Spring Home Price Bounce Masks Underlying Weakness

Submitted by Rich Toscano on July 26, 2011 - 6:53pm
Today's release of the Case-Shiller home price index showed a small (.2 percent) aggregate price increase in May for San Diego:



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Submitted by moneymaker on July 27, 2011 - 8:52pm.

Makes me glad I bought a low price house. The high tier looks anemic but will probably recover eventually.

Submitted by Jazzman on July 30, 2011 - 9:24am.

I've been seeing quite a lot of price reductions over the last 2-3 weeks. Not sure if this is sellers trying to close before the end of the selling season, but it's sends a signal that the price party isn't over. Admittedly, any movement below a full percentage point is not very exciting, and I'm frankly amazed that so many still seem prepared to pay so much for so little. But that's just me. 2003 wasn't that long ago, and prices were ugly even then.

Submitted by sdrealtor on July 30, 2011 - 2:06pm.

Price reductions of overpriced properties dont mean much so you cant take the presence of price reductions to mean prices are going down without comparing them to recent sales. Reductions are common this time of year as sellers recognize the prime Summer selling season is drawing to a close and their chances of getting a lucky sale with it.

Submitted by Jazzman on July 31, 2011 - 7:41am.

That's assuming they are over-priced, and not selling due to tightened credit, high unemployment and a diminishing buyer pool. Also, it's only logical that a home becomes over-priced if prices continue to slide.

Am I the only person (obviously a eccentric, crotchety old odd-ball) left in the world that thinks "you must be kidding" when I see what you get for a quarter million, half a million, or three quarter million dollars? We went from expensive to really insane back to expensive, and still people don't question the underlying causes of being shafted. I am the only person I know of my generation (herein lies one of the problems) who doesn't own a home. So my handicap is that I remember what homes sold for. Anyone recommend a good lobotomist? Apparently, if you drink this stuff called "cool aid" it does the same thing?

Submitted by sdrealtor on July 31, 2011 - 8:37am.

Jazz
My point is most of the stuff I see that hasnt sold is either flawed and people dont want it or it is overpriced relative to the market so that is why it hasnt sold. I'm sure there a properties out there that arent flawed or overpriced too. But just observing increasing numbers of price reductions doesnt tell you enough until you lift up the hood and dig deeper.

As for thinking things are expensive around here, I do too and always have but have adjusted to the reality that we live in an expensive place.

Submitted by bearishgurl on August 1, 2011 - 11:43am.

Jazzman wrote:
That's assuming they are over-priced, and not selling due to tightened credit, high unemployment and a diminishing buyer pool. Also, it's only logical that a home becomes over-priced if prices continue to slide.

Am I the only person (obviously a eccentric, crotchety old odd-ball) left in the world that thinks "you must be kidding" when I see what you get for a quarter million, half a million, or three quarter million dollars? We went from expensive to really insane back to expensive, and still people don't question the underlying causes of being shafted. I am the only person I know of my generation (herein lies one of the problems) who doesn't own a home. So my handicap is that I remember what homes sold for. Anyone recommend a good lobotomist? Apparently, if you drink this stuff called "cool aid" it does the same thing?

Jazzman, if you don't mind my asking, if you are truly the "eccentric, crotchety old oddball" you say you are who has a good and long memory for "your generation," why didn't you purchase any RE when the prices weren't so "insane?"

And, if you have owned your own home in the past (located in coastal CA counties), when did you sell it and why didn't you purchase a replacement home at the time of sale?

Submitted by desmond on August 1, 2011 - 1:25pm.

"Prices are falling but inventory is falling so prices won't fall any lower" "the only price reductions are on overpriced, crappy homes that no one wants". What's with all the excuses? Prices must be headed down............

Submitted by CA renter on August 2, 2011 - 1:36am.

Jazzman wrote:
That's assuming they are over-priced, and not selling due to tightened credit, high unemployment and a diminishing buyer pool. Also, it's only logical that a home becomes over-priced if prices continue to slide.

Am I the only person (obviously a eccentric, crotchety old odd-ball) left in the world that thinks "you must be kidding" when I see what you get for a quarter million, half a million, or three quarter million dollars? We went from expensive to really insane back to expensive, and still people don't question the underlying causes of being shafted. I am the only person I know of my generation (herein lies one of the problems) who doesn't own a home. So my handicap is that I remember what homes sold for. Anyone recommend a good lobotomist? Apparently, if you drink this stuff called "cool aid" it does the same thing?

Nope, you are not the only one, Jazzman.

Stay firm. Your observations are spot-on.

Submitted by creechrr on August 2, 2011 - 1:31pm.

CA renter wrote:
Jazzman wrote:
That's assuming they are over-priced, and not selling due to tightened credit, high unemployment and a diminishing buyer pool. Also, it's only logical that a home becomes over-priced if prices continue to slide.

