The previous post on the elevator house, and paragliding:
The preliminary count of detached sales around North San Diego County came in better than I expected. Once we add the customary 10% for the late-reporters, it’ll be right around June’s total.
Totals as of July 31, 2011:
|July||# of Sales||Avg. $/sf|
The number of SD County detached sales will be close to June’s as well, once late-reporters pony up:
|July||# of Sales||Avg. $/sf|
Below is the recent sales history for NSDCC.
We had 1,006 closings over the last five months of 2010, I’m guessing we’ll have about 900 more sales coming this year. (I added the 10% here to July’s current total of 201 sales):
Those who are juggling the REO inventory are using a variety of tricks – here are three examples:
There are many different pieces to the puzzle, here are a few more.
Jiji has posted this thought a couple of times:
Housing is broken, Agents , insurance, remodelers , landscapers, finance, escrow, builders etc… the list goes on and on. What must never be said,
YOU WILL NEVER HAVE AN ECONOMIC RECOVERY UNTIL THE MAJORITY OF UNDERWATER HOME OWNERS ARE NO LONGER UNDER WATER.
I’m not sure we’ll recover any of the old economy; instead those who are creative and desperate enough, will find a new way to get by. It will need to be independent from housing, because once the underwaterness is resolved, those who are left probably aren’t going to be moving much either.
1. UP OR DOWN-SIZING – Price-wise, to move up or down, you need to change by 50% or more to make it worth it.
It doesn’t make sense to sell for $600,000, and buy for $750,000 – you don’t get enough extra house to make it worth it, and the closing costs are prohibitive. But even if the costs got down to 1-2%, very few homeowners need a slightly-bigger house. Don’t be surprised if you see in the future a JtR-supported remodeling enterprise to assist those who just need an extra bedroom or two.
2. DOWN-DOLLARING – Sellers who want/need to bank some real money will have to leave town.
Those hoping to cash-out will need to leave town, and possibly the state, to net a few hundred thousand dollars. How many homeowners are willing to leave? Those buying now are here for the duration, so the down-dollarers who do leave are part of the cleansing. How many weak hands are left? Admittedly, it could be a large group, but they will likely hang on as long as possible.
3. MORE RENTERS – There is going to be increasing pressure on rents.
Those in both the categories above who do sell, will try to stick around, and renting is a great temporary option. For many it will be permanent, especially those who have family here because as they get older they aren’t going to leave town, just to buy a house. Others moving here from out of town will prefer to rent, mostly because of the difficulty with buying smart.
Upward pressure on rents will impact the good-looking family homes in quality school districts.
According to Wiki, baby boomers control over 80% of personal financial assets and more than 50% of discretionary spending power. Do they have one more move in them? I don’t think so – after investigating the three categories above, many, if not most, will end up NOT moving, and make due with that to which they’ve become accustomed.
There will be great reluctance to selling from now on.
Hopefully we’ve learned a big lesson in this downturn, and people will be more reluctant to load up on debt too.
Which leaves just the out-of-towners, and first-timers, for homebuyers.
Those underwater are just part of the equation, and may just help with expediting the inevitable.
This link seen at Piggington:
Earl had this listed in the high-$600,000s, but after almost five months and no sale, the bank re-assigned it to another agent, and lowered the price.
Will having only 3 bedrooms, no yard, lots of stairs and backing to the street force the price down further? Is this an example of how the general buyer malaise has more affect on the inferior properties?
(How about if we blow out the center courtyard wall and make it all one house, Old-Spanish style?)
There has been periodic speculation that one factor in the continuing high unemployment levels is “house lock,” or the reluctance of households to sell their homes in a declining price environment. This, the theory goes, may create a geographic mismatch between the locations of available workers and available job openings.
If this is true then it follows that household migration should be relatively greater among renters than owners in the current market and should be higher in areas where home prices have been more stable compared to areas that have suffered large declines in home values. It also should follow that migration would be higher in households – whether renters or owners – where the head is unemployed.
The Federal Reserve Bank of Chicago recently completed a study that found that none of these conditions apply to the current recession and concluded that “there is little empirical evidence that house lock has been an important driver of the recent high unemployment rate.”
The study, conducted by Daniel Aaronson, the bank’s vice president and economic advisor and Jonathan Davis, an associate economist, used the U.S. Census Bureau’s Survey of Income and Program Participation (SIPP) as the basis for their study. SIPP is a large representative sample of non-military households which is interviewed every four months (called a wave) for two to four years. The surveys overlap (one group is interviewed in January, another in February, etc.) which allows for a month-by-month analysis of migration rates, however, when a cohort’s two to four year tenure is ended it is replaced by another group as the next wave begins. This results in occasional four month gaps in the data. The SIPP data only allowed for evaluation of state-to-state migration.
In a given year, fewer than 2 percent of all SIPP households cross a state border, but migration is three to four times more common for renter households than for homeowners. This ratio has held throughout the sample period, therefore over the past 25 years a significant portion of geographic relocation has been among households unencumbered by owning a house.
We’ve seen glimpses of ColRich and Pulte, the third builder in La Costa Oaks North is Standard Pacific: