Real estate never goes down they said. Buying a home is the best investment you'll ever make, the NAR says.
I say: Past performance does not guarantee future returns. And if you bought a home in San Diego in the past two years, you're in a heap of trouble now, and we've got a long, long, long way to fall...
I love how the realtor association's chief economist is moving away from soft landing and looking for a new lable. Here's some - housing ponzi scheme, housing charade, housing myth, housing crash, housing disaster and of course, housing panic
San Diego County's home prices took their biggest tumble for any spring on record last month, DataQuick Information Systems reported Tuesday.
The median price of all homes sold in May was $490,000, down $15,000 from April, although it was still slightly higher than a year ago.
Sales slowed for the 23rd straight month on a year-over-year basis, reaching 4,217 transactions in new and existing homes and condos.
Local real estate agents reported about seven months' worth of unsold inventory, but argued that the pace of activity reflects a normal market rather than a crash.
Leslie Appleton-Young, chief economist for the California Association of Realtors, said she no longer uses the term “soft landing” to describe the state of the housing market, but has yet to find a way to characterize current conditions.
“I'm searching for a new moniker,” she said. She and other industry leaders have rejected analogies like a “housing bubble” prone to popping.
In San Diego County, the median price decline in May occurred because of a major drop in the category that includes new construction and condo conversions. That decreased by $71,000 from April to May to stand at $424,000, a reflection of the impact of lower-priced conversion sales.
On a year-over-year basis, the new construction and condo conversion median price was $19,500 lower than the $443,500 median price reported in May 2005.
June 14, 2006
San Diego County home prices take a tumble
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16 comments:
Housing Trainwreck
Picture housing as the driving force, the engine. Each freight car another sector of the economy. First class cars carrying the realtors, mortgage bankers, appraisers, etc.
The remaining freight cars carrying different sectors that will also be adversely impacted.
All in a big heaping pile of smoldering rubble.
"Leslie Appleton-Young, chief economist for the California Association of Realtors, said she no longer uses the term “soft landing” to describe the state of the housing market, but has yet to find a way to characterize current conditions.
“I'm searching for a new moniker,” she said. "
WE HAVE A NEW MONIKER - HOUSING PANIC!!!!!
Hey Leslie
Picture yourself strapped to an upside down Titan booster on the launch pad and the announcer has just called IGNITION.
Destination: Ninth Pit of Hell!
The rocket just takes a while to pick up speed after launch, BUT WHEN IT DOES.......WHOABOY!
How about Housing RocketRide
I know some folks with a beautiful house in South Pasadena. They have told me about their huge payment, $1200.00 a month property taxes and the terror about being able to make the payment. Unfortunately, they are landscapers so their income is directly connected to Real Estate spending. They also could only qualify for an exotic mortgage.
this is simply a brisk renormalization of the market,and i expect a quick recovery when rates return to 2003 levels and lenders adopt 300% debt to income ratios.
SOOOOOOO many people in San Diego are gonna get burned:
http://tinyurl.com/l3mwg
Not going to get any better, rumors are really circulating that the FED will raise 50bp TWICE to 600bp to cut inflation out. While higher shortterm rates usually take awhile to swim through the system, some things like ARMs will be more costly sooner rather than later. Ouch.
They don't give a crap about the housing market, neither do I.
Citibank anal-ist Stephen Kim said the housing market would stabilize much quicker than expected, saying investors should buy housing stocks now.
Sounds like a desperate attempt to end the slide in share prices.
Your obviously not getting it. Moving the overnight rate higher to 600bp will force the 10 year to move higher and higher, even though the FED's control of it has weakened. Take 2000 as a example. Yield inverts, then 50bp hike in May dragged the 10 year higher to cool the economy. We are nearing that again.
The trade off is, that the USD strengthens and other countries don't drop the dollar, so the 10 year doesn't explode to 12%. A payoff I would take gladly.
Take a term from the stock market:
"Short term correction"
ARM indexes:
http://mortgage-x.com/general/mortgage_indexes.asp
Most of them are pretty short, like LIBOR, or 11th district cost of funds.
The point of an ARM from the lender's perspective is to reduce sensitivity to yield curve and they get that by being sensitive to short rates and not long rates like their other mortgages.
I think very few ARM's are tied to 10 year Treasuries.
New fixed mortgages, of course, are quite heavily tied to 10 year and now 30 year (brought back again because of the giant Fed debt explosion) T-bonds.
Yep, each hike BB makes, the less attractive a ARM gets. The previous poster talked about the Fed raising the overnight rate to 600bp, that would be ugly and uglier for ARMs people and help quickly deflate the housing bubble.
Many ARMS are linked to the 10% year treasury, not the overnight rate.
This is simply not correct. Most ARMs are not linked to either of the instruments you describe.
If you have a 3/1 ARM, the fixed term of the mortgage is most closely linked to the 3-year note. 5/1 ARM is 5-year note, etc.
After the fixed period, the interest rate is usually based on the 1-year note since it is usually adjusted annually.
I love how the realtor association's chief economist is moving away from soft landing and looking for a new lable. Here's some - housing ponzi scheme, housing charade, housing myth, housing crash, housing disaster and of course, housing panic
Whatever happened to 'housing implosion'?
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