Are large down payments supporting high-end home pricing?

Apr 2nd, 2011  
by IrvineRenter  in Library News Real Estate Analysis

Astute Observations

Astute Observation by Chris
2011-04-02 08:29 AM

Irvine Home Inventory jumped to 1048?

Redfin’s only showing 834 as of today.

Reply to this astute observation
Astute Observation by zovall
2011-04-02 10:06 AM

I’m not sure what is going on with today’s inventory number.  We’ll have to find another source if this doesn’t get corrected soon.

Reply to this astute observation
Astute Observation by *
2011-04-02 09:07 AM

Great post IrvineRenter. I love the new charts. Thanks

Reply to this astute observation
Astute Observation by SanJoseRenter
2011-04-02 12:30 PM

IR: good roundtable on the nuances of govt policy contributing to the Great Housing Bubble:

http://www.ideasinactiontv.com/episodes/2011/02/did-fannie-mae-and-freddie-mac-cause-the-financial-crisis-and-how-can-they-be-reformed.html

One of the interesting points was that securitization of loans was promoted by the govt to spread loan risk nationally, as a “solution” to the regional failures of the previous S&L Crisis.

Another was that govt policy promoting home ownership to lower-income buyers forced banks to actually do that - utlimately helping nobody.

Reply to this astute observation
Astute Observation by fk123
2011-04-02 05:35 PM

Great to see a post where everything’s not necessarily “hold your money until next year, you’re an idiot for buying this year” kind of mentality.

I think it’s good to see both sides (as long as the data is there to support it)....

Reply to this astute observation
Astute Observation by SanJoseRenter
2011-04-03 10:47 PM

It’s still the case that you’re an idiot for buying this year.

The only things supporting high prices are:

1) artificially low interest rates
2) artificially restricted inventory by the banks.

My guess is that prices will come down another 30% in California as economic realities are recognized.

Reply to this astute observation
Astute Observation by Anonymous
2011-04-02 08:32 PM

Casual comments can cost a home buyer or seller
http://www.latimes.com/business/realestate/la-fi-lew-20110403,0,7072126.story

Reply to this astute observation
Astute Observation by Corona Homes Agent
2011-04-03 01:40 AM

I’m diggin all of those cool graphs you’ve posted.  I just saw the report about many of the OC zip codes going up in value.  Good news for those that are getting in soon.

Keep up the great work,

Cameron
Corona Real Estate Agent
Corona, Ca.

Reply to this astute observation
Astute Observation by Dumbass Sinan Ozyol
2011-04-03 09:47 AM

Did anyone see this link? (Sorry, I don’t know how to get embed the url)

http://www.latimes.com/business/realestate/la-fi-harney-20110403,0,6735337.story

Reply to this astute observation
Astute Observation by Scott
2011-04-03 10:53 AM

Two points:
1) Given the substantial decrease in sales volumes in OC, in reality cash deals have not doubled, they have only risen modestly while mortgage purchase volumes have dropped by 30-40%+. I’m surprised that IR did not point out the data sleight of hand by the OCR.

2) Cash buyers really only improve the housing market if they are buying to live in the home or rent to rent it out.  If instead, the cash buyer is planning to flip the house (like the million $ deal mentioned in the article), all that is really being accomplished is temporarily moving that property into shadow inventory.

Reply to this astute observation
Astute Observation by gepetoh
2011-04-04 08:21 AM

Good points on both.  I think all the increase in cash buy proportions tell us is that those with cash still have cash and think the market is down enough to jump into it for a return rate that looks better than a savings account.  My guess is that as the market flattens out, cash buyers will begin to decrease further as the cash flippers disappear and landlord buyers dry up.

Flippers will decrease as 1) they flip most likely to borrowers, not cash buyers, and 2) steady prices make it no longer worthwhile to flip.

We’re only 2-3 years into what will likely be a 5-7 year doldrum before prices START to make a steady gain.  I think the market behavior in the next 2 years will be a lot different than it has been in the last 2.

Reply to this astute observation
Astute Observation by JGBell
2011-04-04 09:10 PM

What we are seeing in AZ is a return of cash buyers. When prices appeared to have stabilized, they came back with a vengeance. When prices began to drop, again, they pulled back, again.

However, with the number of REO/foreclosure listings now being fed into the AZ supply inventory only as fast as they sell, the very bottom appears to have been balanced/stabilized. As a result, cash buyers are scooping up ALL of the least priced homes. And, almost none of those above. A very bifurcated RE market.

However, as was written in the AZRub this weekend the number of vacant homes in the Valley of the Sons is way over 15%. What that means is that renting out homes purchased at the floor MAY be difficult to do for a very long time.

Proof once again that even in a desert hope springs eternal. And, into each life a little rain must fall.

Reply to this astute observation
Astute Observation by JGBell
2011-04-04 08:21 PM

[mEDITate-OR:
see the Pigs fly out of our RE sales offices…!!!
————-
Dr John, my Philosophy, Logic and Ethic prof
opined that IF you could not be right, at least be funny.
———
In our re-search, we have found YOU to be someone who is both.

Reply to this astute observation
Commenting is not available in this channel entry.

<< Back to main