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| 11/22 |
| 2008/10/28-30 [Reference/BayArea] UID:51709 Activity:nil |
10/28 Dear poor pissed off socialist guy who missed out on the boom,
this is good news for you. I told you the free market would
fix the problem by itself!:
http://money.cnn.com/2008/10/28/real_estate/August_Case_Shiller
What surprised me was SF = 27% decline. I thought SF was immune
to housing bust. What's up?
\_ That's not SF, that is the Bay Area. The declines are mostly in
places like Vallejo and San Ramon. SF proper is only down about
10%, and most of that is in the BayView/Excelsior area. My
neighborhood has not seen any decline, unfortunately. Why do
you think that SF is immune btw? Did someone tell you that?
http://www.dqnews.com/News/California/Bay-Area/RRBay081021.aspx
\_ http://www.socketsite.com/archives/2008/10/august_spcaseshiller_san_francisco_msa_decline_accelera.html |
| 11/22 |
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| money.cnn.com/2008/10/28/real_estate/August_Case_Shiller -> money.cnn.com/2008/10/28/real_estate/August_Case_Shiller/ The S&P Case-Shiller Home Price 10-city index dropped 11% for the month. "It's Economics 101," said Jared Bernstein, senior economist with the Economic Policy Institute. "You have a huge speculative bubble leading to a severe inventory overhang. The US Census Bureau reported on Tuesday that the number of vacant homes on the market held steady in the third quarter, at about 28% of all housing. That's 65% higher than the long-term historic rate of 17%, and represents an excess inventory of nearly a million homes. This number is critical to home price trends since owners of vacant properties - especially banks - will slash their prices to get deals done. The Case-Shiller indexes compare the sale prices of the same homes each year to determine price trends and are considered one of the most accurate home price gauges. In August, San Francisco saw the biggest price declines, down 35%. Cleveland prices rose 11% and Boston prices inched up 01%. He believes the pace of price declines has picked up since then. "There are two explanations for these steeper declines," he said, "neither of which are encouraging. One is that the difficulty in obtaining credit has further constricted demand. The second is that home sellers are finally capitulating on prices. They've been holding out for months, refusing to sell except at their prices. "Buyers and sellers have been staring at each other to see who blinks," he said. Much of that statistical trend is being driven by data from hard-hit western states like California. The California Association of Realtors reported last week that home sales volume jumped a whopping 97% in September compared with the same period a year ago. But the median price of an existing home has fallen 41%. If that trend spreads to other states, price weakness could last for many more months, even as sales volume picks up. What happens after that largely depends on the confidence bolstering effect of the government economic stimulus packages, according to DeKaser. "More credit will be available and housing inventories will be reduced. The deterioration will give way to a more balanced market." But not everyone agrees that the stimulus packages, which are designed to loosen up tight credit, will prove helpful. Peter Schiff, president of broker-dealer Euro Pacific Capital, believes the impact will be decidedly negative. "The goal of all these plans is to give consumers more money to spend. However, excess consumer spending is part of the problem, not part of the solution" he said. "After a decade-long spending orgy, market forces are finally trying to restrict consumer spending and dampen credit. But the stimulus looks to provide a new source of funds after savings, income, and credit have been exhausted. Our imbalanced economy is in desperate need of retrenchment, but stimulus plans will effectively hold the firemen at bay while throwing gasoline on the flames." Schiff explained that the housing boom's exotic mortgages, which let people buy homes with zero money down, have vanished. But easy credit means people will buy more consumer goods and save less to put towards housing. "They'll surrender all the gains they made in the past 10 years," he said, "and be even lower than they were 10 years ago." Cars: 6 Chinese knock-offs Do these vehicles look familiar? China's ambitious quest to become a global car empire is ruffling the feathers of Japanese, European and American automakers. Business Leader Council Live Quotes automatically refresh, but individual equities are delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. |
