topic Re: About that 2009 bottom... in Orange County

About that 2009 bottom...

Goran_K — Tue, 31 Jan 2012 23:22:27 GMT

The just released November numbers show that the CS Index dropped nearly 2 points between October 2011 and November 2011 (November 2010 - November 2011 is a 10 point drop YOY!!!). The SoCal index is now only 4 points above the supposed "2009 bottom".

I wonder what presents December, and January 2012 will bring. :smileylol:

Re: About that 2009 bottom...

BobPhillips-RE — Tue, 31 Jan 2012 23:38:08 GMT

Pending sales have been up in November, December, and so far in January, which should extrapolate into YOY higher numbers, in both prices and number of sales, for January, February, and March.

The price per sq ft of Coto's sales in January is - so far - higher than those in November and December.

Re: About that 2009 bottom...

TrabucoDom — Tue, 31 Jan 2012 23:38:54 GMT

Goran_K wrote:
The just released November numbers show that the CS Index dropped nearly 2 points between October 2011 and November 2011 (November 2010 - November 2011 is a 10 point drop YOY!!!). The SoCal index is now only 4 points above the supposed "2009 bottom".

I wonder what presents December, and January 2012 will bring. :smileylol:

10pts is a major hit...I haven't seen this yet...do you have a link? Is this for La/OC or for national stats?

Re: About that 2009 bottom...

AlexSin — Wed, 01 Feb 2012 00:08:39 GMT

http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff--p-us----

The 10- and 20-City Composites posted

annual returns of -3.6% and -3.7% versus November 2010, respectively

The 10- and 20-City Composites November/October -1.3%

Los Angeles November/October -1.0%

Los Angeles 1 year change -5.4%

Re: About that 2009 bottom...

Goran_K — Wed, 01 Feb 2012 00:30:10 GMT

TrabucoDom wrote:

Goran_K wrote:
The just released November numbers show that the CS Index dropped nearly 2 points between October 2011 and November 2011 (November 2010 - November 2011 is a 10 point drop YOY!!!). The SoCal index is now only 4 points above the supposed "2009 bottom".

I wonder what presents December, and January 2012 will bring. :smileylol:

10pts is a major hit...I haven't seen this yet...do you have a link? Is this for La/OC or for national stats?

This is the Case Shiller "Greater Los Angeles" index (L.A - Long Beach - Santa Ana). So it's a combination of L.A and OC.

Here are the numbers in questions:

May 2009: 159.18 (supposed 2009 bottom according to the RE bulls).

Here's the drop YOY from last year:

November 2010: 173.38

November 2011: 163.92

You're right, 10 points is a major hit. It's the biggest YOY drop since the government tried to pump a trillion dollars into the economy to stop the sinking ship in 2009.

Of course, if you only look at May 2009 as a single point, ignore everything in between until November 2011, then of course the market is "flat". Nothing to worry about. :smileyvery-happy:

Re: About that 2009 bottom...

TrabucoDom — Wed, 01 Feb 2012 00:39:14 GMT

Thaks Goran....yes, an undisputable decline in the LA/OC market in the past year.

I checked out the link from AlexSin...

It looks like after Nov. 2010 prices continued to drift down for the next 4 months before the seasonal activity caused an uptick in May 2011 data for LA./OC. Will history repeat itself....or will Bobstrodomus prove to be correct:

"Pending sales have been up in November, December, and so far in January, which should extrapolate into YOY higher numbers, in both prices and number of sales, for January, February, and March."

Re: About that 2009 bottom...

Ed_in_SoCal — Wed, 01 Feb 2012 00:43:19 GMT

My theory is that the prices are not going down as much now because of the little inventory on the market in the $600k to $900k end, which many bought at or HELOC'd to in 2004 thru 2007 and are now underwater and/or can't afford to sell to move and buy someplace else. And/or they are waiting and hoping that the rebound that all the bulls suggest is just around the corner. So what little inventory that is on the market commands a higher price by sheer demand. When more and more realize there isn't going to be a turnaround and they either sell or walk away, the increased inventory will cause a bigger push down on prices.

I'm not an RE or expert on real estate, so its just my opinion. But all it takes is a Redfin search to see the slim inventory in the high end market, which is my concern.

Re: About that 2009 bottom...

Goran_K — Wed, 01 Feb 2012 03:12:31 GMT

TrabucoDom wrote:
Will history repeat itself....or will Bobstrodomus prove to be correct:

I think history will repeat itself, and Bobstrodomus will be wrong for the 2nd year. This is not me being snarky, I'm actually being serious, Bob made pretty much the exact same post last year even though every one was basically saying there was no conceivable way prices would rise in 2011.

Bob's response to declining numbers have been the same for 2 years, it's all about seasonality for him. Prices drop in the winter, and rise in the spring.

Take this post from Bob for example during the same time in 2010:

11-22-2010 09:58 PM
BobPhillips-RE

HELLOOOOO! California prices USUALLY "drift" downward - yes .04% is a drift - in the fall, and guess what?

