Slow decline or is a big chunk about to be ripped out?

[highpacific]

Oh come on sdrealtor!

Is it really that hard to imagine a drop of 10% between December and January of this year? Look at the case-schiller index (and Rich’s last post). Hell, it dropped 6% in just the last 12 months in SD. ( of course the coast will be the last hit, obviously )

My money is on “10% down” in 2007. Its in the bag.

[LookoutBelow]

 

[LookoutBelow]

 

[Nancy_s soothsayer]

As an insomniac, I often turn on the radio and fall asleep with the Coast to Coast show with George Noory. For California, as mentioned by a “dowser” who called in that show, the “big chunk about to be ripped out” somehow refers to something else: The Big One. No explanation needed, and I don’t mean to scare nobody. Just relaying the weirdness of the show. I think I better take some Ambien to stop listening to those weird callers.

Lookoutbelow just above must have been stupefied by this post he became mute .

[Nancy_s soothsayer]

As an insomniac, I often turn on the radio and fall asleep with the Coast to Coast show with George Noory. For California, as mentioned by a “dowser” who called in that show, the “big chunk about to be ripped out” somehow refers to something else: The Big One. No explanation needed, and I don’t mean to scare nobody. Just relaying the weirdness of the show. I think I better take some Ambien to stop listening to those weird callers.

Lookoutbelow just above must have been stupefied by this post he became mute .

[PD]

I think we will see a big chunk (10% – 15%) taken out this fall. September to January is going to hurt. In January we will hear a flurry of people saying, “Yippie, we hit bottom!” Prices will go up 2% through May. Then we will see another drop the following fall.
I think there are a lot people out there who have decided to sit tight and ride it out. However, once all hope is gone for a recovery, they will list their houses, feeling afraid and broken.

[PD]

I think we will see a big chunk (10% – 15%) taken out this fall. September to January is going to hurt. In January we will hear a flurry of people saying, “Yippie, we hit bottom!” Prices will go up 2% through May. Then we will see another drop the following fall.
I think there are a lot people out there who have decided to sit tight and ride it out. However, once all hope is gone for a recovery, they will list their houses, feeling afraid and broken.

[sdrealtor]

Just a quick preview of what is ahead. May sales look like they could be down about 20% from last year countywide while condo sales could be down around 30%. Based upon May’s pendings that I have seen, June closings are going to be awful unless there are quite a bit of extended escrows from April.

[sdrealtor]

Just a quick preview of what is ahead. May sales look like they could be down about 20% from last year countywide while condo sales could be down around 30%. Based upon May’s pendings that I have seen, June closings are going to be awful unless there are quite a bit of extended escrows from April.

[no_such_reality]

I’m seeing a long medium slide of 4-8% in the median. That’ll in reality reflect a 10% or so drop in like for like that trickle down year after year. Median will move down slowly, because as prices slide, they’ll by better for more, but less than the junk they could’ve bought at peak.

The primary problem I see is buyers will sit tight that have equity and must sell owners will quickly become can’t sell owners because they can’t bring the money to the table and can’t get a short-sale.

That “must sell” home first sits as a wishing price, then as late mortgage, then NOD, then NOT, then eviction, then vacant REO and eventually rehits the market a year later. Just to turn another must sell owner into a can’t sell owner.

I see a very illiquid market ahead if we get the spring fizzle to turn into a fall flop. Prices are holding, inventory is dropping, but sales volume is still dropping. That means sellers are giving up selling and trying to hunker down.

The prices will then set by a owner that bought in 2000, with a fixed loan they can afford, that wants to move and looks out at a world of REOs.

Unlike the 90s, streamlined refis to save an FB will be difficult. When rates are going from 10% to 8%, taking a loan at 10% with 27 years left and turning it into a new 30 year at 8.5% is easy to do to prevent a default. Doing the same when the homeowner had a 3% teaser with rates at 5.5% when rates are going from 6.5 to possible 7-8% range, doesn’t give the owner payment relief.

