patrick.net

I was never able to dance without stepping on someone’s toe.

Dude. The robot is your friend. You don't even have to pick your feet up off the ground. You can also try the sprinkler, although that involves a fairly egregious violation of the hetrosexual no-hands-above-neckline rule.

So, housing. Today someone had xeroxed a couple of recent articles by Bill Gross hammering on the housing bubble and left them on the coffee break table at work. Gorilla bear warfare. I like to see it.

If we are going to be consistently wrong, we may as well make ourselves feel better by distributing propaganda. Who among us, when faced with another report of housing prices being up some absurd double digit number doesn't reach down into our ruck-sack, take out our little red book and read those soothing words... "A spectre is haunting California -- the spectre of a housing bubble. All the powers of The Man have entered into a holy alliance to exorcise this spectre: Fed and Realtor, Senator and Representative, Media Players and, what the hell, German police-spies."

@peter: check it, for this weekend: http://www.miravista.org/ I'm jacked.

Cheers,
prat

Gorilla bear warfare

Lol

I really gotta turn in, which sucks since Prat's here. But I am seriously sleep deprived. Nite all.

Walton's good nite...
Nite Jack!
Nite Prat!
Nite Peter!

One interesting point from the articles by Gross. He asserted that the economy is too tied to asset appreciation for the Fed to ignore, and that Greenspans successor would be forced to ease, allowing for one last glorious bull run in bonds and one last gasp of housing before the whole thing collapsed in a heap.

I once was rather smug about not buying until 2008. I am less so now. Laughing gas these hazmats, fast cats. Lining them up-a like ass cracks, ladys, homies, at the track, it's my chocolate attack.

Seriously.

Cheers,
prat

"although that involves a fairly egregious violation of the hetrosexual no-hands-above-neckline rule."

Who made up these non-dancing heterosexual white boy rules? Throw them into the swamp!

"Lining them up-a like ass cracks, ladys, homies, at the track, it’s my chocolate attack."

Prat, did you just break into free-style rap on a housing bubble blog? Somebody get the boy a microphone.

Ahhh, all you friggen slackers. I finally decide "You know, sure, working like a dog is fine as far as it goes, but you have a PUBLIC to placate prat. THINK OF THE CHILDREN." So I go and get all spun out on speed (important note: *christian* speed) and start posting, and it turns out everyone was here last night, and now everyone's too tired to post.

Well, you know what I say to that? I say, did we give up when the germans bombed pearl harbor? No. But I'm giving up now.

G'night,
prat

"*christian* speed"

Huh? Is this where you read a bunch of CS Lewis and then run around the house really fast?

I had to wait until the bewitching hour to start posting.

(Of course, in reality, Mrs. Prat just threw a book at me and said it was time to go to bed. But I prefer the image of a brilliant-yet-difficult artiste storming off due to some imagined slight, don't you?)

Yes, yes, let us have our illusions.

Is this where you read a bunch of CS Lewis and then run around the house really fast?

Totally. Also, swallow pop rocks and slam a pepsi, and then jump up and down. Finish it off with Orthodoxy by Chesterton, and you too can enjoy Christian speed!

OK, seriously, bump all y'all. I'm going to bed.

Cheers,
prat

Gotta get me some of that pop rocks and Chesterton...have not read him yet. Love Lewis.

Yawn. Must also go to bed.

Hmmm...lingering sentiments of last night to be found here on this thread...but for the most part I'm impressed with the restraint!
I've been preparing for a "test my market value" day tomorrow. But I do need to post my near-(financial)death real estate experience...tomorrow...tomorrow...tomorrow.
I think I'll dare claim LPOTN (last post of the night).

LOL, tsu, I aught to avoid predictions that invite non-self-fulfillment...!
LPOTN (???)

I bought in 1997 and sold in 2003, not because of the bubble but because we were moving to the east coast so my husband could go to law school here. The thought of purchasing here never crossed my mind because I thought we were at the peak then. Plus the 'words of wisdom' from my parents (never buy a house unless you plan to live there for 5+ years) was engrained in me and we're only going to be in this god-forsaken city (Philly) for less than 3 years total. Turns out if I would have bought here in 2003 I would have likely made a huge profit...oh well...in the meantime we are living on the cheap in an apartment for only $950/mo, utilities inc (a big plus for this winter!) and we still have the proceeds from the prveious place for a down payment when we decide to buy.