They also usually drift upward in the spring - usually even faster than the SLOW drift downward in Oct/Nov/Dec.

Yawn.

The truth is prices fell faster in late 2010 than they rose in the Spring of 2011, and in fact never even returned to the November 2010 CS index level. 2011 had 10 down months out of 12. Prices "drifted" down by 10 points on the CS index (aka crushed) and never recovered, and LA/OC went on to have one of its worst years since the collapse began.

I'm going to go ahead and guess 2012 will be more of the same, perhaps at a slower decline. But to say 2012 will be better than 2011 is like saying a broken wrist is better than a broken leg.

Too much unemployment, not enough qualified buyers to soak up excess inventory, and not enough economic confidence to spur buying activity that might push prices up.

Re: About that 2009 bottom...

BobPhillips-RE — Wed, 01 Feb 2012 04:56:26 GMT

Goran said: "Too much unemployment, not enough qualified buyers to soak up excess inventory, and not enough economic confidence to spur buying activity that might push prices up."

Let's break it down, shall we?

Too much unemployment. The employment situation has steadily improved for the past year.

not enough qualified buyers. Yet sales were up in November, December, and so far, in January.

to soak up excess inventory. Local housing inventory is lower than last year

and not enough economic confidence to spur buying activity that might push prices up. Lower inventory plus more buying activity does NOT equal lower prices - actually, it works just the opposite.

And STILL, the median price in Orange County, California, is higher than it was 36 months ago - even adjusting for inflation.

Re: About that 2009 bottom...

Goran_K — Wed, 01 Feb 2012 06:28:10 GMT

See my point TD?

Re: About that 2009 bottom...

Goran_K — Wed, 01 Feb 2012 07:11:10 GMT

BobPhillips-RE wrote:
Goran said: "Too much unemployment, not enough qualified buyers to soak up excess inventory, and not enough economic confidence to spur buying activity that might push prices up."

Let's break it down, shall we?

Too much unemployment. The employment situation has steadily improved for the past year.

not enough qualified buyers. Yet sales were up in November, December, and so far, in January.

to soak up excess inventory. Local housing inventory is lower than last year

and not enough economic confidence to spur buying activity that might push prices up. Lower inventory plus more buying activity does NOT equal lower prices - actually, it works just the opposite.

And STILL, the median price in Orange County, California, is higher than it was 36 months ago - even adjusting for inflation.

Quoting this for later analysis Bob. Hope you don't mind. :smileyhappy:

Re: About that 2009 bottom...

BobPhillips-RE — Wed, 01 Feb 2012 14:37:28 GMT

I have NO problem with my fans reminding me of comments I've made in the past.. On the other hand, those "reminders" are frequently chopped into distorted tidbits, thrown entirely out of their original context, to suit the agenda of the person doing the reminding. That's one of the builtin hazards of being an outspoken public figure. ( As opposed to being anonymous, and able to change my name, if I'm embarrassed by my past comments.)

A few detractors are quick to point out THEIR version, of my comments of the past 18 months, suggesting that I stated that real estate values were not going to go down, which is cutting my actual context roughly, in half. My actual comments over the past 3 years, include the premise that from January of 09 prices gradually rose, mostly due to the tax credits, and from about 18 months ago, that gradual rise, has retreated - although, STILL, not as far as it climbed earlier, for a 3 year net gain. Which is true, and which seems to REALLY bother, my detractors.

All of this movement, both up, and down, when placed into proper perspective, shows a barely perceptible hump, over that 3 year stretch. That - what I label "almost imperceptible" hump - when you back up from the graph, shows the relatively FLAT level of local housing prices, I've expected, for 3 years now, which has been a lot more accurate, than bearish types predicting declines of 20-30-40% over that same period, with preposterous claims of prices "falling off cliffs", or equally ludicrous hyperbole.

So, when presented in an accurate context, I have NO problem being reminded of former comments. They frequently - not always - stand the test of time. More famous (?) pundits than myself, frequently quoted by our resident bear cubs, such as Patrick Killelea, or Larry Roberts, have made predictions, which haven't aged nearly as well, as mine.

Re: About that 2009 bottom...

Goran_K — Wed, 01 Feb 2012 17:29:54 GMT

BobPhillips-RE wrote:
I have NO problem with my fans reminding me of comments I've made in the past.. On the other hand, those "reminders" are frequently chopped into distorted tidbits, thrown entirely out of their original context

I am your fan Bob, I've stated this in the past. You have a lot of knowledge of real estate transactions, pitfalls, and etiquette. But explain to me the second part of your post. How did I distort or chop up your post about the market of 2011 into "tidbits" and take it out of context?

Quoting for context:

BobPhillips-RE wrote:
HELLOOOOO! California prices USUALLY "drift" downward - yes .04% is a drift - in the fall, and guess what?
They also usually drift upward in the spring - usually even faster than the SLOW drift downward in Oct/Nov/Dec.
Yawn.

You posted this in November of 2010.

