http://mhanson.com/archives/274

It just amazes me that on mainstream media, all we hear is how the housing market has bottomed/corrected itself, and through sites like Mark’s, Dr. Housing Bubble, and IHB, we hear the truth - based in facts and figures. Stop lying, NAR!

readytopurchase - 27 October 2009 08:55 PM

http://mhanson.com/archives/274

It just amazes me that on mainstream media, all we hear is how the housing market has bottomed/corrected itself, and through sites like Mark’s, Dr. Housing Bubble, and IHB, we hear the truth - based in facts and figures. Stop lying, NAR!

Just keep waiting for the surge…

RoLar_USC - 27 October 2009 09:13 PM

readytopurchase - 27 October 2009 08:55 PM

http://mhanson.com/archives/274

It just amazes me that on mainstream media, all we hear is how the housing market has bottomed/corrected itself, and through sites like Mark’s, Dr. Housing Bubble, and IHB, we hear the truth - based in facts and figures. Stop lying, NAR!

Just keep waiting for the surge…

The surge of what?

awgee - 27 October 2009 10:50 PM

RoLar_USC - 27 October 2009 09:13 PM

Just keep waiting for the surge…

The surge of what?

The surge from Captain Downsize! DUH!

At least it isn’t Chris Hansen…

awgee - 27 October 2009 10:50 PM

RoLar_USC - 27 October 2009 09:13 PM

readytopurchase - 27 October 2009 08:55 PM

http://mhanson.com/archives/274

It just amazes me that on mainstream media, all we hear is how the housing market has bottomed/corrected itself, and through sites like Mark’s, Dr. Housing Bubble, and IHB, we hear the truth - based in facts and figures. Stop lying, NAR!

Just keep waiting for the surge…

The surge of what?

The surge of REOs. The same “surge” that has been constantly discussed in this forum for the past 9 months.

RoLar_USC - 27 October 2009 11:16 PM

awgee - 27 October 2009 10:50 PM

RoLar_USC - 27 October 2009 09:13 PM

readytopurchase - 27 October 2009 08:55 PM

http://mhanson.com/archives/274

It just amazes me that on mainstream media, all we hear is how the housing market has bottomed/corrected itself, and through sites like Mark’s, Dr. Housing Bubble, and IHB, we hear the truth - based in facts and figures. Stop lying, NAR!

Just keep waiting for the surge…

The surge of what?

The surge of REOs. The same “surge” that has been constantly discussed in this forum for the past 9 months.

Rolar,

There have been rumor(s) amongst those in the business that banks will be pushing short sales rather than foreclosures. Have you heard of the same? Your input would be appreciated. Thanks.

RoLar, I saw your site - I’m not impressed. I don’t see the countless data to back up your perspective such as those found on IHB, Dr. HB, and Hanson’s.

reason - 27 October 2009 11:24 PM

RoLar_USC - 27 October 2009 11:16 PM

awgee - 27 October 2009 10:50 PM

RoLar_USC - 27 October 2009 09:13 PM

readytopurchase - 27 October 2009 08:55 PM

http://mhanson.com/archives/274

It just amazes me that on mainstream media, all we hear is how the housing market has bottomed/corrected itself, and through sites like Mark’s, Dr. Housing Bubble, and IHB, we hear the truth - based in facts and figures. Stop lying, NAR!

Just keep waiting for the surge…

The surge of what?

The surge of REOs. The same “surge” that has been constantly discussed in this forum for the past 9 months.

Rolar,

There have been rumor(s) amongst those in the business that banks will be pushing short sales rather than foreclosures. Have you heard of the same? Your input would be appreciated. Thanks.

Banks have been pushing short sales for some time now. No banks want to foreclose, it is much cheaper for a bank to agree to a short sale (in most cases). Banks are trying everything to have underwater homeowners complete a short sale; which includes loan mods, mortgage payment forgiveness, and no credit dings. I don’t know the specifics, but I’ve heard it costs a bank about twice as much to foreclose as it does to complete a short sale. I’ve seen instances where a homeowner completes a short sale and qualifies for a new loan 18 months later. It’s extremely beneficial to both homeowners and banks to complete short sales.

Some thoughts:

I’ve been on these forums for a few months and reading housing blogs since early 05.  I bought my last condo for 180k in 2001 and sold it in late 2005 for a huge profit.  I was glad to get out and wanted to rent because my next move was going to be a major upgrade.  I was lucky to find a highly upgraded rental property.  I thought I would rent for 2 years and I ended up renting for over 4 years waiting for the bubble to burst.  I’ve spent the last year shopping.

Prices may go down next year. There may or may not be a surge of foreclosures.  The one thing that’s for sure is that recently, properties, even in the 2mil range, were getting snapped up very quickly. Things were going nowhere and then all of a sudden, in August, things started moving fast. My reasonable but lowball offers got me NOWHERE both before and (especially) after August. My mother was looking in the low end (sub 350K) early Q2 09 and those were already hard to buy at that time.

Things have turned. Yes, they may crash further in 2010 but some people on this forum are obnoxiously bearish.  I see posts where people take joy in other people’s misery. I’m over the whole “taking joy in the crash”.  It was fun to anticipate in 06 and watch in 08 but now, I’m over it.

So a few weeks ago, I found a beautiful ocean view property in Newport Coast. There were the typical low ball offers and my first go at it was a pretty low offer. When that didn’t get me anywhere, I stepped up. I ended up with a great deal on a stunning property in a beautiful community at around 30% - 35% off peak prices . The other buyers that were 5% below my offer ended up with nothing.

