patrick.net

As everyone will say, RE is local. I see a 10%-15% price drop in my area. This is listing price only. I guess we'll have to wait and see exactly how much the RE agents convinced those buyers to bid.

buy now or be priced out forever!

But it looks like the sold price is dropping significantly creating a divergence between the listing and sale prices. It would seem like people are trying to front-run the spring selling season with higher prices now. A good guess is people who are in trouble want to get out with prices we saw last year. In terms of the stock market this would be called support and resistance. The listing price is at last years resistance why the sale price broke support.

Prices are falling. What is your source for the claim that they are "staying the same"?

I'm seeing fewer sales and fewer homes for sale in Houston. So both less supply and less sales.

Prices...can't really tell. Don't notice anything significant.

I was in Woodland Hills today and walked with some old friends around the neighborhood (around mullholland, south of the blvd) - I used to rent there...and all the houses that I looked at about 3 months ago, are sold. I don't know what prices they got. If you are looking in this neighborhood you will notice that there aren't that many houses for sale really, crappy inventory. Banks are holding back the shadow invent and are only feeding it slowly into the market. However wrong that is...that's what's up.

Ptipking222 says

I’m seeing fewer sales and fewer homes for sale in Houston. So both less supply and less sales.
Prices…can’t really tell. Don’t notice anything significant.

I'd say down.

I was prequalified for a $726k 30 year fixed jumbo conforming load at 4.34% APR several months ago. I was just recently quoted 5.0%, my monthly mortgage payment just went up $108k (undiscounted, $300 a month x 360 payments) which is a lot of money. Home had prices better drop accordingly or I'm not buying.

I've been watching home prices in Burlingame,CA and Redfin says the divergence from list vs. sold price is diverging in 2011.

@Troy

>buy now or be priced out forever!

Lol! (I've heard it hundred of times now!)

@bottomhunter

>I’ve been watching home prices in Burlingame,CA and Redfin says the divergence from list vs. sold price is diverging in 2011.

Interesting divergence... I wonder if this is happening more in California.

bottomhunter says

I was prequalified for a $726k 30 year fixed jumbo conforming load at 4.34% APR several months ago. I was just recently quoted 5.0%, my monthly mortgage payment just went up $108k (undiscounted, $300 a month x 360 payments) which is a lot of money. Home had prices better drop accordingly or I’m not buying.

Exactly what I am seeing. Rate hikes, but home price remain no change to compensate that!! If that 108k is what trouble you, then you are screwed. I don't see rate going back down during the summer and I doubt home price will drop drop during summer also. Hence, you are at least "priced out" for this period. Good luck.

Dude, this not stock market. 0.5% hike in rate is not going to make prices drop down 50%. I think you are not paying attention to government intervention in the housing market. Wait until Fed pulls the plug on it.

Just looked at the pics - Wow! Pretty nice house, eh? Very upgraded. So it looks like they put a lot of money into this house...1997-2004 and that explains the price.

SubOink says

Indeed interesting. I think looking at prices can be misleading because don’t know what they did to the house.
What if they bought it in 1997 for 255k and it was a total fixer upper…so they added 150k-175k of stuff in the few years, new kitchen, new bathrooms, new roof, new AC…new floors, new tiles…landscaping a destroyed backyard etc…they could have added tons of stuff (I didn’t look at the pictures, don’t know if you can tell)
I don’t know if thats the case here but that could easily cause a house to double in price. When you buy for 250k…that’s pretty darn cheap. You can’t even built a house for that price nowadays.

No these were not fixer uppers. Not by a long shot!. I recall seeing new homes 1996 around 1800-200 sq ft near the Sunnyvale - Mt View border were selling around $200K . No waiting list, no multiple offers and that was pretty typical.

thomas.wong1986 says

SubOink says

Indeed interesting. I think looking at prices can be misleading because don’t know what they did to the house.

What if they bought it in 1997 for 255k and it was a total fixer upper…so they added 150k-175k of stuff in the few years, new kitchen, new bathrooms, new roof, new AC…new floors, new tiles…landscaping a destroyed backyard etc…they could have added tons of stuff (I didn’t look at the pictures, don’t know if you can tell)

I don’t know if thats the case here but that could easily cause a house to double in price. When you buy for 250k…that’s pretty darn cheap. You can’t even built a house for that price nowadays.

No these were not fixer uppers. Not by a long shot!. I recall seeing new homes 1996 around 1800-200 sq ft near the Sunnyvale - Mt View border were selling around $200K .

A lot of my friends bought back in 1997-1999 in woodland hills, they all paid around $320k-380k for their houses that needed major work (south of Blvd)...Most of them upgraded them over the years, put in a pool, new kitchen, new bathrooms - most of them refinanced last year with the low rates and their houses were appraised for around 700k. So for most of them, with current prices, their homes have doubled in prices in 13-14 years...

