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Housings Sideline Buyer: The New Bigfoot?
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2013 Jul 20, 3:37am 29,792 views 79 comments
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_
2013 Jul 20, 6:22am
3 points to retort to your statements
1. Housing pricing will still continue to rise as long as on sale inventory is still low and conventional sales rising while distress sales fall.
In fact in my 2013 housing prediction article I noted that it would be the case for 2013
2. In terms of Sales I was probably a bit too bullish with SAARS rolling by the end of the year 5.1-5.3 Million. At current pace looks like 4.97- 5.05 is more realistic . Even though inventory levels have risen % wise we are still below 2012 levels.
In regard to this article it was more in relationship to the thesis that once rates spiked you would see a rush of applications to purchase homes due to the spike in rates. (Sideline Buyer) By all measures it didn't happen and my interview on Bloomberg Financial in June talked about that in detail.
3. As 
Dont mind Roberta...
he is just worried about his phoenix crap shacks..
Hey, another "housing isn't in good shape" article by the dipstick kid who got a job at mommie and daddie's mortgage business!!!
Douche bag.
Hey, another "housing isn't in good shape" article by the dipstick kid who got a job at mommie and daddie's mortgage business!!!
I didn't read the housing isn't in good shape part of the article. The article I read says that people didn't rush out to buy to beat rising rates. Did we read the same article or do you have a different link somehow?
"It is clear that housing is not on the path to a true recovery." Logaan, February 2011.
2.5 years later... Anyone who got afraid to buy, based on reading your blog, got butt-raped by increasing prices!
You owe them an apology, and honestly, you clearly are clueless so quit giving market advice!
What "TRUE" recovery? It's all FED driven.
You owe who an apology?
You clearly are delusional Robert, I guess it pays to be a follower like you, wow, another fool with pre-programmed thoughts..
yeah, the birther, "vaccines are evil" complete brain dead idiot chimes in!!! The day an utter moron like you agrees with me, i'll be worried :-)
I see nothing, nothing. I am not even here.
Sieg Heil Hilary
Sieg Heil Hilary
I didn't read the housing isn't in good shape part of the article. The article I read says that people didn't rush out to buy to beat rising rates. Did we read the same article or do you have a different link somehow?
Roberta reads what he wants to read...
Furthermore, if you ever say anything bad about housing, you are a dumbshit or a moron or a loser, etc, etc, etc...
_
2013 Jul 20, 6:41am
To respond to your statement in regard to buying a home ( Primary Resident Owner)
"Making a home buying decision should always be based on your own financial capacity to own a home. The home should be looked as the cost of shelter not an investment:
http://loganmohtashami.com/2012/03/14/housing-experts-on-tv-beware-trust-yourself-first/
Now in regard to an investment, buying a home with cash and renting it out was a great economic investment due to fact that you could get a better yielding return renting out a home than most any CD's, Bonds, Cash etc etc.
Auction buying home to flip for a % return was also very profitable.
In regard to my "We don't have enough qualified home buyers (Excluding Cash Buyers) well, take 1/3rd of the cash buyers out and considering where interest rates went and the amount of mortgage purchases buyers... it's been soft all the way around.
Roberta reads what he wants to read...
Furthermore, if you every say anything bad about housing, you are a dumbshit or a moron or a loser, etc, etc, etc...
It is clear on this forum who has original thought and who has pre-programmed thought. The ones clinging to the tree's regardless if the ground beneath them has GONE!
The emperor is wearing no clothes.
Followers are not leaders!
once again the birther troglodyte chimes in!!! Too bad they don't have a vaccine against whatever made you a complete moron!
Brain dead parrot.
It must be nice to live in bliss. No worries, no thoughts of your own. Behaving like a mindless zombie on this forum day in and day out.
And then Obama won again?
Idiot my vote is none of your business.
robertoaribas says
Don't feel so bad, you don't have to take the big bus to school with all those mean kidz, we haz a nice little bus for you!
Brain dead parrot.
It must be nice to live in bliss. No worries, no thoughts of your own. Behaving like a mindless zombie on this forum day in and day out.
