WatchWhat I've observed (in Long Island) these past 4 years since 2008 is that 2009 had the lowest prices between 2008 - 2012 (now).
Then in 2010 suddenly the market went up and now has stayed flat. The market DID go up in 2010 than what the prices were in 2009 but I will agree that it did not go up enough to recover from the 2008-2009 crash nor reverse upside down mortgages.
But what I really mean when I say the market went up - I mean the asking and list prices have gone up. And they have certainly not gone up enough to recover losses for the 2008-2009 but certainly gone up to make it not worth buying unless you REALLY have too.
In addition, I've observed that hardly anything new comes up on the market at all.
And whatever new listing comes up that looks like a deal will require serious money to be put into it due to neglect, damage & wear & tear OR the home is extremely overpriced OR the seller is purposely listing the home at a false low price to try to create a bidding war which usually ends up backfiring on the seller OR the deadbeat seller puts their home on short sale with no fucking intention of selling the god damn place (extremely common that I don't ever get excited when I see a short sale for a good price - ESPECIALLY if it's a good price.) Moreover the short sales are usually neglected in maintenance so I always suspect that some work needs to be done anyway.
OR (This gimmick used by sellers & realtards I always frown at.)
I check the listing history of property and the seller has been putting the property on and off the market for 3-4 fucking years with the same price AND in some cases the sellers has even INCREASED their price. Some properties I SWEAR to you have been on the market for 5 fucking years even going back to 2007. The sellers just delists and relists the property on the market. Like that's going to do anything anyway if it's been over 5 fucking years and you still can't sell the god damn place. They never reduce their price. NEVER. But you will defiantly see that they have even sometimes increase their prices a little bit. These sellers are now trying to be more clever with this gimmick by deleting the listing history of the property and making sure buyers can't find out that their overpriced wooden junk box has not been selling for close to half a fucking decade. But that will not do anything either. Buyers are slowly becoming more aware of how to determine a value and what to buy and what not to buy.
OR (and this scenario is rare but happens time to time)
Homes which are priced competitively compared to other asking prices along with offering more (location, condition, size, features etc) for the price sell VERY VERY quickly.
I have seen first hand buyers in the open house going crazy. These homes sell very very quickly but NOT without a bidding war.
Bidding wars with emotions fired up, egotistical passions, too much attachment and over-excitement of the property will always result in buying the home for the wrong price because logical decisions are then throw out the window. And the emotional decision is rationalized by the person in anyway to make them think it was a logical decision when actually it was not.
What I'm basically getting at here is that the real estate market is a flat out con-game with stubborn sellers, realtards who refuse to submit offers, lie, shill bid, brokers who manipulate the market by preventing good listings from reaching the market - instead they buy the property themselves and sell it at the current bubble prices today.
And yes, I said it! Real estate is still in the bubble. This is a sellers market not a buyers a market. Do not listen to the common advice that this is a buyers market because frankly it is not!
All the real estate inventory currently on the market for the common buyer is all junk that is not selling on the market at all. Homes are just sitting on the market. You do have a few suckers every now and then along with people who have no choice but to buy along with wealthy people who don't really care since losing that amount of money will not disturb their sleep at all.
But other than that. No one is buying unless they really have too or are rich (But even a lot of rich people are refusing to buy at these prices). Many former suckers in early 2000's mania have wised up & are now renting instead.
Sellers have gained a false sense of delusion and optimism that the housing market is going to go up. They gained this mindset at the end of 2009 and starting from 2010 all the way down today at 2012.
In every crash in a market - whether it's stocks, real estate, commodities, gold, silver or bonds - this mindset is ALWAYS present. There is never an exception. Investors lose money but than think that by being optimistic magically the losses will recover. But this is the most fatal mistake in money management. This mistake causes them to then lose not only their money but the shirts on their back.
This is called a "sucker's rally" that is a short-term small gain to give hope to idiots who then later lose even more money than what they lost at the first crash.
This is what is going on in the house market currently and in my humble analysis is partly although not fully the cause for the prices still being largely incorrect to it's true value.
The majority of homeowners are baby boomers. Baby boomers are betting that their home will cover their retirement. They have already lost a quite a bit on their 401k's. 401k's have also done the same thing that the housing market has done since end of 2009-2012.
The majority of these homeowners need to sell but are making an incredibly foolish mistake of not selling NOW. Because NOW is still a sellers market. The prices homes being sold for today are still extremely overpriced and nowhere near at a sane price. Instead these homeowners are speculating to increase their profit. So they want to and also need to sell but are waiting for the prices to go up.
Greed basically. Greed and fear are the two biggest emotions which contribute to losses in ANY investment.
This is a set of inventory that not a lot of people are really talking about. Once a proper crash hits the housing market without the government trying to rescue the sinking titanic - then these people will immediately put their homes on the market and take pretty much any offer they can get.
Fear would then set into their minds. First it was greed and later it will be fear. It's the same cycle of emotions that occurred before the crash of 2008-2009.
Greed of speculating and then fear of losing. Then denial. Then optimism. Then greed and then fear of losing. And then forced acceptance of reality which at first is very ugly but later does you much good and teaches the person a lesson.
I believe these cycle of emotions happen two times before the crowd is then FORCED to accept reality because by than the losses suffered become so great that another sucker's rally cannot be afforded.
Another problem with housing market is foreclosures not being released and hidden from average buyers. Banks not foreclosing quick enough because they then have to report those assets as actually losses on their accounting books.
And the last problem is with property taxes increasing even MORE than what they were in 2005.
Homeownership and buying a home is really something people need to think through carefully. If you really need to buy a home - be careful because they are sharks in the sea! Never ever trust a realtard, broker or mortgage broker! This market is very risky and filled with snakes.
If you can, better to rent. Otherwise, please be very careful and think through everything. Plan ahead for anything unexpected in the market.
I have been watching this market for 2 years now. Reading lots and lots of information. What I wrote above is everything I learned in those two years of observing and reading opinions along with researching charts, historical data, banking practices, fractional reserve banking, demographics and where the majority of americans are financially as an average.
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Norbecker says
I defiantly agree with you that asking prices is NOT the true value of a piece of real estate property.
But asking prices reveal the sellers mindset. And that mindset is STUBBORN & DENIAL.
The mindset of the sellers is still stuck in bubble ponzi scheme drink the kool aid of the bankers & realtards.
The current low inventory is largely in my humble analysis and educated estimation from BUBBLE price demands from the sellers. They are keeping their homes off the market because they are speculating prices will go back up. (also due to foreclosure manipulation & underground deals.)
Sales prices do determine the bottom but if there are no sales due to stubborn sellers than how can you have a bottom?
They only way to have a bottom is by the vast majority of sheep to experience The Great Depression in the 1930's. Only 10X magnified because back than people weren't as consumerist back than - then they are today.
In others words, poverty is going to have to be a common thing.
Sellers will rather starve to death first than to sell their property now for less than the prices in 2005-2007 despite the fact they are STILL getting a very high price.
Greed is the current mindset among sellers not fear.
That's the problem with real estate currently. It's in a complete mess and under a lot of manipulation from a lot of parties to prevent it from hitting TRUE MARKET VALUE.
These sheep would rather die of starvation first before they admit reality & cut their losses. They are begging to be slaughtered rather than taking a loss but still preserving what they at least have or not making the situation more worse than it already is.
They are only going to make the crash more worse this way. (for themselves)
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Mobi says
Limited supplies are always in a sellers' market.
Never drink realtard, banker and seller kool aid that say it is a buyers' market because it is NOT.
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tatupu70 says
Only supply is limited. Demand is falling.
Supply by the way is BOGUSLY limited. And supply has already increased many times greater than what the demand will ever increase.