Jack, nope no Fuchs yet. Put the food out and another panhandling feline showed up for a free meal. So it looks like word is out on the street that there's free cat grub in our backyard. I don't "feel" like he is injured, I think he's on an extended brawl/prowl mission. Thanks for asking about him, he's a great cat, even cat haters love him :)

Turns out if I would have bought here in 2003 I would have likely made a huge profit…oh well…

Lisa-
Are homes selling easily back east now?
Seems the tricky part around here is timing the market, even for homeowners to sell. The few guys I talk to who "invest" in RE are convinced it's still going up...everyone wants to sell at the top. I'm not sure that applies to you, but glad you didn't get stuck with a property that could become hard to move.

Beer? Are we going to have a belated bear/bull Oktoberfest?

That is what pisses me off the most, I don't want a f#%king investment, I want a house. Back in the day, when I was fresh outa undergrad school, I made about 45K a year, there was a house for sale on Swift St in Santa Cruz about 1/2 block from the water, they wanted 250K. No way could I get a loan for 5X income/prop value. And no way could I save up enough for the down. Now that property is south of 1.5mil, and income hasn't risen 4X. I make decent coin now, but it doesn't matter because asshole greedy "investors" coupled with criminal actions by realtor/appraiser/loan officers, have jacked houses into the stratosphere. To suggest it isn't anything but colusion and fraud is to suggest the earth is flat. There is no reason when the population is declining, real wages are declining and for the vast majority the economy sucks, why RE just keeps going up and up. I took a look around the US, I have some relatives in Grand Blanc MI, houses there are going for over 500K, dude this is Mi, Mi sucks, by all measure Mi sucks, why would a track house in Mi be 500K? Bad loans for bad people. I must live in a totally different world as I do not make 150K, only 1 of my friends makes over 100K and we all have great educations, no we are not lazy or otherwise impared, we are just not SW engineers. I see a whole generation marginalized and I just don't like it. The fucking boomers got theres, ours, and someone else's, and there just doesn't seem to be enough to go around. The funny thing about musical chairs, ie the housing market, it's really fun until the music stops and you're the last one standing. I just hope it is like a 747 plowing into the ground rather than a cruise ship hitting the pier.

Surprisingly no mention of the real estate sector gaining jobs.

That's a glaring omission, IMO. The realty business has boomed, as this quote from the Sac Bee indicates:

"As home prices rose statewide, the number of Californians with real estate broker and sales licenses jumped 23 percent, from 363,842 in June 1990 to 449,107 in June 2005."

And that's averaged over the whole state; I'm certain the rate's higher for the BA, given the money to be made.

So, the increase between 1998 and now is undoubtedly much higher than 1990 to now.

Interesting...I did not know that!

When my wife and I sold in late 2003 I thought the RE market had gone completely insane! Since part of my job deals with tax issues I felt there was no way that the FED or the Administration could let this madness go on and that they would raise rates much earlier. Since rate hikes have done little to quell the madness we have had to take on more drastic measures. Well it is now upon us. There is finally a serious and sober debate that should have started a long time ago. The 500K exclusion was designed originally for empty nesters to be able to downsize w/o being punitive and be able to enjoy their retirement, not to be a substitute for a properly planned retirement for failed techies and daytraders. If there was any temptation on my part to think that the coast was clear the tax change debate has put me back on the sidelines until the full impact is known. The fact that we're even talking about doing away with the "free ride" has RE agents reeling!

Those with house price rainchecks (interest only loans) will soon see what the future holds for their property and turn their keys in!

Will banks allow that this time? Why should they shoulder the liability?

This is from Inman news yesterday:

Sales in the nine-county San Francisco Bay Area dropped for the sixth month in a row in September, while median prices for the region dropped 0.5 percent from August to September, according to a real estate research firm.

Meanwhile, year-over-year median price increases have ranged from 17.6 percent to 20.5 percent, DataQuick Information Systems announced today.

