By this Thomas logic, it would take 15.17 months for buyers to gobble up all homes listed for sale at the current pace of deals vs. 14.73 months two weeks earlier
Just remember. 10 months or more of inventory = declining market. It's an easy yardstick and almost always works.
That's cool. That means distressed properties (FCs and short sales) exceed sales. (12% distressed vs. 7% monthly sales). So if every buyer looked for a distressed sale only, then none of the non-distressed properties would ever sell, and there'd still be a bunch of distressed properties available at the end of each month.
That happened long ago in other markets, it's nice to see it finally arrive in OC.
Where I am we don't have that much distressed inventory because our supply was never so tight to drive prices to such a degree. We just saw prices increase about 150% from modest levels.
What we DO have is tons and tons of empty houses sitting on the market. Which is putting strong downward pressure on prices now.
But we were never short on supply until the speculators came in and we didn't have houses selling for 10x income, so it seems to me like a characteristically different kind of housing bust.
Off topic but I have to vent...my 73 year old part time cook (10 hours/week) is about to take out a mortgage to buy a 1 bedroom flat. Her life savings, inheritances, etc come to £220k. The cost to buy the flat including legal, stamp duty etc, £280k. Mortgage £60k and she was offered a 25 year mortgage which takes her to age 98. (She volunteered all these numbers - I didn't ask.) Her only jobs are 10 hours a week for me and two other jobs where she house-sits while the owners are overseas. Her great idea is that she will rent out her flat while house-sitting and between her three jobs and the rental income she is all set. I am, as they say over here, "gobsmacked". I have pointed out to her that renting in London is cheaper and that the interest income on her savings (across several banks, after Northern Rock) would give her some £1000 a month interest, which would allow her to rent a small place and not touch the principal. She's not interested, she must own.
I am beside myself. What if she has a stroke and can't work and can't rent out her place? She is proposing to sink every last dime to her name into a mortgaged flat when she has no steady income and is 73!!! If she has to sell, she will sell at a loss (prices falling here now) and the only people who will make money off her are the real estate agents (commission) and the bank (prepayment penalty). And the stress of it! Who would do this? It is madness.
If you have not visited BubbleTracking lately, notice that Phoenix set a new population adjusted inventory record a few days ago. And it looks like Sacramento may be about to break the high it just set last year...
sterlingerl, my housekeeper dreams of the good ol days when she was 73 and could afford an apt with wall to wall carpeting. But times are tough now and she's not as spry...and may have to give up her other lawn maintenance jobs for less upsetting work (if only to placate Dan...she's that kind of caring person, you know?)
Ok, you pythonesquers, goforit!
CR,
Thanks so much for this table. It makes it much easier to track several important trends. I find the originiations versus net outstanding a great way to track what portion of originations are re-fi or cashout. 2003 $3,852b originations but outstandings only rose (8,285-7,227) or $1,058b.
Do I have that right? Is there any predictive value in the ratio?
Sterlinggurl:
Apparently there are vultures on both sides of the Atlantic. But the most difficult issue to evercome with her is the perceived need to own. If not now, when?
ac You don't count empty houses as distressed sales?
Maybe I should.
What I mean is that we don't have a lot of foreclosures like California. We don't have nearly as many people over their heads - our problem stems more from gross overproduction by homebuilders.
We are getting a lot of "trapped" buyers now who can't sell their houses, especially in the jumbo loan range. But they're not foreclosing yet.
"12 % of housing supply" certainly got my attention. Then I realized that this was really referring to "% of total inventory for sale". While 12% is bad enough, 12% of the total housing stock--well, we will have to wait a few months for that.
Happy Columbus Day bankers....
By this Thomas logic, it would take 15.17 months for buyers to gobble up all homes listed for sale at the current pace of deals vs. 14.73 months two weeks earlier
Just remember. 10 months or more of inventory = declining market. It's an easy yardstick and almost always works.
Everyone will have to dig a little deeper to pay for a Balboa Bar.
That's cool. That means distressed properties (FCs and short sales) exceed sales. (12% distressed vs. 7% monthly sales). So if every buyer looked for a distressed sale only, then none of the non-distressed properties would ever sell, and there'd still be a bunch of distressed properties available at the end of each month.
That happened long ago in other markets, it's nice to see it finally arrive in OC.
