Buyers sit this round out
Thought this piece from the LA Times was interesting. Since the North Jersey news is rather light this Sunday, I decided to include it.
Buyers play wait and see
Buyers play wait and see
"As much as you read and hear about it, it was still a total shock to see what prices were like and what you get for your money compared to other places," he said.
Swiger, who sold his Louisville, Ky., home for $500,000 and rented a Huntington Beach town home for $3,000 a month, said he plans to hold off and buy this winter.
"I'm going to roll the dice a bit," he said, "and see if prices come down in the next six months."
He isn't rolling alone. Sobered up from frenzied exuberance over last year's housing gains by this year's declining sales, price reductions and increased housing inventory, a growing segment of Southland buyers are waiting on the sidelines for a significant downshift in prices.
Bob Taylor, owner of Bob Taylor Properties Inc. in Highland Park, noticed the change in buyers in May.
"Unless they can get a good offer accepted, about 75% to 80% of my clients are saying they want to wait up to one year for 10% to 15% price adjustments," Taylor said.
...
And they appear to have a reason to wait. DataQuick Information Systems reported that the Southern California median price slipped from $493,000 in June to $492,000 in July. The number of sales dropped to 24,669 in July, down about 27% from 33,561 in July 2005.
With an estimated one-third of Southland properties currently "wildly overpriced," according to John Karevoll, chief analyst at DataQuick, a La Jolla-based real estate research firm, patience could be a home shopper's best virtue.
"If you're a buyer, there's no hurry at all," said Edward Leamer, director of the UCLA Anderson Forecast, which provides quarterly economic projections. "Prices are going to be a little weaker a year from now, and there'll be more listings and more choices."
How much weaker remains to be seen, but Leamer anticipates an annual 2% to 3% drop in home prices for three to five years.
38 Comments:
September 7 (Bloomberg) -- Paul Krugman, an economics professor at Princeton University, talks with Bloomberg's Rhonda Schaffler in New York about the outlook for the U.S. housing market, prospects for a recession and concern about the country's trade deficit. (Source: Bloomberg)
"I think we are looking at a housing cycle that we've never seen.
...
If history is any guide, housing prices have got a long way to fall and the housing industry is going to go through a long drought."
mms://media2.bloomberg.com/
cache/vF12v4XdUj8k.asf
use the above link to see video. For some reason the post utility doesn't allow mms references in HTML.
source http://calculatedrisk.blogspot.com/
Want a Laugh?
Listen to this. Someone needs to co nfront these people on national tv or in the print media.
“‘I’m probably going to say that prices turned negative [in numerous metro markets] this month,’ when September sales data are released in October, David Lereah, chief economist for the National Association of Realtors, said Tuesday.”
“‘For a couple of quarters you’ll see price drops from 2 to 5 percent,’ he said in an interview. ‘It’s going to be short-lived, though. If there’s any national downturn, it will probably last a quarter.’ That’s because Lereah predicts the market will pick up again next year after sellers begin to cut prices this fall.”
“‘They will have to, he says. He says that all talk of the Fed’s role, shaky mortgages and irrational speculators aside, what’s at the root of the market stall is sellers’ reluctance to budge on their asking price.”
“Lereah focuses on speculators who acquired properties too high and mortgage products whose interest rates have begun to reset at unaffordably higher rates. ‘Basically the speculators and the exotic mortgage instruments, interest-only loans and zero-down payment loans that permitted households to purchase at lofty prices, they emptied the punch bowl at the party,’ he said.”
“‘This boom would have gone on a little longer if not for them,’ Lereah said. ‘They took prices up higher than they should have been.’”
“Broker Theobald said ‘the non-stop volume of articles on the housing bubble, well, it seems like it did become a self-fulfilling prophecy.’ Lereah sees some truth to that. ‘A lot of Realtors are very angry at the media,’ he said. ‘By discussing the boom building and by anticipating the boom busting, I think it did add to some of the negative psychology.’”
“Lereah and his fellow housing industry economists don’t come out unscathed. Critics say they generated unfounded optimism that the housing market would soar perpetually. Lereah counters that he has been forecasting a change for some time. ‘I’ve been wrong for three years in a row. I’ve said we’re about to get a correction. For three years, I’ve said, ‘This is the year that sales will come down.’”
