Copper was in such short supply. We could not get electrical cords, there weren't any. China needed them all. I think the average house uses about 400lbs of copper. If you understand how copper is extracted/made, it is not simple or easy. Combine that with huge envirnmental restrictions here in the US and you have rising costs. Lumber has come way down due to a pine beetle epedemic and lack of supply, take your pick.

Oh, and combine higher fuel costs and all that gets passed onto the consumer.

Deejayoh said...

On the Building materials argument -

I haven't looked into this in too much detail - but I have been kinda following lumber prices. What I have seen is that they spiked with the big jump in housing starts, and now they have crashed.

"Random Lengths" is THE source on lumber prices, and according to them the composite is down from $380 to $280 over the last year.

check this link, sorry for the length

http://www.randomlengths.com/base.asp?s1=Daily_WoodWire&s2=Market_News&s3=Random_Lengths

WTF said...

One comment about long links.

To make them work better, you can set it up with a "http://tinyurl.com"
and/or

post it as a link using [a href="http://www.yourfavoritelink.com"]Your Favorite Link[/a]

*Note, change "[" and "]" to "<" and ">" respectively.

plymster said...

Great post, Meshugy! Nothing is more impressive than record sales prices all across a single builder. I'm sure they're only giving 100k incentives on their new houses, too. Odd how it flies in the face of the actual DataQuick stats cited by Deejayoh earlier. Of course those were released on March 16, 2007, and in your wacky time-space continuum, they probably haven't been released yet.

Tell me again why we don't ban this liar outright?

searcher said...

In the first post here from meshugy, it said that 192,000 people moved to Riverside, and 'most' came from the 'coast'. So, 'many' of the rest of the people could have come from oh, say, Seattle? Without actual net flow data, this kind of stuff is useless. I love all this pseudo-data that gets passed around as 'fact'.

Grivetti said...

Interesting article from the Seattle PI about the loss of the CD's character due to the housing boom and gentrification...

Central Area: Old neighborhood, new faces

WTF said...

The sad thing about gentrification is that it's been happening for years, even before the housing boom (and already-started bust).

See "Boyz in the Hood" as it is highlighted in that film regarding So. Cal.

What happens to those folks? Where do they go?

Wasn't the fact that living in the cities was cheaper in the past decades one of the reasons they were there in the first place?

Grivetti said...

Again, folks.

I will keep posting this quote by Meshugy until all promise to boycott his nonesense, the best way to get rid of a Troll is to starve the Troll.

Meshugy says:
how am I suppose to believe anything from a place called seattlebubble.blogspot.com

He knows everything he posts is total outdated B.S. The only thing he posts that he actually believes is his zillow property values, which is about as accurate as a Shaq free-throw.... so serious.

For every nonesensical, outdated, shilly article he posts, I can deliver about 10 accurate up-to-date legitimate news service articles that say otherwise.

Grivetti said...

Again....

Wow...they still have double digit YOY appreciation in S.Cal.

...nonesense to be ignored.

straight from CAR itself

YOY prices in Jan '07

San Diego: -3.9%
Los Angeles: 4.7%
Ventura: -2.6%
Orange County: -1.5%
Riverside/S. Bernardino: 6.5%
Palm Spgs/Lwr Desert: -9.4%

Richard said...

For anyone interested, Pimco's housing project has another installment out for March. They're the largest bond fund in the world and have been doing quite a bit of research on housing markets since the bubble became likely.

Somewhat noteworthy is their historical appreciation charts for "major cities". Is Seattle considered a "major city" worthy of mention?

Michael said...

This blog's days are numbered....

U.S. Economy: Existing Home Sales Surge in February
http://www.bloomberg.com/apps/news?pid=20601087&sid=axMAddD5JaQ4&refer=home

Ohio Plans Bonds to Bail Out Homeowners Strapped by Mortgages
http://www.bloomberg.com/apps/news?pid=20601087&sid=asu8RitVhBIE&refer=home


Fed's Geithner Says Subprime Woes Unlikely to Spread
http://www.bloomberg.com/apps/news?pid=20601170&sid=adfKGDJ51rcw&refer=home

EconE said...