I am about to move to Newport Coast into what I’d call, my dream home, and I’m thrilled like a kid before Christmas.  If it drops 5% or 10% more, it won’t feel good but really, I won’t even be thinking about it. Someone could offer me 15% more than I paid and I wouldn’t sell.  When you find your home, you just find your home.  I was surprised that even on a relatively high budget, I had trouble finding a home that was just about perfect for me.

My point is: your home is an emotional purchase, not just a rational one. If you find a home you love and you can afford it, buy it and enjoy it.

readytopurchase - 27 October 2009 11:34 PM

RoLar, I saw your site - I’m not impressed. I don’t see the countless data to back up your perspective such as those found on IHB, Dr. HB, and Hanson’s.

That’s fine, that’s your opinion. My data is primary data, supply and demand, and still remains the number one indicator of the real estate market. Other data, such as that of shadow inventory, which has been the only thing posted on those sites… over and over again… is secondary. It’s good supportive information, but not enough to make a solid argument. Hence, why it has been incorrect for the past 9 months.

RoLar_USC - 27 October 2009 11:45 PM

reason - 27 October 2009 11:24 PM

RoLar_USC - 27 October 2009 11:16 PM

awgee - 27 October 2009 10:50 PM

RoLar_USC - 27 October 2009 09:13 PM

readytopurchase - 27 October 2009 08:55 PM

http://mhanson.com/archives/274

It just amazes me that on mainstream media, all we hear is how the housing market has bottomed/corrected itself, and through sites like Mark’s, Dr. Housing Bubble, and IHB, we hear the truth - based in facts and figures. Stop lying, NAR!

Just keep waiting for the surge…

The surge of what?

The surge of REOs. The same “surge” that has been constantly discussed in this forum for the past 9 months.

Rolar,

There have been rumor(s) amongst those in the business that banks will be pushing short sales rather than foreclosures. Have you heard of the same? Your input would be appreciated. Thanks.

Banks have been pushing short sales for some time now. No banks want to foreclose, it is much cheaper for a bank to agree to a short sale (in most cases). Banks are trying everything to have underwater homeowners complete a short sale; which includes loan mods, mortgage payment forgiveness, and no credit dings. I don’t know the specifics, but I’ve heard it costs a bank about twice as much to foreclose as it does to complete a short sale. I’ve seen instances where a homeowner completes a short sale and qualifies for a new loan 18 months later. It’s extremely beneficial to both homeowners and banks to complete short sales.

Would you agree that most banks in the last 2 years have been understaffed to handle short sales? Would it surprise you that the SS process is being streamlined and major banks are increasing their staffs. Have you notice in your line of business that more and more SS are getting approved in 60 days rather than over 6 months? Have you also heard that since the loan modifications are not working as planned. The govt. are thinking of giving banks incentives to do SS rather than do foreclosures?

JCie - 27 October 2009 11:53 PM

Some thoughts:

I’ve been on these forums for a few months and reading housing blogs since early 05.  I bought my last condo for 180k in 2001 and sold it in late 2005 for a huge profit.  I was glad to get out and wanted to rent because my next move was going to be a major upgrade.  I was lucky to find a highly upgraded rental property.  I thought I would rent for 2 years and I ended up renting for over 4 years waiting for the bubble to burst.  I’ve spent the last year shopping.

Prices may go down next year. There may or may not be a surge of foreclosures.  The one thing that’s for sure is that recently, properties, even in the 2mil range, were getting snapped up very quickly. Things were going nowhere and then all of a sudden, in August, things started moving fast. My reasonable but lowball offers got me NOWHERE both before and (especially) after August. My mother was looking in the low end (sub 350K) early Q2 09 and those were already hard to buy at that time.

Things have turned. Yes, they may crash further in 2010 but some people on this forum are obnoxiously bearish.  I see posts where people take joy in other people’s misery. I’m over the whole “taking joy in the crash”.  It was fun to anticipate in 06 and watch in 08 but now, I’m over it.

So a few weeks ago, I found a beautiful ocean view property in Newport Coast. There were the typical low ball offers and my first go at it was a pretty low offer. When that didn’t get me anywhere, I stepped up. I ended up with a great deal on a stunning property in a beautiful community at around 30% - 35% off peak prices . The other buyers that were 5% below my offer ended up with nothing.

I am about to move to Newport Coast into what I’d call, my dream home, and I’m thrilled like a kid before Christmas.  If it drops 5% or 10% more, it won’t feel good but really, I won’t even be thinking about it. Someone could offer me 15% more than I paid and I wouldn’t sell.  When you find your home, you just find your home.  I was surprised that even on a relatively high budget, I had trouble finding a home that was just about perfect for me.

My point is: your home is an emotional purchase, not just a rational one. If you find a home you love and you can afford it, buy it and enjoy it.

Congrats and very well put.  The market has turned and it is now a seller’s market, that’s fact based upon what I’m seeing first hand not only in Irvine but other cities in Orange County and even Vegas.  Can prices blip down in 2010 or 2011 by 5-10%?  Sure they can, but I just don’t see a crash of 20%+ price declines coming.  I have been shocked of how many strong buyers with huge amounts of cash looking for homes.  The market has stabilized and prices are inching up as we speak.  A home purchase for most buyers, including the ones I’m working with, is a very emotional event which has an intangible value for these buyers.

