Dead Cat Bounce, Spring Fling, or Tide Change?

[Alison Swain]

Too early to state anything I can back up about price increases, but my activity is definitely up. Last month was my worst on record (almost 7 years), with no purchase appraisals all year. This month, I've already got six on the books, three are purchases. Another appointment set for tomorrow night. None of it AMC work. :laugh:

 

[Greg Bell]

Whew , I though we may have some economic problems.No problem now with a nine trillion dollar national debt and a negative savings rate.It's good time to buy , let the good times roll.Please See avatar for instructions (Caution , only view through rose colored glasses)

 

[murray stroupe]

Water cooler & Season

Spring is our traditional selling season so I would try and compare it to last year and see if the seasonal variation is similar.

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Think that's true most anywhere, for houses isnt it??

 

[Lloyd Bonafide]

At the luxury end, home prices are falling

http://www.latimes.com/business/investing/la-fi-homes20-2008may20,0,983225,full.story

The rich may indeed be like the rest of us. Prices of their homes are now falling too.

Gated mansions and hillside estates have held their own through most of the real estate slump, but data released Monday showed big drops in the region's most exclusive neighborhoods.

Median sale prices fell by 13% in Beverly Hills in April, compared with the same month last year. Rancho Palos Verdes dropped 18% over the same period, while Newport Beach's 92660 ZIP Code took a 34% hit, according to DataQuick Information Systems.

Experts say these areas and others are catching up with price declines that struck first in outlying suburbs such as the Antelope Valley and the Inland Empire, where many first-time home buyers purchased their properties with sub-prime loans.

"You can't have one market hugely cheaper than another forever," said UC Berkeley professor Thomas Davidoff, who specializes in real estate.

The decline in the high-end market can be seen in both the Los Angeles and the San Francisco Bay Area markets, according to a study released Monday by First Republic Bank of San Francisco.

The weak economy suggests that prices will remain depressed for some time, said First Republic's president, Katherine August-deWilde.

I am seeing similar things in San Diego. Mid-priced areas, and upper-end areas like Rancho Santa Fe, La Jolla, Coronado, and Del Mar are showing more weakness in the last several months - weakness that was harder to detect 6 months ago.

On the other hand, low-priced areas, where a lot of sub-prime loans were done, have already been devastated, with prices on many properties 40-50% off their peaks. These areas look to be closer to bottoming out, as investors are gobbling up REOs, even thought prices are still trending down.

 

[Greg Bell]

Looks like 1933 . A very nice kitty bounce and with suckers a rally and then poof , soup lines.It seems kitty fell off the stock market today taking United Airlines with it.Quick , buy some beans and ammo..

 

[John Hassler]

Looks like 1933 . A very nice kitty bounce and with suckers a rally and then poof , soup lines.It seems kitty fell off the stock market today taking United Airlines with it.Quick , buy some beans and ammo..

You may be correct but I keep getting positive data from the better neighborhoods or better homes in average ones. These market have had almost no foreclosure activity and values have been effectively flat for the last 3-4 years. When I first posted this question I had just finished three purchase appraisal reports where the homes sold at 99.5% to 100%
of list price (the one at 99.5% included a buyer concession of one free week rent back to the seller). Doesn't sound like too many others are seeing the same type of market which makes me wonder how sustainable this trend is here. Only time will tell.



Here is a current divorce assignment in an above average city for the county (median price around $1m and surrounded by 3 higher priced cities). Subject is 1,400sf 1950s tract home on a 6,000sf lot and all comps are roughly similar. These are my comps (sold are only ones available - not cherry picked - and from Feb through May 2008). One had a seller concession of $2k (concessions are a MLS reporting requirement here) and one had prior MLS listing activity.

Comp #1 ... list $875k ... sold $1,045k ... DOM 8
Comp #2 ... list $999k ... sold $975K (no comm to buyer agt) ... DOM 9
Comp #3 ... list $799k ... sold $850k ... DOM 10
Comp #4 ... list $975k ... sold $975k ... DOM 11
Comp #5 ... list $799k ... sold $875k ... DOM 10
Comp #6 ... list $850k ... sold $885k ... DOM 8
Comp #7 ... list $799k raised to $829k ... pending ... DOM 15
Comp #8 ... list $1,088k ... pending ... DOM 5 (had been listed for 100 days in late-2007 @ $1,189k)


Edit addition: Here's a pdf of MLS stats for the above city

 

[Restrain]

Overall, look for the market to continue to decline. Not because of the market, per se, but because everything else is taking so much out of the income stream. Food, fuel, utilities, taxes, all are going up at high rates, so less money to spend on a home.

Add to that layoffs in areas affected by these issues, and you've got more houses than buyers. Then add on the upcoming ARM resets. Another round of hits to the industry, I believe.

 

[Mike Boyd]

Not here. Too many repos. However, in some sub-markets and in the over a million range they seem to have been stable all along. More sales than the same time last year. Up 29%, I think. Many of those were sales of repossessed home. Inventory of median and below homes is way too high.

 

[CCAAMO]

There is no improvement in the inland empire. There are still numerous REO's that have not been put on the market yet. My projection for the bottom of the market is spring of next year.