“‘But now, it’s not because mortgage rates went up, it’s because of the psychology of the marketplace,’ he said. ‘The prices just got too
Nordvig of Goldman Sachs Expects a Weaker U.S. Dollar on Bloomberg
Weaker dollar in the near future ... possible 15-30% correction.
http://www.bloomberg.com/news/av/
the bubble wouldnt have went as far without speculators and fancy financing!!!
also Lereah had been saying that housing was driven on fundamentals. when %40 of sales were for second homes in 05 i cant see where the fundamentals are
Lreah is back peddling but someo0ne needs to drum up some of those past comments form 1-2 years ago or even 6 months ago.
The guy needs to be held accountable along with his realotr buddies...pumping away.
The realros are a bunch of crybabies anyway. let'em starve.
Prices will continue to fall.Do not bail out a flipping moron or grubbing seller.
You want to lose money from day? go ahead and buy now be a bagholding fool. Remember even though the asset is dpereciating the debt associated with it remains. Not a good position to be in.
in my opinion Liereah should concentrate on selling his investment property in florida ... he will need all the money he has to fund his defense attorney.
how about low balling Liereah? :)
Hey now ... no need to bash Lereah. He's only doing what he's paid to do, which is to be a shill for the Real Estate Industrial Complex.
if you don't stop the problem then you become the problem. To me Liereah is the problem.
Here's a seller who bought in June 2004 @ $755K, and is now asking $10K less (house is still over-priced) over two years later:
Jun 15, 2004 - Closed $755,000 (MLS 1671861)
Mar 05, 2006 - $879,000 (MLS 2253723)
May 01, 2006 - $829,000
Jun 05, 2006 - $795,000
Jul 13, 2006 - WITHDRAWN
Jul 14, 2006 - $795,000 (MLS 2299446)
Sep 07, 2006 - WITHDRAWN
Sep 09, 2006 - $745,000 (MLS 2317848)
And down they go...
Paul Krugman is a kook, but even a broken clock is right twice a day.
Jiggles McBlogger -
Did Clinton ever claim the stock bubble of 2000 was not a bubble??
Did Bush ever claim that the current housing market was not a bubble??
After Greenspan sensed problems he talked about "irrational exuberance". A warning which Mr. Liereah and his crowd ignored. If Greenspan hadn't lowered rates you and me would be building bridges and roads. We wouldn't have had time for blogging.
Buyers by employing a realtor (and there by guaranteeing the realtor income) should be advised of the current market conditions so that they can make an informed decision. What were the realtors doing when the home buyers were chasing down asking prices?? How many of Liereah's clowns stood up (including Liereah) and told their clients to back off from a deal because it a made no economic sense? Where was their fearless leader when such shameful acts were being carried out? Did the realtors really earn their commission??
If however you have evidence that any of the above clearly mislead people then they too should be prosecuted. Two wrongs doesn't make a right!
I think it is time people stopped defending Liereah without understanding that he was the one person who could have turned this around. We clearly need to make examples so that the near future generation is protected of such scammers.
I agree that that people have only themselves to blame.
It is ridiculous to blame Bush or Clinton if you grossly overpaid your house, took exotic scam ARM IO loan and believed that it "only goes up". Stupid people deserve all the bad things (financially speaking) that happen to them.
investors and greater fools can only blame theselves.
i might add that i cant wait to see the arrogent smug looks on ivestors faces to be completley gone.
my sister-inlaw told my wife not to sell and rent that if we waited we would be priced out of the market. i wonder how she feels now. her husband is a rel estate investor ( rich dad poor dad ). and i have to say she was soo arrogant about there new found wealth and thought we were fools
State regulators ordered 11 firms to stop doing mortgage business after investigators found evidence that brokers steered prospective home buyers into mortgages they couldn't afford, and lenders looked the other way.
The Division of Banking on Friday also made emergency amendments to state regulations governing the industry, and sent a letter to brokers, lenders and financial institutions statewide threatening further action should more evidence of wrongdoing emerge.
The division said recent surprise investigations of lenders and brokers turned up evidence that some firms intentionally steered customers into home loans they couldn't afford, typically by inflating borrowers' actual income in application documents.
Also, some lenders who bundle mortgage loans and sell them as securities on so-called "secondary markets" failed to correct the income discrepancies before selling the bundled mortgages, Commissioner of Banks Steven Antonakes said.
"Some of the lenders have perhaps not been doing the level of due diligence they should be doing, and underwriting the loan," he said.
Many of the abuses involved customers with low- to moderate-incomes, often with limited ability to speak English, he said.