RoLar_USC - 27 October 2009 11:16 PM

awgee - 27 October 2009 10:50 PM

RoLar_USC - 27 October 2009 09:13 PM

readytopurchase - 27 October 2009 08:55 PM

http://mhanson.com/archives/274

It just amazes me that on mainstream media, all we hear is how the housing market has bottomed/corrected itself, and through sites like Mark’s, Dr. Housing Bubble, and IHB, we hear the truth - based in facts and figures. Stop lying, NAR!

Just keep waiting for the surge…

The surge of what?

The surge of REOs. The same “surge” that has been constantly discussed in this forum for the past 9 months.

Oh.
Personally, I have no idea if there will be a “surge”.  There are a lot of folks not paying their mortgage and the end result will be a transfer of ownership at much reduced prices and a downward trending market.  The foreclosures and short sales will keep coming for years.

RoLar_USC - 27 October 2009 11:45 PM

Banks have been pushing short sales for some time now. No banks want to foreclose, it is much cheaper for a bank to agree to a short sale (in most cases). Banks are trying everything to have underwater homeowners complete a short sale; which includes loan mods, mortgage payment forgiveness, and no credit dings. I don’t know the specifics, but I’ve heard it costs a bank about twice as much to foreclose as it does to complete a short sale. I’ve seen instances where a homeowner completes a short sale and qualifies for a new loan 18 months later. It’s extremely beneficial to both homeowners and banks to complete short sales.

Robert, for me at least it would be beneficial to distinguish between “short sales” (where the property is sold to a third party) and what I would call “workouts” (where the bank does a loan mod, but the property itself does not change hands). 

With respect to short sales and general demand, based on your observations, is there enough demand to meet the number of short sales available?  TIA.

EvaLSeraphim - 28 October 2009 09:10 AM

RoLar_USC - 27 October 2009 11:45 PM

Banks have been pushing short sales for some time now. No banks want to foreclose, it is much cheaper for a bank to agree to a short sale (in most cases). Banks are trying everything to have underwater homeowners complete a short sale; which includes loan mods, mortgage payment forgiveness, and no credit dings. I don’t know the specifics, but I’ve heard it costs a bank about twice as much to foreclose as it does to complete a short sale. I’ve seen instances where a homeowner completes a short sale and qualifies for a new loan 18 months later. It’s extremely beneficial to both homeowners and banks to complete short sales.

Robert, for me at least it would be beneficial to distinguish between “short sales” (where the property is sold to a third party) and what I would call “workouts” (where the bank does a loan mod, but the property itself does not change hands). 

With respect to short sales and general demand, based on your observations, is there enough demand to meet the number of short sales available?  TIA.

Absolutely. Demand is incredibly high right now, especially in markets where the majority of short sales are. Now, it wouldn’t hurt if banks worked out new procedures to process short sales more efficiently.

JCie - 27 October 2009 11:53 PM

Some thoughts:

I’ve been on these forums for a few months and reading housing blogs since early 05.  I bought my last condo for 180k in 2001 and sold it in late 2005 for a huge profit.  I was glad to get out and wanted to rent because my next move was going to be a major upgrade.  I was lucky to find a highly upgraded rental property.  I thought I would rent for 2 years and I ended up renting for over 4 years waiting for the bubble to burst.  I’ve spent the last year shopping.

Prices may go down next year. There may or may not be a surge of foreclosures.  The one thing that’s for sure is that recently, properties, even in the 2mil range, were getting snapped up very quickly. Things were going nowhere and then all of a sudden, in August, things started moving fast. My reasonable but lowball offers got me NOWHERE both before and (especially) after August. My mother was looking in the low end (sub 350K) early Q2 09 and those were already hard to buy at that time.

Things have turned. Yes, they may crash further in 2010 but some people on this forum are obnoxiously bearish.  I see posts where people take joy in other people’s misery. I’m over the whole “taking joy in the crash”.  It was fun to anticipate in 06 and watch in 08 but now, I’m over it.

So a few weeks ago, I found a beautiful ocean view property in Newport Coast. There were the typical low ball offers and my first go at it was a pretty low offer. When that didn’t get me anywhere, I stepped up. I ended up with a great deal on a stunning property in a beautiful community at around 30% - 35% off peak prices . The other buyers that were 5% below my offer ended up with nothing.

I am about to move to Newport Coast into what I’d call, my dream home, and I’m thrilled like a kid before Christmas.  If it drops 5% or 10% more, it won’t feel good but really, I won’t even be thinking about it. Someone could offer me 15% more than I paid and I wouldn’t sell.  When you find your home, you just find your home.  I was surprised that even on a relatively high budget, I had trouble finding a home that was just about perfect for me.

My point is: your home is an emotional purchase, not just a rational one. If you find a home you love and you can afford it, buy it and enjoy it.

Congrats on your new purchase.  As far as being obnoxiously bearish…I think most people in this forum are smart enough to see the obvious.  Most people in this country can’t.  The Ponzi scheme housing bubble could be seen miles away.  The same goes for reckless government policy that is being used as the band aid to stop the bleeding.  The long term damage will be catastrophic….but Joe Sixpack sees it as and opportunity to buy an “affordable” house with a 5% rate and get 8K back from Uncle Sam.

