The Housing Crisis is Over!

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Tigasulo_IHB

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HAH





My realtor had the nerve to explain to me that it looks like "the housing market bottmed out and that we're experiencing a buying frenzy at the moment". Oh man I started coughing AHem B*** Sh$%**!! He continued to say that recently people have bidding over the asking prices. Then gave me this interesting read:



<a href="http://online.wsj.com/article/SB121003604494869449.html">The Housing Crisis is Over</a>



I'd love to see your comments!
 
Mr. Moulle-Berteaux is managing partner of Traxis Partners LP, a hedge fund firm based in New York.



I suppose it might have something to do with trying to rally Traxis Partners porfolio, can't imagine he's being taken seriously.
 
All you need to know is this section I cut and pasted from the link.







OPINION







This is not a standard WSJ reporting piece. You can use it as you see fit. I find the op/ed section of the WSJ useful for lining the bottom of birdcages or wrapping fish. The remainder the paper is, IMO, excelent - well reported and objective.
 
I stopped reading after this quote:



"Even if home sales pick up, how can home prices stop falling with so many houses vacant and unsold? The flip but true answer: because they always do."
 
[quote author="Tigasulo" date=1211967316]HAH





My realtor had the nerve to explain to me that it looks like "the housing market bottmed out and that we're experiencing a buying frenzy at the moment". Oh man I started coughing AHem B*** Sh$%**!! He continued to say that recently people have bidding over the asking prices. Then gave me this interesting read:



<a href="http://online.wsj.com/article/SB121003604494869449.html">The Housing Crisis is Over</a>



I'd love to see your comments!</blockquote>


What he is saying is that the rate of decline has bottomed and price declines going forward will be less/slower/etc. He very well could be correct. Only time will tell. His prediction appears to be true for Irvine in terms of right now as price declines appear to have leveled off during April and May. He cites lower months inventory and suggests prices will continue to fall into 2009 but at a decelerating pace. That scenario is possible, just not very plausible...
 
He's talking about nationally and everything I read about the national market says the peak/bust occurred in '05. We kept going here in OC. Does that mean that we're futher behind from starting to see a correction?
 
[quote author="stepping_up" date=1212012807] Does that mean that we're futher behind from starting to see a correction?</blockquote>


We certainly are behind San Diego, the IE, Sacramento, and the East Bay.
 
Right...with 10 year treasury yields touching 4% again which will likely result in close to 7% mortgage rates.



Right, we are bottoming...in another 20%!!
 
[quote author="no_vaseline" date=1212014223][quote author="stepping_up" date=1212012807] Does that mean that we're futher behind from starting to see a correction?</blockquote>


We certainly are behind San Diego, the IE, Sacramento, and the East Bay.</blockquote>


I recall reading that the IE peaked in '05 and is starting to see bottom. An investor friend has been unable to acquire the IE properties they were interested in because they were getting bid up. He would prefer OC, but prices still too high here. Just wondering if 3 years is the magic number for the beginning of bottom.
 
[quote author="no_vaseline" date=1212014223][quote author="stepping_up" date=1212012807] Does that mean that we're futher behind from starting to see a correction?</blockquote>


We certainly are behind San Diego, the IE, Sacramento, and the East Bay.</blockquote>


We're not that far behind San Diego. Their peak to current as of March is 25.7% whereas the LA/OC MSA is 24.4%. Not a huge difference.
 
I'm still waiting for the Alt-A and Prime stuff, particularly the option-ARMs, to roll in to the market.



Even if OC is behind SD/IE, it hasn't hit out there yet either. just half of the subprime and the gasoline prices...
 
The only people that claim that we are at the bottom of the housing market is the NAR and Realtors. In Irvine we are not anywhere near the bottom. I believe in the next four years we will see another 20-25% drop from current home prices. When will most of the drop occur during the next four years. Who Knows? If you want to know what a home will be priced at go back to 1998 and add whatever percentage you think is reasonable 3-6% yearly appreciation to the 1998 price and you will see even at aggressive appreciation Irvine is still at least 20% higher than it should be. Irvine was a great place to live in 1998 and it is a great place to live in 2008. There is still no beach or ocean front view last time I checked. We are only in the third inning of a nine inning game. Houses in Irvine in the 1M-2M price range are now taking 11 months to sell. When a house that used to sell for 1.4 million two years ago drops to 1m what do you think that will do to everything below that. 1M homes will become 800K and so on and so forth. REO's and foreclosures in the next year on 1m+ homes will be through the roof in Irvine. Go to RealtyTrac and checkout the NOD's in Irvine on houses over 1M and you will no longer think that Irvine is a tropical island somehow protected from overpriced homes falling back to normal levels for Irvine. If anybody tells you that we are at the bottom put your hand on your wallet and run.
 
