Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Thursday, June 29, 2006

Housing Jumps the Shark

I love that term Jumping the Shark. For anyone who hasn't heard of it before, you can find the definition here. It seems that more and more often the MSM seems to be jumping on the falling house price bandwagon. Some articles do hedge their bets a little by quoting a bubble..if it exists....sort of like my old Italian Nona using her evil eye protection, but the B-word is out there loud and proud.
On my way to the Sonoma Market for my regular shopping this afternoon my husband pointed out this article in the Sacramento Bee.

Study Says Area Home Prices At Risk of Falling
If you've got one of those mutant loans you're in for a bumpy ride according to the study.

In all, eight of the 13 riskiest U.S. markets were in California; the rest were in the New York-to-Boston corridor. All have seen homes appreciate greatly in recent years, far exceeding typical gains of 4 percent to 6 percent yearly.

Officials at PMI, which provides mortgage insurance to buyers making less than 20 percent down payments, refused to speculate about how far prices could fall or make projections beyond two years.

In other words quit calling us. We can't help. What are we mind readers???
Of course Bernankes' raising on the interest rates isn't helping the plummet

Higher rates will continue to put downward pressure on home prices by reducing the number of buyers, said Jeannine Cataldi, senior economist at Global Insight, a business forecasting firm.

Cataldi said despite rate hikes and her firm's 53 percent overvaluation calculation for the Sacramento market, she sees a period of "minimum growth or no growth" in the region's home prices, instead of a crash.

Milner and Cataldi declined to speculate how long it will take for local incomes to catch up to housing prices and spur the market. But one Sacramento contractor believes the area could see home values stagnate for some time.

Over at MSNBC they're using the F-word. Flipper. No longer King orf the sea, or the housing market. It's Farewell and Goodbye
Now that article was written about 2 weeks ago before the rise in interest rates. The part I found particularly amusing was something that reminded me of the old saw.."Remember, they're not making anymore land!" Oh. Really. Then why is this happening?

With land prices falling in some areas, Hovnanian has walked away from about $5.6 million of deposits on land parcels it had options to buy, lopping 5 cents a share off the company’s second-quarter earnings.

Buyers in some cooling markets know they’re in the driver’s seat.

I wouldn't exactly say that the smart buyers are already in the drivers seat. More like they're kicking the tires. The Road Test and the Independent Mechanics Check-Up hasn't even begun yet. This baby's not leaving the lot for a good 18 months at least.


At 6/30/2006 09:27:00 AM , Anonymous Anonymous said...

i like FUBAR better,this market jumped the shark at the end of last summer.

At 6/30/2006 12:00:00 PM , Blogger moonvalley said...

yeah, FUBAR is more like it, I just couldn't resist that picture of the shark.

At 6/30/2006 11:57:00 PM , Blogger marin_explorer said...

Yeah, great photo...even if it's a marlin.

At 7/01/2006 10:58:00 AM , Blogger moonvalley said...

whoops! my bad.

At 7/01/2006 06:23:00 PM , Anonymous Anonymous said...

At 7/01/2006 07:21:00 PM , Blogger moonvalley said...

Wow, thanks anon, great catch! I loooooove that website.

At 7/01/2006 08:14:00 PM , Anonymous Anonymous said...

I am still working on it but soon to have a ton of homes like that in there. There are a bunch in that area as I'm lookin to low ball bid in a year in that area :)

At 7/13/2006 10:11:00 AM , Blogger marin_explorer said...

Tom Stone,
Since comments are locked on the other blog, I thought I would post your comment here:

at least 4 out of 5 realtors believe the horseshit they boss quoted eyler today to show that none of coastal california was at risk of a price drop.i heard of 3 realtors this week who are renting ,or trying to rent, rooms in their is asking $700 a month for a room in santa rosa.i know of 3 open houses last weekend that had no traffic at in sebastopol, two in santa rosa.from what i overheard this is now common throughout west sonoma county.

$700 for a room in SR...I'd call that hopefull! LOL. Based on your story, it doesn't look like a "soft landing" is coming to Sonoma co.

At 7/13/2006 04:18:00 PM , Blogger moonvalley said...

I don't think so. We went over to SR this afternoon on some errands, lotsa price reduced out there.


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