Be careful with your 30% off peak prices.  We all know those prices should never have been, that was pure fantasy land.  The price you are paying today is still expensive relative to historic norms.  Hopefully everything works out and you get to enjoy your house.

USCTrojanCPA - 28 October 2009 12:01 AM

JCie - 27 October 2009 11:53 PM

Some thoughts:

I’ve been on these forums for a few months and reading housing blogs since early 05.  I bought my last condo for 180k in 2001 and sold it in late 2005 for a huge profit.  I was glad to get out and wanted to rent because my next move was going to be a major upgrade.  I was lucky to find a highly upgraded rental property.  I thought I would rent for 2 years and I ended up renting for over 4 years waiting for the bubble to burst.  I’ve spent the last year shopping.

Prices may go down next year. There may or may not be a surge of foreclosures.  The one thing that’s for sure is that recently, properties, even in the 2mil range, were getting snapped up very quickly. Things were going nowhere and then all of a sudden, in August, things started moving fast. My reasonable but lowball offers got me NOWHERE both before and (especially) after August. My mother was looking in the low end (sub 350K) early Q2 09 and those were already hard to buy at that time.

Things have turned. Yes, they may crash further in 2010 but some people on this forum are obnoxiously bearish.  I see posts where people take joy in other people’s misery. I’m over the whole “taking joy in the crash”.  It was fun to anticipate in 06 and watch in 08 but now, I’m over it.

So a few weeks ago, I found a beautiful ocean view property in Newport Coast. There were the typical low ball offers and my first go at it was a pretty low offer. When that didn’t get me anywhere, I stepped up. I ended up with a great deal on a stunning property in a beautiful community at around 30% - 35% off peak prices . The other buyers that were 5% below my offer ended up with nothing.

I am about to move to Newport Coast into what I’d call, my dream home, and I’m thrilled like a kid before Christmas.  If it drops 5% or 10% more, it won’t feel good but really, I won’t even be thinking about it. Someone could offer me 15% more than I paid and I wouldn’t sell.  When you find your home, you just find your home.  I was surprised that even on a relatively high budget, I had trouble finding a home that was just about perfect for me.

My point is: your home is an emotional purchase, not just a rational one. If you find a home you love and you can afford it, buy it and enjoy it.

Congrats and very well put.  The market has turned and it is now a seller’s market, that’s fact based upon what I’m seeing first hand not only in Irvine but other cities in Orange County and even Vegas.  Can prices blip down in 2010 or 2011 by 5-10%?  Sure they can, but I just don’t see a crash of 20%+ price declines coming.  I have been shocked of how many strong buyers with huge amounts of cash looking for homes.  The market has stabilized and prices are inching up as we speak.  A home purchase for most buyers, including the ones I’m working with, is a very emotional event which has an intangible value for these buyers.

Hogwash.
The over $2,000,000 market is dead.  Absolutely dead.
And prices in the under $800,000 market will decline more than another 20%.

awgee - 28 October 2009 04:40 PM

USCTrojanCPA - 28 October 2009 12:01 AM

JCie - 27 October 2009 11:53 PM

Some thoughts:

I’ve been on these forums for a few months and reading housing blogs since early 05.  I bought my last condo for 180k in 2001 and sold it in late 2005 for a huge profit.  I was glad to get out and wanted to rent because my next move was going to be a major upgrade.  I was lucky to find a highly upgraded rental property.  I thought I would rent for 2 years and I ended up renting for over 4 years waiting for the bubble to burst.  I’ve spent the last year shopping.

Prices may go down next year. There may or may not be a surge of foreclosures.  The one thing that’s for sure is that recently, properties, even in the 2mil range, were getting snapped up very quickly. Things were going nowhere and then all of a sudden, in August, things started moving fast. My reasonable but lowball offers got me NOWHERE both before and (especially) after August. My mother was looking in the low end (sub 350K) early Q2 09 and those were already hard to buy at that time.

Things have turned. Yes, they may crash further in 2010 but some people on this forum are obnoxiously bearish.  I see posts where people take joy in other people’s misery. I’m over the whole “taking joy in the crash”.  It was fun to anticipate in 06 and watch in 08 but now, I’m over it.

So a few weeks ago, I found a beautiful ocean view property in Newport Coast. There were the typical low ball offers and my first go at it was a pretty low offer. When that didn’t get me anywhere, I stepped up. I ended up with a great deal on a stunning property in a beautiful community at around 30% - 35% off peak prices . The other buyers that were 5% below my offer ended up with nothing.

I am about to move to Newport Coast into what I’d call, my dream home, and I’m thrilled like a kid before Christmas.  If it drops 5% or 10% more, it won’t feel good but really, I won’t even be thinking about it. Someone could offer me 15% more than I paid and I wouldn’t sell.  When you find your home, you just find your home.  I was surprised that even on a relatively high budget, I had trouble finding a home that was just about perfect for me.

My point is: your home is an emotional purchase, not just a rational one. If you find a home you love and you can afford it, buy it and enjoy it.

Congrats and very well put.  The market has turned and it is now a seller’s market, that’s fact based upon what I’m seeing first hand not only in Irvine but other cities in Orange County and even Vegas.  Can prices blip down in 2010 or 2011 by 5-10%?  Sure they can, but I just don’t see a crash of 20%+ price declines coming.  I have been shocked of how many strong buyers with huge amounts of cash looking for homes.  The market has stabilized and prices are inching up as we speak.  A home purchase for most buyers, including the ones I’m working with, is a very emotional event which has an intangible value for these buyers.

Hogwash.
The over $2,000,000 market is dead.  Absolutely dead.
And prices in the under $800,000 market will decline more than another 20%.

The high-end market may decrease 20% or more, all depends on the economy, but the amount of high-end inventory is also declining and sales are picking up.  I won’t make any predictions on the high-end market because I don’t have any buyers looking for properties in that market so I don’t really track that market closely.  I was speaking more about the middle and low-end market.  I’m willing to bet you that the middle and low-end market in Irvine and South County will not decline over 20% from today’s prices.  I was bearish on housing until the past few months because from what I’m seeing first hand we are currently in a seller’s market.  Not sure if you heard, but on CNBC this afternoon they said they’ll extend the homebuyer’s tax credit and expand it for move-up buyers.  Add that bank’s continue to extend and pretend and you have yourself a seller’s market.

Most all of my buyers are telling that things are picking up in their businesses and their companies.  It’s not just Irvine, the same lack of inventory in Mission Viejo, Laguna Niguel, Huntington Beach, Fullerton, Tustin Ranch, etc is causing multiple offers on homes prices around comps (don’t even ask me what happens when the pricing is below market because it gets nuts),  Unless inventory (real, non-short inventory) increases 100% from current levels, no way prices decline more than 10% from today’s levels.  Irvine prices are up 5% from the Spring of this year and other cities are beginning to see slight price increases (price/sf).  I’ll give you a great example…in all of Irvine there are only 28 detached 4+ bedroom homes (over 1,800sf under $900k) that are active non-short sale listings on MLS and the last 4 homes in Irvine that I put offers on for my buyers had 5-40 other offers.  Increase the square footage to 2,000+ and you only have 18 homes that are active listings on MLS in Irvine (excludes short sale listings) For now we are in a seller’s market.

USCTrojanCPA - 28 October 2009 05:04 PM

awgee - 28 October 2009 04:40 PM

USCTrojanCPA - 28 October 2009 12:01 AM

JCie - 27 October 2009 11:53 PM

Some thoughts:

I’ve been on these forums for a few months and reading housing blogs since early 05.  I bought my last condo for 180k in 2001 and sold it in late 2005 for a huge profit.  I was glad to get out and wanted to rent because my next move was going to be a major upgrade.  I was lucky to find a highly upgraded rental property.  I thought I would rent for 2 years and I ended up renting for over 4 years waiting for the bubble to burst.  I’ve spent the last year shopping.

Prices may go down next year. There may or may not be a surge of foreclosures.  The one thing that’s for sure is that recently, properties, even in the 2mil range, were getting snapped up very quickly. Things were going nowhere and then all of a sudden, in August, things started moving fast. My reasonable but lowball offers got me NOWHERE both before and (especially) after August. My mother was looking in the low end (sub 350K) early Q2 09 and those were already hard to buy at that time.

Things have turned. Yes, they may crash further in 2010 but some people on this forum are obnoxiously bearish.  I see posts where people take joy in other people’s misery. I’m over the whole “taking joy in the crash”.  It was fun to anticipate in 06 and watch in 08 but now, I’m over it.

So a few weeks ago, I found a beautiful ocean view property in Newport Coast. There were the typical low ball offers and my first go at it was a pretty low offer. When that didn’t get me anywhere, I stepped up. I ended up with a great deal on a stunning property in a beautiful community at around 30% - 35% off peak prices . The other buyers that were 5% below my offer ended up with nothing.

I am about to move to Newport Coast into what I’d call, my dream home, and I’m thrilled like a kid before Christmas.  If it drops 5% or 10% more, it won’t feel good but really, I won’t even be thinking about it. Someone could offer me 15% more than I paid and I wouldn’t sell.  When you find your home, you just find your home.  I was surprised that even on a relatively high budget, I had trouble finding a home that was just about perfect for me.

My point is: your home is an emotional purchase, not just a rational one. If you find a home you love and you can afford it, buy it and enjoy it.

Congrats and very well put.  The market has turned and it is now a seller’s market, that’s fact based upon what I’m seeing first hand not only in Irvine but other cities in Orange County and even Vegas.  Can prices blip down in 2010 or 2011 by 5-10%?  Sure they can, but I just don’t see a crash of 20%+ price declines coming.  I have been shocked of how many strong buyers with huge amounts of cash looking for homes.  The market has stabilized and prices are inching up as we speak.  A home purchase for most buyers, including the ones I’m working with, is a very emotional event which has an intangible value for these buyers.

Hogwash.
The over $2,000,000 market is dead.  Absolutely dead.
And prices in the under $800,000 market will decline more than another 20%.

The high-end market may decrease 20% or more, all depends on the economy, but the amount of high-end inventory is also declining and sales are picking up.  I won’t make any predictions on the high-end market because I don’t have any buyers looking for properties in that market so I don’t really track that market closely.  I was speaking more about the middle and low-end market.  I’m willing to bet you that the middle and low-end market in Irvine and South County will not decline over 20% from today’s prices.  I was bearish on housing until the past few months because from what I’m seeing first hand we are currently in a seller’s market.  Not sure if you heard, but on CNBC this afternoon they said they’ll extend the homebuyer’s tax credit and expand it for move-up buyers.  Add that bank’s continue to extend and pretend and you have yourself a seller’s market.

