bubbleinfo.com

Comments in the latimes.com about September sales:

“We are in the doldrums. Nothing much is happening,” said Richard Green, director of the USC Lusk Center for Real Estate. “We are now kind of bumping along, not doing particularly well, but not doing any worse either, and that is probably where we are going to be for a while.”

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Glenn Kelman, chief executive of online brokerage Redfin, said the uncertainty in the marketplace after the expiration of tax credits had created a standoff between buyers and sellers.

“There are a huge number of buyers touring houses, but they have no sense of urgency whatsoever,” Kelman said. “They are all convinced that property values will drop. They are probably right, and they all want a discount.”

And sellers, “instead of lowering their prices,” he said, “are boarding up their windows for the winter, and they are going to wait for the spring.”

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“Today’s market can be characterized as much by activity that’s not happening, as by the activity that is happening. We’re seeing distress-selling, bargain-hunting and entry-level buying, while the rest of the market is still largely on hold,” said John Walsh, MDA DataQuick president.

“As many wait for this market uncertainty and turbulence to pass, demand is being generated and is accumulating. At some point, the mortgage spigot will be re-opened and there will be a surge of buying activity, probably financed with low interest rates,” he said.

The comparisons for detached MLS sales in North SD County Coastal:

Remember how the sales in September and October ’09 were unusually high? This year detached sales in September were only down 6% year-over-year, with a 5% increase in average cost-per-sf.

By Rob Davis at voiceofsandiego.org:

Lake Mead, the vital Colorado River reservoir outside Las Vegas, hit a record low Sunday, The New York Times reports. The reservoir is the lowest it’s been since being filled in the late 1930s, just 39 percent full.

Millions of people — San Diegans included — rely on the reservoir’s water.

So what does its drop mean here?

In the short term, nothing. It doesn’t have any impact on San Diego’s supply even though we relied on the river for 61 percent of our water in 2009. But it does send a bad signal that the river supplying the Southwest’s lifeblood is continuing to face pressure — a pressure that scientists say is growing as the climate warms.

If the lake continues dropping, it will first cause problems for cities in Arizona and Nevada before San Diego. Those states hold lower-priority rights to Colorado River water than California does.

Right now, Lake Mead is filled to 1,083 feet above sea level. If it drops to 1,075 feet, the U.S. Bureau of Reclamation will declare a shortage and implement cuts the seven Colorado River states agreed to in 2007. Those cuts hit Arizona and Nevada — not California.

The cuts would stay in place until the reservoir hits 1,025 feet. Then the shortage is renegotiated and becomes an issue that could affect California.

The Bureau of Reclamation’s current plan for the coming year calls for an increase of up to 40 percent in the amount of water delivered to Lake Mead from Lake Powell, the big reservoir upstream, a step that could help equalize the amount of water in each reservoir and possibly avoid triggering the shortage declaration.

Musings about current market conditions – the sellers aren’t happy about my lowball offers, but what else do you got?  Expect that listings will be cancelling in disgust, with sellers thinking it’ll be better next year.

But selling won’t be “better” in spring or summer or whenever, not as long as the internet is still working – because buyers know the score….and the comps.

Hat tip to Kingside for sending this along:

Licensed real estate broker Sieglinde Summer listed a residential property for sale on a multiple listing service, advertising a price of $749,000 to $799,000. Phil and Jenille Holmes saw the listing, expressed an interest in buying the property and, after some negotiation, agreed to the seller’s asking price of $749,000 to purchase the property free and clear of all prior liens and encumbrances, with a 30-day escrow. In anticipation of the closing, the Holmeses sold the home in which they were then living.

A fact not known to the Holmeses was that the property was encumbered by $1,141,000 in debt. The lenders refused to discount their loans. As a result, the sale could not be consummated. The Holmeses sued Summer, alleging that she was aware of the excess debt and had an obligation to disclose tha information to any potential buyers.

The trial court sustained Summer’s demurrer without leave to amend, finding she had no duty of disclosure with regard to the amount of debt on the property.  The Fourth Appellate District reversed an order of dismissal. The court held that a real estate broker who was aware that a property had significant debt which exceeded the property’s asking price had a duty to disclose that fact to potential buyers.

Read the rest of this entry »

Kris Berg reviewed the new Freakonomics movie, and how they criticize realtors for telling their clients to sell early.  Just like in their book, they refer to a study that realtors wait longer to sell their own personal residences, and get more money.  In the end, the one guy states that he’d rather wait to get his hypothetical extra $10,000 that magically comes one week later.

http://sandiegohomeblog.com/2010/10/04/kriss-most-awesome-movie-review-freakonomics/

The movie makers are just picking on a common target, realtors.  If they really wanted to get some scoop, they’d include the rampant short-sale fraud or how realtor inexperience is costing the clients.  No, instead they keep the focus on a hypothetical case that sounds juicy – the reality is:

1. Today the listing agents are telling sellers to hold out, not dump and run.

2. Agents who over-price their own house are commonplace; it’s because they aren’t very good. 

3. Today you are either priced to sell, or priced to sit.  There isn’t magic that happens a week later.

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Here are two studies that back up what we see on the street, from the latimes.com:

If you’re considering listing your house and you’re serious about selling, you’re better off being realistic right from the get-go.  This is according to a New Zealand housing analyst whose study of online buyer habits echoes one done this year in the United States.

