04.13.2007 - Friday Open Thread
This is your open thread for Friday, the Thirteenth of April, 2007. You may post random links and off-topic discussions here.
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28 comments:
Funny read in todays San Diego Union Tribune stating that there is an increase in prices and declaring San Diego is on the rebound. However, Though the volume of sales is down 26.3% and if you look at the ritzy neighborhoods IE. La Jolla and Delmar, prices have dropped around 17% and all combined is a drop of 4.9% though Solana Beach is up.
http://www.signonsandiego.com/uniontrib/20070413/news_1b13sales.html
Funny how they spin things.
Which means we're in for at least another year of MORE nauseating reporting from team happy pants: Cohen & Rhodes
If we're a year behind CA (which I don't think we are), then we've got a long way to go before we see price drops:
Bay Area home prices up
The median price paid for a Bay Area home moved up in March, regaining much of the decline since last summer
"Prices seem to have held up surprisingly well, probably because of a relatively strong economy.
Indicators of market distress are moving in different directions. Financing with adjustable-rate mortgages is declining significantly. Foreclosure activity is rising but is still in the normal range. Down payment sizes are stable and flipping rates and non-owner occupied buying activity is down, DataQuick reported.
Tim, one thing puzzles me, how were you posting about the Seattle bubble in 1980? I think you need to fix your dates :)
You have links to archives in 1980, '81, and '82. I mean you were really predicting the future if you were talking about the current bubble back then :)
Dis-Info -
I only bother replying because showing your lack of logic is so easy...
Your cherry-picked quote is for SF only, from DataQuick, which is as good as an NAR shill.
What are they saying about California as a whole? Oh maybe this...
California, and especially the Bay Area, are often out of step with national trends from politics to cuisine to culture, but the difference may be less pronounced on home prices if leading forecasters prove correct.
The California Association of Realtors predicted in October that statewide median prices will fall by 2 percent in 2007.
If you want to join the circle-jerk on median home prices, it's going on here. Looks like the other Tim could use your company based on the lack of discussion going on
Rent vs Buy the NYT way.
More on Dataquick (or should I say "moron"?) They seem to have changed the rules for their reporting quite recently. See Marinite's post from April 8th.
The Bottom Line
Overall it should be obvious that comparing DataQuick's current calculations of the median and number of sales with those of before January, 2007 will be problematic at best. For Marin, reported year-over-year appreciation rates will be biased in the direction of being higher. Similarly, year-over-year comparisons of sales will be too high, not just for Marin but for most counties.
The net effect will be temporarily biased data in the direction of suggesting that things are healthier than they really are.
Don't get me wrong: I don't think DataQuick is purposely biasing in that direction; it is just a natural consequence of their (needed and sensible) changes in methodology. But nevertheless, their year-over-year statistics will remain inaccurate until January, 2008 rolls around when they will again be comparing apples to apples, and oranges to oranges.
info= meshugy, right?
Everyone on this blog should watch this:
http://tinyurl.com/2nbqpt
Roller coaster tycoon
Wholesale PPI up 1% in March, after a 1.3% increase in February
Of course, when you take out unneccesary items like food and energy, and normalize housing to get to the "core" inflation rate, things don't look so bad...
who needs food, housing, and energy anyway? We can live off of cars and plasma tv's
Looks like interest rates will be going up...
Realtor with a clue blog in San Diego http://www.bubbleinfo.com/journal/
Deejayoh,
Interest rates aren't going to go up, nor are they going to go down. The Fed is stuck. They can do nothing but sit and watch, like the rest of us.
t,v & Mr B -
on interest rates, could be. I think the Fed may go a couple more quarter point raises but in the end, I tend to agree with you - they are damned if they do, damned if they don't
meshugy=info
He posts under multiple screen names to create the illusion that people who believe the Seattle real estate market is appreciating at an unsustainable rate are a minority, and most people are housing bulls.
I wonder why he doesn't start buying up houses to flip if he believes in the bubble so much. I mean, Seattle real estate will go up 20% a year for the indefinite future because of Microsoft, Boeing, all the smart people here, and the fact that Quincy Jones lived in Bremerton (nearby) and Jimi (Jimmy) Hendrix lived here before he became a famous guitarist.
This may be old hat here, but thought I'd post it just in case. NYTimes has a rent vs. buy calculator on their website. I wanted to get everyone's opinion on how accurate it may be:
http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?_r=3&oref=slogin&oref=slogin&oref=slogin
Hmm... now I see why everyone uses TinyURL.
http://tinyurl.com/2gwgms
Last Month's Pending Sales Surpassed February by 16 Percent
NWMLS figures show the median price for sales of single family homes that closed last month across its 19-county market area was $345,000, up more than 13 percent from a year ago. Condominiums that sold and closed last month fetched a median price of $252,000, for an increase of 10.7 percent compared to twelve months ago.
In the four-county Puget Sound region, Snohomish County experienced the sharpest price hikes. The median price for last month's closed sales of single family homes (excluding condos) was $382,500, up about 16 percent from the same month a year ago; condo prices jumped 25.7 percent, rising from $189,970 to $238,796.
