Hasn't San Diego real estate still shown price increase YoY? Looks like that's not going to last.
But speaking of condos, I think this sector will be hit particularly hard. In so many locations their values shot through the roof even compared to other forms of property in the same place!
30% lower pricing is significantly different than the median price correction and I wonder how the officials register it? Retroactively, so that they can lower previous sale prices that would show present sale prices have not slipped as much or take the blow full force to the temple and hope that the rest of the tentative buyers don't get the idea that maybe they should wait for their 30% discount.
From the Jounal Of Real Estate Research, April 2006, abstract: (quote)The foreclosure discount refers to the deviation between the expected price or appreciation of typical or average property and the price or appreciation of the foreclosed property. Prior efforts to estimate the discount at which a foreclosed property sells have used very similar approaches-the hedonic model. Exhibit 1 shows that three of the four papers find that the selling price of a foreclosed property is 22% to 24% lower. In contrast, consistent with the efficient market theory, the most recent paper, by Carroll, Clauretie and Neill (1997), finds no discount associated with selling a foreclosed property.(end quote)
I guess the markets are not as efficient as one would imagine.
From the Corus quarterly report; (quote)With a loan portfolio consisting, almost exclusively, of condominium construction and conversion loans, the nationwide slowdown in the residential housing market is impacting Corus' business. Evidence of this slowdown is clear from the decline in loan originations, the resulting decline in loans outstanding and an increase in problem loans. The current quarter's earnings declined as a result, and it would not surprise us to see an even greater impact on earnings over the next several quarters, or even years, depending on when the market improves," said Robert J. Glickman, President and Chief Executive Officer.(end quote)
Increase in "problem loans"? Impact on earnings for years, possibly? Not spreading beyond personal real estate?
ron, I would not expect to see .25 on the dollar unless banks get leaned hard on by regulators or in the wake of receivership as the RTC V2 gets into action. Could be a while... '09.
A. There started to be more and more loan requests with no answers (look for the number (1) or (2) at the end. the (2) is because a spammer that just tag every message)
B. There are now less loan requests
I wonder if there will be some offi9cial stat that would support this observation (which may wrong and inaccurate)
maybe even 2011-going to take awhile for all this speculation, foreclosure, resets, to unfold. But I expect to see prices return to trend line within my life time. I hope. LOL
Question: Could someone here explain why the canadian housing market is still red hot? Why aren't BC and Alberta housing markets crashing like the US? Is Canada really different?
Return to trend line? Prices will overcorrect well below it over the next three years, then decline slowly from there for another decade. This isn't your normal housing cycle, it's a once-a-century economic perfect storm.
Canada has a booming economy because of the hot commodity market. The oil producing regions are attracting workers who need housing. Same thing in Texas which is the best housing market. If oil prices plummet these regions will get pummeled like they did in the early 80s.
I think these regions will continue to be hot for another year or so. This is one reason why I expect MTH to do better than most home builders. Most of their business in now in Texas.
Parts of British Columbia - Vancouver and Victoria are not "red hot" anymore. Listings are waaaaaay up and rising and sales are slowing. I thought I read recently that prices in Fraser Valley are now down YOY.
Lumber prices have dropped dramatically, unemployment is up - things are starting to go downhill. There is massive overbuilding here on Vancouver Island.
You have to draw a distinction between Alberta and BC. Alberta has seen rapid population growth (oil boom) and rising incomes.
However it also has vast amounts of vacant land surrounding its cities which means supply will bring down real, if not nominal, prices over the long term. If the price of oil declines prices will come down a lot faster.
BC's #1 industry is forestry which is in serious trouble. Population growth is the slowest in decades. The economy is being kept growing by real estate investment. "Everyone wants to live here" (note contradiction) and "This time it's different" (2010 Winter Olympics) are religious creeds in BC. I don't think I have to explain what that portends for the future.
Both Alberta and BC experienced major (40-50% nominal) RE crashes in the 1980's, but of course the cheerleaders have a laundry list of reasons why that can't happen again.