| www.dqnews.com/News/California/Bay-Area/RRBay081021.aspx The median sale price did the opposite, diving to $400,000 - 40 percent below its summer 2007 peak - as more sales shifted to lower-cost inland markets laden with foreclosures. A total of 7,271 new and resale houses and condos closed escrow in the nine-county Bay Area in September. That was up 05 percent from 7,232 in August, and up 45 percent from 5,014 in September 2007, according to San Diego-based MDA DataQuick, a real estate information service. Last month's 45 percent year-over-year sales gain was the highest for any month since April 2002, when sales shot up 49 percent. However, last month's jump is partly the result of the exceptionally weak activity in September 2007, a record low for that month in DataQuick's statistics back to 1988. Year-ago sales plunged after a credit crunch that struck in August 2007 made "jumbo" mortgages - used to buy higher-end homes - more expensive and harder to obtain. Entry-level sales were already hurting from the subprime mortgage industry meltdown earlier in 2007. Although sales rose in some coastal communities in September, it was the region's less expensive inland markets that pushed sales up so sharply. Contra Costa, Napa, Sonoma and Solano counties combined accounted for nearly 62 percent of Bay Area sales, compared with 52 percent a year ago. Solano County sales doubled from last year, while sales nearly doubled in Contra Costa and Napa counties. "Inland markets have spoken: Sales take off when prices drop 30 percent or more from the peak. Closer to the coast, prices in some areas continue to hold up much better, but sales aren't shooting up by as much, if at all. One reason is fewer foreclosures on the coast mean fewer motivated sellers willing to drop prices. Meantime, mortgage money remains tight for pricier homes, and inland buyers looking to move up now have less equity to do so," said John Walsh, MDA DataQuick president. "For the inland markets," he continued, "September's relatively strong sales provide more evidence that a recovery got well under way this summer. Now it's just a question of whether it will stay on track and provide stable prices and fading foreclosures in 2009, or will it get derailed by an economic crisis." DataQuick's September sales reflect closed escrows, meaning buyers made their purchase decisions in mid-to-late summer, before the worst of the economic news hit in recent weeks. Statistics over the next month will begin to show how housing demand has fared this fall. The median price has plummeted for several reasons: Region wide price depreciation, which varies by location; the relatively high cost and qualifying difficulties associated with the jumbo loans used to finance pricier homes; and a significant shift toward a higher portion of sales occurring in lower-cost inland markets. Foreclosures tend to sell at a discount and are concentrated in relatively affordable neighborhoods. MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $1,890 last month, down from $2,121 the previous month, and down from $3,171 a year ago. Indicators of market distress continue to move in different directions. Foreclosure activity is at or near record levels, financing with adjustable-rate mortgages is near the all-time low, as is financing with multiple mortgages. Down payment sizes and flipping rates are stable, non-owner occupied buying activity appears flat but might be emerging, MDA DataQuick reported. com Media calls: Andrew LePage (916) 456-7157 or John Karevoll (909) 867-9534 Copyright 2008 DataQuick Information Systems. |
| www.socketsite.com/archives/2008/10/august_spcaseshiller_san_francisco_msa_decline_accelera.html Both the 10-City and 20-City Composites have been in year-over-year decline for 20 consecutive months. Of the 20 regions, 13 of them had their annual returns worsen from last month's report. As seen throughout 2008, the Sun Belt markets are being hit the most. Phoenix and Las Vegas are both reporting annual declines in excess of 30%, and Miami, San Francisco, Los Angeles and San Diego are all in excess of 25%. Prices fell across all three price tiers in the San Francisco MSA with the rates of decline accelerating across the board. And according to the Index, home values for the bottom third of the market in the San Francisco MSA have retreated to December 2001 levels, the middle third has returned to October 2003 levels, and the top third has fallen below February 2005 levels. The standard SocketSite S&P/Case-Shiller footnote: The HPI only tracks single-family homes (not condominiums which represent half the transactions in San Francisco), is imperfect in factoring out changes in property values due to improvements versus actual market appreciation (although they try their best), and includes San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (ie, the greater MSA). First Published: October 28, 2008 7:15 AM Comments from "Plugged In" Readers "the real" SF is clearly special. but there does come a point where surrounding locales are so cheap that people have no option but to consider them. clearly I would rather live in SF for $1M than a comparable Daly City pad for $800k. however, if Daly City drops 30% down to $560k then it starts to become attractive. But $440k is a lot of transportation coin, especially $440k plus interest charges and higher taxes etc etc etc. Posted by: ex SF-er at October 28, 2008 7:28 AM Remember all that plaintive, "Oh, I really feel bad for the surrrounding areas with gas going ever higher, good thing we live in Noe" back when oil was $140+ a barrel? Posted by: $2 gas at October 28, 2008 7:36 AM Bottom 1/3 is at 2001 prices Middle 1/3 is at 2003 prices Higher 1/3 is at 2005 prices The bottom 1/3 starts to look really cheap. And what about, "when the lines cross at 160, that's the bottom"? Looks like we blew past the 160 and are just getting out of second gear, accelerating to the downside, and all these data are of course prior to the latest stock market collapse and even before the region has really sunk into deep recession. My gut feeling is that prices have a good chance at "bottoming" at 2001 levels. Remember that in 2001 RE was at the end of the tech boom. You would have been hard pressed to find someone say that RE prices were "cheap" in 2001. The only thing