August 25, 2006

HousingPanic Stupid Question of the Day


If cities were stocks you could short, which housing bubble city would be at the top of your list?

49 comments:

1stMillionAt33 said...

I will short the capital, Washington DC. It's where all the stupid policy started, :P.

Anonymous said...

uh, read the article below - LAS VEGAS BABY!

Anonymous said...

San Deigo, what a joke on the prices there. You can't even drive without hitting illegals running across the road to their camps under the overpassed. Everyone still acting like nothing has changed as prices and sales slow and will crash. I know of several houses that now have new people renting rooms and adults kids heading home.

David in JAX said...

Miami. No hurricanes yet, but when the first one comes it's going to throw the city it hits into a RE tailspin.

Bake McBride said...

Was in San Diego 2 weeks ago for a wedding and on almost every corner was a person holding a sign to advertise an Open House.

I still think that Miami will get hit the worst...They still have a ton of inventory that's going to hit the market.

borkafatty said...

NIZE NOTES:

Is War with Iran Closer?
Yahoo is carrying an AP news story with the following headline: Nations unmoved by Iran's counter-offer

The story goes on to report that,"Germany said Thursday that Iran's response to a package of incentives for halting its nuclear program appears unsatisfactory because it is missing a reference to whether Tehran will suspend uranium enrichment.

Two senior diplomats who have been briefed on the Iranian response told The Associated Press that the six world powers studying it will likely reject Tehran's terms for talks because they do not even touch on the possibility of freezing enrichment."

One would think that this must be near a last chance for Iran, from the perspective of the Bush Administration. If Iran is attacked, obviously all hell could break loose. This is not the time to be short commodities for even short-term trades. You especially don't want to be caught short oil or gold if Iran is attacked.

ecobuilder said...

http://tinyurl.com/jz9tw

Very good article in CNNMoney today:

Getting real about the real estate bubble

Fortune's Shawn Tully dispels four myths about the future of home prices.

Myth #1: As long as job growth is strong, prices can't go down

.... read url

Myth #2: The builders learned their lesson in the last downturn. They won't swamp the market with new houses when the market turns

Myth #3: Low interest rates will keep values rising, or at the very least, put a floor under prices

Myth #4: restriction on development in the suburbs ensure low supply, and guarantee rising prices

Anonymous said...

"meet the new boss, same as the old boss"

"same as it ever was - and the days go by"

BubbleShanker said...

Phoenix, Vegas, OC, SLC, Miami, DC, are all rotten garbage at this point.

Short away.

Anonymous said...

You can short these cities with housing index sold by CME. The market has already priced in a marginal decrease so if you are game bet your house on it with open-ended puts.

Christina said...

I'll be different and short Boston, San Jose and San Francisco.

devestment said...

Bakersfield, Riverside/San Bernardino, San Joaquin Valley, Central Coast.

Anonymous said...

One of the most insane scenarios unfolds in a country far away from here. I’m talking about the Eastern Europe country of Bulgaria where the average monthly income is $200 and a speculative real estate bubble has been forming over the past 3 years. My wife is from there and you used to be able to purchase a whole village for $10,000. Today crappy built apartments sell for 200,000 Euros. Just Google BULGARIAN REAL ESTATE and you’ll see what I’m talking about. Now that is truly insane. No jobs, no work and plenty of ocean front mudslides.

Anonymous said...

PHOENIX...by a wide margin.

Anonymous said...

I second that, Phoenix is the main contender.People here are way out there when it comes to debt, expectations and prospects...a ticking financial time bomb.

Keith,
Is all this element native and reflective of Arizonans or did they move here from elsewhere? This is anecdotal, but my findings is that most of the fortune-seekers moving to Phoenix are mostly from the Midwest...Californinas are in a different class..brighter and more affluent...but a lot of the other transplants qualify as genetic mutants and Bush voters. How can America breed such people in the 21st century?

Anonymous said...

SLC will wothout a doubt be in the carnage. Phoenix 1st, San Diego 2nd. After that 3rd wont matter.

Jip said...

