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  1. an
    July 28, 2009 @ 3:48 PM

    Thanks for the fancy
    Thanks for the fancy charts.

    When you have time, can you update the charts in http://piggington.com/shambling_towards_affordability_december_2008_edition ?

  2. rocket science
    July 28, 2009 @ 10:38 PM

    Anyone care to
    Anyone care to comment/speculate as to the significance of the “high” end being anything above $398K?
    It appears that a year ago it was more like $552K

    http://piggington.com/may_caseshiller_hpi

    Heck even I think I can ‘afford’ a house in the top third at these prices.

    Lack of activity at the ” high” end (which I think many in this discussion group are geared toward) is a contributor, but what does it all mean?????

    I think this concept was addressed previously but am too lazy to find the thread.

    Saving my pennies for now……

  3. SD Realtor
    July 29, 2009 @ 2:29 PM

    You can see from the
    You can see from the resounding response that not many people care for data that shows results like this.

    • CUD
      July 29, 2009 @ 3:01 PM

      If shadow inventory was
      If shadow inventory was released into market, would it represent much of the total inventory to where it could make an impact in prices?

      You mention the shortage of inventory as a component of the uptick in prices, which to me means that they don’t represent something small like 5-15% of the total inventory. Is this data that is available?

      • jpinpb
        July 29, 2009 @ 5:49 PM

        We already know we are in a
        We already know we are in a spring bounce. The activity is expected and the price increase is nominal in relation to all the money the government has thrown at this and all the moratoria. Is this the best that we can squeeze and manipulate out of this market? This price increase, in my view, is so forced. But then, the bubble was fake too. I guess that’s all we can look forward to from now on. “Fake, fake, fake, fake.”

      • patientrenter
        July 29, 2009 @ 8:37 PM

        jp, it’s fake in the sense
        jp, it’s fake in the sense that it’s not supported by free market forces. Home prices today are mostly the result of government intervention.

        But what’s happening is also very real, in the sense that some people are doing very well from the intervention, and others are losing. And the amounts that individuals are gaining or losing are really quite vast compared to other government interventions we talk about. What it going on is not just “on paper”, or neutral. Vast amounts of real wealth are being transferred. There are people who have retired comfortably, or will, based on the manipulated prices of RE and the manipulated rules for borrowing. Others will have to spend 5-20 more years working to supplant the losses they have suffered, or will suffer. These losses can occur directly from high home prices they have to pay, or from higher taxes to feed money into RE, or from a loss of the purchasing power of their savings due to future inflation (to bail out home buyers who borrowed and paid too much in real terms and don’t want to pay it all off in real terms).

      • jpinpb
        July 29, 2009 @ 9:31 PM

        Yes, the bubble was fake, but
        Yes, the bubble was fake, but those who cashed out and didn’t go on a shopping spree, they are set and will retire well. That is real. True. Some people did well. Mostly the big players in the lending industry.

      • SD Realtor
        July 29, 2009 @ 9:59 PM

        Patientrenter I could not
        Patientrenter I could not agree more with what you said on all accounts. Your synopsis can be/should be extended to more aspects of the overall economy then just real estate.

        What is happening is very real. In no way am I advocating that this is a bottom or people should run out and buy. Conversely I think we are all learning the painful truth about where the real power base resides in our country. That free markets were pretty much a mirage, and they were taken advantage of in such a manner that corporate America decided to have a showdown with the government and the government never had a chance. Those who were crowing about buying a home in Del Mar at 1997 prices or similar crash like scenarios are either beginning to see the light or they are hanging thier hats on future catastrophic events.

        Personally I have come to terms with the situation. Indeed I do agree that we have alot more foreclosures, alot more toxic loans, a hell of a large crash in the commercial RE market, more unemployment, the list goes on… and you know what, as bad as it will get, our leaders will simply continue to mock us and spend money we do not have. While we will have higher taxes for those who have higher taxable income the real wealth transfer of the rich getting richer will indeed occur. Those who were in charge during the runup are not only still in charge now, but have an even stronger power base.

        To be honest, I am not really sure how things are going to pan out with the real estate market. However one thing I am 100% sure of now is the sheer will of our government and the implicit slavery to Wall St.

      • patientrenter
        July 29, 2009 @ 11:11 PM

        SDR, I don’t see it as a
        SDR, I don’t see it as a face-off between corporations and the govt, with the govt losing.