Alistair Helm, chief executive of Realestate.co.nz, concluded that a property receives four times as many views in the first week online as it does a week later. His company looked at 1,100 New Zealand properties during a six-week period in July and August.

Helm told the New Zealand Herald that the “most important people in the market” are serious buyers who are searching online every day, and they’re fully aware when a home that might meet their needs becomes available.

A few months ago, the online brokerage Redfin.com looked at traffic for listings in multiple markets.

The homes studied had gone on the market early this year and had been for sale at least 60 days, and the listings had been updated — had a price change or some other significant condition change — at least once.

Redfin.com came to the same conclusion: Brand-new listings get four times as many online viewings in that initial week as they do immediately afterward.

If you’re fishing for an unrealistic price, you may be blowing it, the company said.

Author Mary Umberger writes for the Chicago Tribune.

The foreclosure activity has been throttled around the coastal areas this year. 

There are only 27 La Jolla SFRs on the auction list, and the few that get foreclosed every month (26 this year) are fairly unremarkable.  Here are the latest from the Jewel:

Hat tip to Doug for sending this mention in businessinsider.com about these two articles:

OSAKA, Japan — Like many members of Japan’s middle class, Masato Y. enjoyed a level of affluence two decades ago that was the envy of the world. Masato, a small-business owner, bought a $500,000 condominium, vacationed in Hawaii and drove a late-model Mercedes.

But his living standards slowly crumbled along with Japan’s overall economy. First, he was forced to reduce trips abroad and then eliminate them. Then he traded the Mercedes for a cheaper domestic model. Last year, he sold his condo — for a third of what he paid for it, and for less than what he still owed on the mortgage he took out 17 years ago.

“Japan used to be so flashy and upbeat, but now everyone must live in a dark and subdued way,” said Masato, 49, who asked that his full name not be used because he still cannot repay the $110,000 that he owes on the mortgage.

Few nations in recent history have seen such a striking reversal of economic fortune as Japan. The original Asian success story, Japan rode one of the great speculative stock and property bubbles of all time in the 1980s to become the first Asian country to challenge the long dominance of the West.

But the bubbles popped in the late 1980s and early 1990s, and Japan fell into a slow but relentless decline that neither enormous budget deficits nor a flood of easy money has reversed. For nearly a generation now, the nation has been trapped in low growth and a corrosive downward spiral of prices, known as deflation, in the process shriveling from an economic Godzilla to little more than an afterthought in the global economy.

The downsizing of Japan’s ambitions can be seen on the streets of Tokyo, where concrete “microhouses” have become popular among younger Japanese who cannot afford even the famously cramped housing of their parents, or lack the job security to take out a traditional multidecade loan.

These matchbox-size homes stand on plots of land barely large enough to park a sport utility vehicle, yet have three stories of closet-size bedrooms, suitcase-size closets and a tiny kitchen that properly belongs on a submarine.

“This is how to own a house even when you are uneasy about the future,” said Kimiyo Kondo, general manager at Zaus, a Tokyo-based company that builds microhouses.

As living standards in this still-wealthy nation slowly erode, a new frugality is apparent among a generation of young Japanese, who have known nothing but economic stagnation and deflation. They refuse to buy big-ticket items like cars or televisions, and fewer choose to study abroad in America.

Japan’s loss of gumption is most visible among its young men, who are widely derided as “herbivores” for lacking their elders’ willingness to toil for endless hours at the office, or even to succeed in romance, which many here blame, only half jokingly, for their country’s shrinking birthrate. “The Japanese used to be called economic animals,” said Mitsuo Ohashi, former chief executive officer of the chemicals giant Showa Denko. “But somewhere along the way, Japan lost its animal spirits.”

When asked in dozens of interviews about their nation’s decline, Japanese, from policy makers and corporate chieftains to shoppers on the street, repeatedly mention this startling loss of vitality. While Japan suffers from many problems, most prominently the rapid graying of its society, it is this decline of a once wealthy and dynamic nation into a deep social and cultural rut that is perhaps Japan’s most ominous lesson for the world today.

The classic explanation of the evils of deflation is that it makes individuals and businesses less willing to use money, because the rational way to act when prices are falling is to hold onto cash, which gains in value. But in Japan, nearly a generation of deflation has had a much deeper effect, subconsciously coloring how the Japanese view the world. It has bred a deep pessimism about the future and a fear of taking risks that make people instinctively reluctant to spend or invest, driving down demand — and prices — even further.

http://www.nytimes.com/2010/10/17/world/asia/17japan.html?_r=2&pagewanted=1&hp

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From James Fallows and the Atlantic:

The author returns to his old Tokyo neighborhood and finds an inward-looking country that has lost its ambition.

Japan Surrenders