Housing Market is Frozen (pics)...

onewhippedpuppy · 10-19-2007, 03:20 AM

Looks pretty normal to me. Granted, up to this point things were anything but normal for you guys in SoCal.

Porsche-O-Phile · Porsche-O-Phile's Garage

Seems this market is just entering "Texas standoff" phase. Sellers are still deluding themselves (or being convinced by their scumbag realtors with self-serving motives) that they'll get 2004 prices for their places but the reality is there aren't any buyers stupid enough to pay those prices. Well, maybe there are, but they're very rare and getting rarer by the day. . . But all the realtors hold out for the one idiot in 10,000 that will actually pay $750,000 for a bungalow on a postage stamp lot overlooking a bus depot. Because of that, the market stagnates and in the meantime more inventory piles up, more ARMs adjust, more people lose their jobs or realize what trouble they're in, more sellers get desperate because they can't buy that new place they want until they dump the turd they're currently in, etc. . .

It's damming up the river while the flood waters continue to pile up behind it. The longer the inevitable (large drop in prices) is put off, the worse it's going to be. But nobody wants to admit it yet. Somehow these sellers are convinced to stay and keep their prices in "ridiculous-land" and ride their situations into the ground.

I know I won't be looking for anything around SoCal for quite a while - at least 2-3 years. I may just leave the area altogether. I'm certainly not buying until there's a significant correction to the market. All the slick marketing on the radio and TV and in the papers about "Consult a realtor! Now's a great time to buy! Rates are still low and values have just about bottomed out!" reeks of B.S. so foul the stench is overpowering. It used to be housing was a semi-legitimate market. Now it's worse than going to a used-car lot full of plaid-suit and cowboy-hat-wearing sleazeballs. . .

GDSOB · GDSOB's Garage

With 7 homes under contract and 53 available you have 7.53 months of inventory available. That's a normal market in most parts of the country.

I would be concerned with the rate of change though.

turbo6bar · 10-19-2007, 04:31 AM

SoCal and SF Bay area home sales in September were lowest in 2 decades (can't go further back because Dataquick records do not exist).

If California continues its winning ways, catalist Homes will renamed cataclysm Homes. If the map above is a true indicator, October sales will be astoundingly low.

RoninLB · 10-19-2007, 04:44 AM

Quote:

Originally Posted by Porsche-O-Phile

Seems this market is just entering "Texas standoff" phase. Sellers are still deluding themselves (or being convinced by their scumbag realtors with self-serving motives) that they'll get 2004 prices for their places but the reality is there aren't any buyers stupid enough to pay those prices. . .

same delusion around here.

just read an article on Las Vegas. Tract home buyers are pissed that next door selling for 25% less by the builders. Some builders will sell the whole development cheap.

Porsche-O-Phile · Porsche-O-Phile's Garage

BTW that's a great site. Thanks for sharing.

legion · 10-19-2007, 05:57 AM

Sales just picked up again around here. They were slow last spring/summer (taking up to six months to sell), but started to take off again (1-2 months to sell).

Bloomington/Normal does have a lot going for it. Unemployment is back around 2%. If people were spending an unusually large percentage of their income on housing in SoCal, they are spending an unusualy low amount here in B/N. For example, the wife and I make $100k a year combined, we payed $125k for our house. 30-year fixed (or 15-year fixed, or 10-year fixed) is the norm around here. The rule of thumb most people around here follow is to not spend more than 2 times your annual income on a house. Hopefully this all means that B/N will not be hit hard in the coming years.

Dantilla · 07:04 AM

Looks to me that your market is simply returning to normal.
It just looks frozen compared to how overheated it has been for the last few years.

jyl · jyl's Garage

In Portland, appx 7 months invtry. This had been one of the last remaining "hot" housing markets. Now condos are piling up unsold, or being converted to apartments, with many half-finished projects still being built. Per Zillow, prices have flattened QOQ, expecting to head down shortly.

legion · 10-19-2007, 06:37 AM

BTW, new construction has come to a grindng halt in B/N. Hopefully this means contractors will start acting like human beings again.

