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Welcome To The Bottom: Housing Begins Slow Rebound (AP)


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2009 Aug 1, 1:42am   57,023 views  286 comments

by WillyWanker   ➕follow (0)   💰tip   ignore  

"It was — note the past tense — the worst housing recession anyone but survivors of the Great Depression can remember.

From the frenzied peak of the real estate boom in 2005-2006 to the recession's trough earlier this year, home resales fell 38 percent and sales of new homes tumbled 76 percent. Construction of homes and apartments skidded 79 percent. And for the first time in more than four decades of record keeping, home prices posted consecutive annual declines.

A staggering $4 trillion in home equity was wiped out, and millions of Americans lost their homes through foreclosure.

Now take a deep breath and exhale. The worst is over."

Read the rest here:

http://news.yahoo.com/s/ap/20090801/ap_on_bi_ge/us_housing_mid_year_outlook

This was on Yahoo! News.  You know people are reading it and gobbling it up.  I know the market will remain flat and on the bottom for some time to come, at least here in Southern California.  But, I bet some fence sitters are going to start jumping into the housing market sometime soon.

This does not bode well for those who are calling a return to 80's prices in the Westside of Los Angeles, you know the one's who say that $400 will get you a 3000 square foot house on a 15000 square foot lot in Santa Monica, north of Montana.  :P


#housing

« First        Comments 266 - 286 of 286        Search these comments

266   4X   2009 Oct 29, 8:44am  

@Wankster

Just so you dont think I am wanking your chain. See below for Pasadena.

267   4X   2009 Oct 29, 8:50am  

@Wankster

I understand how low income dwellers like yourself wouldnt see how you could one day afford to live in Sierra Madre. I mean, seeing the below charts I dont ever know how I could afford 300k.

268   thomas.wong87   2009 Oct 29, 9:03am  

What the Fed's Worried About THE U.S. HOUSING BUBBLE ISN'T GETTING ANY SMALLER....
By Anna Bernasek
Fortune/ CNN Money, October 11, 1999
http://money.cnn.com/magazines/fortune/fortune_archive/1999/10/11/267016/index.htm

Let's take a closer look at the house-buying mania. Part of the reason for the boom may be a last-minute rush to buy homes ahead of further rises in rates, but there's more than that going on here. Competition among lenders has changed the market, and the result is that long-term mortgage rates may play a less important role than they used to. Lenders now offer adjustable-rate mortgages, for example, determined more by a bank's short-term cost of funds, and buyers are snapping them up. The mortgage-approval process has become faster and easier because of computerization and the Internet. Then there's a whole new group of homebuyers, in part driven by the federal government's aim to increase the stock of affordable housing. Those who once only dreamed of owning their own home are today being courted by mortgage lenders that require lower down payments and no credit history. According to Fannie Mae's chief economist, David Berson, at least as important as these changes in the mortgage market is consistently high consumer confidence bolstered by growing employment. "Without that," he says, "there would be no housing boom."

Here is a zinger! from 1980 to 1995, prices were 'stagnant at best'...

"But there is a boom, and it's a big one. Suddenly, buying a home has become a great investment--and that's not true just in coastal or Sunbelt hot spots, it's true even in places like suburban Detroit. In 90% of all U.S. metro areas, in fact, real house prices are rising an average of 3% a year. After a 15-year period from 1980 to 1995, when home prices were stagnant at best, any real gains are a major achievement. In some centers, such as New York City, the San Francisco Bay Area, and Los Angeles, where supply can't hope to keep up with demand and demand is driven by phenomenal stock market wealth, real price increases are more in the magnitude of 20% a year. With prices accelerating, homebuyers have come to expect big gains when they sell and are willing to saddle themselves with higher mortgage payments."

269   WillyWanker   2009 Oct 29, 10:38am  

4X says

@Wankster
I understand how low income dwellers like yourself wouldnt see how you could one day afford to live in Sierra Madre. I mean, seeing the below charts I dont ever know how I could afford 300k.