Long Beach, CA. Overpriced and old. I see a LOT of homes built before 1950..

Anonymous said...

Phoenix, and it will be horrific

Anonymous said...

phoenix and las vegas and it's too late to get out of either - there's no buyers unless its at firesale pricing, especially after this week's media glare

here comes housing panic right on schedule

ColumbusOH said...

Hey, someone is cooking the book at Florida Realtor Association. I think HP should make this headline. You can read this article on www.elliotwave.com , to the right.

---------------
How much does $4100 matter?

To start with, it's the difference between $252,300 and $248,200. Yes the math is elementary, but… each of those two numbers were the reported median average sales price in July 2005 for existing homes in the state of Florida.

How can you have TWO median average prices for ONE month? Stick with me.

You have two median averages for one month when the Florida Association of Realtors (FAR) publishes two different figures -- a year ago FAR said $252,3000 was the figure for July 2005, but yesterday FAR said that $248,200 was the figure in that very same July 2005.

Okay, so that's a discrepancy… does it matter? Well, I'd say it does when FAR reports that the July 2006 median average sales price for existing homes in Florida was $250,800, which is obviously more than $248,200 -- which in turn means that FAR could claim that existing home prices in Florida were higher in July 2006 vs. a year ago.

And it's all the more noteworthy in light of what I explained on this page yesterday, namely that median prices did decline in 3 of the 4 major U.S. regions in July, while the 3.2% gain in the South is all that kept the national median sales price from showing the first decline in 11 years.

Obviously Florida is the biggest real estate market among the states in the South, and in fact second only to California among the 50 states in total home sales for the past three years. It would be interesting indeed to see how much the figure published a year ago would have changed the national median average published yesterday.

The discrepancy I describe above appeared in a blog on the Wall Street Journal's website this afternoon. The reporter noted that while data is often revised, FAR did not return calls for comment about this discrepancy. The blog also noted that upon further analysis, restatements of prior-year numbers by FAR magnified year-over-year growth in 12 of the past 19 months.

I'll go ahead and state the obvious about how much $4100 matters in this case -- it's possibly the difference between screaming headlines in yesterday's news (Home Prices Down Nationwide!), vs. the ho-hum stuff that came and went.

Anonymous said...

1. Phoenix
2. Vegas
3. San Diego county
4. SF Bay Area
5. Orange County, CA
6. Riverside County, CA
7. San Bernardino County, CA


Probably some cities in Florida should be in there but I don't know the situation enough there to comment.

I'm really thankful I sold my house in San Diego!

Anonymous said...

Myth #5: Real Estate Always Goes Up

Anonymous said...

There must be ETFs out there based on Regions And Cities.

Shorting Those ETFs such as a Nevada or Arizon ETF will give you the same thing as being short Vegas or Phoenix.

LARenter said...

Surprised not to see Los Angeles here. This towns RE is going down hard and it will have th biggest impact on the economy just due to its size.

borkafatty said...

What's that expression? Money talks, bulls**t walks...

Via a tip to PEEK, I was directed to a May report that flew under my radar: Are Dick Cheney's Money Managers Betting on Bad News?

According to Kiplinger's, the Cheneys, who may be worth close to $100 million, have invested the vast majority of their wealth overseas, in markets that do not fluctuate based on the U.S. dollar:

Vice President Cheney's financial advisers are apparently betting on a rise in inflation and interest rates and on a decline in the value of the dollar against foreign currencies. That's the conclusion we draw after scouring the financial disclosure form released by Cheney this week.


**Obviously DICK! knows where to put his Money...Makes me know that I can sleep real well at night....

No wonder I have Insomnia.**

Anonymous said...

the 2 favorites would be Phoenix and Sarasota. others in contention are San Diego, Vegas and Miami.

boycot said...

TEST

He admits all except the crash landing said...

Hey, Lereah has it all in a powerpoint presentation I found over at

http://paper-money.blogspot.com/

You look at the mea culpa article and open the liars powerpoint slides.

