Griz

23 Comments

    • Southern California Home Sales Rise: No, That's Not a Typo [view article]
      Three phases of an asset price bubble:
      1.) Irrational Exhuberance
      2.) Saturation - As depicted by inventory build & transaction slow down
      3.) Market Clearing - Accelerating transactional activity at ever weakening prices

      The trick is to wait to buy until this market clearing phase has completed over the next 12-24 months as then you can be assured that PRICES will have bottomed.       Aug 20 08:42 AM
    • Today's Negative-Equity Update [view article]
      I find zillow to be consistently 10%+ too high in their estimates for the So. Cal (SD, Orange, LA) areas. I can often search and find many homes on the market with current listing prices well below the Zillow price. Zillow is a lagging indicator, with sale transactions forming the basis of their estimate. As we all know, the price reported in a sale transaction could have been negotiated many months ago, thus in a falling market their estimates come out consistently too high.

      With approximately 46% (and falling) remaining US homeowner equity, as measured by the Federal Funds Flow report, the next 20% to 40% in price declines could wipe-out just about all remaining US homeowner equity. As the price level drops lower, more and more transaction volume is also uncovered. As we eat into the 2004, 2003 and 2002 transaction layers, an accelerating percentage of homeowners will find their way in negative equity positions. No way, that'll never happen? Just like "real estate never goes down" (remember that one?).       Aug 19 10:15 AM
    • One-Third Of 5-Year Homeowners Underwater [Housing Tracker] [view article]
      P.S. The link above for the Fed Flow of Funds report is now updated for Q1 '08. Go to page 102 line 50 to see that homeowner's % equity has dropped to 46% (not sure that the Fed is marking houses to market accurately but that wouldn't surprise me based on their reluctance to force Fannie, Freddie or any of the big banks to mark-down their assets). Aug 13 01:46 AM
    • One-Third Of 5-Year Homeowners Underwater [Housing Tracker] [view article]
      Dear Jason C, If prices go back to 2000 levels then I extrapolate from the May release of the Case-Shiller HPI that prices will need to decline by another 45%! I agree with you that this will probably happen but when it does it will eliminate ALL remaining US homeowner equity... period. According to the Fed's Q4 '07 Flow of Funds report: www.federalreserve.gov... the US homeowner had only 47% of their equity left at the end of last year. What will happen when the whole country is in aggregate upside-down on their homes? Jubilee has arrived. Aug 13 01:32 AM
    • Jeremy Grantham: Global Incompetence Is 'Officially' Scary [view article]
      HARM IS HILARIOUS Aug 01 12:15 PM
    • Boomberg: End of CA Housing Decline in Sight? [view article]
      My neighbor just listed his boat for sale, three homes on the street are in foreclosure, my employer is freezing hiring and is getting ready to do layoffs, I see more and more luxury cars sporting for-sale signs on my way to work, my city is cutting back on services... No, I don't live in Riverside or San Bernadino, I live in South Orange County in a $1M+ neighborhood where many of the homes were financed with alt-a's (a much larger asset class than sub-prime with most of the resets yet to come). The second wave of pain (via the negative feedback loop) is just about to start and it's not going to be pretty. Aug 01 12:09 PM
    • Bust, Bail, Repeat: The U.S. Enters into an Ever-Worsening Cycle [view article]
      Just wait until we have a new president in November... I bet that a whole bunch of this artificial stimulus goes away, we crater into 2009-2010 and they (either Dems or Repub) hope a recovery in time to get re-elected in 2012. Jul 24 03:28 PM
    • Bill Gross: The Housing/GSE Bill Is Best Way Out of Credit Crisis [view article]
      I wonder if all of this government attempts at support fade in November after we have a new president in place (either Dem or Repub)? What would the then incumbent party have to gain in fighting the tide and holding up the economy, as opposed to letting it crumble dramatically and then hope for a recovery before 2012... I bet 2009 & 2010 will present a world of hurt. Jul 24 03:06 PM
    • Economic Report Summary: Plunging Home Prices and Consumer Confidence [view article]
      ajhough I think you are correct. It appears as if we are just about due for our next US Depression of which this would actually make #4. Please see this great article:

      www.kwaves.com/kond_ov...

      Click on the 1st graph to get a lot of detail of pricing, inflation, asset prices, etc. over the past 230 years here in the US...       Jun 29 12:59 PM
    • Housing and Long-Term Competitiveness [view article]
      How can the "investment" of time, labor, materials, etc into the US residential housing asset be anything more than vanity and a horrible waste of resources? When the US housing asset went from $12T upto $22T in the first half of the decade, we should not have banked on that as being a store of value of any kind... and we should not be surprised as it depreciates and is marked to it utility accordingly. May 30 01:24 PM
    • US Housing Inventories Reach Record Highs [view article]
      I'm looking to move to So Cal and I'm seeing more and more nice single family Houses are coming onto the market. I guess this is the next step for delusional owners who won't "accept" the offers they have been getting to buy their homes; they must be thinking "I'll rent it for a year or two until prices rebound". I can now rent a $1,000,000 home in Orange County for about $3,500/mo... no matter how I slice it, I can't make the math work to buy. Now is a great time to rent a home. May 24 08:29 AM
    • SoCal April Real Estate: Rising Sales, Flat Prices [view article]
      Is it just me, or can't anyone else see that "spring blip". May 20 10:23 AM
    • How to Default on Your Mortgage and Stay in Your House [view article]
      Why should citizens (lower or middle class) adhere to "rules of conduct" professed to us by the uppers (banks, gov't., the wealthy, etc. - i.e. The Man) when they themselves do not walk the walk. They get bailed-out, spoon fed, assisted, liquidity enhanced, prevented from systemic failure, you name the reason but in the end they are not allowed to fail. The average American has caught onto the scam and, God Help Us all if the defaulting paradigm catches on in en-mass, we will experience another period of Jubilee and will have to get used to Oil Producing & Low-cost Manufacturing owners of our once great country. May 18 11:28 AM
    • CAR Forecasts 24% Price Drop for California Houses [view article]
      Wow, I could never have believed a realtor group would actually come out with something that resembles the truth (although still a bit optimistic). May 08 09:09 AM
    • New Home Sales, Inventory Chart: You're Going the Wrong Way! [view article]
      How about "repent ye speculators" or "mean reversion walks among us" or how about "renters unite"... Apr 28 09:03 AM
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