In Seattle, the market for single family homes in close-in neighborhoods is actually "hotter right now than it was at this time last year," according to NWMLS director Mike Skahen, owner/broker of Lake & Co. Real Estate, Inc. Skahen said it's rare for homes not to have multiple offers and not to go over the list price, but it is occurring in virtually every price range. Among recent examples, he cited a Green Lake house listed for $895,000 that drew multiple offers and sold for $925,000, and a Northgate listing at $485,000 that sold for $520,000. He also noted Green Lake is fast becoming a million dollar neighborhood with several new homes being built in the $1.5-to-$2 million price range.
Brokers agreed the widely-reported subprime lending problems are having little discernible impact on the local market so far.
"It's important to keep the subprime lending problem in perspective," said Erik Hand, president of Response Mortgage Service, a subsidiary of John L. Scott Real Estate. "It's literally a percentage of a percentage of the market that is being impacted," according to Hand, who noted, "We've been fairly protected from the subprime problem in the Puget Sound region because of our healthy economy and strong housing appreciation. Furthermore, our local buyer demographic tends to be slightly more conservative when it comes to lending; therefore as a region, we have far fewer subprime loans as compared to other parts of the country."
Hi Pugy,
He posts under multiple screen names to create the illusion that people who believe the Seattle real estate market is appreciating at an unsustainable rate are a minority, and most people are housing bulls.
I have to admit, the endless conspiracy theories on this blog are just hilarious!
Meshugy is a real estate agent!
Meshugy is single handedly propping up the market with his posts!
Meshugy is paid to trick us into a buying a house!
Meshugy snatches housing bears at night with his black helicopter!
Meshugy posses secret alien real estate boosting technology obtained from the crashed space craft in Area 52!
Unfortunately the truth is much more mundane....since blogger was bought by google, they automatically log you in with a google account now (hence posts under the name "info"). I think I've got them consolidated now so it shouldn't happen any more.
A quote from John Mauldin's website:
"This week Kenneth Heebner, manager of the top-performing real-estate fund over the past decade (and the top-performing diversified US fund this year), said U.S. home prices may plunge as much as 20% because of rising defaults on riskier mortgages. Heebner runs some $6 billion in various funds through Capital Growth Management.
Subprime loans, made to borrowers with a history of missed payments or untested credit, and "Alt-A" loans, which require little or no documentation, account for about $2.5 trillion of the $10 trillion in outstanding mortgages, according to Moody's Economy.com. As much as 40% of these loans may default, flooding the real estate market, Heebner said.
"It will be the biggest housing-price decline since the Great Depression," Heebner, 66, said today in an interview in Boston. Prices may fall by a fifth in some markets, he said. (From Bloomberg.) Interestingly, has sold all his investments in apartment REITs, which he thinks will come under pressure due to competition from all the homes coming on the market.
He is not alone in expecting a serious drop in home values. Gary Shilling thinks it could be even worse, and a lot of analysts are thinking drops on the order of 10%. It will vary region by region, but those of us who lived through the disastrous crash in the housing market in Texas in the late 80's created by easy credit and a drop in oil prices know that a 20% drop is quite possible.
The always bullish National Association of Realtors says new homes sales will fall by 16%, and existing home sales by 2%, the first drop on record, as subprime mortgage delinquencies climbed to a record 13.3% in the fourth quarter. Anecdotal evidence suggests the rate of delinquencies is rising rapidly.
As I have written about in previous letters, there is a strong correlation between consumer sentiment and housing prices, much stronger than the correlation with stock prices. So it is not a surprise to see consumer sentiment dropping and future expectations so disappointing.
The mid-cycle slowdown or possible recession I see in the future is possibly going to be a lot slower in development than normal. Most bubbles correct fairly quickly in terms of time. It won't be this way with the housing bubble. People are going to be reluctant to sell at a lower price than they think their home is worth, so it typically takes many months for them to get used to the fact that home prices have dropped. Instead of a bubble bursting, the more correct analogy may be a slow tire leak.
This is looking to me like a classic "sell in May and go away" year. April is usually the strongest month of the year for stocks, and it appears that traders are playing it that way. That also means they will have their fingers on the sell button faster than usual. We could see some real volatility in the coming months."
Copyright 2007 John Mauldin. All Rights Reserved
If you would like to reproduce any of John Mauldin's E-Letters you must include the source of your quote and an email address (John@FrontlineThoughts.com)
Online housing site Zillow told it needs appraiser license
Peter Corbett
The Arizona Republic
Apr. 13, 2007 01:30 PM
An Arizona regulatory board has ordered Zillow.com to stop offering its online estimates of home values.
The Arizona Board of Appraisal has issued two cease and desist letters to the popular real estate Web site, claiming Zillow needs an appraiser license to offer its "zestimates" in Arizona.
I guess the Arizona Board of Appraisal is not familiar with the First Amendment.
homerloanseeker:
Sounds like the same kind of people who got Don Imus fired.
that's absurd. Its the same as a broker's opinion of value and does not claim to be an appraisal.
This dude thinks Bainbridge is different.
http://www.bainbridgeislandferrytails.com/index.cfm/page/16596/parent/15898/2007.html
What do you all think of the bailout proposal?
Maybe the ATM cards issued after Katrina could be handed out.
The bailout idea is interesting. I don't personally think it's actually going to work. So far most of the money appears to be in the form of helping "victims" refinance out of their existing ARMs. The idea is if someone can afford a reverse amortized loan, then they will have no problem refinancing to a 30 fixed at 5%. I don't know how true that statement actually is.
Has anyone been able to see the piece done by Roubini talking about the recession and the housing bust? Evidently it's on Bloomberg, but I can get it to play.
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