University of San Diego economist Alan Gin said he is optimistic about the housing market because the economy looks more promising.
“The economy is starting to rebound,” Gin said, “so the question is, can the economy rebound fast enough to save people from these foreclosures? Can enough new jobs be generated so people who are stressed out can find work and meet their mortgages? I think that’s going to be the conflict through much of 2010. Some people might be saved; others will not.”
Rick Hoffman, president of Coldwell Banker Residential Mortgage in San Diego, said his agents have seen more activity in the last few weeks from buyers and sellers, and not just because spring is always more active than winter.
“We can’t keep inventory in our Carmel Valley office,” Hoffman said.
But he characterized consumer confidence as weak.
“When you start looking statistically at prices that reached a floor and have come up a bit, consumer confidence always lags the actual statistics,” he said. “I don’t think the message has gotten to consumers that, hopefully, we’re off the bottom and maybe we’ve changed to a slight increase.”
Rich Toscano, a real estate market watcher at Pacific Capital Associates, said another measurement of price changes, cost per square foot, rose about 5 percent from February to March, double the median increase of 2.5 percent. He said that indicates a rise in value.
“I have a feeling that we are in a recovery of sorts,” Toscano said. But, he cautioned, “I definitely have concerns about the sustainability of the recovery.”
Most worrisome to Toscano and others is the outlook for interest rates. Last week, the Mortgage Bankers Association reported an average rate for 30-year fixed-rate mortgages of 5.31 percent, up from 5.04 percent the week before. Some economists believe that rate could reach 6 percent by the year’s end.
Whew! Thank goodness everything is ok now. 🙂
can this be right?….
“the median price in Rancho Santa Fe was down 72.2 percent from $6.5 million in the first quarter of 2009 to $1.8 million this past quarter.”
median price is based on what has sold and does not necessary reflect true market value of properties, especially with a smaller community such as Rancho Santa Fe. I bet if you saw the median house size and locations of those sold, it would not reflect the same sizes and locations of those that sold the previous quarter. With such a small sampling, statistics can vary greatly. If you REALLY want to know what a home or community is worth, talk an agent that specializes in that area. Numbers don’t lie, but statistics sure can mislead.
“University of San Diego economist Alan Gin said he
is optimistic about the housing market”
How do you figure?
http://3.bp.blogspot.com/_pMscxxELHEg/S8UAZ7_I2yI/AAAAAAAAIBc/7-zGlfcR5ZY/s1600/HouseholdDebtPercentGDPQ42009.jpg
“I don’t think the message has gotten to consumers that, hopefully, we’re off the bottom and maybe we’ve changed to a slight increase.”
It has gotten to consumers, if the house is a distressed sale then they will buy, if not, they know not to buy.
Look out now….
2010 REALTOR® Consumer Awareness Advertising Campaign
Statewide Campaign Highlights:
• Total number of television spots over the 12-week period: 7,498
• 12 total weeks on air:
4/21-4/25 4/28-5/2 5/12-5/16 5/19-5/23 6/2-6/6 6/9-6/13
6/23-6/27 6/30-7/4 7/14-7/18 7/21-7/25 8/4-8/8 8/11-8/15
• The C.A.R. message will be seen or heard statewide over 128 million times
• Television commercials will air in highly relevant home buying/selling programming on cable networks like A&E, HGTV, and TLC
• 900 added-value cross-channel cable promos on all systems. Custom C.A.R. message will follow CNN home show promos. These promos air on various networks.
• 3-minute C.A.R. custom video on all Virgin America flights the months of July and August. Video placed in the Red Hot California segment.
Cable:
• 601 total commercials (four different cable systems)
• Networks: A&E, HGTV, TLC, DIY
Programs Such As:
• Sell This House
• Designed to Sell
• House Hunters
• My First Place
• Get It Sold
• Sweat Equity
• Property Virgins
• Moving Up
“Some people might be saved; others will not.”
Wow! This guy is a genius.
Of all the statistics, studies, trends and ‘experts’ to follow, there is only one I pay attention to: Average Income. As long as that is going down, there will be no long term recovery for this country.
Anyone remembers this pig-snake comment from a housing analyst? It evoked some passions during that time, I remember. Are we finally there yet, atleast 2 years later?
>>>>
April 27, 2008 Courtesy – SDUT
Alan Nevin, chief economist for the California Building Industry Association and San Diego-based MarketPointe Realty Advisors, predicted foreclosure sales could account for as many as 15,000 out of 25,000 total sales this year. But at some point, the foreclosures will drop off, he Nevin said.
“Anybody who’s going to walk away from a house or condo has already done it,” Nevin said. “Now it’s just a matter of the pig going through the snake.”
>>>>
“Rich Toscano, a real estate market watcher at Pacific Capital Associates, said another measurement of price changes, cost per square foot, rose about 5 percent from February to March, double the median increase of 2.5 percent. He said that indicates a rise in value.”