        Almost any political initiative needs two things to be successful:

        1. A broad voter base of support

        2. A (usually much smaller) group of people/ organizations who will receive a very concentrated benefit from the initiative

        In the case of housing, pushing prices up has succeeded in becoming a permanent and incredibly powerful political force because:

        1. Existing homeowners like it that way, and they form a vast majority of active voters across all parties and regions. Most homeowners are incredibly invested in high and rising home prices, far more than almost any other single element of our economic
        system.

        2. The home buying and lending industries are very large, and the people and companies who make a very good living off a booming home market have tremendous resources at their disposal. They can carpet Washington DC with lobbyists and draft laws like no other industry.

        If you were to analyze where each $100 of all that engineered pre-tax gain in home prices goes, I’d guess that about 65-85% goes to homeowners, and the rest goes to the middlemen. But I haven’t done my homework on that. It’s just a guess. It comes from the idea that, when a home bought for $200,000 in 1996 was sold for $1 million of 100% borrowed money in 2007, the seller gained $800,000, less maybe $60,000 in selling expenses. The mortgage brokers and lenders etc probably took about $20-40K up front, and re-sold the loan to Fannie or Freddie, or wherever. So the seller walked away with at least $700K, and all the middlemen walked away with maybe $100K. That’s about 85% of the total profits going to the home seller. I know there’s more going on, but I think the 65-85% is a ballpark.

        SDR or jp, what do you think of this math?

      • SD Realtor
        July 30, 2009 @ 2:11 AM

        I don’t know about the math
        I don’t know about the math as I am to tired to cope with it. As I have said many a time, at some point in 2003 or 2004 the lenders all knew what was down the road and most in the government knew as well. The implication was that when it all crashed and burned there would be some token lambs and the taxpayers would be on the hook for repayment. The investment in leveraged securities by pretty much all of the domestic infrastructure not to mention a hefty foreign investment component all but insured that when the house of cards fell, there would be no other choice. Pretty much every pension, state and local govt, you name it had significant investments. There was no way out. To be honest I dont think the govt gives a sh-t about existing homeowners investments or equity levels. To the contrary I feel as if the govt would rather that homeowners are more in debt because that gives the govt/banks (these are now pretty much interchangable entities) more leverage.

        I think that we the situation is kind of lose lose for awhile. The market treads water and hangs out where it is at with some more losses coming in at the high end. Alternately more bad statistics crop up which will then lead to more astounding backstop efforts, moratoriums, and the likes of measures we would not have dreamed of. I honestly believe there is no limit to how far the current administration will go as well as guys like Frank, Dodd, Schumer etc…

        I really really hope I am wrong.

      • 34f3f3f
        July 30, 2009 @ 2:21 AM

        I’m not clear where this
        I’m not clear where this transfer of wealth is taking place. I saw a lot of wealth go up in a puff of smoke, and then some money pumped back in. Who is getting wealthy now, apart from those who made a buck by getting out early enough? I’m also not clear that the government and Wall Street share the same bed with quite their former gusto. Geitner seems to be upsetting everyone, including Bernanke with threats of meaningful regulations.

      • 4plexowner
        July 30, 2009 @ 3:51 AM

        “You can see from the
        “You can see from the resounding response that not many people care for data that shows results like this.”

        or they realize that an 0.4%, month-over-month “improvement” isn’t worth getting excited about – is there a margin of error in the Case-Shiller data? is the margin of error less than 0.4%? haven’t we talked enough about the month-over-month figures vs the year-over-year data?

        is there other data that would lessen the excitement about a 0.4% “improvement” in the C-S data? oh, yeah

        [img_assist|nid=11603|title=Worst since 1982|desc=|link=node|align=left|width=400|height=236]

        http://www.ritholtz.com/blog/2009/07/more-charts-on-new-home-sales/

      • sdrealtor
        July 30, 2009 @ 11:24 AM

        I dont think anyone is
        I dont think anyone is getting excited but the data show the that we have most likely seen the worst of it. We should bounce around these levels for the next several years then off we go again.

        As for the fall in new home sales there is no surprise there. You cant sell what you arent building.