"Hey now ... no need to bash Lereah. He's only doing what he's paid to do, which is to be a shill for the Real Estate Industrial Complex."
I disagree. True, we are ultimately responsibly for our actions and their consequences. But we can do better in creating the environment that, at least, doesn't cheer us marching straight into the financial destruction.
To me, it's a bigger problem that people are ACCEPTING non-ethical doings of others, simply based on the reasoning that "Well, that's what they're paid to do."
No, that's not what Lereah is paid to do. His job is to analyze and report "objectively" for the American people. I bet NAR's mission statement says it exists to "serve" the American people. What's wrong with demanding they do what they said they strive to do?
By your logic, we can't blame Bush for the Iraq War, because basically, that's what he's paid to do, to be a puppet for the military-industrial-complex (MIC).
Even if the reality is that the occupants of the White House are servants of MIC, we should CONTINUE to remind them and OURSELVES that the president's first and foremost job is to listen to and serve the majority (if all is not possible) of the American people, under the guiding principles of the Constitution.
We should also hold them accountable too. That is why I feel that the minute we stop holding them accountable, we've lost the battle.
I mean, we can certainly expect a NAR chief economist to stop lying, right?
Where did all the buyers go? These homes have been priced to sit, it would appear..?
I just read a story about the housing market from the Philadelphia Inquirer dated 8/14/2005.It quotes J.P. Orleans,President of Orleans Homebuilders which is a large builder in the Philadelphia area saying "Things can slow down but there is no real estate bubble in suburban real esate" "I would bet my life on it"
ABC's "Path to 9-11" airs tonight at 8:00PM:
http://abc.go.com/movies/thepathto911/
The film cover events from the 1993 World Trade Center bombings up to 9-11, and I believe airs without commercials.
Try surfing Realtor.com, they now place these in there listing spaces, every 3 or 4 pages. "This listing is no longer available.
It may have been placed in escrow, sold or removed from the market."
Is that site trying to create some kind of urgency or what. Never seen it before until tonight.
07:17:55 PM
When this ends, in my opinion we will hear some existing stories about gsmls.com and realtor.com.
These guys are quite natural at misrepresenting hard facts. Wouldn't they have tried something 'clever' with numbers?
Housing Boom Gone Bust said...
Where did all the buyers go? These homes have been priced to sit, it would appear..?
in the past 2 years a good %30-%40 of ALL sales have been second homes either vacation or ivestor (speculation) without that %30-%40 we would not have record years and the current outrageous prices. affordability ran its course even with historic low interest rates. if you morgatge 500,000 @ %0 you
still have to pay back 500,000
and some people may have come to their senses with help from people like Grim.
richard @ 5:22
just to let you know i sold in the early spring in south jersey and am renting cant exactly be sure if it was the top but it was sure close and the inlaws are still plowing money into real estate we'll see in about 6 months how it ends . certainly unwinding faster then most thought. the soft landing theory is losing favor but just how hard will it be?
The film cover events from the 1993 World Trade Center bombings up to 9-11, and I believe airs without commercials.
It airs without ethics.
"UnRealtor said...
ABC's "Path to 9-11" airs tonight at 8:00PM:"
Been hearing bad things about misrepresentation of events, and indeed fictitious events mixed in with fact. Considering all of the conspiracy theories out there, I would expect greater diligence when dealing with such serious material.
Planning on giving it a miss
"Been hearing bad things about misrepresentation of events, and indeed fictitious events mixed in with fact."
The only ones complaining about "misrepresentation of events" are Clinton administration officials.
Further, Senate Democrats went so far as to threaten Disney's FCC license, to prevent the unedited program from airing:
http://tinyurl.com/m4w7q
ABC apparently folded, softening certain scenes to make Clinton officials look less bad, which sets a bad precedent for media freedom in the United States.
Regardless, by any objective measure, the US approach to islamic terrorism in the decade before 9-11, cannot be considered anything but feckless. That the ABC film would depict this is hardly a surprise, except apparently to Clarke, Albright, et al.
I have the program recorded, but have not watched yet.
The only ones complaining about "misrepresentation of events" are Clinton administration officials.
Perhaps that's because this "dramatization" essentially attacks the Clinton administration and basically blames it and democrats for the events of 9/11.
It's really too bad that Dubya was on vacation during August 2001 when his administration received word that a terrorist attack was being planned and it involved airplanes. I'm sure that he would have acted on this information in a much more agreesive manner if he wasn't occupied with more important things.