The other part of the story is he does not talk about is that even if we hit bottom, we will stay flat for 5-10 years. Historically, homes go up 4-6 percent a year. . . it has only been the last couple of years that people went crazy. Thus even assuming we have hit bottom, the price of the property will remain flat for about 10 years. Without free money and prices remaining high, there will be not enough people buying.



Look at the last fall we had in housing in the early 1990s (which was not nearly as bad as this one). Houses bottomed in 1991-1992 and stayed flat until 2000-2001.



One example: My parents bought their house in 1990 for $270,000. Good neighbor hood and on a hillside community. One of the neighbor sold a similar house in 1998 or so for about $300,000. In 2000, my parents' house was probably worth $320-$340K. In 2005, the house was worth about $900K with it now down to about $800K. My parents' house is not worth $800K. If you buy their house now, it will take a long time until you will be able to sell it for even a small profit.
 
Thank you for all your comments. I just cannot believe (even though I want to) that the housing market is bottoming out when unsold homes and foreclosures are increasing. I'm learning so much in this forum and I'm grateful that I found the IHB!



Interesting quick reads:



<a href="http://www.businessweek.com/the_thread/hotproperty/archives/2008/05/case-shiller_in.html?campaign_id=rss_daily ">Business Week</a>

<a href="http://www.msnbc.msn.com/id/24797169/">MSNBC</a>

<a href="http://calculatedrisk.blogspot.com/2008/05/housing-another-day-another-wsj-bottom.html">Calculated Risk</a>
 
I continue to get information passed along to me from the mortgage broker we have worked with in the past. He has called the bottom twice now, the first time in May in response to this WSJ article, and again this week, in response to Lansner's article on June 3 about the fact that bank-funded economists claim that OC housing is 5.2% undervalued. I had to go over to Lansner's blog to see how people reacted to the article and was pleased to see that no_vas and others were presenting the other side of the story!
 
[quote author="Tigasulo" date=1211967316]HAH





My realtor had the nerve to explain to me that it looks like "the housing market bottmed out and that we're experiencing a buying frenzy at the moment". Oh man I started coughing AHem B*** Sh$%**!! He continued to say that recently people have bidding over the asking prices. Then gave me this interesting read:



<a href="http://online.wsj.com/article/SB121003604494869449.html">The Housing Crisis is Over</a>



I'd love to see your comments!</blockquote>


LOL! My old realtard kept insisting that prices in Irvine will never go below 5% correction and that already occurred before I entered the market. She got mad at me coupel of times for quoting statistics that housing market will go down and daring to make offers below asking price.



The relation didn't go well and I had to say thank you to the lady.



Gem" I don't know what your source of information is, but I am a realtard adn I know Irvine isnide out. Anyone writing a blog or an article will not know so much about Irvine and the prices here, locally."



Sheesh! I am amazed at my patience for working with her for two months..



She got pissed off when I wanted to make an offer of 495k on 256 Monroe 50. She insisted that it won't go below 525 and there were MANY offers at the full asking price. I pulled out, and two days later the asking price was reduced to 480k. Guess everyone pulled out :-)



Cubic
 
let her know, if she needs to buy home @ any time then u can help her to buy @ the price lower then the listed one.

and split the diff between both of u. plus no commision.



[quote author="Cubic Zirconia" date=1213248677][quote author="Tigasulo" date=1211967316]HAH





My realtor had the nerve to explain to me that it looks like "the housing market bottmed out and that we're experiencing a buying frenzy at the moment". Oh man I started coughing AHem B*** Sh$%**!! He continued to say that recently people have bidding over the asking prices. Then gave me this interesting read:



<a href="http://online.wsj.com/article/SB121003604494869449.html">The Housing Crisis is Over</a>



I'd love to see your comments!</blockquote>


LOL! My old realtard kept insisting that prices in Irvine will never go below 5% correction and that already occurred before I entered the market. She got mad at me coupel of times for quoting statistics that housing market will go down and daring to make offers below asking price.



The relation didn't go well and I had to say thank you to the lady.



Gem" I don't know what your source of information is, but I am a realtard adn I know Irvine isnide out. Anyone writing a blog or an article will not know so much about Irvine and the prices here, locally."



Sheesh! I am amazed at my patience for working with her for two months..



She got pissed off when I wanted to make an offer of 495k on 256 Monroe 50. She insisted that it won't go below 525 and there were MANY offers at the full asking price. I pulled out, and two days later the asking price was reduced to 480k. Guess everyone pulled out :-)



Cubic</blockquote>
 
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