Sandicor MLS Statics / AUGUST

[SHILOH]

Does the inventory number include properties the banks may be sitting on to keep their balance sheets looking better than they are? If the inventory that banks are sitting on is not represented from foreclosed property – then it’s hard to say how much inventory is out there.

[lendingbubblecontinues]

schizo-

buy a house already, would you please?

in search of some crystal meth….

[Duck]

Haven’t you noticed abandonded houses in your area? I saw 2 this morning…..

Abandonded house? Where do you live? Detroit?

[lonestar2000]

It is yet early, many properties, even distressed ones, held out over the summer in hopes of a sale. It also takes several months for a NOD to turn NOT and then a bit of time for a REO. Mortgage tightening is only starting to make it’s impression now, as those who now MUST refinance or sell are finding out. Also, a new wave of resets is just hitting, which will take it’s toll in the months to come.
And people are finally going back to school which takes attention off the RE market.

Relax guys and gals, it is still very early in the game. Save your pennies, a house at a decent price is yet in our future.

[lonestar2000]

Oh, I forgot to add, only new homes are recorded at the time of contract signing. Existing homes are recorded at the time of escro close, which can take 3 months.
And new home sales are a fraction of the entire RE market.
You’re basically looking at three month old data. Today’s sales will not really bourne out until late November.

So…take a deep breath and relax.
Go play some World of Warcraft on a customized emulator server for a few months. 🙂

[SD Realtor]

Schizo inventory will continue to drop. It will not surprise me if it bottoms out in the 15-16k range by the end of the year. I will not be surprised to see a bump up in sales in the spring as well. This is how inventory cycles work right?

Did you want to address the drop in sales volume or are you going to sidestep around that point?

Look I understand and agree with you that there is a heavy heavy bear bias here. Lots of people do think the sky is falling. If your lucky cyphire will invite you to his re-enforced bunker (jk cyphire)… still though, I think just looking at inventory alone is somewhat short sighted, especially if you are hitting on only 2 months worth.

Being out in the trenches I cannot tell you how many people who have considered selling have indeed just packed it in. They do very much believe that things will improve this spring or next spring and will go on the market then. I am not saying there will be an inventory explosion, I am just saying that just measuring inventory is not enough.

Would you agree with the following?

– Sales volumes are down.
– Inventory is cyclical.
– Lots of foreclosures are still ahead of us.
– The economy has a higher probability of slowing down rather then speeding up in the next 1-2 years.

So looking at those 4 basic statements do you agree or not with them? If you do agree with them, do you think housing prices will increase or decrease?

Now, once again, the frustration level is high for people looking in nicer areas and I sense you fall into that boat. How long those areas will continue to hold price levels where they are is anyone’s guess. The big bears here would say no way can they continue to do that. I am sure if you dig around in posts 1-2 years ago you can find predictions of vast housing devastation predicted for 2007. I believe these areas will come down but I just am not sure when… I believe later rather then sooner for MAJOR declines there. However I definitely do not believe we are at bottom or near bottom if that is what you are trying to imply.

SD Realtor

[schizo2buyORnot]

SD Realtor

“Would you agree with the following?

– Sales volumes are down. YES
– Inventory is cyclical. yoy YES
– Lots of foreclosures are still ahead of us. PROBABLY
– The economy has a higher probability of slowing down rather then speeding up in the next 1-2 years. HARD TO PREDICT

So looking at those 4 basic statements do you agree or not with them? If you do agree with them, do you think housing prices will increase or decrease?” DECREASE (in the near term . . . next 6 months)

The following from Fortune Magazine mirror my sentiments about the current RE situation.

http://money.cnn.com/magazines/fortune/fortune_archive/2007/09/17/100250262/index.htm?postversion=2007090509

“Danger: Steep drop ahead
Even if the credit crunch passes without a major catastrophe, the prices of stocks, bonds and real estate have a long way to fall.

(Fortune Magazine) — Credit crises have always been painful and unpredictable. The current one is particularly hair-raising because it’s occurring amid the first truly global bubble in asset pricing. It is also accompanied by a plethora of new and ingenious financial instruments. These are designed overtly to spread risk around and to sell fee-bearing products that are in great demand. Inadvertently (to be generous), they have been constructed to hide risk and confuse buyers.