As the Chairman of the Board was the former Democratic Senate Majority Leader, I somehow doubt that Disney/ABC is part of some right-wing conspiracy to smear Clinton.
Anon 1:33,
I don't see what one has to do with the other.
At least the public had to pay to see Michael Moore's left-wing propaganda; apparently the right gets free air time.
Unrealtor,
Enlighten yourself.
http://www.cnn.com/US/9607/30/clinton.terrorism/
I guess if its up to Roadboy
we speak a different language.
unrealtor -
"ABC apparently folded, softening certain scenes to make Clinton officials look less bad, which sets a bad precedent for media freedom in the United States."
You mean like the pressure put on CBS to cancel the Reagan biopic?
Anon 1:33 -
It is not being made by ABC. It is being made by, and paid for by a right wing Christian missionary group:
"initiated by Loren and David Cunningham and their right-wing Christian missionary group (YWAM) in tandem with its auxiliary arm, The Film Institute, and promoted by uber-wingnut David Horowitz. The Center for Popular Culture, Horowitz’s LA-based group, announced two years ago that it would launch a widespread PR campaign to blame Bill Clinton for the 9/11 attacks."
Follow the money.
I can just see it: George Mitchell, former Democratic Senator, decides that Disney should make a movie blasting Clinton; however, Disney doesn't have enough money to make a movie (Pirates of the Caribbean being a bomb and all), and they already used up all their funding from the Illuminati to make Cars, The Movie.
Therefore, they decide to get their money from Youth for America.
BTW, ever here of a 10-k?
I notice no one has questioned the facutal content of the movie.
CBS "folded" from public outcry (and made a business decision not to offend their customers), ABC folded from government censorship and threats, see the difference?
It takes quite a bit of 'chutzpah' to claim a movie does not agree with the 9-11 Commission Report, when in fact while Clinton officials were preparing to testify before the 9-11 Commission, they were caught destroying documents from the National Archives:
The Washington Post
April 1, 2005; Page A01
Berger Will Plead Guilty To Taking Classified Paper
By John F. Harris and Allan Lengel
Samuel R. "Sandy" Berger, a former White House national security adviser, plans to plead guilty to a misdemeanor, and will acknowledge intentionally removing and destroying copies of a classified document about the Clinton administration's record on terrorism.
Rather than misplacing or unintentionally throwing away three of the five copies he took from the archives, as the former national security adviser earlier maintained, he shredded them with a pair of scissors late one evening at the downtown offices of his international consulting business.
The document, written by former National Security Council terrorism expert Richard A. Clarke, was an "after-action review" prepared in early 2000 detailing the administration's actions to thwart terrorist attacks during the millennium celebration. It contained considerable discussion about the administration's awareness of the rising threat of attacks on U.S. soil.
http://www.washingtonpost.com/wp-dyn/articles/A16706-2005Mar31.html
UnRealtor said...
CBS "folded" from public outcry (and made a business decision not to offend their customers), ABC folded from government censorship and threats, see the difference?
You're delusional.
CBS folded after a letter writing campaign by a bunch of obsessive right wingers, lots of other people were surprised and had no problem with the Reagan biopic. And plenty of regular citizens have been angered by the ABC piece as details have emerged.
And quit quoting the far right conspiracy theories about Sandy Berger. The whole episode was investigated already and has blown over as much ado about nothing.
The far right doesn't speak for "the people" any more than the far left does.
Anon - this isn't the forum to question the factual content. There are plenty of problems, such as the "shot that Berger refused to take" which never happened. Go look at another source than instapundit or Rush. Open your mind a little.
"CBS folded after a letter writing campaign..."
Which is what I said. ABC was targeted by the Senate Democrats, who threatened to pull ABC's FCC license if the film was not edited. I know the facts are uncomfortable, but that's the breaks.
"And quit quoting the far right conspiracy theories about Sandy Berger."
Er, I cited the Washington Post. And Berger was convicted of stealing and destroying classified documents. Again, I know the facts are uncomfortable, but that's the breaks.
I think this pertains to where you reside. I market is the BEST! YES I SAID THE BEST. FOR BUYERS! AND SELLERS The market work in both directions. It's favors one then the other. That how the market has been for decades. Nobody is going to loss money on real estate, it's the best investment. Things always take a dip but then coming back stronger after. I mean come on it's not like the eighties when interests rates were 18%!
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