Wednesday, July 11, 2007

'No one is buying into their Kool-Aid'

From CNN Money:

Paul Kasriel, chief economist with Northern Trust in Chicago, questioned the Realtors' assessment that this is a good time to enter the market, saying weak sales and prices suggest that potential buyers are smart to be sitting on the sidelines right now. "No one is buying into their Kool-Aid; that's why prices are falling," he said.

21 comments:

Patient Renter said...

Go get 'em Paul!

I just heard a bit on NPR at lunch where they talked about the housing outlook using the latest release/report from the NAR. The report indicated that things would remain soft for the rest of this year, but get better next year (as we all know, same crap we've been hearing for a very long time, with an ever receeding horizon).

Anyways, it got me thinking: I wonder how many listeners actually believe this stuff? Also it got me thinking why NPR would air info from the NAR without some opposing viewpoint, being that the NAR is only correct .001% of the time.

Shame on you NPR.

Gwynster said...

I honestly believe that people are trying to paint a rosy picture because if the truth got out, there would be a panic run.

Which program did the piece? The platforms can differ a bit.

smf said...

"I honestly believe that people are trying to paint a rosy picture because if the truth got out, there would be a panic run."

Of course there would be a panic. This is after all not a US problem alone, but well developed throughout the entire world.

And the price runup was so high, that we are talking about really serious losses.

The blogs have plenty of examples of people who overpaid in the last bubble, but the average loss was perhaps $30K-$60K.

Now you can easily see $200K losses and more.

And lately, I have seen Gold River start to go under the cutting knife.

Patient Renter said...

"Which program did the piece? "

It was during an "NPR News" before an hour of Talk of the Nation.

"And lately, I have seen Gold River start to go under the cutting knife. "

Do tell.

Lander said...

Those Wacky NAR Forecasts

Gwynster said...

SMF,

It's funny. I never noticed rentals in Gold River before and now I've seen quite a few in CL. Looks like a nice area and the rents are less then you would pay for a similar place in Davis.

But we all know Davis is completely wacked >; )

I was approached by Duke about very nice position at federally funded social policy center there. It's a dream job. I could be far away before this bust gets much worse.

Patient Renter said...

More job offers? I think I'm in the wrong line of work.

smf said...

Gwyn et al:

Our story about Gold River.

We saw a 3600 sq.ft. home for sale. Sold on 10/06 for $690K to flippers. Went to see it, it was a good layout. But I was turned off when I saw the same dishwasher I had installed in my prior 1300 sq.ft. track home in 1994.

The owners offered it to us at $695K, which was a slight loss to them.

Now a much nicer home of similar size and model, is selling at $700K.

Add another flipper to the loss column. This home is off the market, though still vacant.

Anyways, I noticed thru Zillow a large amount of purchases in GR in the last few years. We figure GR will be in further trouble soon. And now come the rentals.

We have decided to wait and probably find a cheap lot or cheap nice custom home in EDH in the next few years.

Gwynster said...

LOL you have to take a vow of poverty for 6 yrs to get where I am. The dot.com bust hit me hard.
I took a $25/hr pay cut in exchange for some stablity and to change career paths. ouch

I'm sure Duke thinks I'm approachable salary-wise because UC pays crap so their salary will look attractive.

Sittin' Out This One said...

And Gwynster your housing costs will be 1/3 of California.

http://raleigh.craigslist.org/rfs/371767626.html

1900 SF Ranch for $150,000. You could not get a 1 Bd 1 Ba in North Highlands for that here (today, but maybe in 2 more years!)

paranoid renter said...

smf,

Doesn't EDH have an asbestos problem?
Why would you buy there?

paranoid renter said...

gwynster,

I was hit by the tech bust too. Took a massive paycut and a much lower position as result. Now am finally back up to where I was before the bust, but still very paranoid about things.

Gwynster said...

I'm with you on the paranoid bit. I have to admit that starting over on the seniority ladder makes me nervous, no matter where I go. If the economy tumbles as bad as I believe it will, I want bodies piled high and deep in front of me on layoff ladder.

Sittin,

You are so right about the home prices plus I absolutely love VA and NC. I'd be in Durham which is just fine by me. Lovely golfcourse just off campus, tree-lined streets, fiber already running in the areas around the campus, it's heaven on earth.

Now I was asking to submit a resume after a referral from my former director. He knew my goal was relocate to NC so he kept an ear out for me. We'll see what happens.

Reading CL tonight, I again noticed a couple more Gold River and East Sac ads but what caught me was a listing for a 3/2 in northern Land Park for 1300. The images didn't look half bad. My best friend owns a home a block away in much worse condition and his monthly nut is twice that.

That was my coming to Jeebus moment for the week.

AgentBubble said...

No need to be paranoid! Cal Ass'n of Realtors said prices are headed up in 2008! It's never been a better time to buy!

Gwynster said...

Agent,

That had to have you spitting bullets >; )

Pour yourself a nice cab, put on some Nina Simone, and let the world float by. Always works for me.

AgentBubble said...

It does tick me off. Fortunately, NAR/CAR/SAR membership is optional. I'll be saving $400 by not renewing my membership next year!

Cmyst said...

Gwynster, I hope that this job offer pans out for you because it sounds like it could really be a good move. But if you do go, I will miss your comments and perspective on Davis. You'll probably be too content to keep posting on the housing blogs!

AgentBubble said...

Yeah, good luck gwynster!

P.S.--The $795K, 1280+SF condo in Davis fell out of escrow.

Sittin' Out This One said...

Implode-O-Meter is at 97 today.

Will it break 100 by Sunday, July 15?

It was at 0 on Dec 15, 2006.

Seven months and 100 lenders are gone! Poof. That is a burn rate of one lender every 2 days.

Gwynster said...

AB,

Thanks for update. I have to admit I'm surpised anyone even made an offer. My hunch is the appraisal came in low.

I'm just walking on air over of the plans to expand Davis. With my luck, I'll get the job in NC and miss all the fun. I suppose I'll start posting all the news on my blog so that people without access to the Davis Enterprise and the Daily Democrat can watch it unfold with me.

Fanchew said...

Read the SF chronicle today about foreclosures rising dramatically, up 87% nationally with California having accounting for six of the top ten. Saramento's #8. Love this quote from Rick Sharga, vice president of RealtyTrac: "If one thinks of default notices as the canary in the coal mine, the canary has wheezed and gasped and is probably being carried out right now."