Redfin has an excellent feature called “Inventory and Housing Trends.” The data is city-specific and gives us a good idea of where home prices are heading. The data below is specifically for Arcadia, California and basically supports what we’ve been stating all along. Arcadia home prices are under heavy pressure from increasing inventory, rising foreclosures … Continue reading Arcadia Housing Trends – 1st half of 2008
The housing crisis we are facing today is without precedent. Although there have been many housing bubbles in the past, the mess we got ourselves into this time will go into the history books as giant Wall Street financial institutions go from billion-dollar companies to being worth… nothing. I have said several times that as … Continue reading Back to the Fundementals
The June 2008 housing numbers are in so I’ll leave these up over the weekend. We’ve gone ahead and compiled the figures for the entire first half of 2008. I would love to here your thoughts! Arcadia Homes Sales Data Something tells me that this trend will continue for the rest of the year. This … Continue reading Bi-Annual Sales Report
When I was younger (and dumber) I used to think that renting was for poorer folks. My parents hammered into me the belief that renting was equivalent to throwing money away every month. Fortunately, college taught me that it was necessary to challenge everything I’ve learned as a child and realize that many things in … Continue reading 4 Reasons Why You Should Rent
Most people give me a crazed look when I tell them home prices in Arcadia will drop another 25-30% over the next 3 years. Why is that so hard to believe when values doubled and nearly tripled over the course of 4 years? A housing bubble consists of 3 points: a peak and two bottoms. … Continue reading A Peak and 2 Bottoms
We are entering a housing market that will be very different compared to the last 5 years. During the run-up of prices leading to our housing bubble, sellers had the luxury of rejecting offers because there were a dozen more offers on the table. As a buyer, you were expected to be ready and increase … Continue reading Tips for a buyer’s market. Part 1
Yesterday, we wrote about how foreclosures will lead this housing correction and the reported numbers are breaking all sorts of records: California – 1st quarter 2008 113,676 Notice of Defaults issued – Up 39.4% from the previous quarter. Notice of Defaults are up 143.1% from first quarter 2007. Actual foreclosures totaled 47,171 – Highest since … Continue reading Foreclosures leading the way
If you refer back to last week’s Inventory post, I had listed the number of home sales for 1st quarter of 2008: Date Sold Median Price Change YOY January 32 $687,500 4.17% February 32 $815,000 -20.61% March 35 $725,500 -13.16% That’s a total of 99 homes sold in Arcadia over the last 3 months. How … Continue reading Volume Down. Median Down.
Real estate always goes up. Land is running out. Rich foreigners are pouring in by the boat load. Real estate is a great investment. So why in the world are we facing the largest housing and credit crisis in U.S. history? The Culprits Lenders started pushing sub-prime loans so people with bad credit and no … Continue reading So what got us into this mess?
I’ve kept a close eye on the rise and fall of the housing boom for the past few years. During that time I’ve heard all sorts of opinions and stories from renters, homeowners, coworkers, relatives, realtors, brokers and even random strangers. For the past many years it was mostly the usual “buy now before you … Continue reading Say What?
I recently had the opportunity to meet with 3 individuals who “specialize” in real estate investments. I say this with a sarcastic tone because these guys started flipping properties in 2003 and rode the real estate bubble to success. With all the news lately regarding the drop in real estate prices, increase in foreclosures and … Continue reading A Long Way to the Bottom
How do the proposed Housing Bailouts affect taxpayers? There have been several ideas thrown out there so let’s cover a handful of them. The bailout proposals include: Reduction of property taxes. Assisting lenders in reducing the mortgage principal of at-risk homeowners. Subsidizing the same lenders who intentionally made subprime loans. Allowing homebuilders to carry losses … Continue reading Who Pays for the Housing Bailout?
Many have used what I like to call the ‘foreigner-rescue-scenario’ as the primary reason why Arcadia and other cities in the San Gabriel Valley will be essentially immune from the housing crash. I happen to disagree and would be remiss if I simply dismissed it without a closer examination. When kool-aid drinkers state that prices … Continue reading The Foreigner Rescue Scenario
During the rise and peak of the boom, many homes were remodeled or completely torn down and rebuilt. Lending standards were loose and many people were able to take advantage of the cheap money available. Free-flowing credit allowed home equity withdrawals, refinancing and the means to build one McMansion after another. Widespread McMansion development was … Continue reading Supersized Trouble for Unsold McMansions
That is the question. That may not be Hamlet’s question, but that is certainly the question looming over potential buyers as they try to decide whether or not to purchase a home right now. I’ve said before that comparable rents is a key indicator of market fundamentals and I still think that holds true today. … Continue reading To buy or not to buy…
Despite all my years in Arcadia, I’ve never been to a race at the Santa Anita Race Track. I hear it’s fun and quite exciting to cheer on your horse all the way to the finish line. The thrill of a race and potential to strike it rich on a lucky bet is more than … Continue reading Santa Anita Races
A financial bubble by definition is the unsustainable growth of a market due to deviations from certain market fundamentals. These bubbles, much like the ones your 5-yr old blows out in the backyard, will pop. That’s just the nature of the beast. Today we will examine several major contributing factors to the expansion of the … Continue reading What Created the Housing Bubble?
Everyone except those in denial knows that home prices are going to take a tumble crash until it’s back to fundamental normals. Great news for buyers on the sidelines right? Well, what about the offset effects of rising interest rates? Rates have been at historic lows the past few years and it looks like Bernanke … Continue reading Interest Rates vs. Purchase Price
Do you take pride in your work? Dan & Joy Blanding of REMAX Realty obviously don’t because their downed RE sign has been in front of this house for at least 4+ months. It was removed temporarily and then resurfaced in the exact same position about a week later. Do you make people angry? Do … Continue reading The Future of Real Estate Agents
A financial bubble can be defined as the inflated, over-valued state of a market by unsustainable means. It is important to distinguish between what an asset is worth compared to its fundamental value. A house is worth what a buyer is willing to pay for it. During the past few years, a typical single family … Continue reading Market Fundamentals
The Fed’s brilliant stimulus plans includes raising the conforming loan amount from $417k to upwards of over $700k depending on the area. Great, so the government’s idea to solve this massive credit crisis for its nation of debtors is to further encourage consumer spending and debt! The American people are swimming in debt and they … Continue reading A Serious Affordability Issue
The short answer: It’s dead. The long answer: It’s dead. Period. Even the permabulls can’t deny the horrid state of the market anymore. You can’t watch the news or read the headlines without hearing the mention of foreclosures, crashing housing market, subprime blowouts and the soon-to-be-even-crunchier credit crunch. It’s a fact, the US housing market … Continue reading The State of the Market