Quick Update- August 2008

Things have not improved. Our buddies are Meryll, once snotty and too important to hang out with us, are now asking for employment applications. That is on top of the phone calls we keep getting from ex-Lehman guys. 

Anyways, this is a great summary of the current housing situation. Enjoy!

Home values plunge in Southern California
Median home price fell 34% in August from last year, sales up 10% during period but many driven by foreclosures.

“Foreclosure activity remains high, credit is still tight, affordability remains strained on the coast and the job market is soft,” Walsh said. “Some expect prices to bottom out soon … That may happen, but history suggests that few of us will time the bottom precisely.”

Foreclosures accounted for almost 46% of all resold properties last month, up from 10% in August 2007 and almost 44% in July. To top of page

Holy cow. Take out the REO sales and normal transactions are at record lows.

23 thoughts on “Quick Update- August 2008”

  1. Arcadian,

    Glad to see you back for a quick post and that you’re hanging in there.

    What goes around, comes around as they say. It’s galling to think that the top brass at Lehman and Merrill will probably walk away with millions after screwing things at their firms and contributing to economic mess.

  2. The 34% hasn’t come to Arcadia yet. Sellers are still asking 2007 prices; their houses still sit on the market. Who will blink?

  3. Kool Aid drinkers still abound in Arcadia. A friend who lives there seems convinced the prices in Arc/San Marino will drop, but maybe 10% max. Rationale is no one wants to sell and any house that is priced “under market” attracts 20 to 30 buyers who drive the price up. Can anyone confirm that prices are ultra sticky in Arc/SM?

  4. Thanks for all the support!

    Asking prices are still outrageous due to two factors:

    #1 Many sellers do not have the ability to lower prices anymore. Think about it: If someone was able to buy a home in 2005 with $0 down, there is no way he/she can resell it at a lower price-point because it suddenly becomes a short-sell subject to lender approval.

    #2 Greed and misinformation. Agents will recommend an asking price based in comparable listings in the neighborhood/city. A quick look on Redfin will reveal that actual sale prices are slowly dropping each month. 5% here, 7% there and we’ll slowly approach pre-bubble prices. I never said it would happen overnight!

    Like Arc said, properly priced homes will FLY off the shelves (even if I do think it’s overpriced). It is unfortunate that the 200+ sellers currently on the market are not so lucky.

  5. My guess is that it will be like any other government seized property, it will be auctioned off/sold in some form or another.

    If Obama becomes president, he wants to allow people to be able to keep their houses even if they declare bankruptcy. In other words, allow these people to stay in house they couldn’t afford in the first place. If only I had known about this free house offer sooner….. Damn, I hate it when I miss a good deal.

  6. To me, it is a no brainer who will blink. The 30%-50% correction will come to Arcadia too, just a little delay.

  7. Day of reckoning is already here..

    I asked citibank for a preapproval for 1,000,000 loan because we are trying to see how much loan we can get in this credit crunch environment. We got the 1,000,000 loan approval, but it is contigent upon a 33% downpayment. I was a bit of disappointed, since we are a longtime business customer of citibank, have a stellar credit report, and own a pretty successful business. A talk with my cpa reveals that nowadays banks require 30% down. Is it true? or should I find another bank?

  8. The admin are busy with the current credit crisis. I miss the updates too. I’m still following the Arcadia real estate market though. It’s a staring match out there right now.

  9. It’s sad that this site seems to be dead. This is the time we have all bee waiting and watching for~~~and now that it is here~~~no one is around to discuss how the recent financial situation is affecting the Arcadia real estate market.

    I hope this site comes back sometime soon. It has always been a fun and informative read.

  10. I have seen some movement in Peacock Village. For the first time in awhile there are a couple homes for $699.

  11. I like your blog. I do a blog for San Marino Real Estate and am still getting my feet wet. I will make sure and check back regularly.

  12. We have seen some price drop in arcadia the last few days. Some houses are being put up “As is” with below market prices to get bids. Economy is changing quickly nowadays. It is turning for the worst and we are looking maybe losing the Big 3 automaker and higher unemployment.

  13. I’ve noticed the price drops, too. Sellers were holding out long after surrounding areas (Pasadena, Monrovia, Temple City) were falling 20+ percent. Truth is, I haven’t seen a home sell in Arcadia for some time: a year maybe. Maybe if the sellers had dropped their prices 10% instead of 2.5% they might have gotten out while the getting was still good. With the tight credit market, Arcadia will have to drop 50% for sellers to even have a CHANCE of finding a qualified buyer. Anyone notice the folks who are putting up their homes for lease now? Who are they going to lease to? Section 8 families?

  14. Affordability will hinge on the conformingi loan limit which is going from 730K down to 625K next year, unless Congress extends the 730k cap. Right now above jumbo above 730k you are looking at 9% which is not affordable.

  15. Wow. Sign of the times i guess.

    Things aren’t *quite* as bad here in toronto.
    I still see condos being built.

    Also you haven’t posted much in the last while.
    Any chance you’ll be back at the blog thing?

  16. There is $500 billion in Option ARM’s that will be resetting interest rates and/or reached 125% cap on loan to value ratio very soon.
    I believe that we will see some severe declines in housing values in next 12 months. Realtors hang on!!

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