Most all of my buyers are telling that things are picking up in their businesses and their companies.  It’s not just Irvine, the same lack of inventory in Mission Viejo, Laguna Niguel, Huntington Beach, Fullerton, Tustin Ranch, etc is causing multiple offers on homes prices around comps (don’t even ask me what happens when the pricing is below market because it gets nuts),  Unless inventory (real, non-short inventory) increases 100% from current levels, no way prices decline more than 10% from today’s levels.  Irvine prices are up 5% from the Spring of this year and other cities are beginning to see slight price increases (price/sf).  I’ll give you a great example…in all of Irvine there are only 28 detached 4+ bedroom homes (over 1,800sf under $900k) that are active non-short sale listings on MLS and the last 4 homes in Irvine that I put offers on for my buyers had 5-40 other offers.  Increase the square footage to 2,000+ and you only have 18 homes that are active listings on MLS in Irvine (excludes short sale listings) For now we are in a seller’s market.

The reason you have no buyers in that market is because there are no buyers in that market and sales are not picking up in that market.  Do I need to produce Steve Thomas’ data?  The months of inventory in the over $2mil market has gone from about 24 months to 22 months, not enough to be more than a blip.  Ask Delroy how many buyer there are in Coto in the over $2mil market?  How many sales over $2mil have there been in the last month?  Two months?  Six months?  One year?

Yes, I saw the homebuyer’s credit was extended and that will only produce the same mini bubble you are seeing now, but eventually that will produce more foreclosures when prices head down again and further price declines.  Al it has done is put more people in homes who did not have enough of a down payment and now have no skin in the game.  More of the same will not produce different results.  People are so incredibly short sighted.  Look at the big picture.  Almost all home purchasing credit is being extended by the FHA.  And the FHA is about to get clobbered by defaults.  Have the number of NODs and NTSes decreased?  Are folks all of a sudden able to afford their recasting mortgages?  Has there been an increase in employment?  Are wages increasing?  Do your really think the economy can improve because the Fed has printed money?

All the government intervention will produce nothing but more misery and an extension of the housing recession in the long run.

awgee - 28 October 2009 05:57 PM

USCTrojanCPA - 28 October 2009 05:04 PM

awgee - 28 October 2009 04:40 PM

USCTrojanCPA - 28 October 2009 12:01 AM

JCie - 27 October 2009 11:53 PM

Some thoughts:

So a few weeks ago, I found a beautiful ocean view property in Newport Coast. There were the typical low ball offers and my first go at it was a pretty low offer. When that didn’t get me anywhere, I stepped up. I ended up with a great deal on a stunning property in a beautiful community at around 30% - 35% off peak prices . The other buyers that were 5% below my offer ended up with nothing.

I am about to move to Newport Coast into what I’d call, my dream home, and I’m thrilled like a kid before Christmas.  If it drops 5% or 10% more, it won’t feel good but really, I won’t even be thinking about it. Someone could offer me 15% more than I paid and I wouldn’t sell.  When you find your home, you just find your home.  I was surprised that even on a relatively high budget, I had trouble finding a home that was just about perfect for me.

My point is: your home is an emotional purchase, not just a rational one. If you find a home you love and you can afford it, buy it and enjoy it.

Congrats and very well put.  The market has turned and it is now a seller’s market, that’s fact based upon what I’m seeing first hand not only in Irvine but other cities in Orange County and even Vegas.  Can prices blip down in 2010 or 2011 by 5-10%?  Sure they can, but I just don’t see a crash of 20%+ price declines coming.  I have been shocked of how many strong buyers with huge amounts of cash looking for homes.  The market has stabilized and prices are inching up as we speak.  A home purchase for most buyers, including the ones I’m working with, is a very emotional event which has an intangible value for these buyers.

Hogwash.
The over $2,000,000 market is dead.  Absolutely dead.
And prices in the under $800,000 market will decline more than another 20%.

The high-end market may decrease 20% or more, all depends on the economy, but the amount of high-end inventory is also declining and sales are picking up.  I won’t make any predictions on the high-end market because I don’t have any buyers looking for properties in that market so I don’t really track that market closely.  I was speaking more about the middle and low-end market.  I’m willing to bet you that the middle and low-end market in Irvine and South County will not decline over 20% from today’s prices.  I was bearish on housing until the past few months because from what I’m seeing first hand we are currently in a seller’s market.  Not sure if you heard, but on CNBC this afternoon they said they’ll extend the homebuyer’s tax credit and expand it for move-up buyers.  Add that bank’s continue to extend and pretend and you have yourself a seller’s market.

Most all of my buyers are telling that things are picking up in their businesses and their companies.  It’s not just Irvine, the same lack of inventory in Mission Viejo, Laguna Niguel, Huntington Beach, Fullerton, Tustin Ranch, etc is causing multiple offers on homes prices around comps (don’t even ask me what happens when the pricing is below market because it gets nuts),  Unless inventory (real, non-short inventory) increases 100% from current levels, no way prices decline more than 10% from today’s levels.  Irvine prices are up 5% from the Spring of this year and other cities are beginning to see slight price increases (price/sf).  I’ll give you a great example…in all of Irvine there are only 28 detached 4+ bedroom homes (over 1,800sf under $900k) that are active non-short sale listings on MLS and the last 4 homes in Irvine that I put offers on for my buyers had 5-40 other offers.  Increase the square footage to 2,000+ and you only have 18 homes that are active listings on MLS in Irvine (excludes short sale listings) For now we are in a seller’s market.