Wickd89 · 10-19-2007, 06:38 AM

Wow. Wayne. Your living like a rockstar!

My little cousin just sold her house in that area for $1.9M because she was able to get a deal on a larger home for $2.05M (about 2 months ago). Since she purchased the original home for under $1M, I think she did ok for 8 years of ownership.

So those of you in other parts of the country: No need to shed a tear for us poor Californians!

legion · 10-19-2007, 06:53 AM

Like I said, I paid $125k for my house in 2003--and my house was one of the more expensive ones to sell that year. Recently, it seems that houses on my street (and there have been five sold this year) have gone for $150k - $155k. That's roughly 5% of appreciation.

rammstein · 10-19-2007, 07:02 AM

Cool data Wayne, but the interpretation might be a bit off-

I'd like to see the under contract vs. on market map for when things were good. There were probably way more of both, but the question is who much did the ratio change.

The On-Market is ALWAYS quite a bit higher than the under contacts. The reasons vary, but the biggest one exists regardless of market conditions:

Seller isn't very serious, but for the right price will sell. Thus, overpriced house sits on market, and if it doesn't sell seller doesn't care. In the real estate industry, this is known as a 'price-motivated seller', and only a schmuck broker would work that. And there are LOTS of schmucks.

I am more willing to bet that overall volume is lower there, but the ratio is closer to the same. Well, actuall the ratio is probably a bit worse, because sellers who aren't in touch with reality will keep hitting the market with overpriced homes, but its still probably reasonable.

Porsche-O-Phile · Porsche-O-Phile's Garage

Quote:

Originally Posted by legion

BTW, new construction has come to a grindng halt in B/N. Hopefully this means contractors will start acting like human beings again.

Don't count on it.

legion · 10-19-2007, 07:29 AM

Yeah, I'm an optimist at heart.

(And this forum is the place where I get to air any pessimism so it doesn't infect the other parts of my life...)

GDSOB · GDSOB's Garage

While sales have been off, overall listings in our market are down significantly. So, most of the listings are "must sell" for various reasons.

onewhippedpuppy · 10-19-2007, 07:36 AM

6% here, slow and steady wins the race. Not a fortune to be made, but not one to be lost either.

legion · 10-19-2007, 07:39 AM

I'm so glad I did the 30-year fixed and not the 80/20 ARMS my friends in Chicago did.

We're probably going to think about selling in a year or so. I'm probably going to sell the 951 to cut some expenses. We're probably going to think about starting a family.

If we sold today, I would expect to walk away from a sale with at least $40k in profit (equity + appreciation). That will get me into a $200k house with 20% down. $200k will get me 2000 sq. ft., an unfinished basement, and a 3-car garage around here--exactly what I want.

The nice thing is, we don't have to sell. We can afford to wait as long as we have to.

motion · 10-19-2007, 07:40 AM

Quote:

Originally Posted by Wickd89

Wow. Wayne. Your living like a rockstar!

My little cousin just sold her house in that area for $1.9M because she was able to get a deal on a larger home for $2.05M (about 2 months ago). Since she purchased the original home for under $1M, I think she did ok for 8 years of ownership.

So those of you in other parts of the country: No need to shed a tear for us poor Californians!

But her property tax bill just went up $1,000 per month!!! Ouch. Factor in fees and costs, and that was one expensive horizontal move.

onewhippedpuppy · 10-19-2007, 07:45 AM

Sounds like you made some good choices legion. Probably very similar market to Wichita, where money can be made with smart purchases and remodeling to build equity. The good old buy low, sell high. When I'm done remodeling our house, hopefully sometime next summer, we should easily be able to make $80-100k. We won't be selling anytime soon, but it's nice to know it's there. Sweat equity is hard to beat.