[bubble_contagion]

From Bob Casagrand: (6/08/07)

Inventory was 20,904, over 9 months supply. The supply range for inventory varies by size of home with the lowest being 8 months and the high being 12 months. The supply is up 17% from last year and almost 100% from this time in 2005. Year-to-date listings totaled 34,431 which is inline with last years listing number but up 40% from the same period in 2005. Expired, cancelled and withdrawn listings totaled 17,382 up 224% from last years 7,763 and 525% from 2005. These numbers indicate how many times a home is re-listed before it sells or the sellers give up trying to sell.

The 224% increased in expired, cancelled or withdraw listing means there is a lot if inventory “waiting on the sidelines”. People are just renting out, waiting for the market to pick-up or just giving up on selling and going into foreclosure.

BTW I agree that listed inventory is slightly lower this year than last year.

[bubble_contagion]

From Bob Casagrand: (6/08/07)

Inventory was 20,904, over 9 months supply. The supply range for inventory varies by size of home with the lowest being 8 months and the high being 12 months. The supply is up 17% from last year and almost 100% from this time in 2005. Year-to-date listings totaled 34,431 which is inline with last years listing number but up 40% from the same period in 2005. Expired, cancelled and withdrawn listings totaled 17,382 up 224% from last years 7,763 and 525% from 2005. These numbers indicate how many times a home is re-listed before it sells or the sellers give up trying to sell.

The 224% increased in expired, cancelled or withdraw listing means there is a lot if inventory “waiting on the sidelines”. People are just renting out, waiting for the market to pick-up or just giving up on selling and going into foreclosure.

BTW I agree that listed inventory is slightly lower this year than last year.

[bubble_contagion]

Several colleagues of mine are on H1-B work visas. Some bought right away, others have waited and still rent. It seems that income, marriage or kids have much more to do with the decision to buy than immigration status. All of them will apply or have applied for green cards. Once they get it, it will be easier for them to change employers. I wouldn’t be surprised if some leave San Diego citing high living costs. Many U.S. citizen colleagues have done just that in the last three years.

[bubble_contagion]

Several colleagues of mine are on H1-B work visas. Some bought right away, others have waited and still rent. It seems that income, marriage or kids have much more to do with the decision to buy than immigration status. All of them will apply or have applied for green cards. Once they get it, it will be easier for them to change employers. I wouldn’t be surprised if some leave San Diego citing high living costs. Many U.S. citizen colleagues have done just that in the last three years.

[bubble_contagion]

So you are saying that ~250K immigrants that have been living in the US for up to 6 years (work visas last up to 6 years) are now going to stop renting and buy a house next week. It sounds that rents will go down around here.

Most immigrants like the engineers that work at Qualcomm have not waited for their green cards to buy a house. They do not need one to get a loan and, as long as they are employed, obtaining a green card is quite easy. There is little risk in buying a soon as you get off the plane.

BTW Every year the “backlog” is released at some point, just like this year.

[bubble_contagion]

So you are saying that ~250K immigrants that have been living in the US for up to 6 years (work visas last up to 6 years) are now going to stop renting and buy a house next week. It sounds that rents will go down around here.

Most immigrants like the engineers that work at Qualcomm have not waited for their green cards to buy a house. They do not need one to get a loan and, as long as they are employed, obtaining a green card is quite easy. There is little risk in buying a soon as you get off the plane.

BTW Every year the “backlog” is released at some point, just like this year.

[bubble_contagion]

It seems that there is plenty of people with high incomes and large savings waiting on the sidelines. Some will wait for a 5%-10% drop to get in, driving prices up again. This is what is happening now. It seems, without an additional catalist like massive job losses, real prices will stay were they are. Nominal prices will erode with inflation at a snail pace. The US economy may have achieved the dreaded soft-landing.

BTW, mid-30s, married, no kids, $150K/yr, no debt and enough savings for a 20% down even at today’s prices.

[bubble_contagion]

It seems that there is plenty of people with high incomes and large savings waiting on the sidelines. Some will wait for a 5%-10% drop to get in, driving prices up again. This is what is happening now. It seems, without an additional catalist like massive job losses, real prices will stay were they are. Nominal prices will erode with inflation at a snail pace. The US economy may have achieved the dreaded soft-landing.

BTW, mid-30s, married, no kids, $150K/yr, no debt and enough savings for a 20% down even at today’s prices.

[bubble_contagion]

So, to be able to save for a down payment in a reasonable amount of time, even households earning $100K+ have to: brown bag to work, buy only Bonus Buys at the grocery store and settle for basic cable.

But then you look around and find restaurants and bars are packed, malls are over flowing and huge SUVs and BMWs are everywhere. I am missing something?

[bubble_contagion]

So, to be able to save for a down payment in a reasonable amount of time, even households earning $100K+ have to: brown bag to work, buy only Bonus Buys at the grocery store and settle for basic cable.

But then you look around and find restaurants and bars are packed, malls are over flowing and huge SUVs and BMWs are everywhere. I am missing something?

[bubble_contagion]

I believe you will find spending $1500 for living expenses very dificult. That is $50 a day. Most people spend about $10-$15 on food alone. Add gas, car insurance and payments, cellphone or phone or both, electricity, medical and dental co-payments, cable and internet. Then there are always unexpected expenses like car or appliance repairs. You also need clothes and basic stuff for an apartment. Most people also make at least one trip per year to visit family.

[bubble_contagion]

I believe you will find spending $1500 for living expenses very dificult. That is $50 a day. Most people spend about $10-$15 on food alone. Add gas, car insurance and payments, cellphone or phone or both, electricity, medical and dental co-payments, cable and internet. Then there are always unexpected expenses like car or appliance repairs. You also need clothes and basic stuff for an apartment. Most people also make at least one trip per year to visit family.

[bubble_contagion]

You assume the housing market is problematic across the USA. The Feds will not try to save the housing market instead of the U.S. Dollar because, on a national average, housing is not extremely overvalued. It is bubble markets like San Diego that will be toast since the Feds couldn’t care less about a few people that bought overpriced properties in a few cities.

Having said that, I would recommend to move that cash to other currencies or assets.

[bubble_contagion]

You assume the housing market is problematic across the USA. The Feds will not try to save the housing market instead of the U.S. Dollar because, on a national average, housing is not extremely overvalued. It is bubble markets like San Diego that will be toast since the Feds couldn’t care less about a few people that bought overpriced properties in a few cities.

Having said that, I would recommend to move that cash to other currencies or assets.

[bubble_contagion]

In 1994, when the Mexican Peso devaluated abruptly, interest rates shot to 70%. Currently they are around 10%-12% but today the Peso is strong against the U.S. Dollar so those 12% are real!

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