A quote from Jim the Realtor. Look for his take on Alan Gin.
QUOTE
“Last year, sales dropped 17.5% between June and July, this year it’s 28%. (It was a 9% drop in 2004)
The statistics don’t reflect the buyer psychology though. They are being very picky about what they buy, and very careful about the price they pay.
The buyer psychology is all that matters. I am getting so sick of guys like Alan Gin saying there won’t be a problem unless we have significant job loss. He’s an idiot, and obviously he has never sold houses.
I lost all respect for him a couple of years ago when I went to his annual forecast. He trots out a handful of his students at USD to report on their findings about the real estate market. These kids have never owned a house, never thought about buying a house – they are just college kids guessing at what might happen, yet his forecasts are supposed to be credible?
The North County Association of Realtors keeps reporting the same, no bubble to burst here.
Looking at these numbers, you might come to the same conclusion, that the median sales price is flat.
But the median sales price is a lousy indicator. If it would have dropped down one more sale, the median sales price would have been $573,750. That’s probably a better reflection of things to come.”
END QUOTE
Alan, the reason I say you are lying is well explained in the post I made which starts this thread.
As a professor of real estate, you couldn’t possibly believe this stuff. You ought to know that
* prices on many homes are back to 2004 levels,
* sellers are bringing money to closing (one $480K sale brought $60K to closing last month),
* 3 condo developers downtown are cancelling projects,
* 30% of listings are vacant,
* sales are down 30% vs. June 05,
* prices softenend in 04 for low end and in 05 for the mid and high end, while median went up because the distribution of homes sold has shifted,
* $1.7 trillion nationwide ARM resets will cause massive foreclosures in 2007-2008,
* you don’t need a recession to cause high foreclosures because ARM resets cause the inability to make mortgage payments just as a job loss would,
* high use of exotic loans will cause payments to rise 30-70%, causing more foreclosures
, I could go on on and on.
Families in Poway are in foreclosure, even those who bought in the 1980s and refinanced out all their equity.
I sold my house in January 06, for 5% below last summer’s price. I signed a 2 year lease.
The median is a 2 year lagging indicator. The market turned 2 years ago, and the median is not showing it yet. It is unbelievable that not ONE real estate professional has come out to educate San Diegans about the true state of this market. Instead, we are told that everything is fine, prices will plateau. Alan, what do you make of the chart on the main page of this blog, showing the ratio of per capita income to median house price? Why do you not talk about that? Is this a new idea to you, to calculate such a thing? Why don’t you mention rising months supply, low HAI? Why do I seem to know more about real estate than you?
So either you are uninformed about this market, in which case I will happy to meet with you and educate you about the market, or you are lying.
