Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Sunday, March 04, 2007

If Marinite Were Here...

...He would be reporting on this and have something insightful to say about it.

Since my friend has some stalker loser threatening him you are stuck with me reporting in his honor. I left out the typical cheerleading "it's different here" garbage and included the pertinent facts rather than wishful thinking quotes below. If you want the rest of the crap on paper, you can click the link to the Marin IJ.



"Last year, 2,400 detached homes were sold in Marin, down 21 percent from the previous year. In the condo market, 945 units were sold last year, down 25 percent from 2005."

"Corina Rollins, a Greenbrae appraiser and real-estate instructor at College of Marin, is, if not quite bearish, then certainly concerned about current market conditions. Rollins analyzes the number of listings versus the number of closed sales, and she now sees "a significant and growing backlog of inventory."'

"According to Rollins' analysis of the Marin market, which she derives from the BAREIS database, there was 20 months of available detached-home inventory in the year ending Feb. 1, versus 15 months the previous year. For condos and townhomes, there were 21 months of potential sales on the market in the year ending Feb. 1, versus 14 months the previousÊyear.
The market is absorbing properties faster than it can sell them off."

'"Your absorption rate goes down - the speed with which you can absorb the valuable inventory," she said. "It's supply and demand, is what it is."'

"And as inventory increases, buyers feel empowered to negotiate, homes can sit on the market longer and prices can be depressed."

'"There have to be market corrections that allow wages to increase sufficiently to absorb some of the increased costs," Rollins said. "We haven't had that kind of a correction for a while."

Those in related industries are feeling the pain

"Scott Hunt, of NorCal Property Inspections in San Rafael, said business has dried up recently for him and other inspectors. Hunt said he usually gets six or seven jobs a week, but lately he has gone for more than a week at a time without an assignment."

'"I just lost a huge chunk of the market, so I don't know what's going on - the war, the stock market," he said. "I called myself yesterday to see if my phone was still working. My phone hasn't rung in two weeks."

'"It seems like the whole world's for sale, and there's no buyers. It's been dead as a mackerel."'

"Bill Powell, a flooring and carpet specialist who works closely with real estate agents, said business was slow in the latter half of 2006, but it began to show life at the end of January and in early February. Powell said the existing inventory is growing, so sellers are starting to realize their homes must be in top condition to be competitive."

'"It's not a time to put a fixer-upper on the market," said Powell, proprietor of 123-Floor Inc. in San Rafael. "You're going to have to discount deeply or let it sit on the market for a while."'

11 Comments:

At 3/04/2007 11:55:00 AM , Anonymous Anonymous said...

Thanks for the post given Marin House bubble's stopping of his blog. It is really a sad statement that people feel a need to give death threats but I think it shows the professionalism of many who have been pushing real estate. They clearly do not care about open and honest dialogues meant to empower people to make the right decisions for themselves.

The 20 month inventory number is staggering. I am amazed that no re reporters are focusing on this stat -- the very stat that was used two years ago by the re industry to push pricing. It shows me that most newspapers (and I am sad to say my grad school as well) have what they report controlled by advertising and donors vs. what used to be a tradition of telling it like it is.

fyi -- I did see over at calculated risk that one major lender is now requiring any home that is on the market more than 6 months to go through additional underwriting before loan approval. So if you want to sell, there is 20 month supply, do what Jim the real estate agent says -- make your house as attractive as possible, price it BELOW what your neighbor just got, and keep LOWERING your price 2% to 5% each week you are on the market. I will bet if you hit the 6 month mark, expect to hit the one year mark without any nibbles and if you do get a nibble, expect a protracted loan approval process by the buyer and a very high chance that the loan will not go through unless your sales price is in line with last year less 10%.

 
At 3/04/2007 12:03:00 PM , Blogger Marinite said...

trying to figure out where Marin’s fabled real estate market is headed. The answer: No one knows for sure

Ha! When people here say they don’t know which way the Marin market is going, then you know it’s bad.