The figures are deceiving. One year ago, there were many more bank REOs selling in fair to poor condition. This year, many more investor flip/rehabs are selling, especially in low-price areas. So we are not comparing apples to apples. The other factor that has helped prices is the huge shadow inventory that is not making it to market. These properties will have to be sold eventually as short sales or REO sales, which will depress prices in the future.
The other factor that has helped prices is the huge shadow inventory that is not making it to market. These properties will have to be sold eventually as short sales or REO sales, which will depress prices in the future.
An underlying concern for all, but I think we have to add to the list of possibilities that a number of borrowers are going to be allowed to live for free indefinitely. If that ends up being a larger group, the REOs could spread out over 5,10,20 years, ensuring a soft landing.
There aren’t the S&L regulations like last time that insisted that the banks sell properties.
Take Bank of America, who has the Countrywide portfolio which is almost entirely servicing loans without owning the actual mortgage paper. With the help of the federal governemnt they could put those properties aside as the “group to be dealt with later”, and rent them out, or ignore them.
Anyone googled what Gin was saying in 2005, 2006, 2007, 2008, and 2009?
I think this is his 5th bottom call. Sooner or later he’ll be right, but don’t be fooled, he hasn’t a clue what he’s talking about.
Rich looks at the data through the lens of the last bubble, as if this was simply a cyclical bull/bear market in housing. He’s absolutely technically correct. But, he also knows that we shouldn’t have bottomed here, and there is little to no cleanup after this bubble popped. We haven’t fixed anything, the problems are still there, and they’re growing bigger. I don’t want to take that trade personally.
Chuck
“An underlying concern for all, but I think we have to add to the list of possibilities that a number of borrowers are going to be allowed to live for free indefinitely. If that ends up being a larger group, the REOs could spread out over 5,10,20 years, ensuring a soft landing.”
It is very hard for me to imagine today’s buyer seeing this development as an incentive to buy now. Yes, it does mean that distressed inventory would stay low but at the same time I think it would prolong this period of market uncertainty. The last thing a buyer wants to do is buy a house right now and then see one of those screw ball short sales close next door for 200k less than their purchase price. The way to bring buyer’s back is to restore fairness and pricing stability in the marketplace. Letting deadbeats live for nothing indefinitely is only going to solidify the buyer’s instinct to remain on the sidelines and avoid the “rigged” game that real estate has become. When our government gets in the business of picking “winners” we all become “losers”.
swm-I’m not fully sure that average income tells the whole story. For example, imagine an expensive market where most people are renters and only the well-off buy. If the rich are doing fine but the poor are suffering, that won’t affect home sales in that market because the poor wouldn’t be buying no matter what, but average income would be dropping.
Perpetual Deadbeats? Possible but not likely. It looks like matters have reached another point of critical mass and slug of distressed properties will be hitting the market = another downleg.
I think a slightly more optimistic outlook might make sense nationally, and for areas where the local economy’s “growth” during the bubble was not predominantly the result of bubble housing construction. But not for San Diego or the other big bubble regions. It’s going to take a lot more than a slight rise in consumer spending to make enough people feel good about buying a home to enable the banks to start shedding all that shadow inventory.
“An underlying concern for all, but I think we have to add to the list of possibilities that a number of borrowers are going to be allowed to live for free indefinitely. If that ends up being a larger group, the REOs could spread out over 5,10,20 years, ensuring a soft landing.”
I wonder how people considering buying in any neighborhood would feel if they knew that 1/10 of their neighbors (or is it 1/5?) were actually squatters?
Jim, do your buyers ask you to run a foreclosure radar, or somesuch, on the neighborhood that they are buying in to?
According to a Toscano chart, which I’ll have to find, the last So Cal housing downturn had five (5) FALSE BOTTOMS before finally hitting the floor.
Of course this is only visible after the fact. However, why would we stairstep down 5 times over several years then, but only step down 1 or 2x over just 3 yrs this time when things were even worse….
May not be an identical downturn, but I would rather bet we have a few more steps down than no more steps down.
“Rich looks at the data through the lens of the last bubble, as if this was simply a cyclical bull/bear market in housing.”
Is that so? I wasn’t aware of that.
Rich
Clearfund, here is some data for you:
http://voiceofsandiego.org/toscano/article_1947e41c-c1a7-529c-a70a-59f7288bedae.html
However, this bounce has already acted very differently from any of the 90s bounces. In those cases, there was a bounce in spring/summer with a new low hit in the winter. That did not happen this time — there was no new low.
That is a statement of fact about the past, not a prediction of any sort.
Rich
Hmmm, image links there are busted… here is a link to the chart:
http://www.voiceofsandiego.org/app/storyart/1990shomepricerallies.jpg
Rich