Sunday, May 3, 2009

Quote of the day

I really like this quote (from an article in The Huffington Post). It so perfectly explains the market around here (in bold). Read the whole article it' pretty good.

Oddly enough I find myself back in the position of warning that the housing market may be heading to a terrible crash in the near-future. The bubble mentality has not changed at all and appears to be restarting in the very places where the bubbles were the worst. This is probably because people got used to unaffordable prices and think that a drop from unaffordable to just really, really expensive is a buying opportunity. Meanwhile government and the real estate industry are trying to "reignite" the market -- hoping that starting another bubble will put off the reckoning.

People still think that what we are going through a temporary "correction" and that real estate prices are going to "go back up," that houses are "cheap" now, that they should "snap them up" before they are "priced out." They still think real estate is the path to wealth, instead of somewhat of a burden that should only be undertaken under certain circumstances. Namely, when you plan to live there for a long, long time, and you'll pay less (including closing costs, taxes, insurance, maintenance, possible price depreciation, etc.) than rent.


Kane said...

The effect is akin to prices going up at the store, then the said store puts the item on sale, and the folks snap 'em up. What was $20 turned into $40 ... so when it's on sale now at $30, it's a good deal.

That said, I am in the "trying to buy" crowd, albeit one that's still looking for it at a reasonable price. That means NO, I'm not going to counter at $380k for a 1500 sq.ft. in Phillips Ranch or $320k for 1100 sq.ft. in the older part of Chino Hills.

Todd said...

It's also along the lines of a liquidation sale. Circuit City comes to mind as a recent example. The liquidation company came in and raised all the prices to MSRP and then started marking down from there. Many people paid more for an item at the liquidation sale than they would have buying the same item a week earlier at Circuit City's regular price.

People seem to think they are going to miss out on something if they don't act right now. Unfortunately there are too many articles in the news lately that are giving people this impression about the housing market.

jennalee ryan said...

i know that youre all probably getting tired of my "the world as we know it is ending" rants...but after all of the other "crimes" that I reported in the last couple of months NOW this happens at my sons place of employment while hes there (its a brand new movie theatre in an extremely upscale new mall in the best part of san antonio for Gods sake)

A masked robber who made off with at least $3,000 from a movie theater heist had a tough time carrying the money out of the Palladium, police said.

The loot amounted to about 100 pounds of loose change.

According to the police report, the robber, while armed with a handgun, forced the theater’s manager to drive the getaway car closer to the entrance.

“The bags holding (the coins) tore repeatedly,” the report states. The manager was able to get a license plate number.

The suspect is described as a Hispanic male in his 30s, weighing 250 pounds and standing 5 feet, 11 inches tall.

Anyone with information is urged to call police at 207-7425 or Crime Stoppers at 224-STOP.

is it just me?

golfer_X said...

is it just me?

Yup, It's pretty calm here in my neck of the IE.....

Jesse said...

I think the fact that number of foreclosures on the market has been goin down, people are a little panicki. They don't want to miss the boat. But its about to change. The first big tsunami is on its way! I am looking into eastvale area and I have been noticing that the number of listing kept dropping everyday. Most of the market was made up of short sales! but I think the wait is over now! There are 304 houses getting auctioned in the month of may! I dug a little deep into the data from foreclosure radar and it is by far the highest number of sales per month ever. This explains a lot! I looked at numbers from previous months and I noticed that the number of actual foreclosure sales has been pretty low recently. there were just 12 net sales in march. When compared to the "norm" it way too low. Compared to last year its been down 4 folds. And if there is a shadow inventory out there then I see some major problems for housing! I feel bad for all those knife catchers but then are quite annoying pests who make the house buying experience hell! Those bidding wars are crazy! I don't know if people will ever understand that market is distressed its not coming out of the woods anytime soon! Why not pay them what its worth! I can see another bubble replacing this one once the economy gets out of the woods in 3 years or so. Thanks for all your good work X!