All homes on websites are already sold

[kev374]

I am checking realtor.com, ziprealty.com, redfin.com etc. etc. and notice that virtually all of the homes below the $400k level (whatever scant inventory there is) are already in “backup offer” status despite being on the market only a few days.

I know the market is red hot right now but could this also be that by the time they hit the MLS they are already sold? Perhaps unofficial channels are getting news of the listings before it even becomes official? If so, who gets news of the listing before it comes on the MLS?

There is no way all the new listings can already be sold within 1 day. Is that even possible?

The only 1-2 homes I found (in the ENTIRE county of Orange) were “Active” and only because they were severely overpriced.

[HLS]

I do not believe that the ‘market’ is ‘red hot’ any more, maybe in the lowest price range, because people are being scared into buying and that that they are ‘going to miss out’

A MLS listing is instant when it gets listed.
There is no (*VALID*) reason to list it if the agent has a solid offer, unless they want back-ups. There is no time lag that makes it an ‘unofficial’ listing.

It is possible to have an offer the 1st day though.

You are referring to 3rd party websites that sometimes use outdated information. They automatically track MLS but can be delayed.
There are other sites that do not track MLS, an agent has to list the property there manually.
If they do not do it at the same time as they upload MLS, it gets distorted. Another problem is that the manual sites need to have a manual update when an offer is accepted or it still shows as ‘active’ but it’s not.

A lot of the statistical info is inaccurate but quoted like it is from the bible. (You are also dealing with some sales-people that have no ethics)

[spdrun]

How/why is inventory in San Diego metro up over 50% over the past month? (!)

http://www.deptofnumbers.com/asking-prices/california/san-diego/

Not just deptofnumbers, but looking on realtor.com yields the same thing.

[HLS]

Interest rates have EXPLODED and there is no way of knowing what will happen next.
30yr fixed that was 3.50% 60 days ago is now 4.75%.
Market has definitely turned in some areas.
I think that the party is over for the moment.

‘Shortage of inventory’ does NOT mean that houses are worth more or should be going up.
Days on market, median prices and many other stats that are thrown around is utter foolishness to me but the accepted norm to most people, sheeple and agents that it all somehow means something really important. (It’s just noise)

The ‘market’ is in shock. What very few people seem to realize in the macro is how idiotic the ‘housing market’ is and it’s mostly based on the greater fool theory combined with ‘fear’ of missing out along with the availability of financing to complete a purchase.

In the short to mid term, I see prices coming down in many markets once people come to grip with reality. ‘How much’ remains to be seen, based on how the desperate & impatient people respond.

[spdrun]

So interest rates are slightly higher than they were … last year. zOMGz! The HORROR! Eeeeeeeek!

The housing market, especially in San Diego, seems to be a nasty, irrational beast.

Compare to my local markets, which have been slow to change and generally flat or drifting around a bottom:
http://www.deptofnumbers.com/asking-prices/new-york/new-york/
http://www.deptofnumbers.com/asking-prices/new-jersey/edison/

[The-Shoveler]

Inventory is only going up because prices have gone up. If prices retreat I think the market will go back to mostly distressed sales again (for the most part).

I also think the recent rise in interest rates are having a much bigger effect than most realtors want to tell you.

[spdrun]

This may sound really mean, but more short sales on the market would suit me. Rentals in certain areas of SD work fine (we’re not dealing with things like 30% vacancy rates in Phx — I rented “that” condo ~3 days after renovations were completed, to a very cool med student interne), and not everyone has the intestinal fortitude to deal with a bank as middleman/referee in a short sale.

Frankly, this is looking a lot like what happened after the 2009-10 housing tax credit expired.

[HLS]

[quote=spdrun]This may sound really mean, but more short sales on the market would suit me. Frankly, this is looking a lot like what happened after the 2009-10 housing tax credit expired.[/quote]

It’s not mean at all! There are still many people living in houses that they really cannot afford, lulled into believing that they have some sort of right to live an entire lifestyle way beyond their means. It’s what the govt wants (and needs)

This is a sickness of several generations and is a huge pyramid scheme created by the ‘govt’ to support an artificial economy that is based on debt, (which is just another word for living beyond one’s means)
The govt is going to continue to control the ebb & flow.

I said it years ago and I will say it again.
Foreclosures are not the problem, they are the solution. The govt doesn’t want a solution though. It would destroy the economy.
***
The rise is interest rates has made a HUGE difference in the last 30 days. It is human nature for virtually everybody to hesitate when something has gone up in price 35% in a short period and unless you really need it, most assume that it will come back down or at least go on sale, and are going to wait.

