DataQuick: Bay Area home prices flat, slow sales
Submitted by
CalculatedRisk on Wed, 01/17/2007 - 2:14pm (19 comments)
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Here's December's foreclosure numbers...
Piss off Nigel with your blog
"Are you facing foreclosure in Salt Lake City? I may be able to help. Drop me an email at buttmunch(at) nointegrityloans.com to see if I can help you with a refinance or a fast sale."
I dont know how u people feel about this but it really looks like housing market has bottomed. If housing permits dont fall this month I will have to start thinking that this is it. I dont expect prices to increase faster than inflation -- so it looks like we might be in for a very prolonged period of close to 0% price appreciation. This will likely lead to a major slowdown or recession --- in which case housing could suffer some more --- we'll have to see.
I laughed when when Greenspan said that housing is stabilizing but maybe he was right.
The HMI is up, mortgage apps are up, lets see what else is up next week ...
I dont know how u people feel about this but it really looks like housing market has bottomed.
LOL. You enter that same comment every thread shark... you won't know bottom for months AFTER actual bottom and especially not in winter.
If in August... looking back at May-June... we see real 'stability' (no serious increase in months of inventory, transaction volume approaching normal spring levels, prices stable if not appreciating)... then we can say it has bottomed.
Else there is NO evidence of a bottom yet. Just more stalemate, stand off.
I enter the same the comment and you enter the same reply -- I'm just trying to get some reaction. Also --- there is new evidence of stability each time -- so i repeat the comment to see if anyone else thinks the way I do.
there is definitely evidence things are not getting worse -- that could be just because the weather got warmer and seasonal adjustments are out of whack -- but rates are substantially lower so maybe people are buying more -- maybe there is more buying because the weather is warmer as well I dont know.
Who's kidding who? The housing market is no where near stable in most areas of the country. What sells a home is the AFFORDABILITY. Homes are simlply not affordable at these prices.
Affordability is affected by three things: Income, Interest Rates and Price. Incomes are not rising at any really measured pace - at least not enough to make up the affordability gap. Interest rates are not the answer, they can't go much lower over the next year or so. That leaves prices. Either prices will drop enough to make homes AFFORDABLE again (and that's a big drop - 20% or more), or prices will remain static and wait for incomes to catch up. That would take years (at current rates, about 7 - 10 years). The market won't remain static that long because the foreclosures will start to depress prices. Look for prices to be 20%+ lower by end of 2007.
I think the scenario of 7-10 y of rusting prices is quite likely. Just looking around where I live we already had our 20% drop and prices have been about the same since Sep. Given that the HMI is no longer falling and interest rates are not rising -- housing starts probably dont have much farther to fall -- so we could have bottomed.
I agree that afford ability is a problem but as long as you can buy with a next to 0% down payment you can still buy the house. I'm a bit baffled as well but I dont see things getting worse anymore.
So what happens when nobody will give 0% down loans and god forbid you need a downpayment?
Another lender hit the skids today
TEKFleet CRM
Have fun boys and girls
sharbait,
The whole magic of buying with 0% down and getting mortgages of 10 or more times yearly income works only when the prices are increasing. If they are no appreciating (or God forbid depreciating), the whole music stops. Buffet once said "It's only when the tide goes out that you learn who's been swimming naked." Stopped appreciation means that the foreclosures would grow exponentially because no longer you can refinance from one "creative" loan to even more "creative" one.
We can now see from the ABX index that this whole creative lending house of cards is collapsing.
The spring would be important. If the market indeed improved, then I would believe in this economic perpetuum mobile. But I bet it won't.
sharkbait:
You could be right we shall see how the numbers unwind in 07.
I'm not even certain shark is wrong - it might be stable - its just freaking winter, its too early to even guess up or down...
Kinda like looking out at snow covered farm fields and trying to guess if the corn crop will be good in 2007... "Yup the sun's warm today... might even get above zero... gonna be one heckuva crop."
It's great sport & I do love rising to shark's bait... but this one is going to take a long time to sort out. Settle in around the stove.
PartyBoy: Funding America. Just the name alone is a give away. And, yep, that picture definitely portrays a subprime deal going down. And the tagline: "One Priority... Yours" followed by "Stability Strength Execution" overlaid on a picture of the Statue of Liberty. Defintely goes down as one of the sign of the times.
Does anyone have any statistics on how many Lenders are going belly up (in terms of no longer taking new loans) and what their normal operation portfolios were?
I'm seeing a lot of individual links in forums, but don't have a feel for how exceptional these numbers are.
And, yep, that picture definitely portrays a sub-prime deal going down.
LOL. Ya some how a picture of one of their independent broker's offices... say in a worn down 60s vintage strip mall... doesn't convey the same 'confidence' would it.
FWIW - I had no idea this sub-prime world even existed until this bubble went really crazy. Since then I've kept an eye out for them in my travels across middle America... I wish I'd brought my digital camera - some of these places are priceless.
This is what you all are squeeling about?
http://i12.photobucket.com/albums/a216/Pixbucket/SoCalRealEstate2007-01PriceSmall.png
that is "now".
You boys are looking for something more like "then":
http://i12.photobucket.com/albums/a216/Pixbucket/90sbustreal.jpg
"Does anyone have any statistics on how many Lenders are going belly up (in terms of no longer taking new loans) and what their normal operation portfolios were?"
Here it is "http://ml-implode.com/"
"I enter the same the comment..."
Please continue! Evenutally you'll be right.
Wow, Party Boy, that is a great picture at the top of the page. All those people who looked back and turned into pillars of salt . . .
The SF Chronicle has an article this a.m. on this same subject (see http://www.sfgate.com) In addition to slowing sales, the article points out that rents are rising in the Bay Area - by as much as 10%.
Who says ther's no inflation, again?