Another Housing Market Disparity

Submitted by Rich Toscano on February 12, 2009 - 8:28pm

San Diego resale housing activity logged its strongest January in three years:

And inventory declined somewhat, leading to a months-of-inventory figure that was just about half of what it had been in January 2008...

continue reading at voiceofsandiego.org

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Submitted by urbanrealtor on February 13, 2009 - 12:42am.

The stats are consistent with what I am seeing now.

Other than the fact that people like nicer stuff, I don't see that SD's (Adam's) assertions have a lot of value. However, I work primarily in attached and his assertions are primarily about detached inventory.

Putting that differently,yes people are buying more. Further, yes people desire more desirable properties more. This last bit appears, on its face, to be a tautology. However, since our sample areas are different, perhaps he sees something or some stretch of logic that I do not.

I cannot, however, dispute the change in volume. This is the first night I have gotten to watch Stephen Colbert in a couple weeks. The market currently appears to be hopping. This appears to be driven (in my experience) by price rather than being "good inventory".

Submitted by Rich Toscano on February 13, 2009 - 10:05am.

Clearly it's something different than what's ordinary (not to mention a tautology) or he wouldn't have commented on it as being a new behavior pattern.

What he meant, as far as I understood it, was that it wasn't just that people desire desirable things more, but that there was a quantum leap in interest wherein one set of inventory had minimal interest and another set had huge, competitive interest with not much middle ground.

rich

Submitted by peterb on February 13, 2009 - 10:46am.

It may help to have more specific data. For expample, how many sales are short or REO?
This makes sense, as the market prices are down so far that the majority of product in inventory is more likely a "forced" sale of some kind rather than a more "organic" type transaction. Plus,I think the govt has lower interest rates for lower cost product.

Who would sell in this environment if they didnt have a compelling financial reason? Probably, people that still have a decent equity position despite the drop in prices.

Submitted by NotCranky on February 13, 2009 - 1:29pm.

It made me to wonder too Dan. It looks to me like salesmanship, endorsement and networking with a bearish caveat. I am used to seeing it from the realtors here but not Rich. Maybe there are just gaps to fill in? Either way, I am sure you make the right call by dressing up in a Gorilla suit for the meet up,and getting drunk with intentions of crying in the corner, If you need a designated driver let me know. I don't need alcohol to have a good cry and I can still drive pretty well meanwhile.

Submitted by SD Realtor on February 13, 2009 - 1:50pm.

Dan

All I can tell you is what I am seeing. To place a determination of how much "value" a fact holds is as you eluded to, in the eye of the beholder. You mentioned that this is not in the primary area you work.. I on the otherhand have a few clients looking for homes in 4S and La Costa Valley and do not want to pay 900k and this has been a spring of immense frustration for them

Lets take a home in Normal Heights as an example. The home that is pending on Panorama Circle had no business being priced at 875k. I have shown the home and it was nice, but not a chance in heck it should have been priced there. I sent an email to the listing agent when he asked for feedback and the repriced to 849k. Now if you look at that home even at 849 it is a "are you kidding me price" BUT it shows very well. AND it did go pending shortly after that. No way it should have.

Nice use of the word tautology. What I was tring to emphasize apparently with little success was that a 600 or 700k home in San Carlos or Mira Mesa would not move. That scaling of value to the area needs to be done and don't just take the numbers and apply them to every area. I am not trying to stretch any logic or make any statements otherwise.

******

Rus I am not sure what to tell you. I didn't call Rich he called me. Whatever elements of the text you want to call out as "salesmanship, endorsement and networking" you can go ahead and do that. When someone asks me a question I give them an answer. If you want to call my buyers that have been stymied by this market and the activity you can do so. Rich asked me what I saw and I told him. I gave him CLEAR examples of homes and addresses and experiences. If you would like email me and I will send you the MLS numbers so you can verify them.

Submitted by NotCranky on February 13, 2009 - 2:03pm.

Thanks Adam, but that content wouldn't change my point of view. I probably shouldn't have said anything. It's my problem if I don't like it... as it always has been.

Submitted by SD Realtor on February 13, 2009 - 3:04pm.

The comment is not meant to change your point of view.

Submitted by Rich Toscano on February 13, 2009 - 3:22pm.

Russell wrote:
It made me to wonder too Dan. It looks to me like salesmanship, endorsement and networking with a bearish caveat. I am used to seeing it from the realtors here but not Rich. Maybe there are just gaps to fill in?

Exceedingly uncool post, Russ.

Adam wrote about some dynamics he was seeing and I thought they were interesting. So I called Adam and asked for clarification on what he was talking about, and I put his observations into my monthly VOSD update on sales volume in the hope that other people might find it interesting too.

