Ever study crowd behaviour during a theatre fire, soccer panic, or similar? Well, same rules apply during a housing meltdown.
The smart and aware ones get to the fire exits before the masses realise something is wrong. Then the minority sees the situation and heads for the exits. Then the masses all at once make the mad rush, and that's when people get killed.
I think we're just entering mad rush stage.
Slowdown leaves sellers with hard choices - Home homeowners are cutting their asking prices, paying buyers' closing costs and beefing up their marketing in an effort to close deals.
It's not pretty, but homesellers are closing deals by whatever means necessary. They're asking for less money, paying closing costs for buyers or stepping up their marketing amid an eighth straight month of sluggish sales in June.
The rate of appreciation has decreased each month since February's 11 percent. It will keep dropping "kind of like a countdown" to zero by fall or early winter, said DataQuick analyst Andrew LePage.
Orange County's median could dip slightly late this year, as San Diego's did last month, he said. Price appreciation likely won't stall perfectly at zero, he said.
The median home price has increased so much that many buyers are sitting on the sidelines. Some consumers, particularly first-timebuyers, feel priced out of the market, especially with today's higher interest rates, according to brokers and market studies.
Buyers can't afford property tax, mortgage and insurance payments that add up to about $5,000 monthly for median-priced homes.
Buyers also are pausing because of fear prices will drop after they make a purchase, brokers say. Or some may be waiting because they think they'll get a better deal. None of this is good news for sellers. And it gets worse.
The number of sales last month plummeted 26.3 percent from a year ago to 3,608 homes. Yet there are more than twice as many sellers today
Things could get rougher from here, Lobin said. Sales volume, which has been down around 30 percent over the past few months, could drop an additional 10 percent, he said.
July 20, 2006
OC California: "It's not pretty, but homesellers are closing deals by whatever means necessary"
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26 comments:
"by whatever means necessary"?
I thought that was the "Guido Sheets, get rid of your home for only $6 worth of gasoline" informercial?
Oh----I have a great MILLION DOLLAR new House Bubble DOT COM company!
eArson.com
or maybe
"FatTonysList.com"
(registered in a territory without extradition treaty).
It's like Craigslist and that Hitchcock movie Criss Cross.
You torch each other's home.
Server logs are erased after a match is made. Actual identities of your match are never revealed, and all communication is by modern cryptographic protocols.
I live in Irvine, and I've been watching these prices drop sense Feb.
Me and my girlfriend both sold all of our houses and are renting. We have about 500K in cash and gold.
If we choose to at the time, we will buy one of these babies on Woodbridge lake for cash at the beginning of 08.
But, than again, Maybe we'll decide that Newport is the place for us! LOL
What a wild ride!!!!!
Buyers also are pausing because of fear prices will drop after they make a purchase.
I find this to be the least of a buyers worry.IE: Price drop
I think its more the affordability if you are an american and are not house strapped, you most certainly are credit card strapped and up side down automoble strapped.
Yesterdays market rebound in my opinion is an anomaly that will not last. One small move by the U.S in the middle east will wipe those gains.
"You torch each other's home."
That sounds like the scam I saw on TV (law and order??)where two women were going to kill each other's husbands. Didn't work out too well. The first guy to torch loses because the other guy doesn't follow through. Or one gets caught, squeals, and nobody gets any money. The debt is still owed.
There will probably be distress arsons. Desperate people do desperate stuff.
I have even heard, (no proof though) that some foxy r.e. agents in the Coachella valley, California
are having sex on a regular basis with home buyers till escrow closes? Could that be true??
Herd behavior is one of the things that makes markets irrational and pretty much burst my faith in the efficient market hypothesis and its derivaties like CAPM.
RE isn't a liquid market. There can only be a rush to wait in line for the exit, making a sudden collapse in asset values in most markets unlikely.
Oh, and haven't we beaten this torch the house idea to death yet? You can't escape a mortgage by burning down the house.
FYI, realtwhore.com domain name is available. There are some good comedians out there that could have some fun.
butt,,,butt do you think they are REALLY doing that???