  4. ocrenter
    July 29, 2009 @ 10:44 PM

    prediction
    this would be my

    [img_assist|nid=11600|title=prediction|desc=|link=node|align=left|width=100|height=59]

    this would be my prediction for over the next year. expect some additional drops at the high end to get down to near or at -40% down from peak. mid-market would go to -45% down from peak. but the low end already hit bottom and might actually see slight increase in pricing.

    is it worth the wait for a mid-market home currently at -40% to get to -45% down from peak? probably not.

    is it worth the wait for a top-tier market home currently at -30% to get down to -40% from peak? probably worth the wait.

    • temeculaguy
      July 30, 2009 @ 7:11 PM

      ocrenter
      [quote=ocrenter][img_assist|nid=11600|title=prediction|desc=|link=node|align=left|width=100|height=59]

      this would be my prediction for over the next year. expect some additional drops at the high end to get down to near or at -40% down from peak. mid-market would go to -45% down from peak. but the low end already hit bottom and might actually see slight increase in pricing.

      is it worth the wait for a mid-market home currently at -40% to get to -45% down from peak? probably not.

      is it worth the wait for a top-tier market home currently at -30% to get down to -40% from peak? probably worth the wait.[/quote]

      I am in complete agreement with oc’s prediction. The percentage hit that the different price ranges took will converge a bit (I also agree the bottom is in for the low end), it overgyrated a little for a variety of reasons. The financial stability of the different demographics allowed the higher end to hold on better, but it will not survive the invisible hand. A property that was worth 30% more in 1996, 30% more in 2003, 30% more in 2005, is not worth 50% more in 2010. It might be for a little while, but eventually the masses choose the price and unless a community or neighborhood underwent a dramatic change, the same pecking order will resume. This is especially true when comparing two price ranges of housing in close proximity. If a view lot has been worth a 20% premium on a particular street for the last few decades and now it is worth 40% because the group that could afford the extra 20% was more stable so there aren’t any repos, one of two things will happen but the 20% differential will return.

      I can think so much more clearly now that Odom has signed with the Lakers, the negotiations were literally ruining my summer.

    • sdnerd
      July 31, 2009 @ 11:33 AM

      ocrenter
      [quote=ocrenter][img_assist|nid=11600|title=prediction|desc=|link=node|align=left|width=100|height=59]

      this would be my prediction for over the next year. expect some additional drops at the high end to get down to near or at -40% down from peak. mid-market would go to -45% down from peak. but the low end already hit bottom and might actually see slight increase in pricing.

      is it worth the wait for a mid-market home currently at -40% to get to -45% down from peak? probably not.

      is it worth the wait for a top-tier market home currently at -30% to get down to -40% from peak? probably worth the wait.[/quote]

      As someone who was planning to start shopping the ~$700-800K range towards the end of this year – I sincerely hope your prediction is accurate. πŸ™‚

      My hope has been that by Nov ’09-Feb ’10 most of the significant price declines will have taken place. The sooner we are bouncing around towards the bottom the better.

      Now will there be inventory is the question…

  5. DWCAP
    July 30, 2009 @ 9:48 AM

    Maybe I am wrong, but I dont
    Maybe I am wrong, but I dont think the bottom for the whole market is in. The cheapest segment, maybe. The very lowest segments of the market may very well have been oversold. But I certainly dont think the upper ends of the market have been.

    I just think the market as a whole just isnt done just yet. I think we hit another transition point. We moved out of Crazy bubble times and into normal bubble unwind. C-S index is looking more and more like the 1990’s bubble unwind, where spring rallies are met with fall reductions. Id guess we are somewhere around 1992-1993 timeframes. The bulls are preaching again, the bears are researching again, and the government is doing what it does best, hand out money and ‘stimulus’ (gifts) to the influental and powerful.

    Eventually the government will be forced to unwind alot of the crap they have done, and when they do more of the air will be forced out. They wont unwind everything, and housing buying wont be the same, but the situtation isnt forever. If nothing else, rates will have to go up, and when they do alot of people in adjustable loans will be forced out. That is unless we get alot of wage growth with our subpar economy and 10% unemployment rates. (snicker)

    • SD Realtor
      July 30, 2009 @ 10:50 AM

      From my previous post…
      “In

      From my previous post…

      “In no way am I advocating that this is a bottom or people should run out and buy.”

      What I am saying is that all along I preached my fear of the intervention we would see. In no way do I see that intervention letting up. I do see more foreclosures coming and an increase in inventory as well.

      The transfer of wealth I was referring to was the massive transfer of wealth from our future taxpayers to Wall Street. Of course you don’t see it because it is not visible to you.