Am I the only person (obviously a eccentric, crotchety old odd-ball) left in the world that thinks "you must be kidding" when I see what you get for a quarter million, half a million, or three quarter million dollars? We went from expensive to really insane back to expensive, and still people don't question the underlying causes of being shafted. I am the only person I know of my generation (herein lies one of the problems) who doesn't own a home. So my handicap is that I remember what homes sold for. Anyone recommend a good lobotomist? Apparently, if you drink this stuff called "cool aid" it does the same thing?

Nope, you are not the only one, Jazzman.

Stay firm. Your observations are spot-on.

I concur.

Submitted by sdrealtor on August 3, 2011 - 10:52am.

While I dont disagree homes are very expensive, I also remember when you could get change back from $1 when you ordered a hamburger, fries and a drink at McDonalds.

Submitted by desmond on August 3, 2011 - 3:28pm.

sdrealtor wrote:
While I dont disagree homes are very expensive, I also remember when you could get change back from $1 when you ordered a hamburger, fries and a drink at McDonalds.

Now that you put it that way I'm ready to buy a house.

Submitted by sdrealtor on August 3, 2011 - 3:40pm.

Better that than a Happy Meal

Submitted by AN on August 4, 2011 - 12:10am.

I'm one of the young guns on here and I remember gas < $1 and a full tank of gas costing $15-18.

Submitted by CA renter on August 4, 2011 - 4:18am.

Essentially, we are all being forced to place our bets on the direction of the dollar. There are an awful lot of inflationists out there, and they certainly tend to have history on their side.

I'm betting that, "it's different this time." ;)

Submitted by Jazzman on August 4, 2011 - 7:37am.

bearishgurl wrote:
Jazzman wrote:
That's assuming they are over-priced, and not selling due to tightened credit, high unemployment and a diminishing buyer pool. Also, it's only logical that a home becomes over-priced if prices continue to slide.

Am I the only person (obviously a eccentric, crotchety old odd-ball) left in the world that thinks "you must be kidding" when I see what you get for a quarter million, half a million, or three quarter million dollars? We went from expensive to really insane back to expensive, and still people don't question the underlying causes of being shafted. I am the only person I know of my generation (herein lies one of the problems) who doesn't own a home. So my handicap is that I remember what homes sold for. Anyone recommend a good lobotomist? Apparently, if you drink this stuff called "cool aid" it does the same thing?

Jazzman, if you don't mind my asking, if you are truly the "eccentric, crotchety old oddball" you say you are who has a good and long memory for "your generation," why didn't you purchase any RE when the prices weren't so "insane?"

And, if you have owned your own home in the past (located in coastal CA counties), when did you sell it and why didn't you purchase a replacement home at the time of sale?

It's a very long story. Personal circumstances sometimes prevent best choices. Having said that, I haven't done too badly out of both housing bubbles, and got to live in wonderful places around the world. The point I'm making–that some Realtors find difficult to grasp–is that bubbles have usually over-corrected. Dot.com and this one being the exceptions. So there's a natural tendency for those who did everything right, to feel a little aggrieved when all prizes go to those who didn't. Make sense? Anyway, I now see I'm not alone in the room on this one.

Submitted by AN on August 4, 2011 - 7:57am.

CA renter wrote:
Essentially, we are all being forced to place our bets on the direction of the dollar. There are an awful lot of inflationists out there, and they certainly tend to have history on their side.

I'm betting that, "it's different this time." ;)


I will never bet against TPTB :-)

Submitted by CA renter on August 4, 2011 - 11:59pm.

AN wrote:
CA renter wrote:
Essentially, we are all being forced to place our bets on the direction of the dollar. There are an awful lot of inflationists out there, and they certainly tend to have history on their side.

I'm betting that, "it's different this time." ;)


I will never bet against TPTB :-)

That's been the right choice over the past few years. I'm just wondering if it's going to unravel now. They keep pumping money, but they're giving it to those who are already swimming in it. The people who need the money -- and the ones who provide the critical mass necessary to keep the economy going -- are the ones whose jobs have been off-shored.

Not sure the PTB are willing to address the root causes of our economic problems. Certainly, those in D.C. -- on both sides of the aisle -- are strangely silent on the most pertinent issues affecting our economy. It would make their corporate/capitalist masters very unhappy if they actually tried to correctly define and solve the problem.

Submitted by AN on August 5, 2011 - 12:46am.

CA renter wrote:
That's been the right choice over the past few years. I'm just wondering if it's going to unravel now. They keep pumping money, but they're giving it to those who are already swimming in it. The people who need the money -- and the ones who provide the critical mass necessary to keep the economy going -- are the ones whose jobs have been off-shored.

Not sure the PTB are willing to address the root causes of our economic problems. Certainly, those in D.C. -- on both sides of the aisle -- are strangely silent on the most pertinent issues affecting our economy. It would make their corporate/capitalist masters very unhappy if they actually tried to correctly define and solve the problem.


I like the quote, "The Markets Can Remain Irrational Longer than You Can Stay Solvent". Although the quote is about the market, I think it still apply. Which is why I don't suspect things to unravel. I personally think we're more likely to see high inflation than a an unraveling.

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