Data...Sep-97

http://archive.dqnews.com/AA1997BAY10.shtm

Alameda $227K
Contra Costa $225K
Marin $375K
Napa $195K
San Francisco $307K
San Mateo $328K
Santa Clara $307K

Solano $145K

Sonoma $203K
Bay Area Total $260K

SubOink says

A lot of my friends bought back in 1997-1999 in woodland hills, they all paid around $320k-380k for their houses that needed major work (south of Blvd)…

Yes, must have been a pretty large home..
http://archive.dqnews.com/AA1997SCA04.shtm

Mar-97 (000s) YMMV

Los Angeles $166
Orange County $193
San Diego $171
Riverside $129
San Bernardino $120
Ventura $197
So. California $163

tatupu70 says

Did you find where in GAAP it says that all bad debts must be completely written off in 90 days yet? Still waiting on that one…

A quarter is 90 days ... do you want to restate your FS from prior year or prior quarter ?

thomas.wong1986 says

tatupu70 says

Did you find where in GAAP it says that all bad debts must be completely written off in 90 days yet? Still waiting on that one…

A quarter is 90 days … do you want to restate your FS from prior year or prior quarter ?

We don't need to hijack this thread. You don't restate anything--you reserve against the debts...

thomas.wong1986 says

SubOink says

A lot of my friends bought back in 1997-1999 in woodland hills, they all paid around $320k-380k for their houses that needed major work (south of Blvd)…

Yes, must have been a pretty large home..

http://archive.dqnews.com/AA1997SCA04.shtm
Mar-97 (000s) YMMV
Los Angeles $166

Orange County $193

San Diego $171

Riverside $129

San Bernardino $120

Ventura $197

So. California $163

Median Price is meaningless...here are some specific samples for you...

http://www.zillow.com/homedetails/22537-Macfarlane-Dr-Woodland-Hills-CA-91364/19899512_zpid/

1999: public records sold for 337k
2011: zillow estimate $550k (asking 450)

http://www.zillow.com/homedetails/22653-Cass-Ave-Woodland-Hills-CA-91364/19899747_zpid/

1997: public records sold for 225k
2010: sold for $460

Like I said, a double in price in 13-14 years...there are many more actual examples.

SubOink says

1999: public records sold for 337k

2011: zillow estimate $550k (asking 450)

1997: public records sold for 225k

2010: sold for $460

I think those back out to about 4% and 5.5% annualized increases. Pretty darn good! If in their total cost they did not pay too dear of an "ownership premium" over renting, a superb return on their down payments.

Yes, I think so too.

Don't hijack the thread :)

thomas.wong1986 says

Data…Sep-97
http://archive.dqnews.com/AA1997BAY10.shtm
Alameda $227K

Contra Costa $225K

Marin $375K

Napa $195K

San Francisco $307K

San Mateo $328K

Santa Clara $307K
Solano $145K
Sonoma $203K

Bay Area Total $260K

Wow Thomas! You can do the math, as long as those buyers didn't HELOC or Borrow More to Trade Up, and if they did not pay too dearly an ownership premium over renting, you have proven what a fantastic tax deferred return they've achieved on their downpayments.

It makes the point, Bay Area residential real estate continues to be a superb investment.

SubOink says

Median Price is meaningless…here are some specific samples for you…
http://www.zillow.com/homedetails/22537-Macfarlane-Dr-Woodland-Hills-CA-91364/19899512_zpid/

Ok! if medians dont matter, since when do prices simple go up per your example by 50% every so few years. Certainly makes more sense that prices over 14-15 years double given economic growth, raising incomes and inflation. Sure no problem over that.

Im sure there has been plenty of over-glamorization (updates) of homes over the bubble years. If there were lots of upgrades since 1999 it sure didnt help much...

22537-Macfarlane-Dr-Woodland-Hills-CA-

09/03/2002 Sold $475,000 40.7% $251 Public Record Over priced by 100K+
07/20/1999 Sold $337,500 53.4% $179 Public Record
02/03/1994 Sold $220,000 -- $116 Public Record

If 1999 can be called a legit price, than based on simple inflation it seems fairly priced at low-mid 400K. Certainly did not make sense in 2002.

http://www.westegg.com/inflation/infl.cgi
What cost $337 in 1999 would cost $429.85 in 2009
What cost $337 in 1999 would cost $362.53 in 2002.

I dont know what the condition of the home across the street is. But the price history
is rather interesting..

22600 Cass AveWoodland Hills, CA 91364

Price History
Date Description Price % Chg $/sqft Source
06/06/2000 Sold $296,000 69.1% $216
02/23/1995 Sold $175,000 -- $127 Public Record

22600 Crespi StWoodland Hills, CA 91364

Date Description Price % Chg $/sqft Source
10/05/2006 Sold $825,000 109% $424
08/12/2002 Sold $394,000 65.9% $202
11/10/1993 Sold $237,500 -- $122

sybrib says

It makes the point, Bay Area residential real estate continues to be a superb investment.

Pretty much after 1998 and certainly 2000 it looks like russian roulette.