I know of 1 fairly decent sized north county zip code that only has (2) 4bd/3ba 2250 sq ft+ houses for sale in the $400K-$500K price range.
This doesn’t mean they are cheap, it doesn’t mean they are worth more, it doesn’t mean the market is hot but many people will make assumptions and other nonsense based on simple facts that there are only 2 houses for sale.

[spdrun]

The solution to economic woes in the next (say) 10 years would be to embark upon a massive project to rebuild the energy and transport infrastructure of the US not to need fossil fuels.

We keep being bit in the arse every time the price of oil and/or natural gas has a burp, and we can solve this AS WELL AS leading the way to minimizing greenhouse gas emissions.

We lead the way in environmental conservation, starting with Roosevelt the First, we built relatively fast transcontinental railroad when the Europeans and Russians could only dream of building out over such terrain, we built the Interstate system. What’s happened to us over the past 25-30 years.

Yeah, Google is doing some amazing things with I.T., but where’s the will to do more mundane things that require non-electrical engineering as well as electrical?

[HLS]

[quote=The-Shoveler]Inventory is only going up because prices have gone up. If prices retreat I think the market will go back to mostly distressed sales again (for the most part).

I also think the recent rise in interest rates are having a much bigger effect than most realtors want to tell you.[/quote]

I’ll stick my neck out and say that inventory is going up because houses are not selling as fast as they were. The rise in prices was not enough to get people in trouble to sell their house.

It gets to a point that people just cannot wait any longer for various reasons, including death, divorce, job transfer, lack of income, loss of tenant etc. Those who wanted just a little bit more than where the market was a month or so ago may have missed the boat.

There was no reason for houses to go up, they were not cheap, but because interest rates were so low, people only cared about their monthly payment, not how much they were paying.

there are always people that must sell for one reason or another. They do not have the luxury of listening to propaganda from the NAR about how much better the market is going to be in 12 months.

Whatever many (clueless) agents tell anybody is just wishful thinking and poppycock that has been beat into them. The recent rise in rates has created a shock to the system. I’m willing to bet that contracts signed in July will be a disappointing number, and then the industry will put a spin on it

[CA renter]

Great posts, HLS.

[bearishgurl]

Yes, I too agree with your posts, HLS. Except I believe that some areas are much more “interest-rate sensitive” than other areas. Those more sensitive areas are the newer tract development built since 2000, where the family-raising cohort habitually flock to en masse. It doesn’t matter the median value in the tract or condo complex. It could be $250K or $1M+. If it was built after 2000, it attracts the same type of buyer that that buyer typically uses as high of a PM loan they can get without having to pay PMI or MMI. And many do bite the bullet and pay the exorbitant mortgage insurance premiums just to get into the newer tract.

Many, many of the very established areas still have a proliferation of all cash buyers and buyers using <50% PM mortgages.

IOW, I believe that interest rates, high or low, don't have much bearing on actual "worth" of properties in a given area unless high LTV mortgages are the norm in successfully consummated sales.

Therefore, the degree of the impact MIR's have on area sales and values is entirely local.

[Scarlett]

The low number of sales in July, could it be because the bulk of the buyers looking to move for school have already done so to have a few weeks to settle in, especially if the school starts in mid August?

[CA renter]

[quote=Scarlett]The low number of sales in July, could it be because the bulk of the buyers looking to move for school have already done so to have a few weeks to settle in, especially if the school starts in mid August?[/quote]

From what I’ve seen over the years, the “spring selling season” (usually the busiest time of the year for sales) starts to wane around June or July. Of course, interest rates have really shot up and ambitious sellers have been jacking up their prices to such an extent that many (most?) areas are now near or above(!) peak bubble prices.

That being said, the lower sales could most definitely be the result of a lack of listings. There is still very little inventory out there.

[kev374]

Unfortunately I am not seeing a rise in inventory in Orange County…perhaps the situation is different in San Diego. Interest rates have dipped again from 4.6 to 4.29% I believe so perhaps the rise in interest rates was just an overreaction to the Fed statement that they will taper but now they have made it clear they WILL NOT taper and will keep buying bonds indefinitely as needed.

http://www.cbsnews.com/8301-505123_162-57592198/u.s-30-year-mortgage-rate-falls-to-4.29-percent/

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