You were clearly responding to the price weakness reported for the fall of 2010 for OC (.04% drop from Oct to Nov). You didn't mention anything about tax credits of 2009. Did you not say you expected prices in the Spring of 2011 would rise faster than they fell in the Winter of 2010?

This is the same prediction you've been making for 2 years, including this year, and prices did not "drift upward in the spring" of 2011 faster than they fell in Oct-Dec in 2010. Nor do many expect them to do the same thing this year in the spring of 2012.

btw that "impercetible hump" represents nearly $1 trillion dollars in lost home equity, and over $100 million dollars in realtor commissions (probably closer to $200 million but I can't find stats for 2010-2011).

Re: About that 2009 bottom...

TrabucoDom — Wed, 01 Feb 2012 21:55:37 GMT

Goran_K wrote:
See my point TD?

yes....when one is wrong about y-o-y for OC you can move the goal post to 2009 ....and if that isn't working out then screen out all of OC except the very rigid border limits of Coto de Caza....when that falls apart one can discuss just properties over $1M in CDC...then perhaps those homes with international buyers... seems I've heard that somewhere here long ago.

You can always be right if you are prepared to change what you are discussing:manlol:

Re: About that 2009 bottom...

Goran_K — Wed, 01 Feb 2012 22:31:59 GMT

Or just call anyone who quotes you a liar who is distorting what you really meant to say even if they are posting your own words letter for letter.

Regardless, the original point of the thread was to point out, that 2009 bottom may already be gone based on the November 2011 CS. We'll just have to wait for December 2011 and January 2012 numbers before we can finally put the fake 2009 bottom in the trash can of Realtor lies where it belongs.

Re: About that 2009 bottom...

BobPhillips-RE — Thu, 02 Feb 2012 02:06:29 GMT

"btw that "impercetible hump" represents nearly $1 trillion dollars in lost home equity, and over $100 million dollars in realtor commissions (probably closer to $200 million but I can't find stats for 2010-2011)."

When I make predictions/guesses about the real estate market, it is usually about Orange County. If one were to look at a graph, starting on January 1st of 2009, and the lines horizontal lines of the graph, went from 0 up to $600, the 18% gain in the median price for Orange County, that occured from 1/1/2009 until about 7/1/2010, would be barely noticeable, just like the 10% decline, that has occured since.

Goran, I think that you've been participating on this forum for just about a year, probably less, so, I'll cut YOU a little slack to not be aware of comments I made here 2 or 3 years ago. The distortion I speak of, is by posters who KNOW that my comments back 2 or 3 years ago, were claiming that the local real estate market, in my opinion, was going to be flat, over the next few years.

I didn't gloat when prices went up 18% over the 1st half of the last 3 years - while I expected flat. When I made that initial comment, 3 years ago, there was no tax credit on the horizon. Those tax credits created an anomaly from around mid-2009 through about mid-2010, and one effect of that anomaly served to push a lot of home sales that WOULD have occured in the last half of 2010, into the first half, thereby distorting the numbers for both 2010, but also, on a YOY basis, for 2011.

To conclude, prices today are very close to what they were 3 years ago, even adjusting for inflation. The net result is a relatively flat market, throughout the 3 years. As I said, I did not gloat when the tax credits produced an 18% increase, in the local median, but I am raked over the coals because 10% of that increase eroded over the past 12 to 18 months, by people who are cherry picking - or moving goal posts - specifically to try to make my comments look wrong. That's what I'm referring to - forgetting that I was MORE than correct, for the first half, but chastised because the second half numbers SEEM wrong.

The irony in all this, is that prices now, are better than they were, 3 years ago.

Re: About that 2009 bottom...

BobPhillips-RE — Thu, 02 Feb 2012 02:12:55 GMT

"We'll just have to wait for December 2011 and January 2012 numbers before we can finally put the fake 2009 bottom in the trash can of Realtor lies where it belongs."

A price level that has essentially sustained a 3 year period, isn't NEARLY as "fake" as claims by bears - every year for the past 3 - that prices would "fall off a cliff", when they haven't done anything of the kind.

Re: About that 2009 bottom...

Hopefull — Mon, 06 Feb 2012 03:25:24 GMT

Bob, is the increase in sales for December, January and Feburary because of relaxed lending? And I mean relaxed in a bad way. Starting to hear rumors of "giving money away" again.

Re: About that 2009 bottom...

BobPhillips-RE — Mon, 06 Feb 2012 04:06:27 GMT

I'm not sure if financing has relaxed THAT much. Probably just getting more competitive. I just wrote an offer for a client on a purchase just under a milion, with 90% financing, from one of my preferred lenders. That wouldn't have been available 6 months ago.

I really think that it's more of a combination of incredible rates, with more and more people thinking that it's time to get off the fence.

Re: About that 2009 bottom...

Hopefull — Mon, 06 Feb 2012 04:21:27 GMT

Bob, thanks for the quick reply. We just put a offer that was accepted on a short sale on a Huntington Beach condo within walking distance of the ocean. The short sale was already suppose to be "bank approved". Can you tell me what that means? How long before we can close the deal. We're already pre-approved on the leading side.