Well now they’ve gone and done it. The Voice of San Diego has printed the words many thought would never be spoken in this town again:
Some sellers — albeit a small minority — have even begun to sustain losses on their property.
The article concerns San Diego’s colliding trends of fewer home sales and greater home inventory. This is nothing new to readers of Premium Content, where I cover local housing stats in depth, but the long and short of it is that supply is increasing, demand is decreasing, and some folks are starting to do the math on what that means for prices.
As ever, cautious optimism reigns supreme amongst local real estate professionals. Says one:
"If a person has owned more than one piece of property, they have made all sorts of money. If they’ve had a house in the last five years, they’ve made all sorts of money. If they have bought in the last six months, they may not have."
The idea that longer-term homeowners have a bit of equity cushion is certainly valid in some cases. In many cases, though, homeowners have pulled that equity out and plowed it into more real estate (or at least a nice new Beemer and kitchen remodel). It’s this latter group that we’re worried about.
The article then shocks us with a surprise ending:
Analysts said it is the next six months that will prove crucial in establishing whether the upward trend in inventory is likely to have long-term impact on property prices. If inventory continues to rise and sales do not pick up, they said, the net effect will inevitably be lower property prices across the board.
I’m not sure what analysts they could be talking about. Doesn’t the Guild of Real Estate Analysts have some sort of bylaw forbidding the use of the phrase "lower property prices?" In any case, it’s refreshing to hear one of my analytical brethren acknowledging the realities of supply and demand.
Incidentally, the Voice has started running a lot of real estate stories, so interested parties may wish to keep tabs on the Voice website.
Is ANYONE predicting a not-so-soft landing
The Voice of San Diego has earned my respect for it’s unique-to-San Diego non-shill press (though the Union Tribune has recently moderated it’s real estate fawning).
That said, does ANY press, local or otherwise, quote “experts” who predict other than a soft landing? Sometimes I think these journalists just pull quotes out of buckets with different labels: “Real Estate Always Goes Up!”, “This is a Normal Correction” or “We’ll Experience a Soft Landing” .
Not all commentators are
Not all commentators are spelling out an E-Z, pillow soft landing. Professor Shiller comes to mind, as does the Economist magazine (what do they know, those economists), the UCLA Anderson forecast and Charlie Munger, Warren Buffett’s partner.
At the last Berkshire shareholder meeting Munger said that “you have a real asset price bubble in places like parts of California and the suburbs of Washington, DC.” No believer in Greenspan-speak is our Charlie. I’m guessing Calaveras and Modoc counties aren’t the parts of CA he’s referring to.
For what it’s worth, Sir John Templeton (founder of what’s today the latter part of Franklin Templeton funds) also thinks there’s a housing bubble. A legendary investor, Mr. Templeton’s in his early nineties now, but still sharp as a tack and it pays to listen to experience.
Since these names aren’t quoted regularly alongside the local realtor in most stories regarding today’s housing market, you might not know their views offhand. It does seem that most news organizations share the same rolodex and call on the same tired sources for the official view du jour.
Interesting to note as you did however, that the school song has changed in recent months from a Van Halen track to something more subdued, like Kenny G. Could “Lady Sings the Blues” be far behind on the NAR top 40 playlist?
From time to time, people
From time to time, people accomplish the thesis paper by their own efforts. But some prefer to purchase the smashing thought connected with this topic at the thesis service, because it’s more easy.