Let me just say this; I have read several books on this issue (housing bubble) … I’ve studied it for about two years now. I don’t consider myself to be a professional, nor a novice on this issue.
With that said:
Orange County California may be the poster child of this issue.
I was just wondering, How many people live in Irvine, like me, are reading this blog? And of those, how many are renting and waiting for the tide to go out?
This is the best place on the west coast to live.
Actually a better place to be is...living in Irvine, renting having just sold a paid off house toa sucker for 685k. Like me!
I have even heard, (no proof though) that some foxy r.e. agents in the Coachella valley, California
are having sex on a regular basis with home buyers till escrow closes?
Where is Coachella Valley? MAN MY BALLS ARE BURSTING how far from Phx only have a 6 hours before i have to be back at the Car Wash.
You got it brother! Nothing better than renting in Irvine and going to open houses. Listening to agents tell you how the market isn't going down, then you tick off the price drops of the different model plans in the area.
It's fun to see them lower their voice and admit it in almost a wisper.
LOL
Another Irvine renter who sold two houses to suckers. I'm lovin life waiting for the assholes to default and then by it back for half of what I sold it for.Hope they like the load of crap I just dumped on the suckers heads.
Do I hear an Amen!
It will be worth having to hear all the whinning and crying for the next year or two while they all loose their homes.
And, of course, all those broke real estate agents calling day and night hoping for a deal.
Hell, maybe I'll find a house with a vacant lot next door where the old home owner burnt the place down before he left. That way I can have a bigger back yard.
I love Irvine!
Or better yet, Just think of relaxing out on the deck of Water's having your drink served by one of the Brokers from the ReMax office on Barranca.
Irvine renter here. Did NOT buy, do NOT have 500k in cash and gold.
But I'm playing the "watch flippers squirm" game along with the rest of you.
Like 602 Solvay Aisle in 92606. Bought for $500, trying to sell 11 months later for $515k. After closing costs, LOSS. After monthly carrying costs, BIGGER LOSS.
I rent one of these basic townhomes for $1650. :)
I'vebeen trying to sell my gold for a profit. But the asking price just keeps getting lower.
I think all those Town Homes in the 92606 will be selling at 2000 prices before this is over. $180K
And, about the gold, this is the wrong time of the year to even think about selling. Look at this 5 year chart! Tell me what you see?
http://www.usagold.com/analysis/doldrums.html
The "REALTOR" who conned me used any means necessary, and so did the Board of Realtors who cleared him of any wrong doing.
http://victimordeal.blogspot.com/
"Buyers can't afford property tax, mortgage and insurance payments that add up to about $5,000 monthly for median-priced homes.
Buyers also are pausing because of fear prices will drop after they make a purchase, brokers say. Or some may be waiting because they think they'll get a better deal"
This quote describes me. But I am not revelling in the renter position anymore either. It's too bad. I know a lot of people like me, who may have to move away from Orange County regardless. It's too expensive to live here. I'll probably miss the RE carnage party. Damn.
"You can't escape a mortgage by burning down the house."
They think if it burns the insurance will pay. I know a guy who was upside down in a plane (financially) and he had to lower his asking price way below the cost basis. He got lucky, a guy he was letting use the plane hit some power lines and tore it up. The upside down guy got his money from the insurance co.
They will investigate any arsons very closely. Financial troubles will be the tip off.
"I was just wondering, How many people live in Irvine, like me, are reading this blog? And of those, how many are renting and waiting for the tide to go out?
This is the best place on the west coast to live."
It was a nice place to live. I left in 1979 and would never come back. Back in the early 70s SoCAl was a very cool place to be. In the early 80s So Fla was pretty cool. Now they both are shot.
Good scam. Act like a buyer and let the RE whore think that by laying you she will get a deal done. String her along and keep it rolling as long as you can. Cancel out when she is boring.
Only problem is she is probably multitasking several other "buyers" at the same time.
Anyone ever get laid going to a open house where there was no other traffic?
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