Awww did sumbuddy get piledriven by da houzing market??? And then Obama won again? Don't feel so bad, you don't have to take the big bus to school with all those mean kidz, we haz a nice little bus for you!
Actually I walked. But don't worry Obama will make you all walk to school now. No more buses.
http://cnsnews.com/news/article/michelle-obama-gives-nod-walking-school-buses
And then Obama won again?
You really think you had a choice.
Idiot! Brain dead Idiot.
rufita11
2013 Jul 20, 7:41am
2.5 years later... Anyone who got afraid to buy, based on reading your blog, got butt-raped by increasing prices!
Umm. No rape occurred if they simply opted out of purchasing, which is what a lot of 30 & 40 something Silicon Valley types did. There is no big rush when you can rent in a great neighborhood. Buying is and has never been the only ticket into the fortress.
_
2013 Jul 20, 12:29pm
Interesting thesis you have in regard to my thesis.
So, because my main thesis with housing reflects that we simply don't have enough qualified home buyers ( Excluding Cash Buyers) then all those people that I know who can't qualify would not buy a home because of my thought that they couldn't qualify in the first place
Now if you look at this recent economic cycle
You have had a rise from the bottom of the cycle in key areas
-Employment ( still too many part time workers, low paying jobs)
-Industrial Production
-Real Sales
-Real Income
So you for sure have a rising tide a long with a declining unemployment claims number
However, in regard to housing.... You haven't seem the demand from the traditional buyer or the first time buyer like you would have in a normal cycle where interest rates dropped to crazy level as low as 3.25% in 2012
So, I assume you would believed that we had a dearth of buyers that were ready to buy from 2009-2013 but have chosen not to buy for their own personal reasons?
_
2013 Jul 20, 1:38pm
In regard to inventory I believe the title of the article speaks for itself
Housing Inventory Hangover will Continue in 2013
http://loganmohtashami.com/2013/02/27/housing-inventory-hangover-will-continue-in-2013/
-Still too many homes underwater or not enough equity to sell
-Per the latest numbers from LPS 4.5 Million homes either in delinquency or in foreclosure procedure that's going to take another 2-3 years to unload considering judicial state timeline and a more aggressive environment for loan mods
- Housing starts are having a decent uptrend but running 50 year average is 1.5 million total starts and we haven't broken past 1 million yet with conviction. Permits looks good for SFR.
However, inventory hangover still going to be around
Traditional a balance market is 6 months of on sale inventory. 2014 should get us to 7.5 months of on sale inventory.
I would more faith in the housing market if I saw a buyer profile like this
85% mortgage buyers instead of 70%
15% Cash Buyers instead of 30%
Housing inflation is creeping up now on both fronts with prices and rates. Here in CA, take any firm you want Zillow, CAR, Corelogic it's ranging between 16-33% increase
Already 2/3 or O.C. buyers based on their medium income for a Medium price home were priced out "Before" the rate rise in May.
It will be interest to see the existing home sales in August and Sept because that will have the full impact of the rate spike. Already hearing that the report coming up next week will come in light.
So, again, I believe I was too bullish on SAARS as I had 5.1-5.3 Million if trend continues could be looking at 4.95-5.05 million range
Logan,
when you speak about california markets, Roberta wont understand. He only knows of the shit hole called phoenix...
_
2013 Jul 20, 3:10pm
In the Full Year 2011: Home prices declined 4.7%
CoreLogic® (NYSE: CLGX), a leading provider of information, analytics and business services, today released its December Home Price Index (HPI®) report, the most timely and comprehensive source of home prices available today, giving the first look at full-year 2011 price changes. The CoreLogic HPI shows that, including distressed sales, home prices in the U.S. decreased 4.7 percent in 2011 compared with December 2010.
1. Home prices will show a 3-7% decline, nationally in 2011.
straight from My Logan's blog.... Good call! great accuracy!!!