      • peterb
        July 30, 2009 @ 11:21 AM

        There’s an incredible amount
        There’s an incredible amount of financial/economic noise, intervention and activity right now. This makes it hard to determine the greatest factors at work in the market. CA U-3 unemployment of 11.5% is a very clear signal to me that this thing has a long, long way yet to go.

      • sdrealtor
        July 30, 2009 @ 11:27 AM

        Like I said, no one around
        Like I said, no one around here is calling a bottom. What we are calling is that the worst of the carnage is past. The time has come to look for the house you REALLY want to live in. If its a good deal in the current market, its worth considering if it makes sense to you. The days of waiting for a massive collapse in values to 2000 prices for desireable homes in the better areas has past. Aint gonna happen on a large scale.

      • capeman
        July 30, 2009 @ 6:57 PM

        sdrealtor wrote:Like I said,
        [quote=sdrealtor]Like I said, no one around here is calling a bottom. What we are calling is that the worst of the carnage is past. The time has come to look for the house you REALLY want to live in. If its a good deal in the current market, its worth considering if it makes sense to you. The days of waiting for a massive collapse in values to 2000 prices for desireable homes in the better areas has past. Aint gonna happen on a large scale.[/quote]

        We still have a bigger wave of resets coming soon and the unemployment rate is still rocketing past early 90s levels. There is no data and no real reason to think that the worst is behind us. Pricing is going up but there is no reason to believe that will last past the short to mid-term with what’s still to come. The gov’t can keep playing hide the sausage and roll-over games but they can’t keep asset prices up forever unless wages catch up. Either way that goes I’ll have a reasonably priced house at some point.

      • 4plexowner
        July 30, 2009 @ 7:05 PM

        “As for the fall in new home
        “As for the fall in new home sales there is no surprise there. You cant sell what you arent building.”

        that’s the kind of glib answer I’d expect from a realtor – the data doesn’t support the answer, but it is the type of answer I’d expect from a realtor

        [img_assist|nid=11610|title=Time to sell new homes|desc=|link=node|align=left|width=400|height=212]

        [img_assist|nid=11611|title=Builders slashing prices to sell new homes|desc=|link=node|align=left|width=400|height=236]

        http://www.ritholtz.com/blog/2009/07/more-charts-on-new-home-sales/

        what the data says is that builders are having a hard time selling the inventory that they have already built and are having to slash prices in order to sell that inventory – the issue isn’t a lack of inventory

      • sdrealtor
        July 30, 2009 @ 8:10 PM

        4plex,
        Bring the unsold

        4plex,
        Bring the unsold inventory numbers please. All I see and hear is that builders have gone out of business and stopped building. I’d love to see something showing that there is more unsold inventory of new homes today than last year. Bring it on Brutha!

        2-stroke
        To answer the question of what the magic number is, I have a very strong opinion and have seen this resistance over and over again. Up to 900K there is solid demand for what is available. As soon as you get past $900K it gets very dicey.

        Capeman,
        Again, I did not call a bottom. Excluding the super-luxury market of multi-million dollar properties, we have seen large declines everywhere. Most places are 20 to 50% off peak. For the carnage not to be mostly done, we would need to see declines from current levels of about 25% in the stronger areas and more than 50% in the slammed areas from current levels. Aint gonna happen!

      • capeman
        July 30, 2009 @ 9:57 PM

        sdr – not much to be said
        sdr – not much to be said until one of us can tell the other “I told you so” but honestly it doesn’t look good for your prediction in the next 5 years.

      • sdrealtor
        July 30, 2009 @ 10:23 PM

        capeman, I feel the same way
        capeman, I feel the same way about yours. Here are a few real examples.

        Low end property selling for 130K now with a peak value of 275K. How is most of the carnage not done there? Could it drop below zero?

        Mid range property selling for 400k now with a peak value of 600K. How is most of the carnage not done there? A decent 3BR single family home in a decent part of SD going below 300K….I dont think so.

        Higher end property selling for 700k now with a peak value of 950K. How is most of the carnage not done there? A 5BR/2700 sf home in one of SD Counties nicest communities and top school districts dropping to the mid 500’s….nahhhh!!