that makes them look cheap now is that they got even crazier from 01-07. FWIW: I have abosolutely no idea how low or high RE will go. Posted by: Still looking at October 28, 2008 8:26 AM ex SF-er: true for SF. But the bottom of the market was still pretty low and hadn't caught up price-wise with the higher segments. Today, do a search on the MLS for SFHs under 200K in SF. Apart from the quality/location/issues with these 2 places, what's incredible is that you actually have listings at this price range and they are simply sitting there. People are pickier and pickier, which means there are more opportunities to be taken everywhere and there will be more in the coming months. Prices are sticky at the top and it's still way unaffordable to the median income. It's definitely a gamble and with the bear market in WS, there's less wiggle room for taking chances. includes San Francisco, San Mateo, Marin, Contra Costa, and Alameda" One could (and I would) make the argument that our local economy is based on the overall health spread throughout those counties, because it's all interconnected. So, in the sense of an general economic barometer, the MSA works fine. However, I think that it is not an appropriate source of data to use when attempting to assess what a reasonable value for a home might be, if you were looking. At one time, prices may have been going up at similar rates everywhere, and the spread may have been much smaller (when the lower third is at 275 and the upper third 175, the gap in prices is much smaller than it was in 2000). However, as things implode and head downward, per district specifics control the local situation much more than the trend in the MSA No, I am not going to say that the 'real SF' is not going to fall or that 'I haven't seen my home value go down', but I will say that it is going to fall at a different pace to a different bottom than someone else's. In essence, the mean, which is all we are seeing, is no longer representative of the distribution, which, I believe is seeing a higher variance and is perhaps experiencing a mode and median far from the mean. The only other RE market I have experience with is the Twin Cities. There, I expect things to be behaving much nearer the mean throughout the metro, except perhaps the extreme exurbs, as people's choices depend more on the life style they choose to live (suburban and commute, far from city noise and traffic, or in the bustling city close to everything) and less on the size or style of home (not being constrained by a peninsula and ocean means that all homes have large yards and the size distribution of available units is similar everywhere, in the city or elsewhere). They're Betting Against Us (San Francisco) On The CME Posted by: badlydrawnbear at October 28, 2008 9:10 AM rr: I disagree with your assessment of the TC. We too are seeing huge variability in RE prices throughout the metro. some places are taking an absolute beating such as the bad neighborhoods (north minneapolis and the St. Paul downtown hoods) and also the warehouse district (think tons of new and very expensive condos that reached $800-1000/sq ft) and exurbs (20-50 miles away from Mpls/st paul) whereas other areas are only down slightly. there is a clear difference between housing stock in the city (tends to be 50-100+ years old, around 1000-1800 sq ft) as opposed to the burbs where it is newer stock, large yards and large homes (2000-5000 sq ft). The nicer hoods are holding up (North of the Loop) whereas the newer condo towers are getting slaughtered as are the further suburbs and the far flung suburbs and of course the bad parts of town (south chicago) Obviously, the prime parts of all metro areas will always hold up for longer than the non-prime parts. The problem is that there are a lot of transitional areas that people thought were prime. So I'd guess that Cow Hollow, Pacific Heights will hold up. I'm still not so sure about Noe, but I am in the considerable minority, and my perceptions are colored by me being an "old time" SFer that thinks of Noe as working class despite the obvious change. But there are a lot of other areas in SF that have been billed as prime that really aren't. Posted by: ex SF-er at October 28, 2008 9:41 AM Oh come on, name them. Posted by: sparky-the-bear at October 28, 2008 9:52 AM Do these longitudinal home price comparisons factor in inflation? It doesn't appear that it does, but that would seem pretty elementary. If it doesn't, that means, for instance, that the "bottom third" is ACTUALLY notably lower than 2001 prices not equivalent with it, considering that something has to gain value commensurate with inflation to just stay even. Home prices that are equivalent in nominal terms over several years is steadily losing value. So if you paid $500,000 in 2008, if that place was more than $430,000 in 2001, it lost value. Case-Shiller should use inflation adjusted figures, or it's pretty meaningless. Posted by: realist at October 28, 2008 9:55 AM August data! Posted by: dub dub at October 28, 2008 9:56 AM Wow, a lot has happened since August. Posted by: Foolio at October 28, 2008 10:02 AM ex SF-er: off-topic, but how would you compare the relative stages of price decline in the Twin Cities as opposed to SF. As it happens, my wife and I are debating whether to stay in SF and buy something next year or move to the Twin Cities. We were house-hunting there last weekend and were somewhat suprised at how robust the prices were in the SW MPLS area. ... |