13 Comments

1. 

   François Caron on January 24, 2010 at 11:03 pm

   Why make house payments when you can keep the cars and live rent free?

2. 

   Locomotive Breath on January 25, 2010 at 6:26 am

   The vehicles are probably either leased or they are underwater too. No equity in those puppies.

3. 

   007 on January 25, 2010 at 7:29 am

   What is going to happen to real estate prices when interest rates go to the moon when no one will loan us money?

4. 

   3rd Generation on January 25, 2010 at 8:06 am

   Real HOT Market:

   Monday, January 25, 2010
   Existing Home Sales Experience Worse Monthly Plunge in 17 Years
   Posted by TraderMark at 10:31 AM TweetThis
   Similar to “Cash for Clunkers”, “Cash for Cul de Sacs” drew in first time buyers in a rush to get of what was perceived as the last taxpayer largesse to buy homes. Unfortunately, those people were not reading FMMF where they would have been able to see the prediction that Congress would continue to extend and expand said credit past the original deadline since we are a country addicted to free money. Bribing citizens to purchase things by layering on debt to our grandchildren is now the national ethos. Unfortunately, the populace somehow thought the tax program would actually go away…. and hence rushed to lock up homes in the fall.

   Unfortunately, there was a giant sucking sound after everyone rushed in to October and November… and we now see the largest plunge in monthly sales in 40 years. But no worries – the market sold off for 3 minutes until Goldman Sachs reassured clients that the April 2010 deadline for the extensions of tax credit is just another temporary stop, and there will be more handouts “for the middle class” (wink wink) as we get closer to the spring housing market and cries from Washington (i.e. lobbyists from the home builder sector) about how a new extension is needed to keep the recovery rolling. And thus it will be.

   More morphine please!

   (keep in mind existing home sales are 90%+ of the market, hence this report is far more important than Wednesday’s new home sales)

   Via AP

   •Sales of previously occupied homes took the largest monthly drop in more than 40 years last month, plunging far deeper than expected after lawmakers gave buyers extended time to use a tax credit.
   •The National Association of Realtors says sales fell 16.7 percent to a seasonally adjusted annual rate of 5.45 million in December, from an unchanged pace of 6.54 million in November. Sales had been expected to fall by about 10 percent, according to economists surveyed by Thomson Reuters.
   •Buyers were no longer scrambling to qualify for a tax credit of up to $8,000 for first-time homeowners. It had been due to expire on Nov. 30, but Congress extended the deadline until April 30. (until the next extension of course)
   •The share of homes sold to first-time buyers fell to 43 percent in December from 51 percent the prior month…. indicating the expected end of the tax credit played a role in the drop.

   Hurry Hurry Hurry! Step Right UP!

5. 

   Jim the Realtor on January 25, 2010 at 9:03 am

   indicating the expected end of the tax credit played a role in the drop

   They extended the tax credit two weeks before it was due to expire – by then buyers had already committed to buying the deals they had in escrow, and had signed off all contingencies.

   If there was a surge in sales, then it happened in November. I think we can call the 16.7% drop the effect from the tax credit nationally, with very little benefit happening in the Carlsbad-to-La Jolla region.

   You also didn’t mention that Y-O-Y sales were up 15%.

   I’m all for transparency, and would like to direct folks to http://www.calculatedriskblog.com for full details on all economic news.

6. 

   Candi on January 25, 2010 at 11:22 am

   Not hot market.
   http://finance.yahoo.com/news/Home-sales-rose-in-09-as-apf-617614634.html?x=0&sec=topStories&pos=1&asset=&ccode=

7. 

   UCGal on January 25, 2010 at 2:32 pm

   Years and years ago I worked in the car insurance business. A client came in to insure his new Porsche… the agent gave him a hard time about spending $40k (this was circa 1980) on a car. The agent thought he should have bought a house or condo. The client pointed out that he could always sleep in his car, but he couldn’t drive a house.

   Maybe those folks with the fancy cars in the driveway are planning on living in their cars when they finally get the boot.

8. 

   W.C. Varones on January 25, 2010 at 2:35 pm

   What is going to happen to real estate prices when interest rates go to the moon when no one will loan us money?

   That’s what we have the Fed for. If the Fed just prints enough to buy all Treasury debt (and all the mortgages), then we don’t have to borrow from anybody.

   See? It’s easy!

9. 

   JK on January 25, 2010 at 4:00 pm

   Wow, are SD buyers optimistic…

   Jim, where are these big down payments coming from? Previous RE equity, stock options?

   I’m guessing it’s not income / salaries

10. 

    François Caron on January 25, 2010 at 4:04 pm

    “…he could always sleep in his car, but he couldn’t drive a house.”

    How about a motorhome? 🙂

    Something tells me that won’t be much of a joke at the rate the foreclosures are going. But hey, at least it’s a proper roof and wheels all in one package. Whole families have lived for years in those things.

    What’s the going rate for a used VW Bus?

11. 

    CA renter on January 25, 2010 at 4:35 pm

    I’m about as bearish as they come, but IMHO, the drop in sales could easily be related to the absolute lack of decent inventory. We couldn’t buy something right now if we wanted to…there is NO inventory.

    Before somebody says that it’s because we live in San Diego and “everybody wants to live here,” just know that this pattern is being seen all across the country and the globe. That means that the lack of inventory/strong sales are probably due to something other than fundamental factors.

    Still, it’s a strong seller’s market right now.

12. 

    tj & the bear on January 25, 2010 at 10:03 pm

    Geez, Jim, don’t you ever just kick back on a Sunday and watch a game?

13. 

    Anonymous on January 26, 2010 at 8:32 pm

    What beach was that at the end?