Forum Replies Created
-
AuthorPosts
-
LA_Renter
ParticipantPoorSaver,
I think the story on the Westside and premium pockets are the sales volumes. They are getting critically low. I live in the South Bay and we see a similar story with nicer properties not budging in price too much yet. But if you look at the number of transactions taking place it is eye popping. Communities in the South Bay total dollar transactions are off by 30% to 50% from last year which wasn’t that great. This is the same thing that happened to the low end starting in 2006. The volume dried up first, the few properties that were selling got close to full bubble price, now we are in the middle of a bloodletting clearing of inventory with the price per sq ft falling anywhere from 25% and in some cases 50% to 60%. The premium areas of S. Cal cannot sustain these prices at current sales volumes. You have a move up buyer that is snagged in the lower to mid tier, a weakening economy that is becoming more pronounced, a crippling credit crunch along with a second wave of option arm resets. In the face of these headwinds I am of the opinion that the Gubment bailouts are nothing more than the “Mouse that Roared”. Thee are very few PRO demand undercurrents right now other than a few really wealthy people with some cash on the sidelines (that alone will not drive the market).
Now I do think that LateSummer08 should change his handle to LaterSummer09. It is interesting that the areas where the bears have been wrong have not been on fundamentals but on the timing, that includes Poway Seller (no the S&P will not go to 600), AuctionHeaven07, LateSummer08, to the economist like Christopher Thornburg and Roubini. We are going into the worst part of this economic downturn and housing correction starting right about now of course IMHO.
ParticipantPoorSaver,
I think the story on the Westside and premium pockets are the sales volumes. They are getting critically low. I live in the South Bay and we see a similar story with nicer properties not budging in price too much yet. But if you look at the number of transactions taking place it is eye popping. Communities in the South Bay total dollar transactions are off by 30% to 50% from last year which wasn’t that great. This is the same thing that happened to the low end starting in 2006. The volume dried up first, the few properties that were selling got close to full bubble price, now we are in the middle of a bloodletting clearing of inventory with the price per sq ft falling anywhere from 25% and in some cases 50% to 60%. The premium areas of S. Cal cannot sustain these prices at current sales volumes. You have a move up buyer that is snagged in the lower to mid tier, a weakening economy that is becoming more pronounced, a crippling credit crunch along with a second wave of option arm resets. In the face of these headwinds I am of the opinion that the Gubment bailouts are nothing more than the “Mouse that Roared”. Thee are very few PRO demand undercurrents right now other than a few really wealthy people with some cash on the sidelines (that alone will not drive the market).
Now I do think that LateSummer08 should change his handle to LaterSummer09. It is interesting that the areas where the bears have been wrong have not been on fundamentals but on the timing, that includes Poway Seller (no the S&P will not go to 600), AuctionHeaven07, LateSummer08, to the economist like Christopher Thornburg and Roubini. We are going into the worst part of this economic downturn and housing correction starting right about now of course IMHO.
ParticipantPoorSaver,
I think the story on the Westside and premium pockets are the sales volumes. They are getting critically low. I live in the South Bay and we see a similar story with nicer properties not budging in price too much yet. But if you look at the number of transactions taking place it is eye popping. Communities in the South Bay total dollar transactions are off by 30% to 50% from last year which wasn’t that great. This is the same thing that happened to the low end starting in 2006. The volume dried up first, the few properties that were selling got close to full bubble price, now we are in the middle of a bloodletting clearing of inventory with the price per sq ft falling anywhere from 25% and in some cases 50% to 60%. The premium areas of S. Cal cannot sustain these prices at current sales volumes. You have a move up buyer that is snagged in the lower to mid tier, a weakening economy that is becoming more pronounced, a crippling credit crunch along with a second wave of option arm resets. In the face of these headwinds I am of the opinion that the Gubment bailouts are nothing more than the “Mouse that Roared”. Thee are very few PRO demand undercurrents right now other than a few really wealthy people with some cash on the sidelines (that alone will not drive the market).