Ryder warns:
Ryder lowers its quarterly earnings view due to poor demand - MarketWatch
Where I am we don't have that much distressed inventory because our supply was never so tight to drive prices to such a degree. We just saw prices increase about 150% from modest levels.
What we DO have is tons and tons of empty houses sitting on the market. Which is putting strong downward pressure on prices now.
But we were never short on supply until the speculators came in and we didn't have houses selling for 10x income, so it seems to me like a characteristically different kind of housing bust.
Ryder warns:
Damnit. I had a feeling I should have bought some of that last week.
BTW, it really sucks to have a market that actually responds negatively to bad news.
I can't wait until all the hedgies get back to work tomorrow to re-invert the market logic.
ac,
You don't count empty houses as distressed sales?
Off topic but I have to vent...my 73 year old part time cook (10 hours/week) is about to take out a mortgage to buy a 1 bedroom flat. Her life savings, inheritances, etc come to £220k. The cost to buy the flat including legal, stamp duty etc, £280k. Mortgage £60k and she was offered a 25 year mortgage which takes her to age 98. (She volunteered all these numbers - I didn't ask.) Her only jobs are 10 hours a week for me and two other jobs where she house-sits while the owners are overseas. Her great idea is that she will rent out her flat while house-sitting and between her three jobs and the rental income she is all set. I am, as they say over here, "gobsmacked". I have pointed out to her that renting in London is cheaper and that the interest income on her savings (across several banks, after Northern Rock) would give her some £1000 a month interest, which would allow her to rent a small place and not touch the principal. She's not interested, she must own.
I am beside myself. What if she has a stroke and can't work and can't rent out her place? She is proposing to sink every last dime to her name into a mortgaged flat when she has no steady income and is 73!!! If she has to sell, she will sell at a loss (prices falling here now) and the only people who will make money off her are the real estate agents (commission) and the bank (prepayment penalty). And the stress of it! Who would do this? It is madness.
If you have not visited BubbleTracking lately, notice that Phoenix set a new population adjusted inventory record a few days ago. And it looks like Sacramento may be about to break the high it just set last year...
http://bubbletracking.blogspot.com/2007/10/new-record-for-phoenix-at-66229.html
sterlingerl, That is upsetting indeed, but an interesting story. Thanks...
sterlingerl, my housekeeper dreams of the good ol days when she was 73 and could afford an apt with wall to wall carpeting. But times are tough now and she's not as spry...and may have to give up her other lawn maintenance jobs for less upsetting work (if only to placate Dan...she's that kind of caring person, you know?)
Ok, you pythonesquers, goforit!
CR,
Thanks so much for this table. It makes it much easier to track several important trends. I find the originiations versus net outstanding a great way to track what portion of originations are re-fi or cashout. 2003 $3,852b originations but outstandings only rose (8,285-7,227) or $1,058b.
Do I have that right? Is there any predictive value in the ratio?
Sterlinger,
How much are prices falling out there in London? Do Halifax and Nationwide report such falls? Are there better price indicators in London?
Thanks in advance
Sterlinggurl:
Apparently there are vultures on both sides of the Atlantic. But the most difficult issue to evercome with her is the perceived need to own. If not now, when?
Halifax is stating prices fell in September while Nationwide says they rose.
House prices fell in September, says Halifax |
Money |
guardian.co.uk
The article in the Telegraph points out that data quoted by Halifax and Nationwide are three months out of date and the price slide is already here. Worth a quick read...
House prices: on the edge - Telegraph
ac You don't count empty houses as distressed sales?
Maybe I should.
What I mean is that we don't have a lot of foreclosures like California. We don't have nearly as many people over their heads - our problem stems more from gross overproduction by homebuilders.
We are getting a lot of "trapped" buyers now who can't sell their houses, especially in the jumbo loan range. But they're not foreclosing yet.
Things are looking even worse in Sacramento.
Sacramento Real Estate Statistics: Distressed Properties Update
I don't have September sales numbers but according to BMIT the July sales came in at 1.4k.
http://bubbletracking.blogspot.com/search/label/Sac%20Inventory
Orange supposedly is affluent county, immagin what the shituation is in arm pits like Inland Empires.
"12 % of housing supply" certainly got my attention. Then I realized that this was really referring to "% of total inventory for sale". While 12% is bad enough, 12% of the total housing stock--well, we will have to wait a few months for that.
Panic mode is right on schedule.