The reason you have no buyers in that market is because there are no buyers in that market and sales are not picking up in that market.  Do I need to produce Steve Thomas’ data?  The months of inventory in the over $2mil market has gone from about 24 months to 22 months, not enough to be more than a blip.  Ask Delroy how many buyer there are in Coto in the over $2mil market?  How many sales over $2mil have there been in the last month?  Two months?  Six months?  One year?

 

Yes, I saw the homebuyer’s credit was extended and that will only produce the same mini bubble you are seeing now, but eventually that will produce more foreclosures when prices head down again and further price declines.  Al it has done is put more people in homes who did not have enough of a down payment and now have no skin in the game.  More of the same will not produce different results.  People are so incredibly short sighted.  Look at the big picture.  Almost all home purchasing credit is being extended by the FHA.  And the FHA is about to get clobbered by defaults.  Have the number of NODs and NTSes decreased?  Are folks all of a sudden able to afford their recasting mortgages?  Has there been an increase in employment?  Are wages increasing?  Do your really think the economy can improve because the Fed has printed money?

 

All the government intervention will produce nothing but more misery and an extension of the housing recession in the long run.

Awgee, a few things I need to clarify…

1) I don’t track the high-end market at all
2) I don’t know the Coto market very well, I’ve only been out there once with a buyer
3) You and Delroy are the resident experts on Coto and you know you guys will be the first ones that I PM if I have a buyer that is interested in buying in Coto
4) I have only peaked at the high-end markets in Irvine/Shady Canyon and Newport Beach/Coast so that is where I say that is the basic of me saying inventory is down from earlier this year and sales have picked up a little.

So I have no idea how many Coto homes over $2m will sell in the next 6 or 12 months let alone 24 months.  I do keep a very close eye on the Irvine, Huntington Beach, Costa Mesa, MV, Laguna Niguel, RSM, Ladera, and Aliso, and Dana Point for my buyers so I can comment on what’s going on in the sub $1m SFR market in these areas.  The reason the market is so tight right now is because of the lack of real inventory (excluding short sales) as I have mentioned before on several occasions.  Have written over 50+ offers and viewed over 100+ properties in the past 6+ months, I say confidently that the market has swung from a buyer’s market to a seller’s market.  I’m neither a housing bear or bull, I’m just telling people what I’m seeing from the front line as a buyer’s agent.  Irvine is the strongest market out of all the cities I’ve listed….every single property that I have submitted an offer on for my buyers had other multiple offers on it.  Hell, it’s so bad that I can’t even find a small decent detached condo for one of my Irvine buyers under $550k. 

Almost any decent located home that is priced at or below market flies into escrow within about a week of being listed either at slightly under list to significantly over list.  What’s causing the lack of inventory?  I think there are several reasons….1) Banks going in slow motion to foreclose on properties and list them 2) Many potential sellers are still underwater so they can not sell without putting money into escrow 3)  Some equity sellers are waiting until prices rebound further before they list their homes 4) Banks are even beginning to actually get short sales done 5) The amount of buyers has increased since the beginning of the year (could be the improving economic conditions, the home buyer credit, and/or a family need to purchase a home).  I would agree with you that the majority of the home purchases do use FHA financing, but it is not the choice of most buyers in Irvine and the South County cities that I mentioned as many buyers are putting down 20-30%+ downpayments (Irvine had the most cash buyers).  The number of NODs and NTSs has kept increasing and will keep increasing because the gov’t has decided to prop up the big banks along with the whole mark-to-market smoke-n-mirrors accounting trick so there is no rush on the banks’ part to rush getting those REOs out on the market.  I do see the macro economic issues facing us like high and increasing unemployment along with other headwinds and I do read the other blogs and forums that document in detail the shadow inventory levels but I’m just sharing with folks on here what I’m seeing from the front lines.  I’ve been more shocked than anyone else and even poked fun at IPO a bit in the summer when he was posting up that uptick in the CS numbers for Irvine.  But the trend has continued which makes it more than a blip.  Will the home market be volatile in the few years….of course.  Can prices decline from where….hell yeah.  But will prices in the low-end and mid-market of Irvine and South County cities plunge over 20%....not unless some real bad things happen in the economy and mortgage rates surge to over 7% (which I don’t see happening in the near term).  Until inventory levels increase significantly from today or something tragic happens with the economy, you will not see price declines of more than 3-5% in the low and middle housing market in Irvine and South Orange County.

Let me ask you about something else that has really surprised me.  I’m sure you see how much debt the gov’t is having to auction off to pay for all spending….why is there so much demand for that debt and why are the bid-to-cover ratios so high for that new debt?  Are the big banks that got all of that free cash from the Fed/Treasury just parking it in gov’t bonds?

Hogwash.
The over $2,000,000 market is dead.  Absolutely dead.
And prices in the under $800,000 market will decline more than another 20%.

Adjusted for inflation or in nominal terms?  Right now, homes under 750k are going up.  This is based on the buyers that I personally know who are bidding on homes.

To clarify, when I say 2mil, I’m talking about the low 2mils and specifically, I’m talking about Newport Coast and homes with an ocean view and even more specifically, I’m talking about the last 60 days.  I’ve been shopping for homes for a year now and have bid on 5 homes.  The ones that SHOULD sell for low 2s and that get listed above 2.5 sit for months.  Ultimately, the buyer faces reality and cuts the price and when they get close to low 2’s, interest sky rockets.

