San Diego Housing Bubble News and Analysis

Now if they would release the bank owned, we really might start reflecting reality.

It should have been implemented a long time ago. Yet, short sales haven't really ever been the norm.

More gloom and doom scare tactics to get people to buy...do you sales guys ever give up ? The reality is, banks sit on short sales even when multiple offers have been submitted. Basically, shrewd investors ignore short sales listings for that very reason, so this new policy won't make a bit of difference to the wise investor.

Hey - it's three week Bob bashing the 3-year member sdrealtor again. I suggest you give it up. If you came looking for cheerleaderleading realtors to bash, you came to the wrong place.

If you think sdr can affect the market with his comments, you are wrong.

If you think he thinks he can affect the market with his comments, you are even more wrong.

Out of curiosity sake, I am curious to see how the inventory number changes. As of now, from sdlookup - it states there is an inventory of 11,905 for the areas that sdlookup covers.

The real inventory won't plummet.

Now if we can just do loan mods for the 1/3 of southern californian homes underwater, stop wage and employment deflation and find some sort of engine for job creation we may have a bottom in site.

http://blogs.wsj.com/developments/2009/0...

Have foreclosure moratoria—which artificially depressed foreclosures in the fourth quarter of 2008—provided a false sense of security that the worst of the foreclosure tidal wave has passed?

Notices of default in California have spiked in recent months, as more foreclosures have moved their way through the pipeline. A state law had decelerated foreclosures at the end of 2008 and in early 2009. But foreclosures jumped by 40% in April from March in the Golden State, and foreclosure could double or triple this month, according data tracked by The Field Check Group, a Menlo Park, Calif.-based research firm, and ForeclosureRadar.com.

John
The sad truth is that the real inventory in SD County plummeted months ago. It is only now that the inventory figures will more accurately depict what is going on.

It is a miserable experience to be a buyer today. Finding a decent home on the market is never easy and it is tougher than ever. Finding one priced well is even tougher. Once you find it you quickly learn you have a roomful of company and an open bidding process on the home that lasts from 2 to 4 months. This is the market we will be in for a few years to come. Yes prices will be lower for the next few years. However, the unfortunate corrollary is that it doesnt mean you will get something you really like at those prices.

As for the title of this thread, it was intentionally sensationalist. Those around here long enough eunderstand my sense of humor. It was a jab at the media who will leach onto the declining active inventory numbers as meaning something other than improved data collection. Sorry it went over your head Bob.

I don't think anything went over my head. I understood this was just a change in how inventory was counted and that you did too. Seems like a good thing to me.

But I don't agree that the market for buyers will suck "for a few years to come". Not with unemployment at 11%. Maybe in the lower priced areas the bottom is near, but it's nowhere near there in the higher priced areas.

That's a pretty nasty prediction.
I have to think about what that means.

Processing ...

I cannot think of a more rational thing to implement. We have been discussing this measure for months, dare I say even a year. This is not any scare tactic or anything of the sort. In fact this is something that provides more transparency to the market for consumers.

Just because there is a listing that has an offer into the lender doesn't mean that you the buyer have to pass on it. You can call and see if you can submit a backup offer

As I recall a few months ago there were all of two people who stood here and posted how the effective active inventory was much lower then what everyone thought. In fact that entire thread got pretty nasty. If a measure like this was in place back then, we would not have had to debate about that because it would have been there for everyone to see.

Also, Bob, stop trolling.

In the short run this will cause panic, as people feel they are missing out.

In the medium run, this will force more people back to the sidlines. If they cant buy anything they like, why buy?

In the long run this will take a long time to heal.

In no way is this anything more than a realization of the reality that already exists. People like to buy houses, especially when the Government is stimulating the hell out of it and interest rates are just plain stupid. Even if you think they shouldnt.

That's a bold statement sdr. The inventory is going to be suppressed for that long? Only through some kind of chicanery. More moratoriums? Shadow inventory? Something new? I gotta believe the floodgates have to be released at some point.

John
The overhead comment was directed at Bob not you. When i say the market will suck for buyers it is directed at quality not price. Bottom aside finding a house one really likes is easier said than done. Perhaps I'm picky and like those neighborhood gems. The ones with the big private lots. The one in the back of the cul de sac with the primo view. Not the ones on the busy feeder streets, or the ones on steep downhills. or the ones on the busy corner or the ones that have lights shining in the back of your house and master bedroom all night. Or the one under the power lines overlooking El Camino Real. Homes like those will always be available from time to time. I seek out the gems.

ralph
I guess that I am prone to bold statements. I firmly beleive the inventory is going to manipulated and supressed for the next few years. Furthermore, discretionary sellers have left the building. The lower the prices go, the higher the demand is at those levels. Finding a great home was tough even at the peak, it is tougher now and will be virtually impossible at the market bottom IMNSHO.

sdr

SD R,
Those two people....you......me.......no one else...

sdr

Ok last post. I just ran a search on how many active listings should drop off immediately when the change is implemented at it is about 2600 which is approximately 20%. There are also a ton of short sale listings that are not properly entered as having an offer accepted pending lender approval. I know for a fact that the #1 agent with over 200 short sale listings has a current stated policy of not accepting any offers and just letting them pile up. Hopefully there will be efforts to get all agents to comply with acknowledging they have accepted/received an offer. My guestimate is that it would take another 10% off the total.