A total of 11,205 new and resale houses and condos were sold in the Bay Area region last month. That was down 7.8 percent from 12,154 for August, and down 7.2 percent from 12,075 for September 2004.

So far this year 96,591 homes have been sold, down 5 percent from 101,693 for the same nine-month period last year. Last year's year-to-date sales were the highest in DataQuick's statistics, which go back to 1988. Sales this year have been the second highest.

"The Bay Area real estate market seems to have settled into a steady state, with few indicators pointing to any upcoming change. Supply and demand seem stable. We are keeping an eye on rising mortgage interest rates which could slow things down somewhat before the end of the year," said Marshall Prentice, DataQuick president.

The median price paid for a Bay Area home was $616,000 in September. That was down 0.5 percent from $619,000 in August, and up 19.4 percent from $516,000 for September a year ago. DataQuick noted that a slight decline from August to September is normal for the season.

Nice, lots of stats...does DataQuick mention anything specific about inventory?

"Jamie DID show some restraint though when she didn’t say one word about my “stretching the envelope”"

Ahem. Are you baiting me, Jack?

Thanks for the link, Cindy--interesting. I love all these confused sellers. Huh? What do you mean my house isn't worth 500 times what I paid for it? How could that be?!

From the LA Times article:
"In more affordable San Bernardino County, the median home price of $352,000 in September was 33% higher than the year-ago month, according to DataQuick."

Hahahahahaaaaaaa. Yes, you too can own a former crack shack right next to a flop house with a gentleman's club billboard looming over your front yard for a mere 352K. It's a bargain! Gotta love San Berdu, the underdiscovered gem of Cali.

"underdiscovered"

Er, that was supposed to read "undiscovered."

Oh man, back to housing. I was so enjoying being silly.

From the Sacto area
Newly released statistics for the month of September show the median price of a home in the Sacramento area has dropped for the first time in 13 months.

A report from the Sacramento Association of Realtors shows the median price for existing homes in September was $385,000. That's a 2.0 percent drop from the August median of $392,750, and the first price decline since August 2004. The September figures are in sharp contrast to those of only a few months ago, when a vigorous real estate market sparked bidding wars for many homes.

Ok, I've done my duty for the day.

It is good to have a source of information the corroborates what you feel in your gut. There are a bunch of us who have been here for awhile, but I have noticed a lot more traffic in the last month or two and I think the general feeling about housing is getting more pessimistic. I think the most recent purchasers have had to be living under a rock to think buying right now is a good idea.

I think something like 1.2T of mortgage will adjust in 2007. Looks like the "good" time to buy will not arrive before then...

*** NOT INVESTMENT ADVICE ***

…and if they’ve been living under a rock, they will be more willing to overspend on housing!

If they live under a rock, why do they need a house?

Good point!…..Especially being that it is probably nicer under the rock than in those shitboxes that are for sale.

Yes, a "rock" solid home is better than a stucco-covered cardboard box.

Yes, a “rock” solid home is better than a stucco-covered cardboard box.

Certainly a polished black granite rock--unless they're made in Corianâ„¢

Now, financially stable for years to come, we can sit back on our deck and watch the housing bubble collapse…

Glenn, awesome story! I hope some sanity returns to this state, otherwise our long-term economy is in question.

Glenn, seems like you made a great choice. Any regrets? Austin is pretty cool, I'm thinking of jumping ship myself but can't decide on where.

If CA RE never goes down why are all the major big homebuilders stock in the toliet? Took a look at toll bros insider trades, seems the bros sold a ton of stock right before it tanked. Now thats odd. Rats jumping ship?

Madeline

Don't feel guilty, enjoy your good fortune. You weren't one of the piranha's trying to take advantage of the market or one of the suckers who bought in out of fear/greed. I also think you're wise to park the money and wait a bit to buy in. See, you deserve the good fortune you've had because you didn't get greedy and try to buy and flip and you didn't immediately go for the McMansion in the Hollywood hills. Obviously you have more sense than most of the buyers in this market.

"...on the market for 3 months at 720K, just reduced to $689K and no offers

Another house in Fairfax sitting...Jack, ring any bells?