Now I do think that LateSummer08 should change his handle to LaterSummer09. It is interesting that the areas where the bears have been wrong have not been on fundamentals but on the timing, that includes Poway Seller (no the S&P will not go to 600), AuctionHeaven07, LateSummer08, to the economist like Christopher Thornburg and Roubini. We are going into the worst part of this economic downturn and housing correction starting right about now of course IMHO.
ParticipantPoorSaver,
I think the story on the Westside and premium pockets are the sales volumes. They are getting critically low. I live in the South Bay and we see a similar story with nicer properties not budging in price too much yet. But if you look at the number of transactions taking place it is eye popping. Communities in the South Bay total dollar transactions are off by 30% to 50% from last year which wasn’t that great. This is the same thing that happened to the low end starting in 2006. The volume dried up first, the few properties that were selling got close to full bubble price, now we are in the middle of a bloodletting clearing of inventory with the price per sq ft falling anywhere from 25% and in some cases 50% to 60%. The premium areas of S. Cal cannot sustain these prices at current sales volumes. You have a move up buyer that is snagged in the lower to mid tier, a weakening economy that is becoming more pronounced, a crippling credit crunch along with a second wave of option arm resets. In the face of these headwinds I am of the opinion that the Gubment bailouts are nothing more than the “Mouse that Roared”. Thee are very few PRO demand undercurrents right now other than a few really wealthy people with some cash on the sidelines (that alone will not drive the market).
Now I do think that LateSummer08 should change his handle to LaterSummer09. It is interesting that the areas where the bears have been wrong have not been on fundamentals but on the timing, that includes Poway Seller (no the S&P will not go to 600), AuctionHeaven07, LateSummer08, to the economist like Christopher Thornburg and Roubini. We are going into the worst part of this economic downturn and housing correction starting right about now of course IMHO.
Participant“However again, the more I look at things, the more I see a very prolonged stagnant market rather then a market that depreciates fast and loses significant value in a relatively short timeframe.”
If we are to see steep declines in the desirable areas that would be starting right about now IMO. I don’t think they can totally bail this thing out, also as pointed out these Option Arms are heavily weighted to the high cost coastal areas especially CA. A huge bailout of these loans may not be very popular with the rest of the country. Who knows. I think the economy is worse than being reported. I only say that from anecdotal evidence from my work. I am in a sales management capacity with a very large mult-billion dollar corp. Our division gets an editorial every month on our percentage to plan. Nationwide July was the worst performance as a percentage of plan since they have been keeping records. This is business to business sales of a commodity like must have product being sold into basically every sector of the economy. The downturn became more acute in the last 6 weeks. Needless to say it is not exactly pleasant right now. My gut tells me we haven’t seen the full extent of the carnage here. I think the next 6 to 12 months will give the verdict. Just my two cents.
Participant“However again, the more I look at things, the more I see a very prolonged stagnant market rather then a market that depreciates fast and loses significant value in a relatively short timeframe.”
If we are to see steep declines in the desirable areas that would be starting right about now IMO. I don’t think they can totally bail this thing out, also as pointed out these Option Arms are heavily weighted to the high cost coastal areas especially CA. A huge bailout of these loans may not be very popular with the rest of the country. Who knows. I think the economy is worse than being reported. I only say that from anecdotal evidence from my work. I am in a sales management capacity with a very large mult-billion dollar corp. Our division gets an editorial every month on our percentage to plan. Nationwide July was the worst performance as a percentage of plan since they have been keeping records. This is business to business sales of a commodity like must have product being sold into basically every sector of the economy. The downturn became more acute in the last 6 weeks. Needless to say it is not exactly pleasant right now. My gut tells me we haven’t seen the full extent of the carnage here. I think the next 6 to 12 months will give the verdict. Just my two cents.
Participant“However again, the more I look at things, the more I see a very prolonged stagnant market rather then a market that depreciates fast and loses significant value in a relatively short timeframe.”