4PLY, I would only look at 3 bedroom 2 bath homes for use as servant's quarters. I would never live in anything as tiny as that. Besides, Sierra Madre is an armpit of smog. For me the only thing that exists in Los Angeles County is the West Side. And I mean NOTHING east of La Cienega and south of Sunset. Pasadena (CERTAIN areas ONLY), San Marino and La Canada Flintridge are the only areas of the San Gabriel valley that are acceptable. Sierra Madre is stricly pedestrian. I'm sure YOU'D fit right in.

270   4X   2009 Oct 29, 2:05pm  

@WinkyDinkyDoodle

I would only look at 3 bedroom 2 bath homes for use as servant’s quarters.

It has nothing to do with the size of the place you live in and everything to do with location. Sierra Madre has a small town feel with many community events.

271   WillyWanker   2009 Oct 30, 1:27am  

@ 4PLY Brentwood has a 'small time feel' as well (without the smog). You forget that SMOG gets trapped in the San Gabriel valley and shrouds everything in a dirty brown haze. I can't imagine how anyone could live with the smog.

What type of 'community events' are held in Sierra Smogre? Besides 'smog alerts' I mean.

272   pinnacle   2009 Oct 30, 8:16am  

The foreclosure rate in the La Canada-Flintridge-La Crescenta area is up about 800
percent year over year yet the prices remain very high.
I live a few blocks from the Sierra Madre border and the smog is not any worse here than any other area.
There are some houses for sale in Sierra Madre right now for under 400,000 so I don't know how accurate that chart is.
I looked at a condo there a few weeks ago and they were trying to get 249,000. It was not a bad place but I think it will be coming down in price soon.

273   Vicente   2009 Oct 30, 8:29am  

WillyWanker says

4PLY, I would only look at 3 bedroom 2 bath homes for use as servant’s quarters.

Well it's good to know where you are coming from. Thanks for deigning to speak with the peasants.

274   EastCoastBubbleBoy   2009 Oct 30, 2:13pm  

The Fannie Mae figure, does that default rate include bad loans they've purchased from other firms (and now have on their books?) or simply loans that they have underwritten between the tail end of '07 and today.

Keep in mind their share of the mortgage market has increasing, so the increase in risk of default should increase as well; given that they are one of the few who extend credit to "marginal" borrowers in today's lending environment.

When things were going gangbusters in the first part of the decade, Fannie Mae was an afterthought. After all why put down 3.5% when you can take out a 120% LTV no money down loan wiht no proof of assets?

Seriously though a default rate of 4% isn't horrible; it's the rate of acceleration of default that's scary.

275   4X   2009 Oct 30, 3:14pm  

@Wankoff

@ 4PLY Brentwood has a ’small time feel’ as well (without the smog). You forget that SMOG gets trapped in the San Gabriel valley and shrouds everything in a dirty brown haze. I can’t imagine how anyone could live with the smog. What type of ‘community events’ are held in Sierra Smogre? Besides ’smog alerts’ I mean.

Its a small town with 177 events each year, that our community can enjoy. The area is very walkable, with hiking next door...plus we have old town in Pasadena to enjoy. Ohh...I almost forgot, unlike Brentwood we dont have to worry about our next career move since we have all of LA county in which we can job search. Should we want to start a business, we have the largest market in the world that we can sell to.

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276   4X   2009 Oct 30, 3:15pm  

@Wankmydoodle

Here is what you get in Brentwood...enjoy your cornfest.

The Brentwood "Cornfest" occurs one weekend in July each year, culminating in a concert. Past performers include Eddie Money, Eric Burdon and The Fixx.
Numerous local farms operate produce stands or offer "U-Pick" opportunities.
A farmer's market is held on First Street in downtown Brentwood on Saturday mornings during the summer.

