What's going into escrow - Irvine and maybe some Tustin too

NEW -> Contingent Buyer Assistance Program
<p>ipop - I think I understand your rational, and it makes sense, but I would like to warn you about a vague notion I have in my head and am unsure how well I will be able it to express to you.</p>

<p>It seems to me that there are about 1001 variables affecting home prices, some more relevant than others. And there are about 1001 indicators of home price trends. My observation is that there are certain analytic types, my self included, who tend to want to boil down some issues to a cause and effect situation and simplify them, because that approach works with so many issues. If one can find the real cause, one can determine what the effect will be.</p>

<p>But home prices and asset markets in general, can not be synthesized in this manner, at least not reliably. The factors and variables affecting those markets are too numerous and the relevance of each is constantly changing. Even the indicators change both in number and intensity.</p>

<p>I am a short seller in the equities market and although there are definite common symptoms and issues with the companies and equities I short, I have found over time that each situation is different and that difference is critical to my ability to time the short sale and will to a great extent determine if I will make or lose money. I can be right as rain and still lose if I do not understand the differences. Why am I boring you with this? Because I want to tell you that I think I understand what you are trying to do, and I think it is a mistake. It is correct from a micro view, but a mistake from a macro view, and I think you need to look at a longer term macro view if you are trying to time this market. When I short an equity I do not try and short the top. I wait until I see the trend, both in the equity itself, in the sector, and usually in the overall market. Many times I am too late and the advantage to shorting a particular interest will dissappear before I can enter, but better to have lost an opportunity than to have lost money.</p>

<p>By the way, we sold our home close to the top; not at the absolute top, but close enough so the difference we left on the table is irrelevant now. Buy the macro trend, not the bottom. Flow with the market, don't try to outsmart it.</p>
 
It's a given that the credit crunch will have a negative impact on sales volumes. What I don't get is how anyone can ignore seasonality by focusing on month to month fluctuations over year to year comparisons just because the market got a whole lot worse.





It kind of reminds me of that episode of The Simpsons where Homer invests in pumpkins because October sales compared to September sales were through the roof...
 
<p>"how the hell is it that more homes are going into escrow can be seen as a good sign?"</p>

<p>Nutter my boy, where did you ever see me post that? I think more homes going into escrow and sales volume picking up is a terrible sign, especially for me personally. I'd much prefer an utter lack of activity except for weekly price drops with an exploding inventory that crushes prices with its sheer weight. The bottom can't happen fast enough or deep enough for me... Well done post though. Wasted keystrokes, but nicely done nonetheless...</p>

<p> </p>
 
ipoplaya,





Your chart is on my daily walk through of web sites..........I have news that 2 heatherwood went into escrow at 975K. I hope you will be able to update your chart with closing prices.
 
I think ipoplaya has a point. Maybe he did not put it across well enough. I think it is surprising that number of escrows is rising and I am wondering about the mystery behind it. Who are these phantom buyers and will they eventually be able to close escrow at these prices. So far it looks doubtful that they will be able to. Reason ? - well lot of these escrows are not being completed because people are not qualifying financially despite realtards encouraging these people to bid and also because some people are chainging their mind last minute. I personally sense that real estate agents are trying very hard to discourage low ball offers because of the overall negative effect this will have on their commissions, potential snowballing effect i.e conversion into a full fledged panic sell and to keep their/their brethren's speculative exposures protected. I have dealt with this first hand where in an agent just asked me not to send in the offer paperwork because the offer was 15-20 percent below the list price. I also see a lot of buyers who are buying the bullshit from realtors that interest rates are at an all time low (they are not!) or that the fed rate change causes a direct and proportionate change in mortgage rates. Further a lot of realtors are spreading the news that houses are at a low too or that we are at the bottom. All this misinformation is adequate for people who rely on hear-say rather than reading through dense writings, economic trends or discerning between credible and fake representation of facts. All in all I think that some buyers are quite confused about the direction the market is headed. I waste no opportunity in educating anyone who comes in my path about the truth and I always see this look of "Wow I totally did not know this" out there. Leave alone sellers, buyers themselves are in denial that this market is going to get much worse.
 