San Diego just got 100 comps to reflect realistic pricing. Its probably not enough, on its own, to cause further discounting of inventory, but it helps.
San Diego has been going through an interesting process of "low-grading" its inventory of about 18k homes. Inventory growth is sluggish, but that masks the underlying dynamic. About 13k of homes have been taken off the market YTD compared to 5k in '06 and 2k in '05. Replacing these de-listings are a steady flow of foreclosures, NOD's, and discounted re-lists -- all of which are under pressure to sell quickly. Also, the builders continue to build-out lots and offer new homes at a discount to existing.
So price-sensitive sellers are taking their homes off the market, and motivated sellers are replacing them. The result is more discounting, more competition, and more of a sense that you have to be "the low price on the block" to sell. Its quite possible, IMO, that if San Diego traffic slows to a halt this summer as it did last, we will see a step-function decline in the median sales price.
I wonder if everyone catches that detail "step function", Dave? I wonder if we should...recalling a similar "step function" when my father's health went from requiring an hour's rest mid-day to 6 hours as his heart capacity dropped almost over night. I was not prepared for that --expecting a more or less linear progressive decline...according to the stats that reflect a population's performance and not particular individuals.
So some particular regions or even particular neighborhoods or even more particular blocks may be more suitable for this ascription...unless some national "step function" hits and what could be more national than a currency? Another reason the Fed is fighting that phantom "inflation" and not caving in to lower interest rates?
They might not like to recognize the sinking dollar but they are not about to trash it, is what it looks like.
April recordings at 4,855 sales are below the 5,385 sales recorded in March, but above January (4,520) and February (4,280) sales. April recordings are well below the 5,980 sales of April 2006 and 8,735 sales of April 2005, but comparable to the 4,870 sales of April 2000.
So far in 2007, a total of 19,045 homes have been recorded sold, in contrast to 23,960 for 2006 year to date and 36,060 sales for 2005 year to date.
My girlfriend bought her house(never occupied, 2 years old) for .50 on the $ in a ritzy subdivision in Gilbert.
Meanwhile in Tempe, houses priced 30% off the highs get snapped up quickly, while houses priced tp "market rates" sit for months.
The rate at which condos /apartments are going up, the size of the largest university in america would have to grow by 50%
I can't see the Olympics having a huge effect for a 2 week party 3 years away still. Did Salt Lake City and Atlanta have a major population influx and housing price rise ? I don't recall this happening,maybe some others know more on this.
I don't buy the "strong economy" argument for Alberta or BC.
I know of too many people in AB who have bought 2 or more properties for speculation and people who have taken out 95% mortgages and home equity loans for the remaining 5%. The amount of speculation in Calgary is huge and obviously enabled by the easy credit. Looks to me that the strong economy argument is only used to justify reckless lending/borrowing. But this is exactly the same argument and same insanity as in USA 1 to 2 years ago and we all know how it ended.
BTW, listings in Calgary are up 135% YOY. Prices are still going up rapidly.
As an auctioneer myself I can say for a sale the size they had that 70 cents on the dollar would be quite respectable and the lenders were certainly prepared to accept that going into the sale. Price is the motivation to get that many homnes sold in a day. When carrying costs and management fees are figured in during a slower market, time value of money makes 70% look real good today. Please remember that the vast majority of these homes will have significant deferred maintenance issues to deal with as well.
Hasn't San Diego real estate still shown price increase YoY? Looks like that's not going to last.
But speaking of condos, I think this sector will be hit particularly hard. In so many locations their values shot through the roof even compared to other forms of property in the same place!
1st...
30% lower pricing is significantly different than the median price correction and I wonder how the officials register it? Retroactively, so that they can lower previous sale prices that would show present sale prices have not slipped as much or take the blow full force to the temple and hope that the rest of the tentative buyers don't get the idea that maybe they should wait for their 30% discount.
27 months? You see, it's possible to estimate... Maybe it's about right.
Do the lenders reserve tally with 30% loss?