If we are to see steep declines in the desirable areas that would be starting right about now IMO. I don’t think they can totally bail this thing out, also as pointed out these Option Arms are heavily weighted to the high cost coastal areas especially CA. A huge bailout of these loans may not be very popular with the rest of the country. Who knows. I think the economy is worse than being reported. I only say that from anecdotal evidence from my work. I am in a sales management capacity with a very large mult-billion dollar corp. Our division gets an editorial every month on our percentage to plan. Nationwide July was the worst performance as a percentage of plan since they have been keeping records. This is business to business sales of a commodity like must have product being sold into basically every sector of the economy. The downturn became more acute in the last 6 weeks. Needless to say it is not exactly pleasant right now. My gut tells me we haven’t seen the full extent of the carnage here. I think the next 6 to 12 months will give the verdict. Just my two cents.
Participant“However again, the more I look at things, the more I see a very prolonged stagnant market rather then a market that depreciates fast and loses significant value in a relatively short timeframe.”
If we are to see steep declines in the desirable areas that would be starting right about now IMO. I don’t think they can totally bail this thing out, also as pointed out these Option Arms are heavily weighted to the high cost coastal areas especially CA. A huge bailout of these loans may not be very popular with the rest of the country. Who knows. I think the economy is worse than being reported. I only say that from anecdotal evidence from my work. I am in a sales management capacity with a very large mult-billion dollar corp. Our division gets an editorial every month on our percentage to plan. Nationwide July was the worst performance as a percentage of plan since they have been keeping records. This is business to business sales of a commodity like must have product being sold into basically every sector of the economy. The downturn became more acute in the last 6 weeks. Needless to say it is not exactly pleasant right now. My gut tells me we haven’t seen the full extent of the carnage here. I think the next 6 to 12 months will give the verdict. Just my two cents.
Participant“However again, the more I look at things, the more I see a very prolonged stagnant market rather then a market that depreciates fast and loses significant value in a relatively short timeframe.”
If we are to see steep declines in the desirable areas that would be starting right about now IMO. I don’t think they can totally bail this thing out, also as pointed out these Option Arms are heavily weighted to the high cost coastal areas especially CA. A huge bailout of these loans may not be very popular with the rest of the country. Who knows. I think the economy is worse than being reported. I only say that from anecdotal evidence from my work. I am in a sales management capacity with a very large mult-billion dollar corp. Our division gets an editorial every month on our percentage to plan. Nationwide July was the worst performance as a percentage of plan since they have been keeping records. This is business to business sales of a commodity like must have product being sold into basically every sector of the economy. The downturn became more acute in the last 6 weeks. Needless to say it is not exactly pleasant right now. My gut tells me we haven’t seen the full extent of the carnage here. I think the next 6 to 12 months will give the verdict. Just my two cents.
Participant” Personally, I think it is being overblown. The Option ARMS are certainly toast, but the other varieties … remains to be seen. The Option ARMS are certainly toast, but the other varieties … remains to be seen.”
I agree the other varieties won’t have the same degree of problems, but I think size of the Option ARMS alone are big enough to wreak havoc on the market and this looks like it has its barrel pointed at California. Here is a post from Dr Housing Bubble in June explaining the data
___________________________________________
“-$500 Billion in total Pay Option ARMs outstanding in the U.S.
-60 Percent of these issued to folks in California”
““(Businessweek 2006)Now the signs of excess are crystal clear. Up to 80% of all option ARM borrowers make only the minimum payment each month, according to Fitch Ratings. The rest of the money gets added to the balance of the mortgage, a situation known as negative amortization. And once balances grow to a certain amount, the loans automatically reset at far higher payments. Most of these borrowers aren’t paying down their loans; they’re underpaying them up.”
___________________________________________
I don’t think this is overblown, I think this is the nail in the coffin for the higher end markets. All the preliminary data is pointing in that direction.
Participant” Personally, I think it is being overblown. The Option ARMS are certainly toast, but the other varieties … remains to be seen. The Option ARMS are certainly toast, but the other varieties … remains to be seen.”