In the Full Year 2011: Home prices declined 4.7%
CoreLogic® (NYSE: CLGX), a leading provider of information, analytics and business services, today released its December Home Price Index (HPI®) report, the most timely and comprehensive source of home prices available today, giving the first look at full-year 2011 price changes. The CoreLogic HPI shows that, including distressed sales, home prices in the U.S. decreased 4.7 percent in 2011 compared with December 2010.
pwned ;)
_
2013 Jul 21, 2:23am
Home prices had started to rise as of April of 2012,
Inventory levels have been falling, conventional sales to distressed homes have been rising and we simply don't have enough on sale inventory to have a change in that cycle and this trend will continue in 2014 because we simply don't have enough homes on the market.
With 30% cash buyers and still rates well below the early 2011 of 5% there is enough demand in this low inventory environment to keep it going
Also if we all remember the Robo signing settlement came around April of 2012 I know a lot distressed home selling here in CA a non judicial state dropped.
Housing inflation is well alive and rising, this is what we know how to do best here in the U.S. ----- Rotate from one financial bubble to another ---- s
_
2013 Jul 21, 2:43am
I believe that you know when I speak it's more in reference to national numbers not a local market place.
In 2010 we saw high % returns from people buying in auction and selling into the mortgage market. A lot money being made here in So Cal. The highest spread I saw was a auction buy at $337,000 Sold to a Mortgage Buyer at $495,000
I understand why you would dispute Core Logic, NAR, Case S, Zillow etc etc and all the national numbers but those are the national numbers given
And, to idiot mell, if "pwned" means i made 2 million dollars over the past 2 years with my houses, and you and Logjam didn't, fair enough, I guess i'm pwned. smiley face right up yours loser!
You have 2 million dollars in the bank right now, or is that 2 million dollars paper wealth?
There is no 2 million dollar profit until you sell.
It's funny how we had people who bought homes in 2005 ranting that there was no bubble and those that didn't buy were 'priced out forever'.
Fast forward to 2013 and we have people that bought in 2009-2012 insisting that the 30% price increase in the last year IS NOT a bubble and is justified and everyone that didn't buy is a 'loser'.
The more things change, the more they remain the same.
And, to idiot mell, if "pwned" means i made 2 million dollars over the past 2 years with my houses, and you and Logjam didn't, fair enough, I guess i'm pwned. smiley face right up yours loser!
Come on man, you post a lot of graphs and stats and when you're right your right, but when you're wrong and hurl insults at others who then post the correct numbers you should expect some pwnage comments. With all the boasting that you do you should also display some humility once in a while and let others make fun of you without reacting like a rabid rottweiler ;)
"reflect your dipshit notion."
"you are a raving moron."
"Idiots like you"
Must have really hit a nerve there sport. Even hinting that prices will drop makes you go rabid. Baiting you into one of your rants is far too easy.
I purchased 2 investment homes in 2011 that increased by more than 30% since I bought them. But I am smart enough to recognize a bubble and not expect my paper wealth to continue when prices correct as interest rates rise.
My investment homes are for retirement income, not used for bragging on a blog about how other people that didn't buy are losers.
New Renter
2013 Jul 21, 4:33am
That would be because home prices overcorrected. I bought a 3/2 1500 square foot with a 2 car garage for 26K. that is less than most cars.
That IS low. Why do you think the market overcorrected so much in Phoenix?
Logan,
when you speak about california markets, Roberta wont understand. He only knows of the shit hole called phoenix...
Yes, I notice California markets have acted so differently than Phoenix over the past three years...
It's not like both have low inventory
It's not like both have climbing prices
It's not like both have lots of cash buyers
It's not like anybody following my advice a couple of years ago, and buying, would have made money in both markets....
It's ok meccos, there have to be people that are wrong and losers like you to balance with me in the cosmic scheme of things.
OH roberta,
Got your panties in a bunch? haha
I bought a 3/2 1500 square foot with a 2 car garage for 26K.
Proof Roberta owns crap shacks...
New Renter
2013 Jul 21, 4:53am
I bought a 3/2 1500 square foot with a 2 car garage for 26K.
Proof Roberta owns crap shacks...
$26k purchase and rented for $820/mo for 2.5 years. Do the math. Its already earned its keep.
At that price it makes me wonder why didn't the tenant just buy it?