Other than our Congress, who will be willing to take below Treasury yield returns with more risk? Possibly the Chinese, if they can keep the bubble inflated, they can keep us buying junk, which is the bulk their economy. That’s a long shot though.

[no_such_reality]

I’m seeing a long medium slide of 4-8% in the median. That’ll in reality reflect a 10% or so drop in like for like that trickle down year after year. Median will move down slowly, because as prices slide, they’ll by better for more, but less than the junk they could’ve bought at peak.

The primary problem I see is buyers will sit tight that have equity and must sell owners will quickly become can’t sell owners because they can’t bring the money to the table and can’t get a short-sale.

That “must sell” home first sits as a wishing price, then as late mortgage, then NOD, then NOT, then eviction, then vacant REO and eventually rehits the market a year later. Just to turn another must sell owner into a can’t sell owner.

I see a very illiquid market ahead if we get the spring fizzle to turn into a fall flop. Prices are holding, inventory is dropping, but sales volume is still dropping. That means sellers are giving up selling and trying to hunker down.

The prices will then set by a owner that bought in 2000, with a fixed loan they can afford, that wants to move and looks out at a world of REOs.

Unlike the 90s, streamlined refis to save an FB will be difficult. When rates are going from 10% to 8%, taking a loan at 10% with 27 years left and turning it into a new 30 year at 8.5% is easy to do to prevent a default. Doing the same when the homeowner had a 3% teaser with rates at 5.5% when rates are going from 6.5 to possible 7-8% range, doesn’t give the owner payment relief.

Other than our Congress, who will be willing to take below Treasury yield returns with more risk? Possibly the Chinese, if they can keep the bubble inflated, they can keep us buying junk, which is the bulk their economy. That’s a long shot though.

[NotCranky]

Reviewing the thread so far.

We have a big “chunk” being ripped out right now,except the coastal markets an then depending on who you believe.

A big “chunk” will be ripped out when REO prices get slashed like the builders are apparently doing in Temecula.

A big “chunk” will get ripped out when the recession is “officially” announced.

A big “chunk” will get ripped out as the bond market gets more attracative

A big “chunk” gets ripped out because we will have no buyers at any price.

Real Estate goes to Zero by noon today!
Seriously, This has been a great thread
Thanks sdr,bugs and the rest :).

[NotCranky]

Reviewing the thread so far.

We have a big “chunk” being ripped out right now,except the coastal markets an then depending on who you believe.

A big “chunk” will be ripped out when REO prices get slashed like the builders are apparently doing in Temecula.

A big “chunk” will get ripped out when the recession is “officially” announced.

A big “chunk” will get ripped out as the bond market gets more attracative

A big “chunk” gets ripped out because we will have no buyers at any price.

Real Estate goes to Zero by noon today!
Seriously, This has been a great thread
Thanks sdr,bugs and the rest :).

[Reality]

Psychology on the buy-side is of course most relevant in a situation where someone has the means to get into the market but may choose not to. This is where things get interesting. En masse, how long will those who are able to stifle the seemingly inherent urge to own their own home be able to hold off on buying?

The folks with the means to get in who do so won’t affect things much. Most people don’t have the means, not at today’s prices or anything near it. Prices will fall until they are in line with what someone with a normal income can afford. Afford in the traditional sense, that is, not with nonsense financing.

[Reality]

Psychology on the buy-side is of course most relevant in a situation where someone has the means to get into the market but may choose not to. This is where things get interesting. En masse, how long will those who are able to stifle the seemingly inherent urge to own their own home be able to hold off on buying?

The folks with the means to get in who do so won’t affect things much. Most people don’t have the means, not at today’s prices or anything near it. Prices will fall until they are in line with what someone with a normal income can afford. Afford in the traditional sense, that is, not with nonsense financing.

[Author]

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