Learning/lessons from the past boom/bust in Irvine (OC)

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OC, I'll match you and raise your a crazy analysis from Lawrence Yun (like there is any other kind from him).





<a href="http://biz.yahoo.com/ap/070815/home_sales.html?.v=7">biz.yahoo.com/ap/070815/home_sales.html</a>





WASHINGTON (AP) -- Sales of existing homes fell in 41 states during the April-June quarter while home prices were down in one-third of the metropolitan areas surveyed, a real estate trade group reported Wednesday.

<p>The new figures from the National Association of Realtors underscored the severity of the current housing slump, the worst downturn in 16 years.


</p>

<p>However, Realtors officials said they saw some glimmers of hope in the data. They noted that existing home prices were up in 97 of the 149 metropolitan areas surveyed compared with the sales prices of a year ago.</p>

<p>That represented price gains for 65 percent of the areas surveyed, an improvement from the first quarter of this year when only about 55 percent of the metropolitan areas reported price gains from the same period a year ago. In the fourth quarter of last year, less than half of the metropolitan areas reported price gains.</p>

"Although home prices are relatively flat, more metro areas are showing price gains with general improvement since bottoming-out in the fourth quarter of 2006," said





Slight disconnect between paragraphs 1-2 and 3-5. . . .
 
<p>graphrix,</p>

<p>This post is getting side-way.</p>

<p>I long suspect posters here are more of social in nature rather than re interest. I think it's good mix. Hope you feel same. </p>
 
<p>Profette, two bears in love with no moderating influences? I can see it now.... Canned food, guns, ammo, gold, stored gasoline, silver, short-selling everything under the sun... Long walks on the beach discussing dollar hegemony, the fallout of the yen carry trade, 9/11 conspiracies, climate change, peak oil...</p>

<p>Nobody would have to hide their coupon clipping, at least. </p>
 
More from Mr. Yun





<p>"Although home prices are relatively flat, more metro areas are showing price gains with general improvement since bottoming-out in the fourth quarter of 2006," he said. "Recent mortgage disruptions will hold back sales temporarily, but the fundamental momentum clearly suggests stabilizing price trends in many local markets."</p>

<p><strong>Looking ahead, Yun's forecast is one of the most optimistic among economists</strong> (understatement of the century). He predicts home prices will turn slightly positive again by spring of 2008 and rise about 2 percent that year. He said prices will pick up more in 2009.</p>

<p><a href="http://money.cnn.com/2007/08/15/real_estate/NAR_home_prices_lower/index.htm?postversion=2007081512">money.cnn.com/2007/08/15/real_estate/NAR_home_prices_lower/index.htm</a>


</p>
 
<p>Hilarious fliptrack!</p>

<p>I thought it was just me who thought every bear in the world loves gold.</p>

<p>How is it doing, btw?</p>
 
<p>I'm not watching it very carefully. If the credit bubble really has popped, I could see it getting dragged down along with every other commodity, even oil.</p>

<p>Demand destruction is a powerful thing.</p>
 
<p>So how long do these recessionary periods last? Of course there are always lessons learned from past… but things have changed a lot since just 15 years ago.</p>

<p class="MsoNormal"> We have finally entered an era where information is more and more readily available to the masses instantaneously. Here we are discussing on a forum, not a quarter by quarter or month to month blow of the markets, but literally day by day. We see instantly which homes have been on the markets for what period and when and how much they reduced their price… or we can see which homes are being repossessed and which homes have been auctioned off… or the current state of the debt and capital markets… all the information we need at our fingertips…</p>

<p class="MsoNormal"> Economists speak of inefficiencies of markets.. imperfect information.. well I think things are a little different this time around. I believe boom/recessionary cycles are shortening dramatically.. not only because we have learned from our past lessons.. but because we are able to respond to financial crisis much more efficiently than before… as in every cycle… people are just waiting for that perfect period to take advantage of opportunities created in a recessionary environment. Its hard to say when a bottom is coming… but i’m sure markets will correct much more quickly and efficiently than ever before.</p>
 
heh... well i had to try to sprinkle some good news to all the doom and gloom in the headlines... but yea... i hear yea... ppl are gearing up for a rough time ahead
 
re_fan. . . I somewhat disagree. . . look at the dot.com bust. . . tech companies are still recovering from that (Check Cisco, Intel, Motorola, etc. . . .)





