From "Realtor" Greg Sidoff in Arizona in realty times:
Although the market is still active, the number of homes on the market has increased significantly since this summer.
If you have considered selling your home, it is not to late to cash in on the high prices. If you are a buyer, the earlier you jump into the market the better off you are going to be. There are much more to select from now than a month ago
Uh, note to Greg Sidoff:
1) Go for that GED - it'll help you with your job search
2) It is too late to "cash in" on those "high prices" - about 6 months too late
3) the LATER someone "jumps in" the better - why buy now at the "high prices" when they're coming down?
Geeze! Consider your logic, sport, before you type.
What kind of dolt would hire a dolt like this guy to represent them?
If HP readers have time, do a random check of realty times every now and then.. It's like reading the flat-earth society's writings, or the Bush economic report. Hilarious!
March 01, 2006
Realtor's hilarious report from Phoenix - Hurry, buy now before prices come down!!!
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19 comments:
To add to the hilarity - go to the actual article - the word hovering is spelled "Hoovering"
I don't believe it. Too good to be true. Has to be a hoax, right?
(Doo) you think he is a (callage) grad-u-ate hahah!
When I posted it earlier I was searching for the term - Freudian slip!
=)
Hey, this guy knows what he is talking about...he has tons of experience. In about two months he will have been on the job almost a year! LOL
Original License Date: 5/6/2005
Found this from another blog, it's long but boy is it right about California!
-----------------------------------
The mainstream media content is overly influenced by the realtor/homebuilder crowd. I'm shocked, shocked that noosepapers might be influenced by the sources of their largest stable advertising revenue ... Shocked, shocked. It would be like reading Kiplingers or Money magazine and finding articles that recommend one buys mutual funds or something!
Hey, there is no major bubble. In Nebraska or Texas that is. In California there is a massive and unprecedented megabubble. Housing prices are far, absurdly, out of line with fundamentals. The large majority of population growth in Southern California is currently due to Latino immigrants and their offspring, not the crowd buying half million $ mortgages. Yuppies with kids are actually starting to cash out their suburban boxes and moving to other states where they earn $10K less but can just buy a house without a mortgage, where mom can be a stay at home mom, and where junior can walk to a good public school without being shot at or inhaling exhaust from ridiculous lines of cars everywhere. Those few who can be lured by the promise of a job or sunshine to move TO California from other states are not buying houses here in large numbers and won't be until the cost to rent/own changes or rapid appreciation begins again. The cost to rent in urban CA is less than half of the monthly outlays to own, even with the tax benefit. The average one bedroom condo bought in CA now will come with a property tax bill and association fees exceeding a third of the current fair market rental value of this condo! Speculators, flippers and the like are totally dependent on appreciation and now that this has ceased, they are bolting for the emergency exits and inventories are increasing rapidly as average time on the market increases. You can watch local inventories mushroom over the next six months on this site: http://bubbletracking.blogspot.com/
The bubble pattern in appreciation percentages in CA is shaping up just like the 1980 bubble (prices corrected sharply and it took 5-6 years for them to recover) and the 1989 bubble (prices corrected sharply and it took 7-9 years for them to recover) and this is apparent from the government's housing price index appreciation rate. Look at the blue line in the second chart at http://www.housedata.info/CA/SantaAna.Anaheim.Irvine/
This bubble is much larger than the 1980 or 1989 bubbles. I have been an analyst for a large mortgage bank for the past three years and believe that hokey zero-down financing, interest only and option ARM mortgages that were once tools for educated investors seeking to accomplish specific goals have been marketed to the uneducated masses now by a mortgage industry that has created a perfect storm for California real estate. Also, mortgage interest rates when the 1989 bubble burst were around 11%, not the historic lows of 5-6% we see today. If rates go any lower, it will be because of a recession: jobs will disappear and forclosures will boom. If rates go significanty higher, the sheer number of exotic loans resetting in 2006-2008 will cause foreclosures to boom. This foreclosure boom will happen any way, simply because of the absurd amounts of leverage in the current market, unless rates start to fall again very soon. Whether rates rise or fall substantially due to recession, inventory will go way up and demand will decline even more sharply that it is now. So Cal's economy has become overly dependent on the mortgage and homebuilding industries and these industries will be hurt badly if 10yr T-bill (the basis for 30 yr mortgage rates) rates go up even another percentage point. This will happen if Chinese and Japanese bond buyers find a better place to park their money than in US t-bills and this is looking more and more likely as emerging markets continue to show blowout returns and the Euro stabilizes. In fact, the only way to AVOID the impending housing meltdown is for rates to stagnate while wages simultaneously rise as fast as exotic loans reset in California. This is a very unlikely scenario unless we get a major inflow of Chinese internet millionaires or another 1990s type jump in productivity. So far, I haven't seen rents or wages rising substantially since 2002. In fact single and multi-family vacancy rates hit all time highs in Q4 of 2005 (as they had in the quarter just before the 1989 bubble burst). Commodity prices have jumped and there is some minor inflation but businesses can't raise prices much because of competition within a global labor market. Thus, margins have been reduced and this does not bode well for increased wages that might sustain the house price/income ratios that have shot far beyond any prior record.