Rew
2013 Jul 21, 7:39am
So, I assume you would believed that we had a dearth of buyers that were ready to buy from 2009-2013 but have chosen not to buy for their own personal reasons?
It's not a dearth of buyers, right? How long are homes sitting on the market for?
It will be interest to see the existing home sales in August and Sept because that will have the full impact of the rate spike. Already hearing that the report coming up next week will come in light.
I think we will see some initial market cool off in number of sales, but prices will hold/trend upward, and then when the "new norm" sets in for rates ... market activity will increase again (listing and buying).
The recent buying has been conventional 30y fixed or all cash. The Fed is also signaling it won't back away. This doesn't look like a market in trouble this just looks like a market without a lot 'on the shelf' (homes to sell).
We will see a little shockwave by the rate hike, but post that, then what? I think it is way too early to call the effect of the higher rates yet and anything seen these immediately following months cannot be called a trend ... yet.
Prices:
CA is up 18.6% in 5 years.
-- Santa Clara County : 24% gain.
-- Santa Cruz County : 7% gain.
This is a market constrained by inventory, not by buyers, and such markets have what type of price trend? New home building missed expected target (lower), signaling what? Continued low inventory. Rents back to high levels (1500+ for a 2 bedroom around me).
People can continue to scream : 'this can't continue', 'what recovery', 'it's only because of QE', 'pick a favorite' ... but in the end I read these as more whimpers and wishful thinking than what appears to be actually happening.
Rew
2013 Jul 21, 7:54am
Logan, I do agree with the sentiment of your article. A sideline buyer likely doesn't get moved into a buying position because of rate movement. However, a current buyer may have a greater sense of urgency based on rate movement.
Sideline watchers are watching the rate movement and news still. Some will be discouraged and some will add it as another sign that now might be the right time for them.
The biggest determining factor to buy though, is where they see themselves at in life, and having a true desire to go buy a house. Rates are a small trailing factor in a much larger picture. Totally agree.
_
2013 Jul 21, 8:10am
I attended 2 economic conferences in regards to housing both in Los Angeles this year
1. University of Chicago Booth: Where Profesor Sufi asked me to attend because we had a similar view on the capacity of the housing recovery and it's relationship to economy
Here was his work on it
http://faculty.chicagobooth.edu/amir.sufi/research/Sufi_bootheconomicoutlook_20130423.pdf
It was a good discussion we had.
The UCLA Anderson forecast as always was great. A lot speakers and a lot great material to take home
They were very upbeat on housing in CA and for housing in general. My disagreement with some in our discussions on that day was more in the tight lending standards holding buyers back.
I don't believe we have a tight lending standard issue. We have a problem with DTI and light liquid assets.
Here was my interview on Bloomberg Financial in which I argued Bernanke's thesis that QE velocity is poor because lending standards are too tight
http://loganmohtashami.com/2013/03/25/bernankes-lending-standards-delusional-rhetoric/
The concern I brought up with California was that housing inflation was blowing past income growth here in CA. Obvious for the top 10% DTI and liquid assets weren't going to be problem but for first time home buyers, it's going to be a struggle moving forward
CAR had medium prices YOY at 33%
Here is the latest on sales here in So Cal
http://www.dqnews.com/Articles/2013/News/California/Southern-CA/RRSCA130717.aspx
As long as the 30% Plus cash buying metric stays in place C.A. homes can continue once that metric goes down you need the mortgage buyer to step in. I know here in the O.C. you had this chart happening before rates spiked
ON ANOTHER NOTE: If you any of you guys want to take a look at the material from the UCLA Anderson Forecast email me at amclending@aol.com I can send it over. Lot's of good information
New Renter
2013 Jul 21, 9:02am
The concern I brought up with California was that housing inflation was blowing past income growth here in CA. Obvious for the top 10% DTI and liquid assets weren't going to be problem but for first time home buyers, it's going to be a struggle moving forward.
Well thats been the case since the early 1990s, yet somehow prices kept climbing and climbing while employee compensation stagnated.
