patrick.net

But how low will it go before people on the demand side of things bite and keep the bottom propped up? There aren't many new houses popping up within a reasonable distance to silicon valley jobs. Supply and demand still rules, and there are way too many people making way too many Ha Ha's around here.

thomhall,

That's a great (and relatively harmless) experiment to gauge sentiment. I must admit it's difficult for me to keep a straight face when saying "I just bought TWO houses" though!

As to thread's premise, I'll have to agree. Even the MSM has shifted away from; is there or isn't there or even debating if in fact it's popped. The focus now is on "what are the damages going to cost us".

What is unfolding will take some time to take hold. Some areas will hold up better than others due to unavailable land and prime location. BUt I think alot of areas which were nothing special before this all took hold could well see reductions of 50% possible more.

It is common knowledge now in the mainstream that we have a crisis the only question now is how long it will take to see the full impact and if it will take down the economy at large. 07 will be very telling....

Ha Ha,

That's actually a pretty revealing article. I've never heard of the National Mortgage Complaint Center but perhaps it's time I have.

Maybe we all wish this to get over quickly, but we know it won’t. Still, do you think it’s happening faster than you had expected ? Or slower ? Or about the same ?

I'm tracking Boston RE, where we moved out of last year after selling our place there. It's way ahead of the BA and CA, and I think it likely predicts what may happen in the BA, even the "nicer" parts. The city as a whole, and the state as well are (-)ive YoY with median prices, and the trend is continuing downwards. The consensus appears to be that the city proper has seen 5-10% declines in prices since last summer. Realtors there are clinging to the hope that the traditionally busier fall market will jump-start sales. The next few months will be interesting there. I think it's about a year ahead of the BA market in bubble kinetics - we shall see.

A number of homes I've been watching in S Marin in the 1M-3M range have been taken off the market in the past couple weeks. Probably 2/3 of them are gone. From what I can tell, though, transactions are still down.

So inventory is shrinking AND transaction volume is slowing.

This is a bit of what I feared would happen in some traditionally "prime" areas. Inventory is shrinking for probably two reasons:

1) Some sellers have decided to exit the market, because they don't need to sell and they can't get their price.

2) Some sellers are being rejected by agents, especially as more closely held markets shed the weaker (and often newer) agents. More professional agents are being more selective and not wasting time working with unrealistic sellers.

I'm sure there's some delist/relist going on as seasons change, but I've never seen this many homes drop from the market this quickly.

More disconcerting is that this phenomenon may be reflective of the state of the economy: The economy has been very strong, producing frankly record earnings, profits, and growth for the past few years. BUT, most of these gains have gone to the top 1%, meanwhile middle class folks have seen real wages decline in the face of automation and globalization, aggravated by growing inflation.

This means that the over 60% of fully burdened home equity that Americans own is concentrated almost exclusively with older folks and rich folks.

So, if this theory proves out, I'd expect to next see the remaining homes on the market in truly prime areas drop in price until the debt-rich (faux rich) are gentrified out of traditionally rich neighborhoods, and probably replaced by "truer" rich people.