From the Jounal Of Real Estate Research, April 2006, abstract: (quote)The foreclosure discount refers to the deviation between the expected price or appreciation of typical or average property and the price or appreciation of the foreclosed property. Prior efforts to estimate the discount at which a foreclosed property sells have used very similar approaches-the hedonic model. Exhibit 1 shows that three of the four papers find that the selling price of a foreclosed property is 22% to 24% lower. In contrast, consistent with the efficient market theory, the most recent paper, by Carroll, Clauretie and Neill (1997), finds no discount associated with selling a foreclosed property.(end quote)
I guess the markets are not as efficient as one would imagine.
From the Corus quarterly report; (quote)With a loan portfolio consisting, almost exclusively, of condominium construction and conversion loans, the nationwide slowdown in the residential housing market is impacting Corus' business. Evidence of this slowdown is clear from the decline in loan originations, the resulting decline in loans outstanding and an increase in problem loans. The current quarter's earnings declined as a result, and it would not surprise us to see an even greater impact on earnings over the next several quarters, or even years, depending on when the market improves," said Robert J. Glickman, President and Chief Executive Officer.(end quote)
Increase in "problem loans"? Impact on earnings for years, possibly? Not spreading beyond personal real estate?
Its early in the foreclosure game. I am looking for .25 to .35 on the dollar, then I will get very interested in Calif RE.
ron, I would not expect to see .25 on the dollar unless banks get leaned hard on by regulators or in the wake of receivership as the RTC V2 gets into action. Could be a while... '09.
29 months absorption rate! If thats accurate than I can only imagine the absorption rate of markets like Las Vegas and Miami, or Phoenix.
That spells big trouble. Time to sell calls on housing futures?
Not exactly accurate. Would be nice to know how many of the "auction" offers are finally accepted by the bank and at what final price.
Anyone looked at the Mortgage Grapevine - BrokerUniverse
lately.
I don't have stats but my impression:
A. There started to be more and more loan requests with no answers (look for the number (1) or (2) at the end. the (2) is because a spammer that just tag every message)
B. There are now less loan requests
I wonder if there will be some offi9cial stat that would support this observation (which may wrong and inaccurate)
Could be a while... '09.
barely :
maybe even 2011-going to take awhile for all this speculation, foreclosure, resets, to unfold. But I expect to see prices return to trend line within my life time. I hope. LOL
Question: Could someone here explain why the canadian housing market is still red hot? Why aren't BC and Alberta housing markets crashing like the US? Is Canada really different?
Return to trend line? Prices will overcorrect well below it over the next three years, then decline slowly from there for another decade. This isn't your normal housing cycle, it's a once-a-century economic perfect storm.
If your finances survive, housing will be cheap.
Canada was late to the party. Their time, just like Seattle, who is say, in between San Diego and Canada (and I dont mean geographically) will come...
Canada has a booming economy because of the hot commodity market. The oil producing regions are attracting workers who need housing. Same thing in Texas which is the best housing market. If oil prices plummet these regions will get pummeled like they did in the early 80s.
I think these regions will continue to be hot for another year or so. This is one reason why I expect MTH to do better than most home builders. Most of their business in now in Texas.
Parts of British Columbia - Vancouver and Victoria are not "red hot" anymore. Listings are waaaaaay up and rising and sales are slowing. I thought I read recently that prices in Fraser Valley are now down YOY.
Lumber prices have dropped dramatically, unemployment is up - things are starting to go downhill. There is massive overbuilding here on Vancouver Island.
most CMBX are near their all time high (bad, high risk) which is the start of back to logic on the comercial R/E market.
see for example CMBX-NA-AA 2
Markit Homepage
On the other hand the ABX are doing well (half way between the bottom and top)
ABX low is higher risk.
see
ABX-HE-AAA 06-1
Markit Homepage
some of the newer ABX are still doing VERY poorly:
ABX-HE-BBB- 07-1
You have to draw a distinction between Alberta and BC. Alberta has seen rapid population growth (oil boom) and rising incomes.
