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May 1, 2007 at 7:01 AM #8968May 1, 2007 at 7:21 AM #51505
LA_Renter
ParticipantThis was pretty fluffy. Basically what they are saying is that if there are no negative consequences from the housing downturn we have hit bottom.
And they add this caveat;
“But they add that there’s a major wild card: the question of whether a wave of foreclosures might drag down local home prices and exacerbate the current economic slowdown.
“We’ve only seen the very tip of the iceberg” in foreclosures, warned Ryan Ratcliff, a UCLA economist who evaluated the county’s housing market.”
With that said I always like to show the Credit Suisse ARM reset schedule.
We are on bar 4, look at the bars moving forward.http://www.irvinehousingblog.com/wp-content/uploads/2007/03/reset.PNG
Basically what this article is saying is that if these ARM resets don’t materialize we should be O.K. There is nothing like an exercise in “wishful thinking”. Way to go Union Tribune.
May 1, 2007 at 7:32 AM #51507Alex_angel
ParticipantThis article is riddled with holes.
Please explain this Tribune. A typical home in 2002 that was worth $200k went up to $800k by 2006 and now sits at $700k and you call this a bottom? This home is still pver[riced by $500k. You guys are a joke to say the least. The bottom is were the home prices should be, not some super high inflated price.
May 1, 2007 at 7:44 AM #515084plexowner
ParticipantI love that ARM reset chart! If you haven’t seen it before take a look.
Note the BIG chunk of green in months 40 thru 60 – if I am counting correctly, this corresponds to 2010 thru fall of 2011 – these are Option ARMs where the mortgage holder has the option of paying 1) a fully amortized payment, 2) interest only, or 3) minimum payment (which results in negative amortization)
Now, given what you know of the typical American consumer, which of these three options do you think has been exercised the most?
How upside-down will these mortgages be in 2010/2011?
~
I am expecting the final bottom in this real estate cycle to be created in 2010 / 2011 when the Option ARMs blowup and those homes come onto the market as distressed inventory in a market that has already been declining for 5+ years – at that point there should be enough inventory available to satisfy demand for the next 3 to 5 years
Sentiment towards real estate will be very negative and it will probably seem like the market will never bottom out
The “bottom” that I am expecting will last for several years as the massive overhang of inventory is worked off
May 1, 2007 at 7:53 AM #51509lniles
ParticipantI just saw that article and came here to post but you beat me to it! I love the front-page link title: “Housing prices start rebound”. Then you read the first line and see them throwing themselves easy back-outs from this statement: “The worst MAY be over” … “But that’s not to say that home prices are going to immediately start going back up” … “there’s a major wild card: the question of whether a wave of foreclosures might drag down local home prices and exacerbate the current economic slowdown.”
This is a for-real, coffee-out-the-nose LOL. Gotta give ’em credit for this though:
“The hiring pace has slowed considerably”
“Making matters worse, 40 percent of the jobs created during the past year have been in leisure and hospitality, the lowest-paying job category in San Diego, paying an average of $376 per week – less than half the average construction salary of $862.”
I can’t see how they can put this job slowdown in the same article as a hypothesized housing rebound. And $376 per week? That’s less than $20k per year assuming they work every week! Where will those people live?
May 1, 2007 at 8:50 AM #51517SD Attorney
ParticipantMISSION ACCOMPLISHED!!!
This article needs to be saved. Let’s email the author Dean Calbreath periodically over the next few years to remind him how asinine his article is.
It truly reminds me of when Bush stated Mission Accomplished four years ago in Iraq.
May 1, 2007 at 9:23 AM #51519Anonymous
GuestWhat a joke! The Anderson Forecast and economists in general are so clueless about the real world. The fact that Alan Gin contributed to the forecast demonstrates the lack of credibility of this report.
The comical aspect is how they predict housing will start to rebound after a very small drop, and give no empirical evidence to support it. On the contrary, after their initial bullish prediction, they go on and on listing all of the doom and gloom scenarios that we all know in regards to foreclosures, loss of jobs in the industry, etc.
This is one of the most non-sensical articles I have read in quite a while.
May 1, 2007 at 9:33 AM #51521LostCat
ParticipantUCLA and the Anderson Forecast are the biggest two jokes in the country. In fact, I haven’t seen the Anderson Forecast predict the right thing yet, so why do people make a big deal out of it?
F-n UCLA.. Give me a break. What a second rate school…
May 1, 2007 at 10:56 AM #51530AK
ParticipantThe bearish Chris Thornberg left UCLA recently so this ain’t the same Anderson Forecast we’ve seen in past years …
Sort of like the FOMC without inflation hawk Jeffrey Lacker.
May 1, 2007 at 11:45 AM #51535bayparkwatcher
ParticipantStan Sexton, the Realtor quoted in the article, found me my first home eons ago. It’s nice to see a Realtor telling it like it is.
May 1, 2007 at 1:27 PM #51543GoUSC
ParticipantVery weird because I attending the UCLA Forecast today and they specifically stated that we are looking for a 2 year continuing decrease in home prices in San Diego (see my other post).
All in all the presentation was bearish overall nature. Not horribly but when I talked to the speakers afterwards and pressed them they came out being even more bearish in private then when in front of the whole audience.
I specifically asked the chief economist what the impact of a. negative person savings (2 years running); b. increasing personal debt; and c. the inability to use your home as a ATM and his response was “We just don’t know at this time but something will have to adjust to compensate.”
Go figure.
May 1, 2007 at 1:48 PM #51548sdrealtor
ParticipantAgree with almost everything said re Anderson Forecast. FYI, typical home in 2002 was worth about $500K went up to $800K and now sits at $700K would be more accurate. You couldnt buy a decent townhouse for $300K in 2002.
May 1, 2007 at 1:51 PM #51549blahblahblah
ParticipantAgree with almost everything said re Anderson Forecast. FYI, typical home in 2002 was worth about $500K went up to $800K and now sits at $700K would be more accurate. You couldnt buy a decent townhouse for $300K in 2002.
Huh? A typical home in 2002 was $500K? Couln’t buy a decent townhouse for $300K? In SD? A lot of my friends bought nice houses in 2003 for $420-480K. And I remember 2002, there were decent townhomes for $300K in good areas. Maybe you have nicer tastes or richer friends than I do…
May 1, 2007 at 2:32 PM #51554ParticipantConcho,
You miss the point and maybe I didnt do such a great job making it. perhaps this will be clearer.It’s not that the typical home in 2002 was $500K but rather the typical $500K home in 2002 went up to $800K and now sits at $700K. No house worth $200K in 2002 went up to $800K by 2006. I also doubt your friends $420 to 480K homes ever reached a value of $800K.
As for the $300K townhomes in 2002, for about $325K you could get a 3BR/2BA 1400 sq ft 20 year old townhome with a 2 car garage in Encinitas east of El Camino Real. That was my benchmark.
May 1, 2007 at 3:01 PM #51558ParticipantUnderstood sdr, that makes sense. Also, Encinitas is always a little pricier than the areas of SD I usually watch and that explains the difference. It’s funny a $25K difference seems so small now that I would just equate $300K with $325K! In actuality it’s a lot of money of course but I’ve become so jaded with all of these high prices that I don’t even notice $25K now…
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