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Mobi says
California mindset is way dangerously in LaLa Land mindset. California I believe will be slaughtered more than any state including all of New York (Long Island & Manhattan).
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tatupu70 says
Agree but that only applies to a free market. Today you do not have a free market.
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Mobi says
Agree. The basic system of balance in any free capitalist market.
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bubblesitter says
That maybe the next thing that is probably going to hold up the economy like the real estate bubble concealed the true weakness in the US economic system.
I also believe another internet bubble is going to heat up and/or already has. Facebook particularly.
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Mobi says
Same con line you heard from realtards and bankers. Now you are hearing it from high school teachtards and college professtards.
Mobi says
Which makes me especially have no faith in the sheeple of this nation. They think it's extremely responsible & success oriented to take a monstrous debt all for a piece of useless paper based on you speculating that you will land a job to make a income. No discharge of the loan and you get no asset in return for the loan except a piece of paper which may or may not gain you diddly squat.
A mortgage you at least get a solid asset. If you fail to make a payment you can run around legal loopholes to prevent foreclosure or live for free while the bank takes their time or play the short sale con game with the bank or rent it out to make an income.
And you can always discharge it in bankruptcy. If I had to choose between a student loan or a mortgage. I would pick the mortgage.
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iwog says
based on recent results, that is not the case.
BA prices lower...
http://dqnews.com/Articles/2012/News/California/Bay-Area/RRBay120216.aspx
SoCal prices lower...
http://dqnews.com/Articles/2012/News/California/Southern-CA/RRSCA120215.aspx
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tatupu70 says
There is more supply than there is *qualified* demand -- however, the supply is being held off the market.
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Robber Baron Elite Scum says
All evidence to the contrary, of course. Sales are increasing.
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Austinhousingbubble says
Maybe... I've been hearing about the so called shadow inventory for 3 years now. It's always "about to hit the market". Any reason why it will hit now?
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tatupu70 says
I heard unemployment is also decreasing. It's like 2% now. I heard gas prices are only 25 cents a gallon now. I heard the dollar is now actually being backed by commodities, gold and silver.
I heard economists have discovered leprechauns to have solved the economic recession and the economy is recovering because of leprechauns.
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tatupu70 says
Exact market timing is for day trading sheeple looking to get rich quick.
Long-term investors and individuals who see the bigger picture can not foresee exact market timing. But they do foresee what will eventually come to pass in the end give or take.
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tatupu70 says
The norm if you want to call it back in 1989 to mid 90s was around 10%, and it went to 50% and now down to above 30%. Still its 3x above the norm and will continue for some time now.
Southland Home Sales Flat, Prices Edge Down Februry 15, 2012
http://dqnews.com/Articles/2012/News/California/Southern-CA/RRSCA120215.aspx
Foreclosure resales – properties foreclosed on in the prior 12 months – made up 32.6 percent of resales last month, up from a revised 32.4 percent in December and down from 36.8 percent a year earlier. Foreclosure resales hit a high of 56.7 percent in February 2009 and a low of 32.8 percent last June
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You will know the bubble is done when people stop showing up to the ritual suicides of Reatlor®s and mortgage brokers. When people jaws are tired of shrieking DIE DIE YOU FUCK DIE AND SUCK THE COCK OF SATAN IN HELL! and there's no novelty left in Reator®s killing themselves and their brains spraying across the parking lot of the CostCos.
Then you'll know you're at least two generations from a bottom.
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tatupu70 says
As always, I appreciate your skepticism. Shadow inventory, as I understand it, refers to all loans in default or in threat of default which have not been liquidated. Attenuating foreclosures is essentially a gambit designed to keep banks and investors solvent, since liquidating these loans would require the banks to realize a massive loss on their books, rendering them instantly insolvent. Thanks to the suspension of FASB 157, the institutions that hold these notes (and more importantly, second liens), are able to mark the assets to model rather than market, which provides a buffer from losses and a real disincentive to foreclosure. Often times banks will increase the available amount of the second lien or HELOC in some small amount in order to make the note appear current on their books ('a rolling loan gathers no loss').