This blog's days are numbered....

I'm not so sure about that...this will take a while to play out IMHO.

U.S. Economy: Existing Home Sales Surge in February

Didn't inventory levels "surge" even more?

Ohio Plans Bonds to Bail Out Homeowners Strapped by Mortgages

I'll bet it's a whole lot cheaper and easier to bail out people when you are talking about a state where RE prices are some of the lowest in the country.

Fed's Geithner Says Subprime Woes Unlikely to Spread

Only time will tell.

meshugy said...

U.S. Economy: Existing Home Sales Surge in February

March 23 (Bloomberg) -- Sales of previously owned homes in the U.S. unexpectedly surged last month by the most in three years, a sign that the housing market is probably past the worst of its slump.

Purchases increased 3.9 percent in February to an annual rate of 6.69 million, the National Association of Realtors said today in Washington. Sales have risen in each of the past three months, a streak not matched since April 2004 in the midst of the five-year housing boom.

msrelo said...

http://www.bloomberg.com/apps/news?pid=20601087&sid=a8ilcv.eOxMc&refer=home

Grivetti said...

Fed's Geithner Says Subprime Woes Unlikely to Spread

pffft.... you're gonna believe the Fed?

Greenspan blamed for subprime crisis

Members of Congress are pointing angry fingers at Alan Greenspan and other U.S. bank regulators for fostering a mortgage market "on steroids" and failing to thwart a predictable subprime meltdown.

Yeah, the Fed, their predictions are sprinkled with gold! fields of flowers and fluffy puppy-dogs!

Anybody who believes the Fed's going to bailout homeowners with softening interest rates is a fool.

Grivetti said...

U.S. Economy: Leading Indicators Index Fell 0.5%

Some economists see increased chances of an economic downturn. Former Fed Chairman Alan Greenspan said March 5 there's a ``one-third probability'' of a recession this year. He later said he expects fallout from subprime-mortgage defaults to spread to other parts of the economy, especially if home prices drop.

Help me, I'm confused! From 'soft landing' to 1/3 probability of a recession this year?

Again, if you believe anything from these snake-oil salesman and charlatans at the Fed, you deserve what you get...

Deejayoh said...

U.S. Economy: Existing Home Sales Surge in February

Pullleaazzzzee!!!!!!!!!

Take of the lead shields and put on your thinking caps gentlemen!

Home sales "surged" from January... Like they do EVERY EFFIN YEAR!!!

but... they are down on a year to year basis. 2007 < 2006 < 2005.

I believe they call it "correcting for seasonality".

Here's a chart that shows the comparisions.
Annual comparision

Chris said...

More BS from Shug's article:

Sales have risen in each of the past three months, a streak not matched since April 2004 in the midst of the five-year housing boom.

This is just plain wrong. Sales of homes looked like this last spring/summer: June 2006 > May 2006 > April 2006. Sales look like this every year, because this is a seasonal industry. Sales go up in the spring, peak in the summer, decline in the fall, and bottom out in the winter.

As DJOh said, it's the YOY numbers that are important. And YOY numbers for Feb 2007 are not so hot. I don't think I've ever seen such a misleading article.

Don't be surprised if these clowns do the same thing for March, April, May, and June. They have to ignore the YOY numbers, because that's where you find the ugly truth.

Deejayoh said...

Actually, easier to get to the link here. previous link forces you to scroll down page.
Chart


You'll see February is always up from January, but that on a year to year basis sales are still down. The Bloomberg article is just a lazy reporter spewing back the NAR spin.

tut tut

refractedthought said...

"This blog's days are numbered...."

Yay! We've been saved by a 4% month-to-month sales increase and some meaningless drivel from "experts" who didn't even see there was a problem to begin with!

NEWSFLASH -- sales were DOWN YOY by 3.6%. Furthermore, fallout from standards tightening has barely had any time to affect these numbers at all.

meshugy said...

NEWSFLASH -- sales were DOWN YOY by 3.6%. Furthermore, fallout from standards tightening has barely had any time to affect these numbers at all.

Actually, MLS shows King County Pending sales were up 7.66%. Strong Leading indicators show that this could be a hot Spring selling season.

refractedthought said...