Step right up... said...

http://www.cme.com/clearing/clr/list/contract_listings.html?type=hng

Pays your money takes your chances...

smugbastard2 said...

Phoenix is #1 on my roster fo' sho'
Next up to bat is... Riverside and San Bernardino counties. I live here but at least I can drive to Orange County to my high paying IT job unlike people in PHX. People here in Riverside are in their own inner bubble inside the core bubble. They believe we are special and it wont affect us here. Number #1 reason they claim : job growth. SHIT! Most of the jobs here are housing reltated. My friend used to deliver milk and now is a loan officer. nuff said. WE ARE TOAST!!

Anonymous said...

Anonymous spouse of Bulgarian. Try a google trends search on Bulgaria property and you'll see who is buying it:

1. Varna, Bulgaria
2. Sofia, Bulgaria
3. Cork, Ireland
4. Limerick, Ireland
5. Dublin, Ireland
6. Reading, United Kingdom
7. Leeds, United Kingdom
8. Milton Keynes, United Kingdom
9. Watford, United Kingdom
10. Brighton, United Kingdom

I visited Bulgaria a few years back. Beautiful country but until crime and corruption come under control, there's not a chance its economy will support $200,000 apartments. not in Sofia and certainly not in the villages and decaying soviet leftovers along the black sea.

Anonymous said...

the stupidest thing about this question is you've asked it before. Why not fewer posts with higher quality of content? Now that's an intelligent querstion.

Anonymous said...

I thought that was the current home sales graph - very similar!

Anonymous said...

yeah, if you ask a question once you can never ever ask it again because nothing changes and you should never look at new input

boy, realtors are sure pissy!

an_dochasach said...

Within the U.S., its a touch choice which domino will fall first and hardest. Probably a place that is just close enough to a major city to have its economy distorted beyond recognition but not close enough for a tolerable commute once $#(~ hits fan. Port Charlotte, FL fits the bill but as much as I'd like to keep the "I'll sell you swampland in FL" phrase alive for another generation, Richmond,CA; Phoenix,AZ and D.C. will drop further and faster. But the real gold medalist bubble isn't within U.S. borders.

It's going to start with the letters DUB, but I'm not yet sure whether it will be Dublin or Dubai. Both have "good" fundamentals a mile or two beneath the current prices. Dubai's economy is less dependent on constructospecuvestment, but regional problems make it at least as risky. A coin toss decides... tails... it's Dublin Ireland.

Anonymous said...

Phoenix - Miami - Washington DC and San Diego.

Anonymous said...

I should have sold in 05 bought in 97 in San diego - Hear that sucking sound - I do - its the sound of money going down the shithole for good. SHIT SHIT SHIT the only people allowed to make money are the top 11% of the Population ( The Very Rich ) the rest of us can just EAT SHIT...

NYC_COP said...

I know that the question relates to a city, but can I short the entire state of California? If I can't, then I'll short NYC. Former crack houses in Bedstuy that are nothing but shells are going for $550,000 and up. In 1998, I was going to purchase a one family home in South Jamaica Queens NY through HUD's Officer Next Door Program. The foreclosure sale price was $60,000. The purchase price with the OND 50% discount was a $30,000. I did not go through with the deal (to much rehab required + neighborhood was really, really bad). That house is now worth close to $300,000. That should not be. The correction will visit NYC and when it does, it's going to be ugly.

illegally yours in PHX said...

I second that, Phoenix is the main contender.People here are way out there when it comes to debt, expectations and prospects...a ticking financial time bomb.

Keith,
Is all this element native and reflective of Arizonans or did they move here from elsewhere? This is anecdotal, but my findings is that most of the fortune-seekers moving to Phoenix are mostly from the Midwest...Californinas are in a different class..brighter and more affluent...but a lot of the other transplants qualify as genetic mutants and Bush voters. How can America breed such people in the 21st century?


Genetic mutants...ahahahah I guess I'm not the only one who thinks that to.

illegally yours in PHX said...

I say PHX fo SHO!! At least Florida has coastline. PHX has nothing...and I mean nothing!

Anonymous said...