Who are these phantom buyers? There are people who have sold perhaps in the last 1-2 years and possibly want to buy back in. I am sure this is only a small percentage though, and the following is more likely.





They are same people who shop at Neiman Marcus and think a 10% price reduction is a fire sale...."Oooh Honey, look! That Louis Vuitton bag I want is no longer $1,700, but $1,500!".....Give me a break.





Don't forget that kool-aid is very addictive and sticky. It is free-flowing. How many blow-hard analysts have you heard on TV saying "buy on the dips." or "Are financials bottoming?" or "Is the worst over?" How about NO! The worst is nowhere near over and the same goes for housing as well. Check out this little diddy from financial sense about the looming collapse of our fractional reserve banking system:





<em>--According to the <a target="_blank" href="http://www.federalreserve.gov/releases/h3/Current/"> Federal Reserve Board website</a>, U.S. non-borrowed bank reserves have gone from $37B to $199M (nope, that’s not a typo) in the last month. We have been discussing this with Sitka Pacific Capital’s <a target="_blank" href="http://globaleconomicanalysis.blogspot.com/2008/01/bank-reserves-go-negative.html"> Mike ‘Mish’ Shedlock</a> for the last two weeks. He concludes: “Banks in aggregate have now burnt through all of their capital and are forced to borrow reserves from the Fed in order to keep lending.” Simply put, the U.S. banking system has no reserves. In addition, the FDIC has recently begun <a target="_blank" href="http://www.fdic.gov/news/news/financial/2008/fil08002.html#body"> modernizing large-bank insurance rules</a>. We hope this is a wake-up call to everyone as to the extent of the credit crisis. Bank account balances should be used only for transactions. Instead cash should be held in the form of U.S. Treasury Bills at a conservative brokerage or trust. Under the mattress is also perfectly acceptable (your parents or grandparents had to do it!). For investors, we advised last year to <a target="_blank" href="http://seekingalpha.com/article/48136-why-we-re-bearish-on-banks"> sell the banks</a>. Banks will be soon forced to sell assets (yes, even 10 year Treasury Bonds) at deeply discounted prices to pay depositors.--</em>





Our nation's financial disasters aside, I do think we should welcome sales. Price drops only become comp killers once they are recorded sales. The median price won't start falling precipitously until knife catchers unite! Keep the properties coming.
 
<em>Wasted keystrokes, but nicely done nonetheless...





</em>Not really, as many other readers here read my posts, and many of them see the facts I post. Then, they think logically, and think... OMG, those numbers are awful, and how could it not keep getting worse, er better when it comes to prices. Yes, they were wasted keystrokes on you, but other people don't want to waste money, so they read and understand the simple logic I post.





BTW, has an escrow closed yet?
 
<p>Well then ole Grapher, I'm happy to have served as a object for your sermon if indeed the congregation is much better off for it. </p>

<p>You'll have to pardon my simple-mindedness. When you wrote a post seemingly directed at me, asking questions that have nothing to do with anything I've posted here or anywhere, e.g. "how the hell is it that more homes are going into escrow can be seen as a good sign?", I do get a bit confused. </p>

<p>If your schtick is making wild inferences (and in this case incorrect) from basic information and then conjecturing about those inferences for what you think is the greater educational good, then more power to you man... Seems a little tangental to me but I'm sure some enjoy it. </p>

<p>Personally I think you take the Uber-Bear thing a little too seriously, but I'm not really one to judge. No reason to get all emotional because houses are going into escrow. It's just data. Relax a little. The apocalypse will come soon enough... </p>
 
<p>Graph - "BTW, has an escrow closed yet?" </p>

<p>I think the answer to that is yes. Three of the first five escrow entrants I listed are off market now. I would assume that means they've either gone pending sale or closed.</p>

<p><a href="http://www.ipoplaya.com">www.ipoplaya.com</a></p>
 
FWIW,





In MLS right now,


15 Bella Rosa is still accepting Backup Offers


18 Delaware closed 1/30/2008 at $805k


11015 Hiskey Lane closed 1/31/2008 at $993k
 
<p>If they fell out of escrow, they'd like be showing as active again, just as a couple of others I picked up on my search.</p>