      • capeman
        July 30, 2009 @ 10:31 PM

        130K dropping 50%… not
        130K dropping 50%… not likely. I’ll agree on that but the price spreads between low/mid/upper and not including true luxury homes have never been like they are 2002-now. They will compress quite a lot more (like in the mid 1990s and before) unless the economy, unemployment and credit situations turn around very quickly.

        I’d bet the case/shiller adds another 50% down from here on aggregate in the next five years. That would be 60% down from the peak but I will go so far as to say 70% down from peak and I’ll bet a nice steak dinner on it!

      • sdrealtor
        July 30, 2009 @ 11:11 PM

        The beauty of it all is that
        The beauty of it all is that if it doesnt drop that much I’ll be living in a great thouse in a great neighborhood and if it doesnt I’ll be living in the same house. I already live in it. I’ve got nothing at stake and will be fine with my living situation either way. How bout you?

        FYI, I already bet a really nice steak dinner on much less than that with CA Renter.

      • FormerSanDiegan
        July 31, 2009 @ 8:09 AM

        capeman wrote:
        We still have

        [quote=capeman]

        We still have a bigger wave of resets coming soon [/quote]

        This is spouted every few days as a factor. I agree with your points about employment and wages relative to prices being important. But people need to look at the “coming wave of resets” more carefully.

        The fact of the matter is that the coming wave of resets will result in lower rates for many borrowers. Only the option ARMs where “owners” have allowed their principal to increase (negative amortization) are a real disaster. Your standard 5/1 ARMs made 4-5 years ago would reset to a rate ~1.5 points lower than the original rate (except for those that have a minimum rate, which was typically the start rate).

        Mortgage resets were the match that lit the giant pile of brush on fire, the impact of the upcoming resets is like throwing more matches on the fire, they don’t matter that much relative to the employment and overall economic picture.

      • sdrealtor
        July 31, 2009 @ 11:37 AM

        FSD
        I dont know what you are

        FSD
        I dont know what you are looking at but looking at the current trajectory of the new home months of inventory on that graph, it looks like we could be below 6 months of inventory in the next quarter.

        sdr

      • FormerSanDiegan
        July 31, 2009 @ 1:49 PM

        sdrealtor wrote:FSD
        I dont

        [quote=sdrealtor]FSD
        I dont know what you are looking at but looking at the current trajectory of the new home months of inventory on that graph, it looks like we could be below 6 months of inventory in the next quarter.

        sdr[/quote]

        Here’s what I looked at: current sales are a bit less than 400,000 units on the graph. If this were instantly (a thought experiment not a prediction) 600,000 units, the months inventory would go from 9 months to 6 months.

        600,000 units is small by historical standards and about half the recent peak.

        If we have any reasonably economic recovery, I would expect new home prices to stabilize in short order somewhere around current levels.

      • sdrealtor
        July 31, 2009 @ 2:27 PM

        One complication is that the
        One complication is that the months of inventory factor in new homes being built and that is happening at a decreasing rate. I dont know how to factor that in but its not as simple as multiplying sales by months of inventory if that makes sense.

        Additionally they have scaled back so much it will take time to gear up again. I beleive we will see a very real shortage of new homes across the US in the near future.

      • CA renter
        July 31, 2009 @ 2:11 AM

        sdrealtor wrote:Like I said,
        [quote=sdrealtor]Like I said, no one around here is calling a bottom. What we are calling is that the worst of the carnage is past. The time has come to look for the house you REALLY want to live in. If its a good deal in the current market, its worth considering if it makes sense to you. The days of waiting for a massive collapse in values to 2000 prices for desireable homes in the better areas has past. Aint gonna happen on a large scale.[/quote]

        Why, specifically, do you think we won’t see a crash in the higher-end? What, specifically, will be the impetus for future price rises over the next decade?

        Do you see new jobs and raises coming, or will it be an influx of wealthy foreigners with stronger currencies (the only “hope” I see for the higher end)?

        Do you attribute the growth we’ve seen since 1982 to ingenuity and productivity growth, or do you think a credit bubble might have been responsible? Will be be able to maintain the size and strength of the credit markets as we move forward? Do you think the Baby Boomers might have had an influence on prices during the 1970-2005 era, and do you think the majority of new immigrants and existing citizens (with their falling wages and disappearing benefits and pensions) will have the same effect on housing prices, as those Baby Boomers downsize, consolidate, and pass away over the next few decades?