I was wondering if anyone would mention New York.

New York City is one thing. Even when prices drop in the city the really expensive areas will still be out of reach for many people. Trump and others built lots of tall buildings downtown on the westside many still under construction. Instead of getting 5 million for a small apartment maybe they will have to settle for 2 million each. Though there are in Trump's buildings some apartments set aside for Police, Firefighters, and Teachers at prices that are supposed to be within their reach. I think as rentals. I'm not sure as I don't really want to live downtown so I have never looked into the details.

What I'm interested in is how the suburbs such as upper Westchester and even Putnam counties will fair. They went up very fast in the last two to three years as people were priced out of places closer to the city. I think that these places might collapse even as prices closer to the city fall at a slower pace and I'm not so such the city will see prices drop slowly either. This would be the last 10 years in reverse. Prices out in these places only started to raise late in the cycle as people absolutely had no way to purchase closer to the city. As prices in the city fall even a bit I think some if not many will want to move closer to their jobs. Gas prices together with 3 hours of driving each day to get to and from work make these places much less desirable once prices are lower near the city.

Eti said...

Boston

Anonymous said...

Phoenix, Miami, Riverside Co., all because of inventory. San Diego Co. due to prices and inventory!

condoze said...

I don't know much about the west coast, but I have experience with the northeast, so I'll also give a plug for Boston, New York City areas as ready to tumble.

People forget so fast. The early to mid 90s are not that far off. I remember catalog after catalog filled with color photos of auction properties. They were bank REOs, Fannie Mae, Freddie Mac properties, then RTC. Thousands of them. In Boston, condos could be had for 10k or under in these auctions in the Fenway, Dorchester, Roxbury. 5k or under in East Boston, Chelsea. I witnessed a few go for 1k (that's right $1,000) at a Freddie Mac auction in 1994 at the Framingham Sheraton. They had to beg to get it, too. No interest.

In Manhattan, there were coop apartments in relatively nice buildings going for 10-20k in these auctions. I remember some right off of Grammercy Park, a really nice area. Out in Queens and Brooklyn, you could have them for next to nothing, say 5-10k. In Jackson Heights, Queens, they were asking 1,000 at one complex, named Donnelly Gardens, and 5-8k at another complex across the street.

All this was barely over 10 years ago, and peak prices in the late 1980s never reached even half of what they are today. I don't remember anywhere near as much speculation or easy money, or the availability of crazy option loans. And salaries haven't increased very much either since then. I see it all repeating, probably worse this time, and very soon.

If you don't believe the prices I've written above, it's easy to check (at least for Boston). Records of coop sale prices aren't easy to get in NYC, and I don't have the old auction catalogs that were sent me (I really wish I had them now). But for Boston, you can just go the Suffolk County Registry of Deeds and do some lookups for various streets in Boston, East Boston or Chelsea for the years 1992, 1993 or 1994. You'll be amazed.

Sit tight. Stay debt free as possible. Two or three years from now, anyone with a few bucks in their pocket, or a high value credit card with some space on it, will be able to buy a property.

Anonymous said...

All of them...in a manner of speaking

Anonymous said...

Neighbor three doors down (north san diego county inland) House on market for over 90 days, taken off market, changed MLS#, actually listed as New listing, with a price reduction of $85k ! Two and a half weeks now...nuthin!

This is getting Fun to watch!

Anonymous said...

Awesome Pic with state's housing inventory increases here:

http://tinyurl.com/s88l4

"So many new homes are available on the outskirts of Phoenix that it is "a total bloodbath,"

Florida has three intersecting inventory fiascos!

Anonymous said...

:Boston, East Boston or Chelsea

Dude, the next time around, these areas will be warzones, not places to live in.

I remember that until very recently, Chelsea (as oppose to the Yuppie zone namesake in London/NYC) was a dangerous place to live in.

Anonymous said...

I'm in Las Vegas. had my house on the market for 6 months. Started out asking $489, now down to $455 and still no takers. Bought it for $300 in 2003 so I'm still in the black - on paper anyway.