Granted, estimating the exact number of homes in shadow inventory is another story, and a critical factor in determining how much of a threat it really represents. Michael Olenick has done some really interesting research and knocked some numbers together, as has Yves Smith of Naked Capitalism. Check it out:
http://www.nakedcapitalism.com/2012/01/michael-olenick-10-million-shadow-inventory-says-housing-market-is-a-long-way-from-the-bottom.html
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tatupu70 says
Really? What about interest rates at 5%? More? What about conforming loans going to 417 and no more FHA?
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bubblesitter says
We are looking more and more like Japan each and every day. ;)
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iwog says
The question is then why are people not selling? There are many possible reasons and if you knew the percentages you would be wise to the direction.
1) people that can't sell because they are underwater (35% of mortgage holders)
2) people that just recently bought and are basically underwater from a transaction cost basis (damn that 6%)
3) people that want to sell but know they cannot get what they want. They also believe the market will recover so feel waiting to sell is smart
4) people that love their house and really are not sellers, at least for prices close to market. (they do exist).
5) people the are actively trying to sell and forced to reset expectations for price
I think the selling ecosystem is a combination of all 5. There is not one correct answer. However, when you see very low sales you can infer the percentages of these groups. It is not unlike selling any asset. The only real difference is the added complexity because to sell you have to have other digs and move if you are a resident. That leads to many people deciding not to sell, because with no equity build up they are not upgrading to something bigger.
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Norbecker's website
iwog says
I gotta disagree with you. So if there is currently a decreased supply (sellers) I also think there is not enough demand (buyers) at current market prices. When the price comes down the buyers will appear. This may be what we are seeing with the current sales boom now. Imagine you were wanting to buy a house in 2008-9 but got scared off by all the talk of a housing crash. Well now prices are less then they were in 2008 and the mortgage interest rate is lower also........so it seems like a good time to buy. This can cause a decrease in supply causing prices to creep up. When prices go up enough that buyers are no longer interested and stop buying the supply will increase and prices will drop.
It is as simple as that. There are external forces that effect supply and demand.....but there always is and always will be. So the bottom line is price is the sum of supply (sellers) and demand (buyers).
Part of the problem is getting good information. Who can you trust for accurate price and sales numbers????? NAR, realtors, CNN, blogs?????
I think http://www.housingtracker.net has some good data and you can see trends starting AFTER the fact. Just because prices may be going up now does not mean they will continue to do so. Want to know where housing prices will be going over the next 6-12 months? I'll tell you in 13 months. LOL
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RentingForHalfTheCost says
I know the exact reason because I've watched nearly every house on that street that has changed hands over the last 4 years. I've become friends with many of the long time residents and I own four of the homes myself.
People aren't selling because they are very happy with their purchase and have no intention of leaving. Either they owned the house prior to the bubble, or they bought after the crash.
When almost everything is for sale, the best homes go first. This was 2009. What is left now is the dregs. That's why prices do not tell the whole story and it's why I CANNOT do today what I did in 2009 and 2010 even if I had all my money back. The homes are no longer available. Period.
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iwog says
This is rare, in my experience. The buy-and-hold housing consumer seems to be the minority, at least in the areas I look at (not just central Texas). I'd say 5-8 years seems to be the average amount of time people stay in any residence. People move around a lot. My guess is that this will change in the coming years, but who knows.
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Austinhousingbubble says
Yikes. Why not just rent then?
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Austinhousingbubble says
The transaction costs will eat heavily into any equity they may have built...yikes.
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Robber Baron Elite Scum says
Good way to go through life. If data comes out that disagrees with your idea of the ways things should go, just ignore it. And pretend that it's fake.
Let me know how that works out for you.
