I’m going to get the whole December resale data rodeo up very soon. In the meantime, here’s a quick look at the pummeling taken by prices (as measured by our imperfect indicators, of course).
For the month of December, the size-adjusted median price was down 4.6% for single family homes, 5.8% for condos and 5.0% overall. That’s right, for the month. The graph below shows the declines from the peak.
The plain vanilla median fared even worse, for what that’s worth, down 6.4% in a single month. More to come…
Nothing that we haven’t
Nothing that we haven’t anecdotally heard about, but “ouch” comes to mind.
15% reduction between June
15% reduction between June 07 to Dec 07.
5% in ONE month??? Who said
5% in ONE month??? Who said they won’t be giving houses away!
I’m not so sure. I just can’t wait for the vast majority of resets to happen.
I’m as bearish as the next
I’m as bearish as the next guy and more so than many, but I can’t believe that 5% will hold. It’s gotta be an aberration. Either that or we just heard the bubble pop.
I think it’s about time for
I think it’s about time for an article in Voice of San Diego and/or the Union Fibune called “San Diego Real Estate Market Geniuses Revisted” with prior quotes from George Chamberlin, Chuck Smiar, Alan Nevin, Gary Watts, etc. It would be an all-encompassing eat-their-words-athon that would show them all for the complete frauds that they are. Oh, but I forgot… we have to forgive them… this was all so “unprecedented” and “unpredictable.” The “100 year flood.” Yeah… no one saw this coming…
Bugs — Do you think that
Bugs — Do you think that lenders slashed prices as they were trying to get some homes off their books? If so, I wouldn’t expect any more 5% months (until next December, anyway), but since they trashed all the comps I also wouldn’t necessarily expect a rise. (If that’s what you meant by prices not holding).
Davelj — I wish I’d been more diligent about collecting permabull quotes. Man, that would have been fun. I half-heartedly started collecting Chamberlin quotes in 2006 and wrote about it here: http://piggington.com/chamberlin_supplemental
The really fun quotes would have been in the 2004-5 region when these guys were at the height of their arrogance… but alas, I did not have the foresight.
Did any Piggs collect anything like this? If so maybe we could put something together. Not just to be a jackass (though that’s part of it), but to hold analysts accountable for the bad advice that had a negative impact on people’s lives.
Rich
“Not just to be a jackass
“Not just to be a jackass (though that’s part of it), but to hold analysts accountable for the bad advice that had a negative impact on people’s lives.”
meh. crucify them! especially gloria penner and her round table of idiots.
I agree, hold every one of
I agree, hold every one of those idiots (Chamberlin, et al) responsible and mock them daily. They caused this whole mess for sure!
Rich: Is your data from
Rich: Is your data from DataQuick? I’m just wondering when we’re going to get the bold headlines from the UT showing these incredible losses.
While all of us know the blogs are way ahead of the mainstream media, the reach of the dinosaur media is important.
Bah, I feel certain this
Bah, I feel certain this reflects not an underlying value shift as much as a mix shift. Volume on higher $/sf falls, volume on lower $/sf increases, therefore median shifts dramatically lower.
Now if Case-Shiller HPI reports 5% MoM declines, the world, at least locally, is coming to an end.
Stop being fearful. When
Stop being fearful. When median price was going up 5% a month, did you see UT and the DataQrooks guys nuancing the 5%. No, it was only when prices started going down did they started explaining away all losses. So gains, all goods. Drop, not real.
And the Qrooks will just say its down 15%, never in the history of the galaxy have home prices gone down that much or at all. Buy now.
I beleive what you just
I beleive what you just observed is the switch to a foreclosure driven market. For the last two years, only the perfect homes were selling and prices were holding up pretty well. Now the screaming deals (given current market conditions) are dominating the market.
Rich,
I recall your
Rich,
I recall your Chamberlin article and enjoyed it so much that I thought a more all-encompassing article would be even more enjoyable. When time permits I’m going to do some internet searches for prior quotes from these clowns. Maybe we can dig up enough for a shame-a-thon.
Let’s add Rick Hoffman
Let’s add Rick Hoffman (Coldwell) & Stephen Rodgers (Prudential Cal) who through their eternally sunny real estate columns in the Sunday paper are personally responsible for influencing what must be thousands of San Diegans to buy at just the “wrong” time, thus indirectly causing millions upon millions in residential RE losses (with plenty more to come). Their constant “Now is the Best Time to Buy” mantra throughout this entire crash (and still harping it to this day) may be the most irresponsible advice since the Enron executives were touting their stock just before the scandal. If the real estate industry were regulated SEC, do you think they would be walking free?
If many quotes can be found
If many quotes can be found online then creating a Wikipedia page for each person to log and cite them might be the way to go. Then you can reference that Wikipedia page for Chamberlin and others for an article.
Why go looking in the past
Why go looking in the past when they are still with us. Froma n article on the woes of KB Homes in 1-9-08 LA Times.
The National Assn. of Realtors gave a more upbeat assessment of the housing market Tuesday, predicting that home sales would hold steady and then climb by year's end.
"A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed until late 2008," NAR chief economist Lawrence Yun said.
Yep, those lines on the graph are going to make a right hand turn.
rs
Rich,
I think sdr may be
Rich,
I think sdr may be onto something when he commented about switching over to an REO dominated market. As far back as I can remember on this board when we were talking about how the REOs would influence the market we were bandying about a 25%-30% ratio of REOs vs. Non-REOs as being the trigger point. Prior to that amount, the REOs would be seen as being infrequent, inconsistent and more affected by the regular sales prices than vice-versa.
I’ve always thought that once the percentage of REO sales exceeds that trigger point they become frequent enough to be considered a viable alternative to buying a non-distressed property. At that point they start to drive the market based on the principle of substitution – if a buyer waits long enough they know another one will pop up.
For the most part, sales closing in December would have been negotiated in November and would have been listed in September or October. This was right after the magnitude of the financing problems became more apparent.
I think sdr is right and we’ve passed that tipping point. The 100th monkey has now picked up the habit and from here on out the rest of the troupe is going to be all over it. The banks are starting to recognize that they have a huge supply of these coming down the pike and that the market won’t turn around in Spring of 2008 after all.
Thanx for the plug Bugs. I
Thanx for the plug Bugs. I spend too much time for my own good pouring over the mls inventory and recent transactions as well as networking with many other agents. From this I often see trends developing well before they are apparent or can be verified via statistics.
Here’s another thing i’ve recently observed of late. I’ve seen a few properties (townhomes) in relatively prime market areas that are close to 2002/early 2003 prices. They look to be close if not at positive cash flow. To test my hypothesis, I actually put a rental ad up at the price i would need to get to break even with 10% down at the price I believe I could negotiate. I got about 20 responses from potential tenants in a few days.
Duplicate
Duplicate
LorenD
coastal real estate
LorenD
coastal real estate devotee
My experience is that the sub-prime mess did stop the spigots and it was harder to get a loan late in 07 but I think by March or April we will see the lenders come out with new programs and we will be heading back to a more normal lending environment. This is the main reason for the acceleration on the downside. Expect a bounce due to extreemly low rates and pent up demand.
We hear all kinds of hype about the sub-prime market but the truth is the vast majority of sub-prime borrowers have not missed a payment. The resets coming are going to leave most borrowers close to the rate they have now because many are pegged to the 1 year LIBOR which is under 3 right now. The RE-Set deal is a non issue at least for now.