patrick.net

roberto,

You can define the region of Bay Area whatever you want.

I always figured it was the counties that border the San Francisco Bay, which means it does not include Santa Cruz County.

If it makes you feel better, you can include Phoenix as a lower cost part of the Bay Area.

marko says

There is a reason early settlers didnt settle there.

Funny stuff. I really like that quip........I'm going to use it from now on because it says it all about that area. I have never cared for Phoenix myself or other HOT, sandy desert areas. The last time I was there was about 5 years ago visiting friends and they wanted us to move there because of the low cost of housing. I know there are people that love AZ, but the state would have to pay me to live there. When folks bring up Phoenix for one reason or another I tell them that when I was there 5 years ago I didn't leave anything there so there is no reason to go back.

Its a market with a 4 - 6 year inventory backlog at what is going to become normal sales rate IE: all part of the "New Normal" sales pace (including the 'shadow AKA Held-back market.) I am thinking that the NEW NORMAL is a GDP that will bounce around +1 1/2% 2% and minus 1-2%. I know these are radical and highly debated. But what do you think?

I dunno about Phoenix prices and don't have an opinion about the prices there in the short term. In the long term its difficult to see how they can sustain 10 million people without a sustainable water supply.

Whole southern corner of the West/mid-West has that (water) problem.

Too many goddamn people out there but that is where the jobs/weather are so whatyagonnado?

tts says

Whole southern corner of the West/mid-West has that (water) problem.
Too many goddamn people out there but that is where the jobs/weather are so whatyagonnado?

Waddagonnado? - Rent.

robertoaribas says

Are you being intellectually dishonest, or are you just a simpleton

That's a lot of the problem. I read some of these posts and think, "Damn it, my 11-year old neice has better grammar and spelling than this dolt!" This same individual then mutters something about an 800K loan he/she took out, and I just shiver. Amazing, isn't it, that a bank will give a fool who doesn't know the difference between "your" and "you're" a loan for nearly a million dollars. My grandfather, who went to a one-room schoolhouse for all of 8 grades, writes and communicates far better.

We have become a nation of moronic boobs.

3 years ago my family moved in with me. 2 houses and 1 apt collapsed into a single home. I was ahead of the curve, and friends looked at me like I was crazy to WANT to be with my family. It was seen as an excuse because my parents were broke (they're not) or I needed help with the mortgage (I could've paid cash for the house). Now I'm hearing about friends and family doing the same thing as us, as the kids don't even bother trying to get their own place as the new reality is move back in and save. My Aunt+Uncle had a beach house in FL, one in NH, and an in-law with their daughter. Two beach houses sold (not under duress) and now they rent a place for cheap for 1 month in FL, one month in NH, and travel. My other aunt moved in with her daughter to watch her kids and retire 3 years early.

It isn't just forclosure and loss of jobs. People are diggin in, because no one believes the stock market is going to save them. Its a massive shift in the way we LIVE, just like the way $4.00 gas changed the way we drove/bought cars. BANG! 5 years from now we're going to see a multi-ethnic version of the Waltons on TV, but this time it will be in the suburbs and funny.

robertoaribas says

However, existing homes, already exist see? so when demand drops off, they sit there, and later prices drop.
Are you being intellectually dishonest, or are you just a simpleton?

Well--why don't you do a little legwork and post a graph that proves your theory then?

Add to this new home sales drop of 12.4%. Perfect recipe for price rebounding.

http://finance.yahoo.com/news/Instant-View-New-home-sales-rb-1932018602.html;_ylt=AoHhpg4IKvg.3AGiww1J2cm7YWsA;_ylu=X3oDMTE1N2ZkcnZxBHBvcwMyBHNlYwN0b3BTdG9yaWVzBHNsawNuZXdob21lc2FsZXM-?x=0&sec=topStories&pos=main&asset=&ccode=

robertoaribas says

Do you need a graph to show the sun rises in the east?

OK smart ass. Do you think the relation between sales price and sales/mo. is as well established as the rotation of the earth?

Just because you think something doesn't mean it's true. I almost guarantee that there are many things that seem logical in your head but turn out to be completely wrong. Such as low interest rates lead to higher home prices. Seems logical, right? Unfortunately it turns out to not be true historically.

If you want to make a point, it's always best to have data to show. Otherwise skeptical people such as myself will dismiss it.

schmitz_kris says

marko says

I dont think the “lowest since 1995″ is that big of a deal in the long view of things.

The July drop was a RECORD-BREAKER.

