Now the red team is drinking the ivory tower kool-aid too.
Here is their latest post, with the secondary headline that reads – Recovery Fueled by Investors is Stalled Until Traditional Homebuyers Step Up:
http://www.redfin.com/research/reports/real-time-price-tracker/2014/price-tracker-may-2014.html
They call this “the most disappointing metric of the month”:
Maybe it’s because I’m such an optimist, but I am happy to see sales this high – heck, with the rapid rise in prices, sales could be a lot worse.
Buyers are being misled to think it is disappointing to not be at frenzy levels.
This year our local sales around the San Diego north county coastal region have been in line with 2010/2011 levels, which should be good enough, considering how much higher prices are:
We know that sales are the precursor to the market’s direction, and as long as they stay relatively stable and similar to previous years, pricing might hold.
But the average pricing has been a bit erratic so far in 2014:
Buyers who read the mass media are starting to believe the market is ‘disappointing’, when really it’s been terrific for a post-frenzy period. In most areas, we are at record prices and sales are holding up!
Up here in the Bay Area, no one is buying this doom and gloom. We are supply constrained, demand cannot be more robust.
You also have to look at sales volumes from say the mid 90’s to 2006. 2014 is way below those. Saying sales are similar to 2010 and 2011 is misleading in the broader picture. 2010 and 2011 were also low sales years as the county had really high unemployment and was probably still in recession although technically not. If you compare this to normal markets in the 1990’s or 2000-2006 sales are down and first time home buyers are way down.
I disagree, on several fronts. Do you have facts?
2000-2006 was a normal market?
Once the 2-out-of-5-year program kicked in, the frenzy erupted in the late 1990s.
No-doc financing was available straight through, which is much different than today. Sure, government-manipulated low rates help today’s prices jump like crazy, but if you can’t verify income, you aren’t getting a mortgage today. Anybody with a pulse could get 3.95% neg-am loans from 2005 to 2007, which boosted the sales count, and increased pricing.
First-timers are way down because they get blown out by those with more horsepower. Go try it yourself – I’ve tried it. Skylar had 10% down and we had to make 13 offers before getting a home, and that one had more to do with me knowing the listing agent and I got a favor.
Most importantly, we need as an industry to quit thinking the sales of the 1990s and early 2000s have anything to do with today. My comparison to 2010 and 2011 is far more applicable than to 10-20 years ago. The financial/housing crisis has changed the mindset of everyone involved, and left an indelible mark.
I’ll list the SD County sales anyway for Jan-May, and note that many of us have said that the natural cycle was ready to turn in 2001 – and Angelo rolled out the no-doc interest-only loans and pushed them hard:
1996 – 7,019
1997 – 7,701 (2-out-of-5-year implemented)
1998 – 9,140
1999 – 9,973
2000 – 9,564
2001 – 8,983
2002 – 10,959
2003 – 10,476
2004 – 11,134
2005 – 10,463
2006 – 8,291
2007 – 7,154
2008 – 6,253
2009 – 8,670
2010 – 8,598
2011 – 8,345
2012 – 9,596
2013 – 10,407
2014 – 8,736