      • sdrealtor
        July 31, 2009 @ 11:19 AM

        CA Renter
        I always ignore the

        CA Renter
        I always ignore the real higher end because that is not something mainstream folks like myself or most of my clients concern themselves with. The homes that are approximately $700K to low $1M’s are what I consider higher end. Are we referrring to the same higher end? I cant answer your question until I know the answer to that.

      • CA renter
        July 31, 2009 @ 2:35 PM

        sdrealtor wrote:CA Renter
        I

        [quote=sdrealtor]CA Renter
        I always ignore the real higher end because that is not something mainstream folks like myself or most of my clients concern themselves with. The homes that are approximately $700K to low $1M’s are what I consider higher end. Are we referrring to the same higher end? I cant answer your question until I know the answer to that.[/quote]

        To me, “high-end” would mean homes that are generally priced in the $1MM+ range.

        Here’s my thesis: if a house that sold for $2MM in RSF should sell for $1MM in 2011, what would keep the prices up in tracts like LC Oaks? Personally, we’ve started to take a longer look at the “higher-end” (customs that might have been priced at $1.5MM-$2MM at the peak) in hopes of finding something with less competition…but with the right lowball offer, could come in at or around the same as the high-mid/low-high (tract homes listed at $700K-$800K), where there are too many people competing to overpay.

        We certainly can’t be the only ones thinking about this. If the high end deteriorates enough, it will squash the tract homes in places like LC and Enc.

      • jpinpb
        July 31, 2009 @ 7:19 PM

        CA renter – I’m with you on
        CA renter – I’m with you on price compression on all levels. If places in Bay Park that sell, say, for 500k to 600k come down to 400k, then why would I buy a place in Clairemont for 400k. Clairemont would have to reduce also.

      • Eugene
        August 1, 2009 @ 12:51 PM

        jpinpb wrote:CA renter – I’m
        [quote=jpinpb]CA renter – I’m with you on price compression on all levels. If places in Bay Park that sell, say, for 500k to 600k come down to 400k, then why would I buy a place in Clairemont for 400k. Clairemont would have to reduce also.[/quote]

        It could just as easily work backwards. If you don’t have enough supply in Clairemont at 400k price point, Clairemont would appreciate and compress the gap with Bay Park till enough buyers elect to pay a bit extra to live in Bay Park instead of Clairemont.

        Which one of the two scenarios would materialize? That depends on the amount of overall supply and demand.

      • sdrealtor
        August 1, 2009 @ 1:55 PM

        Pretty shaky thesis. For $2M
        Pretty shaky thesis. For $2M at the peak in RSF you got a shack that needed several hundred thousand of rehab work. Decent houses in RSF are very disconnected from NCC tract homes by several degrees of affordability. BTW if high end nice custom places deteriorate there are plenty of people a few degrees higher on the food chain waiting to snap them up.

      • an
        August 1, 2009 @ 11:19 PM

        Some latest charts from SDHPI
        Some latest charts from SDHPI with July data:

        [sdhpi-0907-tiers.png]
        [sdhpi-0907-tiers-2.png]
        [forecast-0907.png]

      • CA renter
        August 2, 2009 @ 3:17 AM

        sdrealtor wrote:Pretty shaky
        [quote=sdrealtor]Pretty shaky thesis. For $2M at the peak in RSF you got a shack that needed several hundred thousand of rehab work. Decent houses in RSF are very disconnected from NCC tract homes by several degrees of affordability. BTW if high end nice custom places deteriorate there are plenty of people a few degrees higher on the food chain waiting to snap them up.[/quote]

        I’d rather buy this:

        http://www.sdlookup.com/MLS-090042948-16934_Mimosa_Rancho_Santa_Fe_CA_92067

        or this:

        http://www.sdlookup.com/MLS-090012753-7376_La_Soldadera_Rancho_Santa_Fe_CA_92067

        or this:

        http://www.sdlookup.com/MLS-090013018-7236_La_Soldadera_Rancho_Santa_Fe_CA_92067

        INSTEAD OF THIS:

        http://www.sdlookup.com/MLS-090024382-6831_Helenite_Carlsbad_CA_92009

        or this:

        http://www.sdlookup.com/MLS-090040091-2914_Las_Olas_Ct_Carlsbad_CA_92009

        or this:

        http://www.sdlookup.com/MLS-090030747-

        —————–

        While I admit that there are very different tastes (and we prefer the older, custom, single-story homes with character), you can live in RSF for the same price you’d pay to live in a stucco box in a tract neighborhood in LC or Enc.