Yes , now today's news does say it was record-breaking and I will agree that is much more significant of a statement as it points to being unprececedented rather than yesterday's news which says it was as low as 1995. Of course the news has been changing on a daily basis - the weather reports are the only reliable news items

Potter's not selling he's buying...

robertoaribas says

Yeah, I just drove through the bayarea: Narrow dilapidated freeways, crowded as hell, and crappy looking homes and buildings. Enjoy. Now I see why you pay a dollar more for a gallon of gas, and more than my mortgage on property taxes!
The redwoods? nice. California north of the bay area? very nice looking, Heck Oregon coast looks much nicer, I’d take it over the bay area too!
When I left Berkeley, I didn’t leave anything there either, so I’m not going back.
Now, if your reasoning is that “phoenix home prices are falling because its hot there”… or some such, well, whatever… 27% drop in sales nationwide, doesn’t seem to be discriminating against any one area these days… But with your prices, the upcoming slide in price will be much more painful. Hard to lose too much if you buy in Phoenix, and your mortgage with taxes and insurance is only 900 a month…

when you were in the Bay Area had they built huge housing tracts out in places like Lathrop or El Grove yet ? Those areas have crashed big time.That is not the Bay Area like the news media says. but they can easily include those pricedrops in the bay area median which does skew the whole picture. As far as the Bay Area, sure there is downside but the nicer areas near the employment areas are still not going to crash as hard as the crappy areas. The condo market will probably crash thruout the Bay Area - at least in the East Bay they continue to build Condos during all this mess. Entire condo projects are heading for auction soon since they cant sell them via FHA since FHA only allows loans if more than half the condos are owner-occupied. Now if we consider the condo market as part of our median calcs then we will definately have lower median sales prices hitting the news soon.

robertoaribas says

Examining a contrary interpretation of events, to test a hypothesis makes sense. Sticking your head up your tail and claiming all data doesn’t matter doesn’t make sense.

Agreed. Not sure who is doing that... Seems to me that most people here tend to highlight data that agrees with their view of the world and discount data that doesn't.

And then call people who disagree with them idiots.

robertoaribas says

taputu, you seize on the miniscule each time, rather than ever sticking to a point. Its like talking with a little child who can’t think.

Really? You completely misrepresented my point. Of course I know that the general economy-specifically wage inflation--has a much greater impact on house prices than interest rates. That was my point. Many, many posters here continue to write that lower interest rates will lead to higher prices when history has shown that not to be the case.
You then posted that I thought higher interest rates lead to higher prices. How is that miniscule? That is just a complete lie.

Tenouncetrout says

It’s a Buyers Market, sans the buyers.

NOT! Its a Collapsing Market.

While I am at it, time to pre-empt a faulty argument that will likely pop-up soon. Again it is about time lag.

This is from http://www.calculatedriskblog.com/2010/08/more-negative-news-flow-coming.html

CR has the following to say about time-lag.

First, as I noted in the existing home inventory post, the months-of-supply will probably stay in double digits for some time and anything over 7 or 8 months of supply will put downward pressure on house prices. However it will take some time for reported house prices to start declining. The Case-Shiller house price index for June will be reported next week (really a 3 month average of April, May and June). And prices probably didn't start falling until July. The July numbers will not be reported until the end of September, and that will be a 3 month average of May, June and July. So it might take until the end of October to see the price declines in the Case-Shiller indexes.

TechGromit says

While I might agree that a 4 to 6 year backlog of housing inventory is on the high side, the 12 month figure is a tad low in my opinion. I believe there is a sizable shadow inventory that banks are sitting on and not placing them on the market until housing conditions improve. If these houses were accounted for the backlog of inventory could be double the 12 month official figure.

I actually can see how many properties the banks own in my area (and for other areas too but haven't looked). They do not have an excessive amount. I'm pretty sure what they are stalling on are the homes where nobody has made any payments. The banks have not even filed a notice of default for them yet. There are also a bunch of pre-foreclosures.

Jeez Bob, what exactly is your point? Apart form being condescending and picking small fights with people?

Is it that prices will fall in the Bay Area to that of Phoenix? Just not sure what you're trying so hard to tell us.

If prices drop the same percentage in both areas, The Bay will hurt more because prices are higher? Genius!

You don't sound like a renter to me. So you're on the wrong side of the fence there. Are you involved in the RE industry? If so... nice timing.

Sure we should be even listening to you?

That puppy can't spell. Sure is cute though.

schmitz_kris says

That puppy can’t spell. Sure is cute though.

LOL!! Good eye !!

OH look the markets higher...guess all this crap was priced in?

sybrib says

I always figured it was the counties that border the San Francisco Bay, which means it does not include Santa Cruz County.

Most funniest thing I heard from a realtor, based in Los Gatos some 3 years ago, she keep talking about how Santa Cruz was going to become some kind of French Riveria for the rich with second homes for weekend get aways. Rich potent KoolAid these folks have been drinking... Your right, SCC is very different from the rest of the BA.

thomas.wong1986 says

Your (sic.) right, SCC is very different from the rest of the BA.