If you think these observations are wrong, feel free to correct them. If you think they are not notable, feel free to explain why I was wrong to note them.

But for you to immediately jump in and start publicly accusing people of lying about some hidden agenda is pretty offensive.

Rich

Submitted by NotCranky on February 13, 2009 - 5:29pm.

Rich I didn't say you had a hidden agenda, he is in sales,you are friends, what's hidden?The salesmanship and endorsement come with the territory. I didn't say you are evil because of it. I didn't say either of you premeditated anything, yet you both seem to think I believe that. I don't. Those marketing type aspects seemed prevalent in absence of your usual top notch writing. I think I insulted your article in the process though.

Back to the content.
My comments are derived from thinking that the feedback is not notable yet the language tends to create a sense of urgency."mad rush for good inventory". What is that really supposed to mean in the big picture? He has always made some urgency play vs. the bearishness caveat. He knows it. In my opinion you just gave him forum for that.

I should have expressed myself better. I don't think it is so "uncool" as poorly done.

Submitted by Rich Toscano on February 13, 2009 - 6:11pm.

"mad rush for good inventory"

Just to be clear, those were my words (don't want Adam to take the rap for my turn of the phrase).

FWIW the message I've always gotten loud and clear from Adam is that the bear market has a way to go, but it is getting there at a pace that is frustrating (for would be buyers) and subject to occasional shorter term rallies. It seems pretty straightforward, and it's really difficult for me to understand how that would be interpreted as trying to create a sense of urgency. There's no urgency until the FINAL bottom is in, and at no time have I seen him imply anything except to say that he thinks the bottom is years away.

As a matter of fact, he reiterated when we were talking that he thinks the bottom is years away and prices are still too high. I didn't happen to put that in the article, because those are themes I've already beaten to death and I didn't think it added anything. But how can you possibly frame that as trying to create a sense of urgency?

Maybe I should let Adam speak for himself but since I dragged him into this (given that it was my idea to put that article up) I feel like I should clarify my take on it.

BTW it's fine to insult an article that I write... it's not always pleasant for me but I do make mistakes and when that happens I expect people to call me on it. Insulting me personally by accusing me of underhandedness (which is how I took your post) is a different story.

Rich

Submitted by Rich Toscano on February 13, 2009 - 6:17pm.

BTW I just went back and read the article again and noted this line (emphasis added):

I should note that this guy is a long-time housing bear who believes the bottom still lies well into the future.

Just makes you want to rush right out and buy a house (per our evil masterplan).

Rich

Submitted by SD Realtor on February 13, 2009 - 6:20pm.

You can follow every post up with a snipe and I will simply ignore them from now on and not address them in the same way I do for Breeze. At least he is just goofing around most of the time but you have a different problem.

There is no "sense of urgency" play here. The advice is for people to sit and wait rather then battle this recent activity. Otherwise deal with the competition and expect frustration. Don't make insinuations and say something like "he knows that." You think that I am saying the market is gonna turn around or something? Did I ever insinuate that? Did I ever say that?

Maybe before you do that you should talk to my clients and let them tell you my outlook on the market.

You seem to make a hell of a leap of faith about me without knowing any facts or talking to any people that actually work with me Russell. Like I said, you want names and numbers you can call them and they can tell you if I have created any sense of urgency for them.

I do not know what you are bitter about dude. Perhaps you should get over it.

Or did you not state your thoughts well again?

I am posting this against my better judgement because usually I would rather not deal with rash posts. Usually I respect your posts, other then your snipes, but this one crossed the line. It will be the last one I respond to.

Submitted by NotCranky on February 13, 2009 - 11:51pm.

Rich, I am considering a response to the personal stuff by email. I don't want to complain and explain too much here.
Thanks

Adam, Fair enough.

What's the news? Perhaps it is that prices are finally falling in the price ranges in question. No doubt houses that become relatively cheap ahead of the competition sell.That's the same thing that has happened with all price ranges. Buyers do pay attention.

The news is not that there is a mad rush for that specific price range. The news it that some sellers in that price range are capitulating either to protect their bottom line or because they facing a world or hurt. If it had been reported that downward pressures were being felt in that price range as opposed to a "mad rush to buy", buyers would be encouraged to wait.The report of a mad rush for "good inventory" gives the impression that buyers will miss out if they wait. Which version of the story would benefit real estate agents, or just be more kosher.

I agree we should not be bearish just to be bearish but there are a lot of upper ecehlon people out here facing a world of hurt in desirable areas ripe to prey on. Notice how offensive that language is when we tag it on the wealthy?

I feel like I contribute an alternative perspective to the mainstream tone of the blog.Forgive me if sometimes it comes out the wrong way. I mean to be a productive contributor but I was born with a fight for the underdog gene.Inspite of all this I am human and therefore we have alot in common.

