Nor_LA-Temcu-SD-Guy

Yea smells like a dead cat alright, really don’t see speculators jumping in again (got to get about 15% to make a profit I figure), And I sure as heck don’t make enough (even if I had a six figure salary) to buy a decent house to live in (30 year fix 20% down). So I would say that this horse is good and dead and won’t be getting up again for awhile. But that’s just my opinion.

I agree with LA_renter. The change in the inventory numbers is just the cat doing a flip in mid-air. Not a bounce. Save this post topic for 2008.

yeah, I think you’re on to something sdduuud. Whatever it is, it shows how this ‘crash’ is sticky on the way down.

I think we’re going to see more people saying it’s just temporary.

I think we’re going to see more manipulation of oil prices by the government (as needed before elections etc.)

I think we’re going to see more businesses hit hard, but the media or general public response will be, ‘it’s just an isolated case.’

Is it really a crash, if it is so sticky? Or is it merely a burst, albeit a slow leak. Does it matter what we call it?

Wait another year until next fall to really see if anything happens

At least thats my game plan. Besides, I really do not want to buy anything until the client decides whether or not to renew my contract for another year. I am saving right now for the downpayment and cannot risk losing work and being stuck in a 6,000 monthly payment with no cash in the bank. That would be suicide. For the next year to 18 months, wait and ride it out. I need another year to build up cash and credit anyways. Fortunately a cheap room does the trick and we can revisit the market a year or two from now. My co-worker who owns a home in Moorpark/San Fernando Valley pulled his home off the market and cannot sell it for the 1.1 million he wants. So it is starting to come back down but VERY SLOW process. Patience. Yeah and it sucks to pay massive tax but the year of per diem cuts down on taxes since I also use my room in San Diego as primary residence and pay little tax for the next year on the contract. Once it is decided to renew or not, I can cross the bridge of whether to buy a place in Ventura or Agoura Hills.

Scott

Speaking of pulling houses off the market, my buddy’s grandmother died, leaving a very plain house and small rental on a good sized lot in North County. There are 8 heirs, and it was supposed to be sold according to her wishes. It was appraised at something like $750-800k, and it’s basically a couple of boxes. They were offered $650k for it a couple weeks ago, and turned it down. No kidding. They didn’t think it was enough.

Here’s the kicker: They’ve colluded and decided to pull it off the market, and hold on to it for 2 years…when the market “will be better and we can get more for it” (their words). It would be funny if it wasn’t so sad. Mind you…we’re talking about 8 people in their 60’s and 70’s, native San Diegans, who’ve been through multiple real estate cycles and should know better. But they’re buying into the soft landing premise and the concept that this little crap property tripled in price over the last 8 years because of sound fundamentals, and will continue to go up. This time, you see, it’s different. Uh huh. Pure greed is what it is.

I’ve pretty much given up explaining to people about stock bubbles, real estate bubbles, real wage decline, and well…common sense. It’s pointless. I’ve been pointing them to the many sites like this and they still don’t get it. As I said, it’s pure greed.

There are still alot of people that have it in their mind this is only a dip and the boom will resume. I was one of those people back in 2000 knowing my Ariba stock was going back up to 150 from 5. Right now any data point that is favorable to RE is being devoured. There has been a slight seasonal dip in inventory, on Wall Street you have Cramer with a blow horn screaming don’t listen to the HB CEO’s they are too doom and gloom, BUY BUY BUY. The money managers on Wall Street have a tendency to feast on novice shorts, they have made a nice meal of them lately. The soft landing argument is still fresh and alive even as these horrendous numbers show no sign of abating.

I saw where somebody posted the headlines on the last RE downturn from the LA Times, starting in 88 through about 96. You can see the reporting of many false starts during that downturn. I don’t anticipate this will be any different. Downturns are not totally linear, there will be months where sales will show a slight YOY increase then fizzle. Home prices in San Diego have dropped 9% since this time last year and they are currently dropping, thats about as much of a drop that you can get in an asset class like RE. And as everybody has pointed out we haven’t seen the full brunt of the ARM resets. This thing is far from over.

Here come the foreclosures

“Thanks to a 19 percent increase in foreclosure activity, California leapfrogged past Texas and Florida to report the most new foreclosure filings of any state in September, it says. The state documented 14,806 properties entering some stage of foreclosure, nearly three times the number reported in September 2005 and a foreclosure rate of one new foreclosure filing for every 825 households — 1.3 times the national average. The state’s foreclosure activity has risen more than 40 percent over the last two months.”