3.6% was nationally.

And you do know what the word "pending" means, right?

Alan said...

This blog's days are numbered....

This blog will end when:
(A) The bubble bursts.

or

(B) It becomes clear that there is no bubble.

(A) could happen next week or it could happen two years from now. The thing about bubbles is that they are based on psychology and very difficult to predict with respect to time. Once it does burst no one will be interested in wondering about the past.

Because of (A), (B) is very unlikely to happen. We could be ten years down the line with median income to price ratios of 30 and you would see the same people claiming we were in a ten year bubble while Meshugy talks about how he has retired to San Diego with $6 million in capital appreciation he made on the sale of his Ballard house.

Unless someone can make a convincing argument that there is no bubble, this blog will be here until the big *POP*.

The person who does make the convincing argument will have my deep gratitude.

meshugy said...

No end to housing slump in sight

Yet there were still parts of the country, particularly in the West, with sharp price increases. The hottest states were Utah, Wyoming, Idaho, Washington and Oregon.

Chris said...

Countrywide Leads Insider Selling Spree

Insiders at Countrywide, the nation's largest mortgage lender, have sold $314 million worth of shares in the company just since August. That's according to regulatory filings tracked by Interactive Data Corporation.

The sales include a staggering $94.5 million by chief executive Angelo Mozilo, and $17.5 million by mortgage division chief David Sambol.


When the CEOs of the mortgage industry abandon ship, you know things are not looking good.

synthetik said...

This blog will end when:
(A) The bubble bursts.


Are you sure? The bubble has flipped its lid nationally yet www.thehousingbubbleblog.com is going strong, now 100% fresh with no trolls.

Tim might decide to change the name to simply "Seattle Real Estate Disaster", then later to "Seattle Real Estate Bargain Hunter".

The fact that we have a republican in office doesn't stop Rush Limbaugh from his rants. Jon Stewart will still be going once the Decider is long gone, etc..

I think this blog will always be a place where people can come and get no-bull information on the local Seattle RE scene.

MisterBubble said...

"The hottest states were Utah, Wyoming, Idaho, Washington and Oregon."

Gee, Meshugy, I guess you're right. If Washington is one of the "hottest" states, it will clearly continue to be hot for the indefinite future. Oh, woe is me...I've been Priced Out Forever (tm)!

But still...who knew that Wyoming and Idaho were just as HOT as Seattle? I guess there must be Strong Jobs (tm) there, too, huh?

WTF said...

When I was in Jackson, WY last June, one of the locals told me it was the most expensive county in the United States. I could hardly believe it, but then we walked by a real estate office and you'd be lucky to find anything listed under 7-figures.

MisterBubble said...

Uh, yeah. It's Jackson Hole -- one of the premier ski destinations in the United States. It's a bit like saying you're surpised that property is expensive in Aspen (which is located rather precisely in the middle of freaking nowhere).

If you're looking for cheap propery in Wyoming, I would encourage you to visit the other 98% of the state. You'll have all the cheap land you can handle....

WTF said...

Mister Bubble,

Ummm....yeah, I was there. I noticed the big ski hill.

Of course there's a ski resort there...there's a bunch of them around the country...

Plus, there's Beverly Hills, Manhattan, any number of other ritzy expensive places in this country. I was just surprised that Jackson Hole was more expensive than those as well.

I think it's because they actually are somewhat limited with available space. Most of the valley is part of the Grand Teton National Park or already divided up into ranches and ranchettes.

And yeah, the rest of Wyoming is pretty much a hole as well.

EconE said...

Jackson Hole isn't driving the RE prices in Jackson. Snow King is.

hehe

Eleua said...

The report released today on February sales was based upon closings of sales made months earlier.

It will be interesting to see how the Spring reports hold up under the new lending standards that came out in early March.

People that were able to drink this report pretty are going to be chewing their arms off when the Spring reports hit.

The housing market is coyote ugly.

Jazen said...

If the Fed raises rates, you will see an accelerated correction in the housing market. I am a firm believer in higher rate hikes.
http://money.cnn.com/2007/03/24/news/economy/fed_Mishkin/index.htm?postversion=2007032401