The housing market should have normalized around 2002 or 2003, but interest rates stayed unrealistically low long after 9/11, mainly due to Chinese imports, Bu$hco trade policy, and bond buyers, while the stock markets languished causing many speculators to put their money into real estate instead of stocks. World equities markets, especially developing markets, have begun to show increased stability along with strong appreciation and speculators are rotating out of real estate and back into stocks and commodities very rapidly. Many of these speculators will get out in time to avoid the major carnage but will facilitate the downward spiral as they exit.
The ones who will really get hurt are first time buyers, consumers of exotic mortgages, people who ran off to get rich quick seminars because of water cooler chatter, and the holders of mortgage backed securities. The easy financing of unqualified buyers, unparalleled popularity of real estate "gurus," and the rapidity of the word of mouth hyping of real estate, along with the ridiculous number of licensed brokers and real estate 'professionals' we now have, caused this bubble to get way out of hand. Adding the numbers of brokers, builders, and transaction support workers, the number of jobs involved in the disappearing real estate boom far exceeds the number of aerospace industry jobs lost (about 700,000) when the cold war ended. This recession triggered by this downturn is credited with bursting the 1989 bubble. There are about 200,000 licensed brokers in California and close to 2% of the state's population has been actively engaged in pumping real estate for the past two or three years! Home buying has been devoid of critical reasoning and dominated by emotionalism for quite some time, and 2002-2005 appreciation rates have removed any shred of healthy skepticism or critical cost-benefit analyis that ought to accompany major economic decisions. It's tulip mania (google it and read please--this happens periodically and the first confirmation that a bubble exists consists of massive mainstream denial that a bubble exists and arguments of 'this time it's different')! The absurd California real estate bubble will collapse under its own weight, probably beginning in 2006 or 2007, but any of a number of likely economic scenarios will cause it to implode with a vengeance that will make the 1989 real estate bubble and the 2000 NASDAQ bubble look like economic hiccups by comparison.
Posted by: Happily renting for now at February 26, 2006 10:12 PM
"Sellers should be hoovering up all the money buyers are throwing at houses these days. Buyers, picture yourselves living in one of Phoenix's new Hoovervilles."
Did you know the great American poet Robert Frost wrote about the real estate market? Here's one for the ages, and also for March 2006, to the question of whether the bubble will "burst" or simply "deflate":
Fire and Ice
Some say the world will end in fire,
Some say in ice.
From what I've tasted of desire
I hold with those who favor fire.
But if it had to perish twice,
I think I know enough of hate
To say that for destruction ice
Is also great
And would suffice.
-- Robert Frost
Housing Bubble crash..... denial, denial, denial !!!
the river in Egypt?
I think we need a federal program to retrain real estate 'professionals' so they can contribute to the economy in some way between 2007 and 2011. We know they can look good, use positive words, drive around in leased luxury cars. Some of them can even fill out forms and use the word "darling" three times in a sentence. Any thoughts on jobs for them?
In the UK, "hoovering" means "vacuuming" (after Hoover vacuum cleaners), which also seems to fit nicely.
Yes, I can think of a job for them, "Walmart Greeting Clerk" :)
Stick this guy on a "buy-here, pay-here" used car lot and he'll fit right in.
My turds know more about real estate and economic theory than this SALESMAN.
This guy SHOULD MAKE you want to TAKE a second LQQK at that 7 month 5% Certificate of Deposit(FDIC) in LAST Sundays paper !
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