I think that 5 years is a pretty good turnaround. It took about 5-8 years for the last bubble to recover. . .2 to 3 years of flatness and then the boom in 2000 or so. I think that we'll be back to "normal" around 2010 or 2011.
 
<p>Re-fan does make some interesting points. I have considered them myself.</p>

<p>I've heard comments along-the-lines of "when no one will touch real estate with a ten-foot pole, is when it will be time to buy", and think at least the first part of the proposition may be met soon.</p>

<p>I am not speaking of our own market, so the affordability argument doesn't necessarily apply.</p>

<p>Of course, where lending critera end-up will also be a major factor - but lets assume we end up with standards more generous than today, but tighter than in the past.</p>

<p>Is it not possible that when the "bottom" is found, it could be followed not by stagnant pricing, but a return to strong pricing?</p>

<p>Take the stock market for example, when there are steep sell-offs of something, they often bouce back after the hysteria has passed. They typically don't linger at the bottom number, unless there was a very good reason for the decline to begin with. And these days, it's easy for a company to lose market cap due to broader hysteria.</p>

<p>Many factors contributed to what we are witnessing today, but I personally think the speed of information now is having a profound affect . </p>
 
<p>IrvineCommuter - I found one for you. No make that two.</p>

<strong>Slight gains seen for '92 housing market</strong>


October 1, 1991

<p><strong>Byline: Andre Mouchard </strong></p>

<p><strong>The Orange County Register</strong>


California's housing market will snap out of its three-year losing streak in 1992 to post modest gains in sales and median home prices, according to a forecast released Monday by the California Association of Realtors.</p>

<p>But those rosy predictions from the state's biggest real estate trade group are based on the belief that consumers in California are on the verge of becoming considerably more optimistic than they are today, a notion disputed by some economists.</p>

<p><strong>State disputes federal report on OC real estate</strong></p>

<p>May 3, 1990


</p>

<p><strong>The Orange County Register</strong></p>

<p>A special report due out today from the state Department of Banking will show that Orange County's real estate market is not headed for trouble, as federal banking regulators warned last month. The report was produced in response to warnings from the Federal Deposit Insurance Corp. that several key areas in California are showing signs of troubles similar to those now wracking Phoenix and the Northeast. The FDIC report cited Orange County as one of the state's most</p>
 
graphix. . thanks again for your news gathering skills. . .I am shocked that the NAR didn't see the housing collapse in the early 90s. But I believe Yun is right on this time. . . heck I am going out right now and say that sales go up by 20 percent by 01/08 and that the median price will go up another 30%. . .. BTW: I have a bridge in NYC that I'd like to sell.





Janet:


While technology does speed up the world, the 2007 economy is also infinitely more complicated than 15 years ago. The problem that everyone is running into now is that the credit crunch is affecting everything. . . hedge funds, banks, brokers, home builders, corporations. . . everyone is affected. Even if you can patch up the Titanic, it'll take them a while to turn the ship around.
 
<p>IrvineCommuter:</p>

<p>Your reference to the dot.com bubble is a little confusing.. stock market crashes are perfect examples of efficent market corrections... money moves rather quickly from bad to favorable stocks. Once these bad stocks seem solid again.. money moves back in relatively quickly. But i'm not sure how this applies to the RE cycle?</p>

<p>Also you mentioned that the economy is infinitely more complicated than 15 years ago. Although I do agree our current financial markets have provided many more tools, platforms, mechanisms for further efficiency and how this might be complex in nature.. I don't see how it complicates the economy. </p>
 
<p>re_fan, I'll take a stab. The dispersal of risk makes it difficult to identify the ultimate bag-holders, such as <a href="http://globaleconomicanalysis.blogspot.com/2006/12/email-from-bernanke.html">Madame Merriweather's Mud Hut in Malaysia</a>.</p>
 
<p>wait.. so are you saying we are going to have an entire financial meltdown? an ever-lasting recession? i dont get the point... i thought we were talking about efficiencies or lack there of in markets... </p>

<p> </p>

<p> </p>
 
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