Here’s a clue.

Yes, that 20 month inventory figure IS staggering and something most agents will not want you to see.

I appreciated the comments in the article for why the county average/median is so useless. Like I've said before, we have at least two markets... one for the wealthy folks who don't care if they over pay and one for the rest of us.

And I see the IJs brought back McLaughlin. What a hack. This is the guy who had nasty things to say about me and my blog when my blog was first covered by the IJ. I hope he eats his shorts.

 
At 3/04/2007 12:50:00 PM , Blogger Athena said...

Ooh! I hope the additional underwriting applies even if the home owners and shyster agents have gone through the dog and pony show of pulling the house off the market for 30 days in order to get a new listing. Hopefully the more stringent standards will apply to these people in particular!

Hey Marinite... good to see you!

And yes... those who don't know where Marin's market is going have their eyes closed and are just trying not to look. Willful ignorance. :-D It won't matter, they can click their heels and wish really really hard, but they will soon find out where their train is going. Call Neil and tell him to pass us a big bowl of popcorn. ;-)

 
At 3/04/2007 12:58:00 PM , Blogger Marinite said...

Call Neil and tell him to pass us a big bowl of popcorn

And pass around a big 'ol mug of the Fool-Aid will ya?

Marin is as much a part of the local housing market as anyone. But our county stats are nearly meaningless. Our sample sizes of sales are often far too small to make the mean/median worthy of reporting and certainly not to make any conclusions of what your house is really worth but that doesn't stop the IJ or RE agents from touting them when they are in their best interest. And Marin is just as dependent on the first-time buyer and, by extension, the move-up buyer as any market.

Now, back to my house cleaning...

 
At 3/04/2007 01:00:00 PM , Blogger Marinite said...

And Athena, thanks for covering Marin's market while my blog is down.

 
At 3/04/2007 04:51:00 PM , Anonymous tom stone said...

I met have met corina several times,she is a very smart woman indeed.and she will be teaching a course on advanced cash flow analysis this summer at COM,which is very worthwhile.when corina says something,she is precise in her language.so marin is at 20 months inventory NOW. it will be interesting to see where it is in 2 months...a 36 month supply would not surprise me at all on july1st.yes underwriting is getting tighter...something to due with criminal indictments and 31 lenders gone in less than 90 days,perhaps.

 
At 3/04/2007 05:47:00 PM , Blogger marin_explorer said...

"I just lost a huge chunk of the market, so I don't know what's going on..."

That sounds rather familiar to late '99, when things were humming along nicely until suddenly the bottom fell from under my tech brokerage business--and before any obvious indicators in the market.

And once again, Wall Street is still somewhat upbeat, but the unsettling indicators are beginning to wander home like a herd of lost cattle. Stay tuned for scene two of this tragicomedy.

 
At 3/04/2007 07:41:00 PM , Blogger Lisa said...

Twenty months of inventory is just stunning, and I love how this is the first we've heard of it. Both the IJ and SF Chronicle just "bypass" the whole topic of inventory.

Just in time for the Spring selling season...who on earth would go ahead and buy right now??

The Chronicle ran two stories today on Foreclosures in the Biz section. So, the negative drum beat is picking up. It's about time.

 
At 3/05/2007 09:36:00 AM , Anonymous Enorah said...

completely off topic but important to know

www.forsakencraft.com a san diego housing bubble blog is down due to death threats

 
At 3/05/2007 09:46:00 PM , Blogger Marinite said...

www.forsakencraft.com a san diego housing bubble blog is down due to death threats

Hmmm, a trend is forming.

 
At 3/07/2007 11:43:00 PM , Anonymous marmelade said...

20 months is staggering . . . I can't imagine being a retail shop owner and sitting on a turn-over rate of 20 months on the cans-of-beans sitting on my shelves!

 

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