Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Monday, September 25, 2006

Source of Growth, Cause for Concern...

"The pace of existing home sales in the United States fell for a fifth straight month in August and prices dropped from year-ago levels for the first time in more than 10 years, a realtors group said on Monday."

"The National Association of Realtors said existing homes sales slipped to an annual rate of 6.30 million units from a 6.33 million unit pace in July."

"In addition, the stock of unsold homes on the market rose 1.5 percent to 3.92 million units. At August's sales pace that represented a 7.5 months' supply, the highest since April 1993."

"Kathy Lien, senior strategist at Forex Capital Markets in New York, said the most troubling aspect of the report was the drop in prices."

'"What was once the primary source of growth and expansion in the U.S. is now the source of concern and nervousness," she said."

"NAR chief economist David Lereah, however, said the August slip in existing home sales data could be the bottom of a slump for the sector."

'"This price drop, in my view, has stopped the bleeding in the sales marketplace," he said. "It seems that the 6.3 million level has now hit bottom. We are now flat with single-family home sales."'

"Prices will continue to come down in the short-term, Lereah said, and sales will remain flat. Still, he emphasized that the pace of sales in August has not slipped as badly as in previous months."

'"That is good news for housing," he said. "The health of the housing sector is in transactions, is home sales, not home prices."'

Spoken like a true realtor. They need people to think it is safe to keep buying. You can buy from a true underwater FB and still get screwed. Buying now is still a Fool's market, and it is just dumb to catch a falling knife. It hasn't even sunk in yet to many sellers that the winds have changed. Many have no idea how to explain the run-up in unrealistic price gains, but feel entitled to it anyway. No more indulgence of magical thinking. Why would you want to indenture yourself for life to pay for someone else's sense of entitlement and maxed out credit card of a house?

'"The conclusion that I'm drawing is that we're very close to the bottom of the housing market," said Bernard Baumohl, executive director of The Economic Outlook Group in Princeton Junction, New Jersey. "By the first quarter of next year, we'll start to see a rebound."'

Close to the bottom? A rebound? (stifling laughter) Something tells me we have only just begun. First quarter of next year I bet we start to see some panic as the bulk of the ARMs readjust.


At 9/25/2006 12:07:00 PM , Blogger Marinite said...

The conclusion that I'm drawing is that we're very close to the bottom of the housing market

LMAO! If this is the bottom (or close to it) then this has been the fastest housing correction in all of recorded history. Every other housing correction has taken 5 or so years to reach bottom.

I so wish the real estate industry would be held accountable for what they say in public.

At 9/25/2006 03:44:00 PM , Blogger marin_explorer said...

"The health of the housing sector is in transactions, is home sales, not home prices."

Hahaha! Housing is "healthy" as long as you make a sale, homedebtors be damned! What duplicitious BS.

And yes--we have yet to see the correction, Marinite.

At 9/25/2006 04:25:00 PM , Anonymous tom stone said...

i do not think we will see much of a spring bounce,if any.i do know a few other people in the real estate business that are knowledgeable,honest,and frank.i treasure them.btw did you see the full page ad by realtors in the sunday pd,extolling the good works of realtors!!??? good grief,when an industry feels like they have to take out full page ads telling everybody how nice they are.....and i see good old harry coffee there from investor's trust,be sure to call him if you want to mine your equity,he's real good at that.

At 9/25/2006 04:33:00 PM , Blogger Athena said...

What Lereah meant by BLEEDING - is that with no sales there are no commissions for his peeps. With no commissions- their bank accounts are bleeding.

He is simply looking out for number one... his realtor people... his sole job is to make sure they make money. He can care less about the FB's and everyone who might lose money. As long as it finds its way into a realtor's pocket is all he cares about.

At 9/25/2006 05:34:00 PM , Blogger Lisa said...

"The conclusion that I'm drawing is that we're very close to the bottom of the housing market..."

Remember what they said when sales really started to slow last Fall? That we'd see a rebound in Spring 2006. Didn't happen. It's laughable they're trying to brush this off as a market blip that will disappear in a few months. As time goes by, fewer and fewer will be interested in paying these prices on an asset that isn't appreciating any more.

At 9/25/2006 09:02:00 PM , Anonymous trailer trash said...

National Ass. of Realtors chief economist David Lereah told some more lies about how NOW is the best time to buy real estate. Whether the real estate market is going up, down or sideways, Mr. Lereah always puts a positive spin on any negative aspects.

The only thing that scares me is that Mr. Lereah is now talking about "bleeding in the sales marketplace." A healthy, go-go, buy-it-now real estate market shouldn't be hemorrhaging.

In spite of all of the dumb things David Lereah says, he is not stupid. He really does know what's going on. He's not an idiot, he's a compulsive liar. He lies for a living. That's what the NAR pays him to do.

At 9/25/2006 09:12:00 PM , Anonymous tom stone said...

while driving around today,running errands i saw five open houses in sebastopol,santa rosa,oakland and piedmont.i have never seen an open house on a monday before.has anyone else seen this?

At 9/25/2006 09:41:00 PM , Blogger Athena said...

MV and Tom... did you see in the 5 houses that sold in Sonoma last week had a house listed at Montini ... the sales price... "$260,000

???? :-?

At 9/26/2006 10:52:00 AM , Blogger Marinite said...

has anyone else seen this?

I've seen some in Marin. I also recently seen some previous for sale via realtor signs transform to FSBO. There is one Open HOuse FSBO that is up 24/7.

At 9/26/2006 05:06:00 PM , Anonymous Anonymous said...

"The conclusion that I'm drawing is that we're very close to the bottom of the housing market..."

Top 40 songs of...
1929 -- "Happy Days are Here Again!"
1931 -- "I Have Five Dollars"
1933 -- "Brother, Can You Spare a Dime?"


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