But is SCC special?

simchaland says

thomas.wong1986 says

Your (sic.) right, SCC is very different from the rest of the BA.

But is SCC special?

nah ... it has a much higher per-cap of freaky folks than any place on earth, including Frisco. Felton is like a witches and demons camp or something. Santa Cruz gives me the willies. Watsonville, Freedom, Parajo, and Aromas are pretty heavy with non-Americans that speak spanish (see there, PC all the way!! lol)

simchaland says

thomas.wong1986 says

Your (sic.) right, SCC is very different from the rest of the BA.

But is SCC special?

No not special at all. But the crap that was being thrown around by vested interest for a couple years made it look like it was. At the end it was just that .. lots of smelly crap floating near the coast.

What is becoming true today, regardless of lower interest rates, or lower monthly payments, are not having as much as impact on buying as was during the bubble.

Its all about the overall price you actually will repay from your income.... as it should be, as it was long before the bubble started.

Home sales drop by 27% to reach 15-year low

Sales of existing homes around the country declined by 27% in July to a 15-year low, according to the National Association of Realtors. Industry watchers attributed the decline -- the steepest in 40 years -- to an impasse between buyers waiting for the market to bottom out and sellers reluctant to lower prices further. High rates of unemployment, foreclosures and tighter credit standards are also hampering home sales, despite the lowest mortgage rates in decades.

Bap33 says

nah … it has a much higher per-cap of freaky folks than any place on earth, including Frisco. Felton is like a witches and demons camp or something. Santa Cruz gives me the willies. Watsonville, Freedom, Parajo, and Aromas are pretty heavy with non-Americans that speak spanish (see there, PC all the way!! lol)

I bet you heard about gang member who killed a surfer recently. Yes, its different now compared to the days i surfed. No one is singing kumbayah around SC anymore.

if you look at the SC surf scene, you may agree, they operated as a type of gang .. but not for drug turf, just wave turf. I never wanted to dress like a seal and play "here sharky sharky", so I never had any beef with those crazy dudes riding the waves. I stayed on the sand and played "here girly girly", but that's a different blog. lol

When I wrote that I didn't consider Santa Cruz County part of the Bay Area, it was not meant to be a comment about anything except that Santa Cruz County does not border the bay.

That's all.

Bap33 says

if you look at the SC surf scene, you may agree, they operated as a type of gang .. but not for drug turf, just wave turf. I never wanted to dress like a seal and play “here sharky sharky”, so I never had any beef with those crazy dudes riding the waves. I stayed on the sand and played “here girly girly”, but that’s a different blog. lol

I've been surfing Monterey/Seaside, Asilomar, Carmel, La Selva and the Santa Cruz area (Steamers and 41st) for the past year without any problems. You'll find that all the whiny "surf gangs" pretty much shut up when the surf gets well over double overhead. At that point, it's only the dedicated who are out - and all the crap talking stops.

Funny, because when it gets HUGE out in the bay, the hardcore surfers are in the 20 foot breaks, while the surf gangs hang out in the smaller stuff. They really aren't as tough as they'd like you to think they are... at that point it's a numbers game.

Dressing up like a seal may not sound appealing, but surfing has been one of the best activities in my life. It eliminates stress, an excellent core body workout, you get to see dolphins/whales/otters daily, and you get to experience God's beauty - especially when you watch the sun rise over the mountains in the morning. It can be freezing cold outside, but you're nice and warm in a wetsuit. That's why people get hooked on it.

joshuatrio says

It eliminates stress, an excellent core body workout, you get to see dolphins/whales/otters daily...

And don't you get to see great white sharks this time of year while you paddle on your flimsy board in a suit that makes you look like a seal?

sybrib says

When I wrote that I didn’t consider Santa Cruz County part of the Bay Area, it was not meant to be a comment about anything except that Santa Cruz County does not border the bay.
That’s all.

It goes beyond just borders, different type of economy, character, and other demographics.

simchaland says

joshuatrio says

It eliminates stress, an excellent core body workout, you get to see dolphins/whales/otters daily…

And don’t you get to see great white sharks this time of year while you paddle on your flimsy board in a suit that makes you look like a seal?

Seen a leopard shark... that's about it. Most of the people who surf in this area have been doing it 20-30 years and have never seen a shark.

I also met the guy who got bit by a great white in Marina a few years back... he's still surfing.

You're odds of getting food poisoning are greater than getting attacked by a shark.

robertoaribas says

You are more likely to die from a farm machinery accident then surfing. [i find this odd, because I do surf, and will never operate farm machinery in my life. Any of you surfers been attacked by a combine or a plower?]

Lol - nice post.

Question, where do you surf ? It looks like you're in Arizona so other than a wave pool, you don't have many options...

this is good news for those who wait, right?