I have multiple backup offers behind me.  There were 5 or 6 ocean view homes I had to choose from in Pacific Ridge in the first half of summer.  All of a sudden by mid/late summer, they all got snatched up near/at/or above asking and in most cases, for all cash.  My broker was very bearish said to me, “I have to eat my words, things have absolutely turned in the past couple of months.”

Perhaps, in aggregate, the data shows a slow high end market but there are people, many with cash, snapping up the BEST properties.  When something gets priced right, it moves and moves fast.  And much to my surprise, there is a large number of cash buyers.  I’m thinking to myself, “where are all these people who have a few million in cash coming from?!”. 

Anyway, just some more information for you guys to process. But this info is coming from a bearish buyer reporting “frontline” information.

BTW: No offense to anyone but if I was a guy with a few mil in cash (maybe someone from a foreign country), I think I’d look at the coast before I pay 2mil for an inland property like Coto.

JCie - 28 October 2009 10:58 PM

Hogwash.
The over $2,000,000 market is dead.  Absolutely dead.
And prices in the under $800,000 market will decline more than another 20%.

Adjusted for inflation or in nominal terms?  Right now, homes under 750k are going up.  This is based on the buyers that I personally know who are bidding on homes.

To clarify, when I say 2mil, I’m talking about the low 2mils and specifically, I’m talking about Newport Coast and homes with an ocean view and even more specifically, I’m talking about the last 60 days.  I’ve been shopping for homes for a year now and have bid on 5 homes.  The ones that SHOULD sell for low 2s and that get listed above 2.5 sit for months.  Ultimately, the buyer faces reality and cuts the price and when they get close to low 2’s, interest sky rockets.

I have multiple backup offers behind me.  There were 5 or 6 ocean view homes I had to choose from in Pacific Ridge in the first half of summer.  All of a sudden by mid/late summer, they all got snatched up near/at/or above asking and in most cases, for all cash.  My broker was very bearish said to me, “I have to eat my words, things have absolutely turned in the past couple of months.”

Perhaps, in aggregate, the data shows a slow high end market but there are people, many with cash, snapping up the BEST properties.  When something gets priced right, it moves and moves fast.  And much to my surprise, there is a large number of cash buyers.  I’m thinking to myself, “where are all these people who have a few million in cash coming from?!”. 

Anyway, just some more information for you guys to process. But this info is coming from a bearish buyer reporting “frontline” information.

Oh believe me, you aren’t the only person that has asked that question.  I keep asking myself that question as do all of my buyers, especially when you see an Irvine property go $100k over comps to a cash buyer willing to slap down over $800k.  Really makes me wonder if I’ve done something wrong in my life not have to liquid funds of around $1m in my bank accounts since there seems to be so many of these people roaming around with that kind of cash.  Maybe I need to start my own business or something….

All agreed on your analysis of Irvine and the lower end market.  The problem is that people confuse past results and behavior with a propensity for the future to look the same without analyzing why?

Good question about the long bonds.  I had much the same questions and after awhile of reading Zero Hedge, I got what was going on.
The short bonds are still being bought by foreigners.
The long bond is mostly being bought by the Federal Reserve.  The dealers are buying them and then somtimes less than two weeks later the Fed is buying them from the dealers at POMO.
Also, some foreign central banks are buying them, but selling agency debt to the Federal Reserve.  The central banks are just exchanging agency debt for treasuries and making it look like a purchase.
It would not suprise me if the Fed is also exchanging treasuries for devalued equities with the member banks.
Bernanke does not want the American public to see what is on the Fed’s books.
Go Ron Paul and HR1207.

Bottom line, very few of the long bond is freely purchased, and the Fed is just printing money.

Steve Thomas’ October 19 data:
Slice     Listings   Deals   Time in months   2 weeks ago     1 year ago     2 years ago

$2m-$4m     698     36       19.39         20.41       22.42         25.09
$4m +      380     12       31.67         32.17       34.30         31.63

Yeah, they are just flying off the shelves.

awgee - 29 October 2009 07:11 AM

Steve Thomas’ October 19 data:
Slice     Listings   Deals   Time in months   2 weeks ago     1 year ago     2 years ago

$2m-$4m     698     36       19.39         20.41       22.42         25.09
$4m +      380     12       31.67         32.17       34.30         31.63

 

Yeah, they are just flying off the shelves.

So, there’s over a year and a half’s worth of supply in 2-4 mil and two and a half years at 4 mil+?  Geez.  Maybe if you are a buyer in that category you should make extreme low-ball offers on everything even marginally acceptable and hope there’s an equity seller desperate enough to take the bait.

Geotpf - 29 October 2009 07:44 AM

awgee - 29 October 2009 07:11 AM

Steve Thomas’ October 19 data:
Slice     Listings   Deals   Time in months   2 weeks ago     1 year ago     2 years ago

$2m-$4m     698     36       19.39         20.41       22.42         25.09
$4m +      380     12       31.67         32.17       34.30         31.63

 

Yeah, they are just flying off the shelves.

So, there’s over a year and a half’s worth of supply in 2-4 mil and two and a half years at 4 mil+?  Geez.  Maybe if you are a buyer in that category you should make extreme low-ball offers on everything even marginally acceptable and hope there’s an equity seller desperate enough to take the bait.

Why?
Why not just wait?