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LA_Renter
ParticipantBond yields up, oil up, inflation up, Housing nose diving, potential systemic shock in global financial markets due to re-pricing of portfolios. Does anybody think the term “Goldilocks” economy should be replaced with “Sybil” economy??
ParticipantScruffy,
You never responded to my post about the San Fernando Valley that you hailed is still going up in prices. Give us some analysis here.
ParticipantScruffy,
You never responded to my post about the San Fernando Valley that you hailed is still going up in prices. Give us some analysis here.
ParticipantThe credit debacle has been unfolding with historically low rates throughout the last year. This is not so much an issue with interest rates as it is the quality of the loans given. It was a financial experiment that went gravely wrong. If interest rates fall it will help a little but not much.
This correction is occurring from the bottom up. The neighborhoods that you speak of are at the top of the food chain. The bottom of the food chain is literally being wiped out. You cannot erase the move up buyer and expect the top of the market to be immune. I will admit this is a very difficult market to read. We have never seen a housing market correction stemming from a credit bubble.
ParticipantThe credit debacle has been unfolding with historically low rates throughout the last year. This is not so much an issue with interest rates as it is the quality of the loans given. It was a financial experiment that went gravely wrong. If interest rates fall it will help a little but not much.
This correction is occurring from the bottom up. The neighborhoods that you speak of are at the top of the food chain. The bottom of the food chain is literally being wiped out. You cannot erase the move up buyer and expect the top of the market to be immune. I will admit this is a very difficult market to read. We have never seen a housing market correction stemming from a credit bubble.
ParticipantScruffydog, In reference to this
http://www.dailynews.com/gregwilcox/ci_6273184
System glitch delays housing numbers
“The news last week that the San Fernando Valley saw a record median house price of $650,000 in May was not all that surprising. The bigger surprise was that it eclipsed the prior record set in April of $637,000.”I would like your opinion on this. Please read my post above concerning San Fernando Valley home sales. Click on this link;
Now look at the data on the link. These are San Fernando Valley home sales dating back to 1984. Look at April and May of this year.
April 447
May 629Compare that to Aprl May sales during the last downturn of 90 – 93
……….’93…..’92….’ 91 ….’90
April..762….692…..865….824
May…818….701..1,000….882OK, April May sales of 2007 were not even close to the worst years of the downturn in 90 to 93. A downturn where home values dropped around 35%. These numbers do not factor any population growth between 90 – 93 verses 2007. That makes this Spring the most severe downturn on record in the San Fernando Valley by a large margin. FACT. Now look at how the Daily News is reporting this. A Record median home price. Do you see a problem with the reporting here?? Give me your thoughts on this. I’m curious.
ParticipantScruffydog, In reference to this
http://www.dailynews.com/gregwilcox/ci_6273184
System glitch delays housing numbers
“The news last week that the San Fernando Valley saw a record median house price of $650,000 in May was not all that surprising. The bigger surprise was that it eclipsed the prior record set in April of $637,000.”I would like your opinion on this. Please read my post above concerning San Fernando Valley home sales. Click on this link;
Now look at the data on the link. These are San Fernando Valley home sales dating back to 1984. Look at April and May of this year.
April 447
May 629Compare that to Aprl May sales during the last downturn of 90 – 93
……….’93…..’92….’ 91 ….’90
April..762….692…..865….824
May…818….701..1,000….882OK, April May sales of 2007 were not even close to the worst years of the downturn in 90 to 93. A downturn where home values dropped around 35%. These numbers do not factor any population growth between 90 – 93 verses 2007. That makes this Spring the most severe downturn on record in the San Fernando Valley by a large margin. FACT. Now look at how the Daily News is reporting this. A Record median home price. Do you see a problem with the reporting here?? Give me your thoughts on this. I’m curious.
Participanti put this on a thread but I thought it would be appropriate here;
I know this blog focuses on San Diego but I just came across this graph for the San Fernando Valley. I have to admit it took me by surprise. I didn’t realize sales had basically fallen off a cliff to this degree.
Sales for Single Family homes during April and May were the lowest recorded ever dating back to 1984. They were substantially below April/May sales during the infamous downturn of 90 – 93. Wow! This thing is really starting to hit in LA, finally.
Participanti put this on a thread but I thought it would be appropriate here;
I know this blog focuses on San Diego but I just came across this graph for the San Fernando Valley. I have to admit it took me by surprise. I didn’t realize sales had basically fallen off a cliff to this degree.
Sales for Single Family homes during April and May were the lowest recorded ever dating back to 1984. They were substantially below April/May sales during the infamous downturn of 90 – 93. Wow! This thing is really starting to hit in LA, finally.
ParticipantAs has been pointed out several times on this blog and others, the primary difference between this downturn and the last is that this downturn is coming from a credit debacle verses a severe downturn in employment. I don’t know but I would speculate that the higher end neighborhoods were being hit harder at this stage of the cycle in the last downturn than they are currently. If you lost your high paying aerospace job, then your house in your nice neighborhood went on the market very soon afterwards. That has been missing from this correction thus far and is why the higher end neighborhoods seem to be holding their ground.
How this correction plays out from what appears to be starting from the bottom up is going to be the fundamental difference between the two. Nationally we have about $500 billion in ARM resets in 2007 and about $700 billion in 2008. We are half way through this year and how many subprime lenders got whacked already? We are approaching record defaults and foreclosures, and the credit markets are getting the first whiffs of contagion with the Bear Stearns failures. This set of circumstances did not exist during the last downturn. At this point I have to admit I have no idea which downturn will be worse.
ParticipantAs has been pointed out several times on this blog and others, the primary difference between this downturn and the last is that this downturn is coming from a credit debacle verses a severe downturn in employment. I don’t know but I would speculate that the higher end neighborhoods were being hit harder at this stage of the cycle in the last downturn than they are currently. If you lost your high paying aerospace job, then your house in your nice neighborhood went on the market very soon afterwards. That has been missing from this correction thus far and is why the higher end neighborhoods seem to be holding their ground.
How this correction plays out from what appears to be starting from the bottom up is going to be the fundamental difference between the two. Nationally we have about $500 billion in ARM resets in 2007 and about $700 billion in 2008. We are half way through this year and how many subprime lenders got whacked already? We are approaching record defaults and foreclosures, and the credit markets are getting the first whiffs of contagion with the Bear Stearns failures. This set of circumstances did not exist during the last downturn. At this point I have to admit I have no idea which downturn will be worse.
ParticipantCatchy title for a thread..
ParticipantCatchy title for a thread..
ParticipantTheChaz,
The information you are seeking can be found in the Bubble Primer at the top of the front page of this blog. Read through those and that should answer most of your questions.
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