[schizo2buyORnot]

Prices in the top 1/3 are now at March, 2005 prices.

Minor Correction . . .

The top 1/3 . . . As of Aug, 07 index # is at 211.48 (not 226.73) for a drop of 5.8%

The original post in referring to the top 1/3 of market erroneously had the Aug, 07 index # (226.73) which is the # for the ENTIRE SD market, not the top 1/3 index # (211.48). The 5.8% total drop was and is correct.

In search of a crystal ball . . . .

[schizo2buyORnot]

Prices in the top 1/3 are now at March, 2005 prices.

Minor Correction . . .

The top 1/3 . . . As of Aug, 07 index # is at 211.48 (not 226.73) for a drop of 5.8%

The original post in referring to the top 1/3 of market erroneously had the Aug, 07 index # (226.73) which is the # for the ENTIRE SD market, not the top 1/3 index # (211.48). The 5.8% total drop was and is correct.

In search of a crystal ball . . . .

[schizo2buyORnot]

Prices in the top 1/3 are now at March, 2005 prices.

Minor Correction . . .

The top 1/3 . . . As of Aug, 07 index # is at 211.48 (not 226.73) for a drop of 5.8%

The original post in referring to the top 1/3 of market erroneously had the Aug, 07 index # (226.73) which is the # for the ENTIRE SD market, not the top 1/3 index # (211.48). The 5.8% total drop was and is correct.

In search of a crystal ball . . . .

[schizo2buyORnot]

Cal. Senate legislative analysis of Mello Roos deductibility

“Because the IRS has not challenged the deductibility of Mello-Roos taxes, the prevailing view is that Mello-Roos taxes are deductible. However, if the IRS were requested to issue a letter ruling on this issue, observers speculate that the ruling would prohibit the deductibility of Mello-Roos taxes on income tax returns.”

“Some observers maintain that the question of tax deductibility depends on the nature of the project being financed. They claim that if the taxes are being used to finance a facility or project that benefits the general welfare and is more regional in nature, generally the taxes are deductible.”

Bottom line . . . everyone is doing it under the guise of “well it might be deductible, there’s no clear law, its going to same me a pile of cash, and I can always claim ‘gee I didn’t know'” Gotta love government efficiency and fairness in looking out of the little guy.

http://info.sen.ca.gov/pub/93-94/bill/asm/ab_2001-2050/ab_2017_cfa_930413_182502_asm_comm

2007 Legal journal article giving you all you ever wanted to know on “mello roos”, prop 13, and how to cure insomnia . . . .

http://www.accessmylibrary.com/coms2/summary_0286-31286263_ITM (first part well organized)

http://www.allbusiness.com/north-america/united-states-virginia/4508627-1.html (whole article poorly organized)

In search of a crystal ball . . . .

[schizo2buyORnot]

How Fed may be screwing the prudent investor . . . .

Linked article goes on to make this point

“The players in the biggest trouble, of course, were the ones who’d taken the biggest fliers in junk mortgages, ultra-risky leveraged buyouts, and other financial esoterica that proved to be malignant.”

. . .

“Finally, consider this. Even though Bernanke’s cut may mean that some junk mortgages will reset at lower rates, the cost of large, high-quality fixed-rate mortgages, which are tied to long rates, will be higher than they’d otherwise be. (Yeah, penalize the people who are prudent – way to go!)”

http://money.cnn.com/2007/09/28/news/economy/sloan_bernanke.fortune/index.htm?postversion=2007092814

In search of a crystal ball . . . .

[schizo2buyORnot]

I’m here . . . you need something?

In search of a crystal ball . . . .

[schizo2buyORnot]

2500 sq/ft home in La Jolla for $875,000 in 2010???? I’ll be kicking and scratching to be the first in line for that home.

In search of a crystal ball . . . .

[schizo2buyORnot]

They call it the “old site” because the methodology and numbers are inaccurate. The more accurate number is the number on the main site. Which is inventory is up 1.5% yoy. You don’t really belive the “old site” actual inventory number of 15,000 do you? This would be an inventory number some 8000 units less than the numbers sited in either of the other two sites blogged here.

In search of a crystal ball . . . .

[schizo2buyORnot]

Yup,

Up 1.5% yoy from this time last year.

http://www.housingtracker.net/askingprices/California/SanDiego-Carlsbad-SanMarcos/

FYI, the difference in the Bubble Market number of 23K and the housingtracker.net number of 22k is that Bubble Market’s inventory numbers include vacant lots for sale. The housingtracker.net number only includes SFH and condos, not raw land. This is arguably the better and more accurate number for purposes of following the residential RE market.
In search of a crystal ball . . . .

[schizo2buyORnot]

SD Realtor

“Would you agree with the following?

– Sales volumes are down. YES
– Inventory is cyclical. yoy YES
– Lots of foreclosures are still ahead of us. PROBABLY
– The economy has a higher probability of slowing down rather then speeding up in the next 1-2 years. HARD TO PREDICT

So looking at those 4 basic statements do you agree or not with them? If you do agree with them, do you think housing prices will increase or decrease?” DECREASE (in the near term . . . next 6 months)

The following from Fortune Magazine mirror my sentiments about the current RE situation.

http://money.cnn.com/magazines/fortune/fortune_archive/2007/09/17/100250262/index.htm?postversion=2007090509

“Danger: Steep drop ahead
Even if the credit crunch passes without a major catastrophe, the prices of stocks, bonds and real estate have a long way to fall.