        …and I know you’ve seen the inventory numbers/days of inventory for RSF, Del Mar, etc.

        The high end is going to clobber the high-mid tier, IMHO.

      • CA renter
        August 2, 2009 @ 3:20 AM

        BTW, where are all the
        BTW, where are all the “people a few degrees higher on the food chain waiting to snap them up” right now, when there is PLENTY of inventory for them to choose from?

        They seem to be absent from the housing market, no?

      • sdrealtor
        August 2, 2009 @ 11:51 AM

        CA R
        You proved my point for

        CA R
        You proved my point for me. The older custom single story homes in need of major remodelling in RSF appeal to folks with very different tastes and thus ar enot connected to the high mid-tier homes in NCC. Someone looking for a new 4000 to 5000 sq ft 5br/4.5BA LC Villages trophy home doesnt view the older RSF 1 story customs as close substitutes.

        The folks higher on the food chain dont want those 40+ yr old fixers in RSF. Those arent what i was referring to as decent homes in RSF. Most people look at those as teardowns. You are comparing apples to oranges and they arent connected.
        sdr

      • CA renter
        August 2, 2009 @ 4:31 PM

        Excellent! Less competition
        Excellent! Less competition for me. πŸ™‚ πŸ™‚ πŸ™‚

      • CA renter
        August 2, 2009 @ 4:32 PM

        BTW, I’m sure you’ve seen
        BTW, I’m sure you’ve seen some of the names of the owners of those single-story customs. I’ll bet those people are far further up the food chain than the new money buying the McMansions.

      • sdrealtor
        August 2, 2009 @ 7:27 PM

        There shouldnt be much
        There shouldnt be much competition for the dogs of RSF. But that wont impact the high mid tier which would discredit your thesis.

      • CA renter
        August 2, 2009 @ 10:28 PM

        Perhaps you’re right, sdr.
        Perhaps you’re right, sdr. Only time will tell. Still looking forward to 2012. πŸ™‚

  6. 2-stroke triple
    July 30, 2009 @ 12:10 PM

    SDR et al,
    Watching from the

    SDR et al,

    Watching from the sidelines it appears that there may be a price point above which sales are really slow. Where we live in Coronado, very little is moving above $900K. In Point Loma, Mission Hills and Kensington the cutoff looks to be between $650 and $750K. Not sure about the more desirable coastal areas in North County.

    From your perspective, what is the magic number above which little is moving? What is driving this number? Conforming loan limit? How sensitive is this number to interest rates, size of down payment, etc?

    • SD Realtor
      July 30, 2009 @ 12:17 PM

      To me the magic number varies
      To me the magic number varies with the neighborhood. I dont think anything in particular is driving this number. Once you get into the 7 figure zone it is always a slower ballgame. It is intuitive to state that these high enders are where the biggest potential for the most pain is.

  7. FormerSanDiegan
    July 30, 2009 @ 2:02 PM

    What I find most interesting
    What I find most interesting about this is that one of our own regular Pigg contributors (esmith, I believe)actually released this news on JUNE 1ST !

    http://sdhpi.blogspot.com/

    Here is an excerpt …
    “Regarding the official Case-Shiller index with 3-month averaging, next month’s numbers for San Diego should be flat or slightly down, but May C-S will definitely be up (due to be released July 28, if I’m not mistaken)”

    So, when C-S is reporting in November that prices are up year-to-date in San Diego through August, you’ll already be able to see whether they will be sustained through early fall.

    It’s like getting the press release 8 weeks in advance.

    • jpinpb
      July 30, 2009 @ 2:16 PM

      From the ZIPs I’m watching,
      From the ZIPs I’m watching, there’s a lot of activity 500k and under and anything above that moves a little slower. Then anything 800k and above moves slower yet. Just what I’m observing.

      Be interesting to see what happens once summer is over. As I said, and as everyone knows, spring and summer is historically the best time to see sales and we are seeing them, as expected, particularly w/the incentives out there.

      Maybe the banks will never release their inventory and people will be living there for free ad infinitum. In that case, we are at bottom for sure. Also a new low in moral hazard. The consequences are minimal. The incentives are great. Buy now and stop paying.

      • FormerSanDiegan
        July 30, 2009 @ 2:33 PM

        I would guess that by
        I would guess that by December or January we will see year-over year increases in the Case-Shiller index in San Diego for the first time in the current cycle.