However it also has vast amounts of vacant land surrounding its cities which means supply will bring down real, if not nominal, prices over the long term. If the price of oil declines prices will come down a lot faster.
BC's #1 industry is forestry which is in serious trouble. Population growth is the slowest in decades. The economy is being kept growing by real estate investment. "Everyone wants to live here" (note contradiction) and "This time it's different" (2010 Winter Olympics) are religious creeds in BC. I don't think I have to explain what that portends for the future.
Both Alberta and BC experienced major (40-50% nominal) RE crashes in the 1980's, but of course the cheerleaders have a laundry list of reasons why that can't happen again.
San Diego just got 100 comps to reflect realistic pricing. Its probably not enough, on its own, to cause further discounting of inventory, but it helps.
San Diego has been going through an interesting process of "low-grading" its inventory of about 18k homes. Inventory growth is sluggish, but that masks the underlying dynamic. About 13k of homes have been taken off the market YTD compared to 5k in '06 and 2k in '05. Replacing these de-listings are a steady flow of foreclosures, NOD's, and discounted re-lists -- all of which are under pressure to sell quickly. Also, the builders continue to build-out lots and offer new homes at a discount to existing.
So price-sensitive sellers are taking their homes off the market, and motivated sellers are replacing them. The result is more discounting, more competition, and more of a sense that you have to be "the low price on the block" to sell. Its quite possible, IMO, that if San Diego traffic slows to a halt this summer as it did last, we will see a step-function decline in the median sales price.
I wonder if everyone catches that detail "step function", Dave? I wonder if we should...recalling a similar "step function" when my father's health went from requiring an hour's rest mid-day to 6 hours as his heart capacity dropped almost over night. I was not prepared for that --expecting a more or less linear progressive decline...according to the stats that reflect a population's performance and not particular individuals.
So some particular regions or even particular neighborhoods or even more particular blocks may be more suitable for this ascription...unless some national "step function" hits and what could be more national than a currency? Another reason the Fed is fighting that phantom "inflation" and not caving in to lower interest rates?
They might not like to recognize the sinking dollar but they are not about to trash it, is what it looks like.
AZ RE struggles
April recordings at 4,855 sales are below the 5,385 sales recorded in March, but above January (4,520) and February (4,280) sales. April recordings are well below the 5,980 sales of April 2006 and 8,735 sales of April 2005, but comparable to the 4,870 sales of April 2000.
So far in 2007, a total of 19,045 homes have been recorded sold, in contrast to 23,960 for 2006 year to date and 36,060 sales for 2005 year to date.
My girlfriend bought her house(never occupied, 2 years old) for .50 on the $ in a ritzy subdivision in Gilbert.
Meanwhile in Tempe, houses priced 30% off the highs get snapped up quickly, while houses priced tp "market rates" sit for months.
The rate at which condos /apartments are going up, the size of the largest university in america would have to grow by 50%
I can't see the Olympics having a huge effect for a 2 week party 3 years away still. Did Salt Lake City and Atlanta have a major population influx and housing price rise ? I don't recall this happening,maybe some others know more on this.
I don't buy the "strong economy" argument for Alberta or BC.
I know of too many people in AB who have bought 2 or more properties for speculation and people who have taken out 95% mortgages and home equity loans for the remaining 5%. The amount of speculation in Calgary is huge and obviously enabled by the easy credit. Looks to me that the strong economy argument is only used to justify reckless lending/borrowing. But this is exactly the same argument and same insanity as in USA 1 to 2 years ago and we all know how it ended.
BTW, listings in Calgary are up 135% YOY. Prices are still going up rapidly.
As an auctioneer myself I can say for a sale the size they had that 70 cents on the dollar would be quite respectable and the lenders were certainly prepared to accept that going into the sale. Price is the motivation to get that many homnes sold in a day. When carrying costs and management fees are figured in during a slower market, time value of money makes 70% look real good today. Please remember that the vast majority of these homes will have significant deferred maintenance issues to deal with as well.