"There's Still More to Come"
From the Stockton Record:
After a year and a half of painful "adjustment" in the housing market - slowing sales and sliding sales prices after four boom years - there's still more to come, the chief economist of the state Realtors group told Central Valley agents and brokers Friday.From the Redding Record Searchlight:
State sales of existing houses the first five months of this year are down 18.7 percent from the same period last year, said Leslie Appleton-Young, chief economist for the California Association of Realtors. "And it's getting worse," she added. "So this market, unfortunately, has not bottomed out yet. We're moving toward it, but it's not there yet."
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This year's attendance of about 100 Valley agents and brokers looked to be about half the usual attendance at the annual event.
Appleton-Young said the Central Valley market peaked in the boom years of 2002-05 in August 2005 at a median sales price of $363,680...Since that August 2005 peak in the Valley, she said, the median sales price has slid by 8.8 percent to $331,580. It's down 6.7 percent just the first five months of this year, compared with a year ago, she said. "It's not a falling off a cliff, but it's certainly a squeeze down," she said.
Foreclosures from buyers who got in over their heads continue to affect the market, pushing up the number of homes for sale, she sad. That run of foreclosures still has a year and a half to two years to go, Appleton-Young said.
From the Modesto Bee:Investors played a huge role in the five-year real estate boom that hit Shasta County before fizzling out last year...In 2005, the Redding area topped a nationwide list compiled by LoanPerformance of the percentage of homes sold to investors. Nearly one of every five homes was bought by speculators.
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It couldn't go on forever, and home prices and sales have come back down to earth...Investors, though, are still a factor in the area's housing market, according to LoanPerformance. The San Francisco-based mortgage research firm reported that Redding in 2006 was among the top 30 metro areas for percentage of investor-purchased loans, coming in at No. 16. About 14 percent of the loans in Redding in 2006 were taken out by investors.
BEWARE BUYING RENTAL HOMES — Few investors are able to buy homes, then immediately rent them out for a profit. "The rental market is soft right now," [Ken David] Elving [co-owner of Matel Realtors] said. "You have to offer very aggressive rental rates to get homes rented. If your price is above $1,000 (rent per month), you're in trouble."
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FORGET FLIPPING — A couple of years ago, many investors made big bucks buying fixer-upper homes that needed relatively minor remodeling. After quickly making upgrades, they would resell the homes for far more than their expenses. That's called flipping a house, and it works great when the real estate market is hot.
Not now. "Flipping is financial suicide now," Elving warned.
6 comments:
Leslie Appleton-Young said "And it's getting worse," she added. "So this market, unfortunately, has not bottomed out yet. We're moving toward it, but it's not there yet."
Quick, someone find a quote from LAY where she said we hit bottom a year ago or whatever!
Not quite calling bottom, but here are some:
3/31/07
[California Association of Realtors Chief Economist Leslie] Appleton-Young noted that California already is in a market slowdown that's lasted 1 ½ years. Any restriction on the money supply for subprime borrowers will make the recovery longer, particularly in those inland regions that rely more heavily on that kind of financing. Fewer subprime loans will mean there will be fewer buyers, she said.
3/9/06
When the California Association of Realtors' chief economist, Leslie Appleton-Young, came to Sacramento in November, she gave us information about the market beginning at the national level, and then the state, and then about our own backyard, and she was very definite about the fact that we are not in a bubble. I had heard the term, but it's getting a little old. A soft landing is what [Appleton-Young] told us we would have, and I agree with her 100 percent."
2/28/06
"The California real estate market is beginning to experience the soft landing that we expect to be the underlying dynamic driving the housing market this year," CAR vice president and chief economist Leslie Appleton-Young said in a statement. "The number of homes for sale has risen to a six-month supply, which will translate into a slower rate of price appreciation than we experienced in 2005."
What do you guys think of this "variable pricing" that is showing up more and more. What a joke! Yea, if it's listed for $400K-500K, like I'm going to offer $450K. Isn't the lower end of the range, the *real* listing price?? What's the other number for, to make you feel like you got a deal?
These sellers crack me up. Paint the front door red, put a half-inch layer of white paint over everything else, cover up the water stains and the termite damage. You bought it two years ago for $150K less than you're selling it for. It's all easy money, and tax-free!
There, I'm done . . .
The variable price isn't new, but it may be more common now. It always struck me as something Realtors communicated to one another on MLS; it wasn't for the buyer's eyes, but for the agent's. Because you're right, it's kind of stupid as a bargaining tool if the buyer knows your "real" bottom line.
No we're not at the bottom...
CNN did a piece called "ARMageddon"
talking about judgment day coming
for millions who took out arms in
the coming months. Many will lose
their homes.. starting in October.
It's on the CNN page under real
estate for today...
To call a bottom is ridiculous and dangerous. Markets don't go straight down without giving the investor some hope that its about to turn and go straight up. The head fakes, dead cat bounces, and other positive blips only lure in the unsuspecting who's greed to make it in first, is only followed by another leg down that crushes that theory. We've yet to see anything that gives any hope that the bottom is even close.
Imho, we need several, if not six months of sideways motion, with each negative data cancelled out by a positive one that emerges. Even then one risks that this market is just consolidating and will resume its downward move.
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