        Of course, this won’t be headline news until March or April 2010.

        AT that point we will also be debating the vagaries of the C-S index and why it is biased based on market mix and other factors.

  8. Anonymous
    July 30, 2009 @ 11:20 PM

    There is a clear seasonal
    There is a clear seasonal trend to the numbers, so I fail to understand the excitement of some when we can see a similar pattern every year. I don’t think prices will approach zero at the lower bound, so…?

    Considering the extraordinary and unnatural manipulations of the CA markets it’s hard to see any potential for meaningful and sustained price increases over the medium to long term. Some are more cavalier with their gambling dollars than others!

    I know SDrealtor – I hear you and I see you on your points. Perhaps FHA really is the new subprime. Maybe the bubble is back baby! You are cunning in your approach – I have to hand it to you. You understand psychology.

    • sdrealtor
      July 30, 2009 @ 11:25 PM

      Bubble isnt back and aint
      Bubble isnt back and aint coming back anytime soon. I do understand market psychology though very well.

  9. 4plexowner
    July 31, 2009 @ 4:11 AM

    “Bring the unsold inventory
    “Bring the unsold inventory numbers please”

    [img_assist|nid=11619|title=New home sales and inventory|desc=|link=node|align=left|width=400|height=280]

    http://news.goldseek.com/GoldSeek/1248934020.php

    looks like 9 months of inventory at the current rate of sales – according to Rich, there is downward pressure on pricing above an 8 month supply

    “more unsold inventory of new homes today than last year”

    the number of new houses is only half the equation – the rate at which those new houses are selling is the other half – based on the chart above, inventory vs sales was climbing until the start of this year

    was it the national and state tax credits that caused the trend change this year? is it a housing / economic recovery causing the change? builders have reduced / stopped building so the inventory vs sales numbers are improving? the massive “green shoots” campaign along with the annual spring / summer uptick in housing purchases perhaps? combination of factors?

    • FormerSanDiegan
      July 31, 2009 @ 8:20 AM

      4plex makes an excellent
      4plex makes an excellent point. Way to bring data.

      It would take sales levels reaching rates equal to about 50% of peak levels (~600k units) to get months of inventory below 6 months. That sales rate corresponds to sales rates at 200 or 2001 levels.
      IF (a big if) there is a general economic recovery, I don’t see why new home sales wouldn’t reach 600,000 units or so over the next couple of years.

      Prior to the current recession, the last time sales rates were below 600k units was 1992.

      • peterb
        July 31, 2009 @ 9:02 AM

        Former makes a very good
        Former makes a very good point. But I’ve seen data on the payment type that is being made by most holders of this loans. And as many may have suspected, most are making the absolute minimum amount allowed by the lender. So when the borrower has to start making the real payments, even though the adjustable is low at this time, it’s still a great deal more than they were previously paying.

        There’s a very good chance that this persistantly high unemployment is going to create another round of defaults on all kinds of personal credit lines and loans. When one is unemployed, there’s no loan mod or other way around it, they’re going to default. And we know the chain reaction this can create.

      • FormerSanDiegan
        July 31, 2009 @ 9:19 AM

        peterb – I agree that it is
        peterb – I agree that it is employment which is the main issue.

      • FormerSanDiegan
        July 31, 2009 @ 9:16 AM

        FormerSanDiegan wrote: That
        [quote=FormerSanDiegan] That sales rate corresponds to sales rates at 200 or 2001 levels.
        [/quote]

        Correction: 1991 or 1992 levels.

    • sdrealtor
      July 31, 2009 @ 11:34 AM

      4plex
      That is not what I

      4plex
      That is not what I asked for and proves nothing. If anything it substantiates my case. I asked for actual Unsold Inventory Numbers not months of inventory. What this graph shows is that months inventory dropped 25% in a few months. Months inventory rose because sales fell not because there was a growing unsold inventory. The builders arent building much anymore so months inventory should continue to plummet. It’s dropping like a rock right now. New home sales will continue to show low numbers even in the face of any recovery because inventory is dropping.

      lastly, the “downward pressure on pricing above an 8 month supply” is a rule of thuimb Rich put out there are hardly a hard rule. Couple that with a very local market for RE and these national numbers tell me very little about any specific market. Some ar elikely in far worse shape while others are in far better shape.

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