(Fortune Magazine) — Credit crises have always been painful and unpredictable. The current one is particularly hair-raising because it’s occurring amid the first truly global bubble in asset pricing. It is also accompanied by a plethora of new and ingenious financial instruments. These are designed overtly to spread risk around and to sell fee-bearing products that are in great demand. Inadvertently (to be generous), they have been constructed to hide risk and confuse buyers.

How this credit crisis works out and what price we end up paying has to be largely unknowable, depending as it does on hundreds of interlocking and often novel factors and how they in turn affect animal spirits. In the end it is, of course, the management of animal spirits that makes and breaks credit crises.”

SD R . . . would you not agree that

Asset bubbles and bursts are hugely influenced by the emotions of buyers and sellers?

That this emotional factor is inherently difficult to assess?

Very few people successfully time major turns in asset cycles?

Seeing beyond the emotion and focusing a variety of concrete factors is the only way of possibly divining when such turns in asset markets occur?

A weakening dollar combined with a global economic expansion outside of the US means that foreign buyers in the neighborhoods I want to buy in (Scripps, CV, 4S, etc.) make dramatic drops there less certain? How many foreign buyers have you assisted in those areas that 1) have the money (even more if their wealth was from non-US $ assets) and 2) largely ignore many of the finer economic points we banter about here and just buy because the like it, the schools are good, and their friends live there???

Stabilizing inventory always occurs as a leading indicator before any RE cycle turn?

In other words inventories stablize at the top, contract, eventually leading to a price rise. Or, they stablize at the bottom, expand, eventually lead to a price fall. I’m looking for early signals of a turn. Stablized inventories is one factor always preceeding a turn. We would have to have multiple other confirming factors (i.e. stablized sales, falling interest rates, absense of job losses, no recession, etc.) before a turn could occur however. I’m just keeping my powder dry and seeking feedback from persons such as yourself as to the the significance of what could, or could not, be an early leading indicator of a turn.

In search of a crystal ball . . . .

[schizo2buyORnot]

Facts can be a troubling thing . . . especially when the facts are on the other side of your argument.

And I quote from Rich Toscano

“August resale inventory was actually down almost 4 percent from a year prior.”

Here’s the link to his article . . . .

http://www.voiceofsandiego.org/articles/2007/09/13/toscano/880augsupply091207.txt

He is making exactly the only point I have made here. Inventories have stablized, or in Rich’s assessment declined 4% yoy. I have always granted its just one factor in a mix of factors which indicate more downside from here taken in total. However, leveling inventories bears watching nonetheless. Nothing “imaginary” or “inane” here just facts cited by the Toscano himself which mirror exactly what I have posited.

Props to FormerSanDiegan for getting my point . . . .

“Actually schizo is correct that inventory has been flat for a couple of months.”

I guess its just not in line with the whole “rah rah rah . . . housing is going to crash and we are going to buy at the bottom” mentality/group think crowd’s hopes and dreams. It is in line with those who take a dispassionate and objective analysis of what will be perhaps the most important financial decision we will ever make.

Still impatiently renting . . . .

In search of a crystal ball . . . .

[schizo2buyORnot]

little one . . . you’ll notice from my posts I don’t unilateraly engage in the inane ad hominem attacks or worthless blather of “go ahead buy a house! a huh a huh a huh yuck yuck yuck . . . . etc.” I cite hard facts and statistics and ask for feedback from PIGS as to the facts’ meanings. But I am amused when my anonymous alias is attacked by someone such as you and I do rather enjoy responding . . . thanks for the entertainment.

In search of a crystal ball . . . .

[schizo2buyORnot]

Are you blind or just can’t read a statistical read out? The link to inventory, not sales, clearly lays out that for the past 2 months the yoy inventory numbers have been essentially flat. Sales have weakened and thus the “months of inventory” has expanded. Actual inventory numbers yoy have been flat. Attack the numbers/statistics all you want’ its right there.

In search of a crystal ball . . . .

[schizo2buyORnot]

In addition to sales numbers that are not dropping off a cliff. We have stabilized yoy inventory numbers as well for about 2 months running.

http://www.housingtracker.net/askingprices/California/SanDiego-Carlsbad-SanMarcos/

Note: I now we beat this “dead horse” (inventory and its significance) to a pulp on another recent thread but its worth linking inventory levels to the sales numbers thread.

In search of a crystal ball . . . .

[schizo2buyORnot]

Unfortunately (I’m a renter) you can add Scripps Ranch, Carmel Valley, and 4S Ranch to that list (areas I want to buy). The drops here have been painfully slow. The stickiness of prices seems counter intuitive but prices remain very high . . . . As in any RE cycle the places which are currently getting hammered the worst in SD are the worst areas. The good areas seem to be holding for now.

“holding” = 5-10% decline but no retrenchment to 2003 levels.

Still patiently renting . . .

In search of a crystal ball . . . .

[Author]

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