Good night all.

Submitted by SD Realtor on February 14, 2009 - 12:30am.

Nothing to say to you Rus. Talk to Rich. You make it sound like I called him or something. He called me, he asked me specific questions I answered.

You are so far out in left field I have no clue what you are talking about anymore in this thread.

Submitted by CA renter on February 14, 2009 - 1:45am.

Inserting myself in this little tiff here...

I live in the area SDR often writes about, and can confirm what he said. In south Carlsbad, Encinitas, Solana Beach, etc., there is very little decent inventory, and what does get listed goes pending pretty quickly if it's priced well.

We have been physically checking out houses for years in this area, and have seen **a lot** of traffic any time we check out a decent house. Doesn't matter what day of the week or time of day, there are always multiple parties checking out these houses.

There are MANY overpriced tract McMansions here that will sit for a very, very long time, and there are a few rather unimpressive older homes that have been listed near peak price that are also sitting. That's not what he's talking about from what I can tell.

**Highly desirable, well-priced** inventory is selling quickly, and prices are perhaps down 15-20% on the best properties, if that. We are nowhere near pre-bubble prices, and buyers are still "snapping them up."

In the past couple of months, though, I'm seeing a few more cracks in the higher end properties. Like TG said about the "popcorn" pricing effect in Temecula, it starts with one really good deal, and ends up with many more to follow.

I don't expect the high-end areas to bottom until 2011 or 2012, if we're lucky. Just MHO.

Now, can't we all just get along? ;)

Submitted by NotCranky on February 14, 2009 - 10:56am.

SD Realtor wrote:
Nothing to say to you Rus. Talk to Rich. You make it sound like I called him or something. He called me, he asked me specific questions I answered.

You are so far out in left field I have no clue what you are talking about anymore in this thread.

I know you are way smarter than that Adam. Try to read it again when you are not so mad at me. You are making more comments in defense of yourself that are out of context of anything I have said as compared to the notion that I am in left field. Besides that you usually like to end as the "nice guy" so here is your chance.

Carenter, I think you are amazing I'd like to have half of knowledge that you do in some fields. I just think getting along is overrated.Don't be suprised if middle class etiquette makes some adjustments for that fact in"hard" times.We've got some thinking and acting to do and it will probably involve hashing things out in a manner contrary to comfortable customs.Luckily I am quite prepared for that from a manners perspective.

Submitted by Rich Toscano on February 14, 2009 - 11:26am.

Russell wrote:

What's the news? Perhaps it is that prices are finally falling in the price ranges in question.

Yeah, Russ, because I never report about prices falling.

Accusing me of real estate boosterism, which is what you appear to be doing, is perhaps the most bizarre thing I have ever heard.

I am not going to waste my time by combing through every sentence just to make sure it can't be misinterpreted by someone who is looking for something that isn't there. I'm just not going to do that.

I don't want to spend any more time on this bizarre conversation either. So please let's just put an end to it.

Rich

Submitted by NotCranky on February 14, 2009 - 11:46am.

[/quote]

I don't want to spend any more time on this bizarre conversation either. So please let's just put an end to it.

Rich[/quote]

Good idea, This isn't turning out constructive for anyone.

Submitted by CricketOnTheHearth on February 18, 2009 - 5:37pm.

I admit, I, too groaned when I heard 'buyers are snapping up desirable houses in desirable areas' or the words to that effect; as I have been waiting for far too many years to be able to afford a decent place to live, close to where I work (RB). Retirement isn't getting any further away and I would really like to have a place and have it paid off by then :O

But, like me, I'm sure there is a lot of pent-up demand out there (new-nesters and the like) who have just been waiting for things to drop to a price point they can handle. Unfortunately for me, it appears from this news that these people can afford a higher price point than I can.

However, as many have pointed out, the Alt-A resets have yet to run their course, and I agree with the commenter above, based on that and various other data I've seen, that the generalized bottom looks to come in roughly 2011 or 2012. I'm just hoping that will mean I'm able to snag a decent place in a locale that isn't plagued by gangs/stereos/etc, and not have it nipped out of my grasp by all the other pent-up-demanders like me.

Frustrating as even the whiff of possibility of seeing all hope of affording one's own home twitched out of one's fingers, I agree it is not nice to take it out on Rich and SD Realtor. They are just reporting the news. If anyone, cuss out the $OB's who can somehow afford to buy $600K houses and thereby prop the prices up a little longer (apparently).

Submitted by CricketOnTheHearth on February 18, 2009 - 5:48pm.

Re this, Mr. Drysdale on the "Spring delusion bounce" thread had some very interesting comments (that give me a bit of hope).

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