I agree the other varieties won’t have the same degree of problems, but I think size of the Option ARMS alone are big enough to wreak havoc on the market and this looks like it has its barrel pointed at California. Here is a post from Dr Housing Bubble in June explaining the data
___________________________________________
“-$500 Billion in total Pay Option ARMs outstanding in the U.S.
-60 Percent of these issued to folks in California”
““(Businessweek 2006)Now the signs of excess are crystal clear. Up to 80% of all option ARM borrowers make only the minimum payment each month, according to Fitch Ratings. The rest of the money gets added to the balance of the mortgage, a situation known as negative amortization. And once balances grow to a certain amount, the loans automatically reset at far higher payments. Most of these borrowers aren’t paying down their loans; they’re underpaying them up.”
___________________________________________
I don’t think this is overblown, I think this is the nail in the coffin for the higher end markets. All the preliminary data is pointing in that direction.
Participant” Personally, I think it is being overblown. The Option ARMS are certainly toast, but the other varieties … remains to be seen. The Option ARMS are certainly toast, but the other varieties … remains to be seen.”
I agree the other varieties won’t have the same degree of problems, but I think size of the Option ARMS alone are big enough to wreak havoc on the market and this looks like it has its barrel pointed at California. Here is a post from Dr Housing Bubble in June explaining the data
___________________________________________
“-$500 Billion in total Pay Option ARMs outstanding in the U.S.
-60 Percent of these issued to folks in California”
““(Businessweek 2006)Now the signs of excess are crystal clear. Up to 80% of all option ARM borrowers make only the minimum payment each month, according to Fitch Ratings. The rest of the money gets added to the balance of the mortgage, a situation known as negative amortization. And once balances grow to a certain amount, the loans automatically reset at far higher payments. Most of these borrowers aren’t paying down their loans; they’re underpaying them up.”
___________________________________________
I don’t think this is overblown, I think this is the nail in the coffin for the higher end markets. All the preliminary data is pointing in that direction.
Participant” Personally, I think it is being overblown. The Option ARMS are certainly toast, but the other varieties … remains to be seen. The Option ARMS are certainly toast, but the other varieties … remains to be seen.”
I agree the other varieties won’t have the same degree of problems, but I think size of the Option ARMS alone are big enough to wreak havoc on the market and this looks like it has its barrel pointed at California. Here is a post from Dr Housing Bubble in June explaining the data
___________________________________________
“-$500 Billion in total Pay Option ARMs outstanding in the U.S.
-60 Percent of these issued to folks in California”
““(Businessweek 2006)Now the signs of excess are crystal clear. Up to 80% of all option ARM borrowers make only the minimum payment each month, according to Fitch Ratings. The rest of the money gets added to the balance of the mortgage, a situation known as negative amortization. And once balances grow to a certain amount, the loans automatically reset at far higher payments. Most of these borrowers aren’t paying down their loans; they’re underpaying them up.”
___________________________________________
I don’t think this is overblown, I think this is the nail in the coffin for the higher end markets. All the preliminary data is pointing in that direction.
Participant” Personally, I think it is being overblown. The Option ARMS are certainly toast, but the other varieties … remains to be seen. The Option ARMS are certainly toast, but the other varieties … remains to be seen.”
I agree the other varieties won’t have the same degree of problems, but I think size of the Option ARMS alone are big enough to wreak havoc on the market and this looks like it has its barrel pointed at California. Here is a post from Dr Housing Bubble in June explaining the data
___________________________________________
“-$500 Billion in total Pay Option ARMs outstanding in the U.S.
-60 Percent of these issued to folks in California”
““(Businessweek 2006)Now the signs of excess are crystal clear. Up to 80% of all option ARM borrowers make only the minimum payment each month, according to Fitch Ratings. The rest of the money gets added to the balance of the mortgage, a situation known as negative amortization. And once balances grow to a certain amount, the loans automatically reset at far higher payments. Most of these borrowers aren’t paying down their loans; they’re underpaying them up.”
___________________________________________
I don’t think this is overblown, I think this is the nail in the coffin for the higher end markets. All the preliminary data is pointing in that direction.
-
AuthorPosts