You do know who has been buying back in 2000...at any price ?
Without the inflated stock prices back in 1999, crazy stock option give aways by local start ups, doubtful we would have seen prices move that much.

Since 2000, we been living on past legends and myths. Too many still expect the region to experience some 80s or late 90s boom.

SubOink says

I was in Woodland Hills today and walked with some old friends around the neighborhood (around mullholland, south of the blvd) - I used to rent there…and all the houses that I looked at about 3 months ago, are sold. I don’t know what prices they got. If you are looking in this neighborhood you will notice that there aren’t that many houses for sale really, crappy inventory. Banks are holding back the shadow invent and are only feeding it slowly into the market. However wrong that is…that’s what’s up.

Go to Corbin street. Line of foreclosures on sale. Quite a few by pierce college too. Slightly up around Mulholland there are many, just they don't have signs posted for whatever the reason.

thomas.wong1986 says

Since 2000, we been living on past legends and myths.

I intensely disagree with this, because fortress communities only have one-way streets leading into them.

It only takes $5M of bank to buy a place in the fortress. Dotcom handed that out in the thousands. AAPL was the OG money pump in the 80s, and came back roaring in the past 10 years.

GOOG is the new kid, and made how-many-thousands of successes.

Then all the growth in medical and legal profession here.

Yet additional housing stock in the fortress has been zero in my lifetime. Well, they've finally subdivided the last parcel in Los Altos apparently, and this lot: http://goo.gl/maps/kXzJ is being turned into 53 new houses right now.

Cvoc and Troy you're both right. There's not that many homes on the market in The Fortress, no shortage of buyers compared to the amount of available properties.

For the rest of us, who aren't rich from stock options nor basing our expectations of reasonable housing cost based on crowded cost per sq m in places like Mumbai/Shanghai, well working class outside the Fortress wall neighborhoods are looking bleak. I think my outside The Fortress Walls Bay Area home is down by more than half from June 2006.

Troy says

Our sins 2002-2007 were very great

Troy, our sins go back a lot further than that. I am not referring to what happened in Genesis, though that tale can be a metaphor for it all.
The slipping began we when masked our declining standard of living by ever more households sending a second adult into the workforce. The sins began when we topped out on that trend to about 1.80 adult fulltime workers per household, when that jig was up is when the sinning began, first with the Credit Card Nation (see book by with that title) began, then the extension of typical car loan financing beyond four years, next the popularity of adjustable mortgages, next the creative mortgages, then the HELOCs of the time period you refer to.
The sinning was well underway by then.

sybrib says

The sins began when we topped out on that trend to about 1.80 adult fulltime workers per household, when that jig was up is when the sinning began, first with the Credit Card Nation (see book by with that title) began, then the extension of typical car loan financing beyond four years, next the popularity of adjustable mortgages, next the creative mortgages, then the HELOCs of the time period you refer to.
The sinning was well underway by then.

I agree on that Sybrib.. and as a result saving plunged!

sybrib says

The slipping began we when masked our declining standard of living by ever more households sending a second adult into the workforce.

You are correct, though I'd like to think that women should be allowed to be in the real economy should they choose. Lending money on only the top earner in the household would have avoided much of the problem.

http://research.stlouisfed.org/fred2/series/USALFWNA

Total Debt (gov't & household) was at GDP until 1980 then began detaching:

Total US Debt vs GDP

thomas.wong1986 says

and as a result saving plunged!

One man's savings is another man's debt.

If you want interest returns and not have to pay the bank for holding your money, that is.

Troy,

as a parent of a daughter and a partner of a woman, I am totally a feminist. It is one of the reasons I speak of sending another worker into the job market instead of women not being homemakers anymore.

Some see that trend as a movement in the direction of equality of the genders. No argument there. Not a bad thing, and good to make the family unit for flexible/robust.

However, it was also a movement of necessity.

fewy says

But it looks like the sold price is dropping significantly creating a divergence between the listing and sale prices.

Troy says

If we’re going to get serious about making homes affordable we’ve got to liquidate the rent-seeking going on.

You might want to look at the definition of rent seeking. The term does not refer to rich people buying up property to use as rentals.

In fact, "rent seeking" is what you will get when you allow GSEs or other government meddling in the housing market. When government determines who is allowed to buy, who is subsidized and who is penalized, you will see plenty of lobbying to see that the rules favor the K Street clients at the expense of competitors.

HeadSet says

You might want to look at the definition of rent seeking. The term does not refer to rich people buying up property to use as rentals.

In economics, rent-seeking occurs when an individual, organization or firm seeks to earn income by capturing economic rent through manipulation or exploitation of the economic or political environment, rather than by earning profits through economic transactions and the production of added wealth.

>In economics, rent-seeking occurs when an individual, organization or firm seeks to earn income by capturing economic rent through manipulation or exploitation of the economic or political environment, rather than by earning profits through economic transactions and the production of added wealth.

Agreed. Maybe more definitions need to be created for the other concepts, though.