Economists particularly enjoy calling the inflection points in the market. Much fanfare surrounded Calculated Risk’s calling the bottom back in March. He may or may not be proven correct. The data on falling inventory certainly suggested a bottom was in the making, and even if he is later proven wrong, I doubt the real bottom will much farther down. Further with the delays in reporting on Case-Shiller, it won’t be known until more than a year from now when the [Read More...]
Part of living in California is deciding whether or not to play the California housing lottery. If you win, you could gain hundreds of thousands of dollars. If you play, you could spend hundreds of thousands of dollars and endure the consequences. If you lose, you could lose hundreds of thousands of dollars and end up homeless, destitute and bankrupt. But just like gamblers flock to the casinos, everyone believes they can be a winner, and now with our bailout [Read More...]
The housing bubble has many lessons to teach us. I have written on the subject for five years now in hopes that people can learn from the successes and failures of those impacted by the housing bubble. Someone recently posted a link in the thoughtful remarks to a website devoted to those who are underwater. It’s a chance for people to share their stories. As you might imagine, this is a giant pity party and a support group for housing [Read More...]
Today’s featured property was emailed to me by a reader who thought it suspicious. It was listed at well under its comparable market value, and it went pending immediately. This reader contacted the listing agent what the pending price is, and he was told $1,000,000. He followed up by asking if he could submit a backup offer for more than $1,000,000. What do you think the listing agent said? A scrupulous listing agent looking out for the best interest of [Read More...]
Affordability in many markets is at record highs. Even here locally, houses are more affordable on a monthly payment basis than any time in the last decade. Yet, houses are not selling. Why is that? Income growth is stagnant due to the weak economy and job picture, the housing wealth of the entire nation has all but evaporated, and many potential home buyers have high debt burdens from a combination of student loans and rampant credit-card borrowing during the 00s. [Read More...]
Ordinarily, housing market pricing gets pushed up to the limit of affordability. Chronic shortages of housing keep prices high, and homebuilders respond by providing new homes to meet the demand. In short, demand nearly always outpaced supply. In the aftermath of the housing bubble, that is no longer the case. Many of the houses built during the rally of the housing bubble were a response to artificial demand caused by unstable loans being given to people who didn’t have the [Read More...]
Astute Observations