_
2013 Jul 21, 9:17am
Take 1996-2007 with a grain of salt because all you needed was a pulse and a social security number to buy a home. This cycle is obvious much different.
Primary Resident Buyers now who can obtain a mortgage has the DTI to own.. The low down payment option still out there so it's just a mater of DTI in the big sense.
The big difference is going forward, X out the cash buyer is that you will need to have the income to buy. First time home buyers are very soft this year, at the 29% level when historical norms are around 40-43%.
For me at least I can't even consider normalized rates until we get to the 6% level and the FED fund rate is at least 3-4% higher. So, it's going to be a juiced market until 2016-time frame because of the FED ... and even with that once mortgage rates get to that 5.875%-6.375% level with home prices rising like they are we should see impact on demand.
Once that cash buyer metric falls off, you need that first time home buyer to step in and with Student loan debt at 1 trillion and housing inflation ramping up, it's going to be a struggle at best.
( In fact the #1 at the UCLA economic conference going forward barring a recession of course was the Student loan debt problem) especially when everyone knows rates are heading higher
Also, starting next year is when CFPB, QM and QRM gets resolved and you will have DTI caps at 43%.
For now with the inventory low, interest rates low and cash buyers high, the uptrend in prices are in tact but we will pay for this rapid rise in the future
Here is a look at the 10 year note going back to 1790
1. Home prices will show a 3-7% decline, nationally in 2011.
straight from My Logan's blog.... Good call! great accuracy!!!
He also predicted at the beginning of this year that home prices would only rise by 2-5%. At least in California we will well surpass this.
_
2013 Jul 21, 9:31am
Nationally depending who's number you want to look at we are running between 4-12% increase in home prices.
Here in CA on different metrics 16-33%.
California, clearly in Mini Bubble action price levels but inventory are dreadfully low here. A few months ago the NAR was complaining that inventory is too low and now Mother Cheerleader of them all YUN from the NAR said " Home Prices are moving too Fast" A disconnection from economic reality when incomes are growing at 1-3%
National numbers a bit different
"Based on recorded sales of non-distressed properties (existing and new homes) in the 100 largest metropolitan areas, the FNC 100-MSA composite index shows that May home prices rose from the previous month at a seasonally unadjusted rate of 0.5%. The two narrower indices (30-MSA and 10-MSA composites) recoded a 0.4% increase. On a year-over-year basis, home prices were up a modest 4.0% from a year ago."
http://www.fncrpi.com/press_releases.aspx?pr=67
Your claim that "a home isn't worth anything until you sell it" is a cop out from an idiot who doesn't want to face how wrong he's been.
What alternate reality blog are you reading?
You said: "I made 2 million dollars over the past 2 years with my houses." and I replied: "There is no 2 million dollar profit until you sell."
The homes may be worth what you imagine, but you haven't "made" any money until you sell them. Is that so hard to understand? Ask your economic professor friends, if you have any friends, if you can claim you made money on a home before actually selling it.
Try stepping away from the alcohol. You need all the brain cells you can get.
this may seem odd to you, but on every bank loan application I've ever filled out, they have asked what my homes are worth. I'm fairly certain they didn't want $0 on that line, since I wasn't selling them.
They also ask how much in mortgage debt you hold... and who has liens on the homes. Not your wealth here.. until the loans are paid off.
tatupu70
2013 Jul 21, 9:40pm
They also ask how much in mortgage debt you hold... and who has liens on the homes. Not your wealth here.. until the loans are paid off.
Yes, and you subtract the worth of the home from the outstanding mortgage to get the wealth. It's pretty simple really.
"reflect your dipshit notion."
"you are a raving moron."
"Idiots like you"Must have really hit a nerve there sport. Even hinting that prices will drop makes you go rabid. Baiting you into one of your rants is far too easy.
I purchased 2 investment homes in 2011 that increased by more than 30% since I bought them. But I am smart enough to recognize a bubble and not expect my paper wealth to continue when prices correct as interest rates rise.
My investment homes are for retirement income, not used for bragging on a blog about how other people that didn't buy are losers.
Amen.
I really dislike it when he takes over a thread with all the angry, defensive name calling.
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