The Bubble has Burst
 

In the past week I have talked to a friend whose house is curretly for sale in Upland, CA ......his Realator says NOTHING IS SELLING. Nobody is even looking...

And I have talked to my Accountant in CA, she says NOTHING IS SELLING.....

Looks like we are in that limbo period where values are just hanging the next step is a DOWNWARD one.

Here in LV production is begining to catch up to demand...yet an acre of land ready to be built on is going for 600K to 1M..so prices here are still on the rise soCA boyz your time of coming to LV on the cheap is over.

In my immediate area 3700 to 4000 sq ft houses are going from 675K to over 1M.

It's not a loss until you sell, right trust fund boy? ;)

I'm surprised the market is already showing weakness. I expected it to happen, but not this soon. I bet Wayne's head is swollen big time. :)

Now, when is this slowdown supposed to hit the Midwest and Southeast? I'm ready to pounce.
Jürgen

location, location, location. Houses are still selling fast in our neighborhood, and in the last couple weeks we've had 3 agents knocking on our door asking if we were thinking of selling.

"in the last couple weeks we've had 3 agents knocking on our door asking if we were thinking of selling."

Is this not a sign of a weakening market? Not enough walk in traffic, lets go pound on some doors? Just a thought.

Location is right. When realtors are going door-to-door looking for listings, it often means they have buyers waiting to purchase in that particular neighborhood. In the San Fernando Valley the demand is still ahead of the supply - i.e. prices are still going up. Location, location, location, indeed.

Good point. Trolling for buyers would be a better indicator of a slowdown.

I remember the time three agents came to my door and asked if I was selling . . .

Or trying to generate some churn; if they convince party A to sell, party A now has to buy something, or live out of a shopping cart.

Most houses here are sold before official listing. At or above asking price.

The homes above 2.5 million have slowed a bit but are still selling.

Yeah right Tabs. Even in the CA desert (Temecula) homes are still moving quickly. Many new homes coming online this fall in North County. Looked at some model homes 2 weekends ago, 3600sq/ft, 7000sq/ft lots (small), limited views, starting at $950K and quickly going to $1.2M. Phase 4 (8 homes) sold out by lunchtime the day it was released. Next phase is expected to +$35K with no view lots.

I still don't understand how a person of "middle income" can afford to live in CA.

I talked to an agent/friend a few days ago. He said the listed inventory is very low here in Phoenix and many houses are selling for more than the asking price.

I'll believe it when I see it, Tabs. In NorCal, we still have lines of people camping overnight just to get a shot at signing up for a new house, sight unseen.

In my town, the homes on our street are selling for 200-250% of purchase price, and they are only 3-4 years old. I'm not too excited personally, because I wouldn't know where to go if we sold!

The people who are banking on a real estate crash (moving into smaller homes and waiting, holding off on buying rentals, etc.) are taking a huge risk for a return/savings that I think might give them 5-10% at best. 10% downward is a huge correction in housing prices.

LAT article based on the Census:
"California's population is expected to grow by an additional 12
million people by 2020, a 36 percent increase."

Everyone wants a house.

Afford to live here or buy a house here? To get a home you have to start small and inexpensive. Some of us have posted about this before. The key is to get something in a good location, near good schools and shopping. A total fixer if necessary. Just make sure your yard is big enough to BBQ come January :) Once you own a home here you could justifiably say "How can I afford NOT to live here?". If you don't own (or want to) then how much is year round outdoor time worth to you? Ocean, mountains, desert, snow, camping, it's all here and within a 2 hour drive.

Reports out laast week indicated the 'median' home price in the San Fernando Valley reached $500K last year!

My realtor friends say exactly what Tabs indicated: no shoppers for the past month, plus. Lots and lots of downward price revisions.

How far prices will need to implode before buyers come back is the big question on the West side of El Lay.

I'm sure this varies by area, though.

One additional economic data point is that retail sales took a big dive in June, with car sales being the lowest in 6 years. There's an 'unsettled' feeling that's not showing up in the Consumer Confidence numbers...

Its all over the board around here. I just sold a condo for $20k over comps in one day. 2 friends with a condo and high-end house are having no luck at all. Buyers are looking for realistically priced properties, because there is so much inventory. Gone are the days of tacking $50k on the price, just because you can :) Well, at least for now.

It would appear there's a disconnect between the "man on the street" anectdotal reports and the stories published in various rags.

It's very easy for me to believe there's a certain amount of hype being generated here. Nay, say ye? Look back at the stock market bubble and the news stories of that era.

I agree with Motion things are all over the board, some areas are doing better than others. There is so much inventory of cookie cutter track homes next to nothing of intrest. I know some people in Ladera ranch who had to enter a lottery to get dibs on a new home, now the additional phases are unable to sell. The market is slowing but homes are selling, many prices are dipping back to last year but for most that means little since prices have risen for the past couple years. The beaches are still hot, the reason is location and climate. Just come to the beach on a hot day and you will see why; thousands of people drive many miles to the coast to be in cooler weather. For those of you inland I would be a little worried.

What's happening in my hood:

House 2 years agao 500K
House 2 months ago 850K-1M
House today 750K-950K

Tabs is correct. It is slowing down. Buyers are backing out because of the increase in interest rates. We know an agent who is now starting to worry, and might get back into the tech sector from where he came. He says interest rates will surely go up after the elections. No matter if Bush or Kerry's in office, Greenspan is gonna' pull the plug.

Interest rates will go up, market momentum and sentiment is going down, and Fall will be here in 3 months (people with families tend to stop looking to move once school starts up).

Should be an interesting end of the year.