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tatupu70 says
Mick Russom says
I think what you are trying to say is that demand may decrease if interest rates rise or conforming loan limits decrease. I would mostly agree with you. Historically, interest rate changes have been lagging indicators and the rate doesn't rise until the economy is humming. As such, I would expect incomes to be rising and confidence to be up before the rate changes and the effects of the rate change to be drowned out by other factors. That's what usually happens.
The statement about supply and demand that you quoted is still correct though.
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If you don't buy a house now, you will be rent for the rest of your life.
Can you afford 10% rent increase every year?
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Roslyn, NY
tatupu70 says
You quoted no data. Fail...
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xenogear3 says
Can you afford 10% property tax increase every year?
You are repeating the same realtard garbage that was said in 2003-2005.
If home prices can't increase 10% forever what makes you think rent can increase 10% forever?
Please let us know when finally decide to actually THINK instead of having realtards do the thinking for you.
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Kew Gardens, NY
I dont know what towns your looking in but I sold my house in Feb 2010 in Mineola and now I see houses for sale which are bigger and nicer and the asking price is about what I sold mine for. Conversely I see garbage where they are asking for the moon. There are far less suckers now though so those housees stay listed forever becaues the seller doesnt care if they sell. Belive me the market is coming down every year. Im now watching my gf sell her house and down size in lynbrook. Her house is gorgeous. She paid 424 in 2004 and her italian family redid all in marble and granite. She is asking 465 and got no offers so far. While we were researchin housing prices in trulia I saw a huge beauty where they are asking 575 but they paid 650 for in in 2010. The small houses we are looking at all are much cheaper than a few years ago. Maybe areas like Port washington by the water hold their value better but middele class areas are plunging in prices in my opinion.
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wthrfrk80 says
There is no equity until there is a home price appreciation,when you sell it. :)
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xenogear3 says
Gotta love Realtor fear-mongering. The same argument help drive the bubble.
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Robber Baron Elite Scum says
Sorry--I have posted articles on other threads. Figured you had seen them. Here you go:
http://www.crainsnewyork.com/article/20120222/REAL_ESTATE/120229978/1072
Success!
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bubblesitter says
You realize that the P in PITI is equity, right?
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xenogear3 says
With the stock pile of money you accumulate in your investments by being a renter, you will be able to buy a house and not have to think of it as an investment. If it continues to go up that is great, if it goes down you don't really care. That is true freedom. A house is now considered dead money. You can't depend on the price direction for your wealth anymore.
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Robber Baron Elite Scum says
Good comeback.
For those inclined to review the 30 years of history between rents and home prices take a look at this report. After I read it I didn't walk away thinking that increasing rents will be my financial downfall. Exactly the opposite. As the report shows, though, it is all about what kind of person you are. Do you need the threat of the house going into default to force you to save or can you do it on your own. If by renting you take the saving every month and spend it in restaurants or on entertainment then you will absolutely be behind. I don't, so know where I am best suited going forward. As a renter.
http://www.fma.org/NY/Papers/Lessons_from_30_years_of_Buy_vs_Rent_Decisions.pdf
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RentingForHalfTheCost says
Even more important is how long you plan on staying in the house. If you plan to move in less than 5 years, then you are certainly better off renting. If you plan to stay 15+ years, then you are almost certainly better off owning.
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thomas.wong1986 says
Your 'recent' figures are from February. http://www.socketsite.com/archives/2012/07/caseshiller_san_francisco_first_yearoveryear_gain_in_18.html
SF prices are up, not only month over month, but year over year:
"According to the May 2012 S&P/Case-Shiller Home Price Index, single-family home prices in the San Francisco MSA rose 3.9% from April to May 2012, down 38.1% from a May 2006 peak but up 0.6% year-over-year, the first year-over-year gain in eighteen (18) months.
For the broader 10-City composite (CSXR), home values rose 2.3% from April to May, down 1.2% year-over-year, down 32.9% from a June 2006 peak."