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LA_Renter
ParticipantC.A.R. Reports Sales Decrease 27.8 Percent in April, Median Price of a Home in California at $597,640, up 6.2 Percent from Year Ago
LOS ANGELES–(BUSINESS WIRE)–Home sales decreased 27.8 percent in April in California compared with the same period a year ago, while the median price of an existing home increased 6.2 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.
“April sales fell in part because of tighter credit standards and growing concerns about the impact of subprime loans on the market,” said C.A.R. President Colleen Badagliacco. “Throughout the state inventory levels have increased to their highest levels in recent years, giving buyers more time to view a greater variety of homes and sellers who set realistic prices an edge in the market.”
ParticipantC.A.R. Reports Sales Decrease 27.8 Percent in April, Median Price of a Home in California at $597,640, up 6.2 Percent from Year Ago
LOS ANGELES–(BUSINESS WIRE)–Home sales decreased 27.8 percent in April in California compared with the same period a year ago, while the median price of an existing home increased 6.2 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.
“April sales fell in part because of tighter credit standards and growing concerns about the impact of subprime loans on the market,” said C.A.R. President Colleen Badagliacco. “Throughout the state inventory levels have increased to their highest levels in recent years, giving buyers more time to view a greater variety of homes and sellers who set realistic prices an edge in the market.”
ParticipantAP
Home Prices Fall for 9th Straight Month
Friday May 25, 10:10 am ET
By Martin Crutsinger, AP Economics Writer
Sales of Existing Homes Fall to the Slowest Pace in Nearly 4 YearsWASHINGTON (AP) — Sales of existing homes fell by a larger-than-expected amount in April while the median price of a home sold during the month fell for a ninth straight month as the troubles in the subprime mortgage market acted as a further drag on housing.
ParticipantAP
Home Prices Fall for 9th Straight Month
Friday May 25, 10:10 am ET
By Martin Crutsinger, AP Economics Writer
Sales of Existing Homes Fall to the Slowest Pace in Nearly 4 YearsWASHINGTON (AP) — Sales of existing homes fell by a larger-than-expected amount in April while the median price of a home sold during the month fell for a ninth straight month as the troubles in the subprime mortgage market acted as a further drag on housing.
May 24, 2007 at 10:23 AM in reply to: Home Sales Soar by Record Amount . . . Are you kidding me? #54736ParticipantThis is really getting to be a confusing situation. It appears the primary activity were low end home sales in the south. I have family that lives in Kentucky and I visited earlier this year. Home prices are not disconnected from fundamentals there. In fact you could probably sale a high end home in California and buy a good chunk of the state of Kentucky. Interest rates are still historically low so I can see how activity would increase in these areas. Such is not the case in the bubble markets as we all know. The bulls here in California are on their knees praying for a rate cut. That just got put off with today’s report. It appears we are now heading into the brunt of the ARM Reset / foreclosure storm with mortgage rates going up not down. IMO this is very bad news for California RE. The FED remains in a very tight spot. There are actually rumblings of further rate hikes. This is a worst case scenario for the state of California. Job growth is anemic, retail sales (auto), are down, net out migration of monied population, more college grads leaving than coming in, escalating NOD’s and foreclosures, falling home prices and no relief in sight. Will California be the sacrificial lamb before the FED can step to the plate?? It’s starting to look like that everyday.
May 24, 2007 at 10:23 AM in reply to: Home Sales Soar by Record Amount . . . Are you kidding me? #54751ParticipantThis is really getting to be a confusing situation. It appears the primary activity were low end home sales in the south. I have family that lives in Kentucky and I visited earlier this year. Home prices are not disconnected from fundamentals there. In fact you could probably sale a high end home in California and buy a good chunk of the state of Kentucky. Interest rates are still historically low so I can see how activity would increase in these areas. Such is not the case in the bubble markets as we all know. The bulls here in California are on their knees praying for a rate cut. That just got put off with today’s report. It appears we are now heading into the brunt of the ARM Reset / foreclosure storm with mortgage rates going up not down. IMO this is very bad news for California RE. The FED remains in a very tight spot. There are actually rumblings of further rate hikes. This is a worst case scenario for the state of California. Job growth is anemic, retail sales (auto), are down, net out migration of monied population, more college grads leaving than coming in, escalating NOD’s and foreclosures, falling home prices and no relief in sight. Will California be the sacrificial lamb before the FED can step to the plate?? It’s starting to look like that everyday.