Replying to a sarcastic post with equal sarcasm isn't bashing.

SD Realtor is spreading more gloom and doom tonight. Whereas I will give you some good news.

For the past three months or so, the banks have suppressed inventory all across America because they have been waiting on the federal government to announce and pass the various housing/foreclosure bills. It made no sense for banks to act before they knew exactly what type of assistance they would receive courtesy of Uncle Sam. In recent weeks the Obama administration made into law the $75B foreclosure assistance program. Banks now know exactly what type of modification programs the government stands behind, and how much in the way of federal subsidies they will receive for doing modifications rather than foreclosures. The Feds have stated they hope this latest program will curtail 50% of future foreclosures, but admit that is a best case scenario. The point is, there are more foreclosures to come...definately not as many as in 2008, but definately more than in Q1 2009.

That leads to the second piece of good news....for a variety of reasons, non distressed property has been in a holding pattern for a considerable period of time. At some point sellers will decide its time to sell...that will increase the supply as well.

But the most important thing to remember from this thread is the following....unemployment numbers will continue to deteriorate throughout 2009, while at the same time, mortgage rates will go up later in the year, and even more so in 2010. Higher rates will reduce demand across all price levels, and at the mid/upper levels, prices will drop significantly.

You can all sleep better now...

sdr I know the "guy" you are talking about. He has a new and improved policy where you email everything in and he says he will get back to you in a day. I just sent an offer into him and guess what, 3 days and no response. Also if you look at his success rate of actual solds verses how many of those listings expire or get cancelled it is pretty weak.

One thing that all buyers should know when working with short sales is that ALOT depends on the listing agent.

********

Back to the main thread, as adverserial as we are, most of our threads are actually in the same vein. Your spring prediction was golden. I have been saying for years, yes literally years that my biggest fear of this depreciation cycle was the lengths that our government would go to suppress it. Some of those measures have been overt and direct, while others have been more indirect. This behavior will continue and perhaps increase.

I do believe that we need substantial catalysts to help buyers out and I just don't see them in the short run. My hope is/was the inventory, hopefully an imminent burst in foreclosures, and at some point it will shift to interest rate hikes. I agree we will see them start to run up but I don't think they will be the monster hikes. IMO those will not happen for awhile yet. I am not a bond market expert though so I don't know.

***SDR or sdr or urban***

What the heck is this listing about?

http://www.sdlookup.com/MLS-090005587-14...

Price reduced 3/3/09 from $2,995,000 to $2,195,000

Price **increased** 5/16/09 from $2,195,000 to $2,950,000

This is not the first time I've seen stuff like this. What is going on????

This is feeling very 2003-2005 to me WRT fraud and "funny stuff" going on. Seeing more and more of it lately, and am NOT trusting "the market" at all right now.

I think they put granite, travertine and stainless steel in hence the recent price increase.

Lucky for you, I have considerable knowledge of the bond market and fed policy. All I can say is trust me...the bond market is a bubble just waiting to burst. Back in Q1 when the Feds finally realized that demand for US treasuries was weakening, they took drastic measures of last resort...measures that Bernanke was hoping to avoid. Which is to say, the Feds started buying US treasuries in what some might describe as a last ditch panic effort to avoid a depression. So far, Bernanke's actions seem to be working in the short term, as buying treasuries has had the effect of lowering mortgage rates to record low levels - and as a result, has created a real estate buying frenzy among investors and first timers.

The problem for the Fed, and they are openly discussing it now, is in order to avoid a depression, they have created inflation, and potentially hyper inflation.

Bob I am not a bond market expert nor am I a novice. I do have access to some very expert bond market guys though. I have been waiting for th ebond market to pop for quite a long time but am out of the guessing business for it.

The current administration is not going to let the bond market pop. Even if they have to give the entire state of Alaska to China, I do not seem them letting that market roll over just yet. Things are entirely to fragile right now so they need to slow roll the process just like everything else.

Look back at previous posts and we have discussed all of this as nauseam so you are not really bringing anything new to the table. We all admit it will pop, we all admit that we could/should see double digit interest rates like the 80s and the only disagreement is when.

If you think Obama is gonna let this happen in the next few months or even a year I disagree entirely. It doesn't matter what he has to put up as collateral.

Bob, thanks for the inside information on the Bond market. If I read this right, you are suggesting that the Fed may have to reverse course and that the result would be that interest rates would go up. Maybe this is the next bubble. Interesting.

Also, thanks for the good news on the release of REOs in the future. Maybe we should start a new thread about that stuff, but what should we call it ? Hey, here's a stab at coining a phrase. Let's call it "shadow inventory".

Hmmmmm.... now that's an interesting idea. Do you think they'd take it? I have a brother-in-law who used to live in Alaska, I'll gladly throw him into the deal for free.

Direct funding of the GSEs by the Treasury has affected mortgage rates also. I do not know which effect has been greater.

Eric