277   WillyWanker   2009 Nov 23, 12:02am  

@ 4PLY
Wow, you mean you can ACTUALLY go to a CITY COUNCIL SPECIAL MEETING in Sierra SMOGRE? What a BARN-BURNER! *yuck yuck yuck*

279   Tude   2009 Nov 23, 12:10am  

The median sales price was $173,100, down 7.1 percent from a year earlier and off 1.6 percent from September.

280   Done!   2009 Nov 23, 12:38am  

Well here's a large chunk of that 10.1% spike.

http://miami.craigslist.org/search/rea?query=owner+finance&catAbbreviation=rea&minAsk=min&maxAsk=150000&bedrooms=3

the banks release some inventory, every three months or so, and cash investors buy them up as quick, as they hit the market.

here's a search with out the keyword "owner financing"

http://miami.craigslist.org/search/rea?query=&catAbbreviation=rea&minAsk=min&maxAsk=150000&bedrooms=3

It's not that I am looking for anything, I use 150K as a cap, to gauge what is going for 120K to 150K. It's gotten better over the year, but IMO, it has a way to go yet. There's still to many houses out there that belongs in the 120-150K range that is still in the high 190s to mid 200's.

These houses almost every single one I've inquired on, has already been purchased by a private equity firm trying to flip it for a big profit than what they paid the banks.

It's still a cooked books racket, they might as well claim sales are up 50%, but that isn't moving real inventory that I am actually interested in.

Those still sit unsold.

281   pinnacle   2009 Nov 23, 1:04am  

If sales are up why were mortgage applications down 12 percent in October?
It must be cash buyers who think they will be able to rent these houses out, but the rental market keeps slumping and jobs keep disappearing in the same areas with high sales turnover.
Who will want to rent there is there are no jobs?
Also I keep getting notices of "back on the market" homes that were counted as sales in the
previous statistics so a lot of these deals are falling through and being sold again.

282   bubblesitter   2009 Nov 23, 2:13pm  

pinnacle says

If sales are up why were mortgage applications down 12 percent in October?

It must be cash buyers who think they will be able to rent these houses out, but the rental market keeps slumping and jobs keep disappearing in the same areas with high sales turnover.

Who will want to rent there is there are no jobs?

Also I keep getting notices of “back on the market” homes that were counted as sales in the

previous statistics so a lot of these deals are falling through and being sold again.

Yep. My rent dropped 8% this year. Couldn't be happier...and slam dunk on that mortgage applications point :)

283   4X   2009 Nov 23, 2:57pm  

knewbetter says

I’ve been listening to people bitch about buying a house for over 15 years. You can always find a reason not to buy one. Even it they break the affordability secret code, now its because they don’t want to fix anything, or they may have to move, or now’s not a good time, or we need some more money to pay down the debt, or its just a hassle.
Whatever. Knowing what it costs to build a house I wouldn’t own a 1000sqft ranch for $500,000. But I wouldn’t expect prices to drop 70% in the most desirable markets in the U.S.

What about the 50% decrease in Japans real estate markets over the past 15 years?...this is evidence that markets can and will adjust.

284   4X   2009 Nov 23, 3:00pm  

WillyWanker says

@ 4PLY
Wow, you mean you can ACTUALLY go to a CITY COUNCIL SPECIAL MEETING in Sierra SMOGRE? What a BARN-BURNER! *yuck yuck yuck*

Stupidity seems to be your favorite color. Lets end our debate here.

285   WillyWanker   2010 May 1, 2:59pm  

4PLY, How's that house hunting going with your (modest) budget? :P

Did you look at the yoy DQ price jump for Sierra Smogre??? UP 26.5%!!! Gotta love the numbers. Perhaps you might want to try out La Puente instead.

http://www.dqnews.com/Charts/Monthly-Charts/LA-Times-Charts/ZIPLAT.aspx

286   WillyWanker   2010 May 1, 3:05pm  

Some of that wonderful air over Sierra Smogre. Air you can sink your teeth into. :P

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