ParticipantYou can always lay some puts on the stocks they are invested in. In the event of a downturn this will hedge any losses. That way you don’t have to sell the stocks and take a tax hit. Keep in mind these will also be a drag on that portfolio in the event they go higher but it does act as an insurance policy. There are also some bear market funds you can play that are attached to the Dow, S&P and Nasdaq. I have to admit the market is tricky right now. There is a lot of momentum to the upside and at the same time we are in a housing bust and a lot of concrete evidence the economy is slowing down. One main reason for this is that the Global market is strong and that is playing well with US Companies with strong international business. This is only way to look at it. Some people like to play Bonds as a hedge.
ParticipantYou can always lay some puts on the stocks they are invested in. In the event of a downturn this will hedge any losses. That way you don’t have to sell the stocks and take a tax hit. Keep in mind these will also be a drag on that portfolio in the event they go higher but it does act as an insurance policy. There are also some bear market funds you can play that are attached to the Dow, S&P and Nasdaq. I have to admit the market is tricky right now. There is a lot of momentum to the upside and at the same time we are in a housing bust and a lot of concrete evidence the economy is slowing down. One main reason for this is that the Global market is strong and that is playing well with US Companies with strong international business. This is only way to look at it. Some people like to play Bonds as a hedge.
Participant“Financial activities employers cut 700 jobs. The category includes sub-prime mortgage lenders, several of which initiated layoffs in recent months. ”
Do you think they are missing a couple zeros here??
Participant“Financial activities employers cut 700 jobs. The category includes sub-prime mortgage lenders, several of which initiated layoffs in recent months. ”
Do you think they are missing a couple zeros here??
ParticipantThats exactly the way I see it Kev. I can tell you that I am seeing some anecdotal evidence of a slow down in my business which is not directly related to RE. My customers who are basically distributors are belly aching right now. I am talking with my peers in California and we are seeing a definite softening.
Those numbers are alarming and they should be alarming to each sector of housing. Basically the plankton of the housing food chain is disappearing. Regarding home prices falling I keep on remembering my statistical analysis class I took in college. Prices are always a lagging indicator. You will more than likely see the steepest price drops as actual RE investment bottoms and improves. Thats what happened last time.
ParticipantThats exactly the way I see it Kev. I can tell you that I am seeing some anecdotal evidence of a slow down in my business which is not directly related to RE. My customers who are basically distributors are belly aching right now. I am talking with my peers in California and we are seeing a definite softening.
Those numbers are alarming and they should be alarming to each sector of housing. Basically the plankton of the housing food chain is disappearing. Regarding home prices falling I keep on remembering my statistical analysis class I took in college. Prices are always a lagging indicator. You will more than likely see the steepest price drops as actual RE investment bottoms and improves. Thats what happened last time.
ParticipantTo me this correction is playing out like clock work. A very slow clock. I think people have stock market expectations in regards to the downturn. We all saw the Nasdaq pop and the relentless fall. History shows that property market bubbles do not behave that way. IMO if the economy holds you will see what we are seeing now (low volume, high rate of NOD’s/foreclosures, slightly falling home prices) year in year out into the next decade. If we go into an economic slump you will see steeper nominal price declines. The rent verses own equation really starts to stand out in a market like this. Given the current home price to income, home price to rent fundamentals combined with stagnant to falling prices, there is absolutely no financial gain of buying a home right now. It is the worst possible thing you could do with your money right now in a strict financial sense. Now for people with a very long term outlook that don’t look at this as an investment and can find a home they are happy with and can afford, who cares. For people that are still stretching themselves to the hilt to squeeze into something they normally wouldn’t want because of some fear of being priced forever 1) dude you already are priced out 2) you just made the worst financial decision of your life (that can be backed up using hard data).
Keep in mind that we have not seen the true impact of the ARM resets and won’t have a true idea of how this will play out until late 2008. If you want see what we are facing refer to the Credit Suisse Arm reset schedule. If that chart is accurate we have not begun to see the worst of this yet. We have only seen the roller coaster stop going up. IMHO.
http://www.bubbleinfo.com/statistics-2007/2007/3/15/arm-reset-schedule.html
ParticipantGood post PD. I agree.
“If 100% or 50% or even 25% of all real estate changed hands in a year, the distressed sellers would be only a small fraction of overall sales and would not have a big effect on prices. However, total sales in year, as a percentage of all housing, is quite small. Therefore, distressed sellers, as a percent of all sellers, can be quite large. This has a big downward effect on prices.”
I won’t make a direct comparison between the US Property market and Japan’s bubble of the 1980’s but the dynamic you described was what happened in Japan. The people that could make their payments stayed in their home which was a majority of the Japan’s RE market. But home prices fell for 16 years because the market is determined at the margins. I remember Rich debating a pro RE economist last year on a PBS station and the economist/Realtor made the same point when addressing the rapid rise of inventory. He pointed out that if you look at the total number of homes in San Diego only a small fraction are for sale. It’s a bogus argument.
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