How this credit crisis works out and what price we end up paying has to be largely unknowable, depending as it does on hundreds of interlocking and often novel factors and how they in turn affect animal spirits. In the end it is, of course, the management of animal spirits that makes and breaks credit crises.”

SD R . . . would you not agree that

Asset bubbles and bursts are hugely influenced by the emotions of buyers and sellers?

That this emotional factor is inherently difficult to assess?

Very few people successfully time major turns in asset cycles?

Seeing beyond the emotion and focusing a variety of concrete factors is the only way of possibly divining when such turns in asset markets occur?

A weakening dollar combined with a global economic expansion outside of the US means that foreign buyers in the neighborhoods I want to buy in (Scripps, CV, 4S, etc.) make dramatic drops there less certain? How many foreign buyers have you assisted in those areas that 1) have the money (even more if their wealth was from non-US $ assets) and 2) largely ignore many of the finer economic points we banter about here and just buy because the like it, the schools are good, and their friends live there???

Stabilizing inventory always occurs as a leading indicator before any RE cycle turn?

In other words inventories stablize at the top, contract, eventually leading to a price rise. Or, they stablize at the bottom, expand, eventually lead to a price fall. I’m looking for early signals of a turn. Stablized inventories is one factor always preceeding a turn. We would have to have multiple other confirming factors (i.e. stablized sales, falling interest rates, absense of job losses, no recession, etc.) before a turn could occur however. I’m just keeping my powder dry and seeking feedback from persons such as yourself as to the the significance of what could, or could not, be an early leading indicator of a turn.

In search of a crystal ball . . . .

[LA_Renter]

“I’m just keeping my powder dry and seeking feedback from persons such as yourself as to the the significance of what could, or could not, be an early leading indicator of a turn.”

Welcome to the club!

[little lady]

“in search of some crystal meth….”

Hahahahahahahahahhahahhahhalol!

[SD Realtor]

Schizo –

to answer your questions…

Asset bubbles and bursts are hugely influenced by the emotions of buyers and sellers?

Fundamentals get way out of balance first. Those that understand the fundamentals are first to exit. Emotion is what fuels the steep parts of both curves, (up and down)…

That this emotional factor is inherently difficult to assess?

Actually no I do not think the emotional factor is difficult to assess, I think it is painfully easy to assess.

Very few people successfully time major turns in asset cycles?

This is true. However not timing real estate valleys does not harm a homeowner who is buying for owner occupancy. If they are on either side of the valley by a year or so then I see no harm at all. The fallacy is trying to time the bottom.

Seeing beyond the emotion and focusing a variety of concrete factors is the only way of possibly divining when such turns in asset markets occur?

Yes looking beyond emotion is crucial.

A weakening dollar combined with a global economic expansion outside of the US means that foreign buyers in the neighborhoods I want to buy in (Scripps, CV, 4S, etc.) make dramatic drops there less certain?

I can say with 100% confidence that dramatic drops in these areas have no bearing on foreign buyers. Drops in these areas is substantially dependent on employment. A layoff at Qualcomm, many engineering firms, and biotech firms will have more impact on these neighborhoods then the value of the dollar.

How many foreign buyers have you assisted in those areas that 1) have the money (even more if their wealth was from non-US $ assets) and 2) largely ignore many of the finer economic points we banter about here and just buy because the like it, the schools are good, and their friends live there???

In fact none. Every buyer I have assisted in these areas have made their income and augmented their savings through gainful employment here in the United States.

Stabilizing inventory always occurs as a leading indicator before any RE cycle turn?

Yes but that may occur years before the bottom. I can honestly say that I have never ever seen pricing this far extended. It is WAY more extended then in the previous cycles. So if there is any indication of how this will play it, it is on the longer side of a depreciation cycle, not a shorter one. I think you are not considering cyclical inventory cycles as you seem to dismiss them with no thought at all.

What other indicators besides inventory are you considering? Do you think that is the only indicator you should follow? What other indicators to you point to us reaching the bottom of this cycle?

SD Realtor

[little lady]

“Abandonded house? Where do you live? Detroit?”

Santee, and heck yeah… There are about half a dozen homes I can think of abandoned, foreclosed, sitting EMPTY..some for more than a year!!

The last time I saw that TEMECULA ’94.

It didn’t even get that bad in Santee back then!

[Author]

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