<p>Not many situations where people would finally get to escrow and then withdraw the listing completely if the escrow termed. Maybe if it was a short and the escrow was their last shot before foreclosure... We'll see soon.</p>
 
<p>Thanks Zov. Weird that I can't get Bella Rosa to show on redfin...</p>

<p>Edited - Ah, there it is... I refreshed and voila.</p>
 
IMO - The biggest factor affecting home prices and home sales for the next year will be what the next two weeks brings to Ambac and MBIA. I think that looking at the number of escrows closing in the last few weeks for an indication of future sales is akin to putting one's ear to the ground between two train tracks to get a feel for the weather and concluding by a perceived sound that there is a light rain on the way which will help crops. It's possible, but if you lift your head and look up you will realize it is a locomotive with 100 cars behind it.
 
<p>I hope you are right awgee. Frankly, I don't see the signs in the customary places. Gold is trending down, bond yields have been relative flat of late, the equity markets have been trading gently up, etc. etc. </p>

<p>If the locomotive is right around the corner, where is the flight to quality in the markets, the jitters, the uncertainty? I loaded up on gold for the run to $1000 per ounce when everything hit the fan, but it seems the markets have been molified by the Fed and the stimulus package.</p>

<p> </p>
 
Huh? Are you serious? Gold is trending down and the equity markets have been trading gently up? What in the world are you looking at? The last three or four days? A week at the longest? Is that how you determine trends?<p>


Gold has gone from $250 to $900 in three years. What is your time frame for $1000?<p>


Well, it all makes sense now. Good luck.<p>


I am curious. How old are you?
 
<p>I'm talkiing about the last week or two awgee. Not long term trends. More specifically, the markets reaction to Fed rate drops and proposed government stimulus package.</p>

<p>I bought gold last year when GLD was in the high 70's to low 80's. I expected Fed easings and government stimulus packages would get the market thinking about inflation. That would/should drive more buying into gold... What has happened to the price of gold since the Fed got crazy with their rate drops? Pull up some charts and tell me if you think GLD is behaving the way you'd expect since Fed got busy. Is the 10-year behaving as you'd expect either considering the economic news of late?</p>

<p>How about the S&P? Looks like it's up 5-6% since mid January. Partial to tech stocks? The Nasdaq is up 7% over that same time... Like I said, markets trading gently upward of late. </p>
 
<i>"Gold is trending down, bond yields have been relative flat of late, the equity markets have been trading gently up, etc. etc. "</i><p>
The all time spot gold high was $933 made on 2-01-08, one business day ago, in London. The closing New York high was $926 on 1-30-08, four business days ago. Trending down? Huh? a week or two? Huh? It has moved down for arguably one day. Or maybe four days at the most.<p>


<i>"What has happened to the price of gold since the Fed got crazy with their rate drops? Pull up some charts and tell me if you think GLD is behaving the way you'd expect since Fed got busy."</i><p>


I have absolutely no expectations of what gold or GLD will do as a result of the recent Fed behaviors. Trying to make money on a short term one-off event as unpredictable as a Fed fund rate move is not something I consider when I am investing, trading, speculating or anything else. None of the short term moves, including the ten year are relevant.<p>


I am so amazed I do not know what else to say. I am at a loss. And I need to put my girls to bed. Later.
 
I have been pondering what will happen to gold and the dollar lately, and I am going to go against the flow here and predict gold will top and the dollar will bottom soon -- in the next 6 months at the latest.





The US economy is leading the world economy into a recession. We cut our interest rates first, thus the dollar declined and gold went up. Now that the rest of the world is starting to feel the pain, other central banks will soon be lowering their interest rates stopping the decline of the dollar, even if Bernanke keeps lowering interest rates here. Also, we will be the first to raise our rates at the beginning of the next cycle probably late this year or early next year. Traders will start accumulating dollars in anticipation of these two events. Rising interest rates, or the anticipation of rising interest rates, will draw money out of gold. Gold will top 6-12 months before the end of the recession as money exits its safe harbor and looks for bargain priced assets.





I could be totally wrong.
 
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