Monday, November 06, 2006

Fed Admission and Updates on Some Favorite Marin POSs

Kudos to the Housing Panic blog for this find.

Apparently, one Fed member admits that the Fed caused the housing bubble. This is news-worthy to me only because back in August the Greenspan Fed published a very academic paper that they used to pull a Pontius Pilate on us -- to wash their hands of any responsibility of causing the housing bubble.
In an apparent and rare in-house critique, the president of the Federal Reserve Bank of Dallas said that because of faulty inflation data, the Fed kept interest rates too low for too long earlier this decade, fueling speculative housing activity.

Mr. Fisher noted that subsequent revisions show PCE inflation was actually a half a percentage point higher than originally estimated. "In retrospect, the real Fed funds rate turned out to be lower than what was deemed appropriate at the time and was held lower longer than it should have been," Mr. Fisher said.

"In this case, poor data led to a policy action that amplified speculative activity in the housing and other markets. Today...the housing market is undergoing a substantial correction and inflicting real costs to millions of homeowners across the country. It is complicating the [Fed's] task of achieving...sustainable noninflationary growth."
Greenspan was recently heard muttering these words which the NAR has made much ado about:
"This is not the bottom, but the worst is behind us"
He must be talking about the rest of the year. If so, I have to agree with him. But what happens when houses come back on the market early next year? Will buyers' opinions have changed? Will suicide loans look good again? Will those million dollar Mill Valley POSs look like a good deal again? I don't know; anything could happen. I do expect a "dead cat bounce" in Marin next Spring. But that's just me.

Later, this was dropped on us:

Greenspan also touched on the potential adjustment in loan costs for home buyers with nontraditional mortgage products.

While some individual buyers may feel the pinch as their payments rise, Greenspan said those changes were "very unlikely to have a macroeconomic effect."

I don't know if Greenspan used the word "pinch" or if it was chosen by the writer of the article, but either way I don't think the people who are foreclosing on their homes would consider themselves "pinched" exactly. But I am sure he is right that there won't be much of an impact of these "pinched" buyers on the broader macroeconomic scene. Just MHO.

***

Remember this beaut in San Rafael? The one that overlooks the San Rafael industrial landscape? You know, the one that was featured in the New York Times so long ago? Well, despite the fact that we are in the "off season" it is still on the market with yet more price reductions. So I guess that "job transfer" to Atlanta wasn't all that urgent or are they holding two mortgages now?
Price Reduced: 06/06/06 -- $1,695,000 to $1,649,000
Price Reduced: 07/06/06 -- $1,649,000 to $1,625,000
Price Reduced: 07/12/06 -- $1,625,000 to $1,575,000
Price Reduced: 07/27/06 -- $1,575,000 to $1,535,000
Price Reduced: 09/03/06 -- $1,535,000 to $1,499,000
Price Reduced: 10/02/06 -- $1,499,000 to $1,395,000
That's a drop of 18% from the original asking price. Not much. I expect ultimately twice that. But anyway, sellers can ask whatever the heck they want. What it actually sells for is another matter. Buyers set the selling price, not the sellers.

***

And my all-time favorite yellow POS on Shoreline (the one across from the 7-11) is still for sale too. What a surprise. They haven't lowered the asking price since the last time I blogged it but that is no doubt due to the fact that the asking price is still right around their break-even point which is way more than a sane person wants to spend for that dinky, noisy shack.

So Mr. Seller: what's it like fearing that you will never sell that piece of shister without taking a loss? Are you praying each and every night, making solemn deals with God (or in Mill Valley is it Buddha, Krishna, purple crystals, or whatever?) to be a better person and all that as long as He gets it sold? Are you doing the whole St. Joseph thing now? Inquiring minds want to know what it's like to be another Marin FB. After all, this is God's Country dontchya know. Not being able to sell overpriced housing is not supposed to happen here.

***

And finally, this one is still on the market too. Same asking price. Hasn't budged. Same story -- they are at their break-even point and can't go any lower without taking a loss.

Mr. Seller: same questions to you as above.

***

Yep, I'm definitely in a belligerent, irreverent mood tonight.

17 Comments:

Anonymous Anonymous said...

Yep. Some days this stuff seems so ridiculous you've gotta laugh.

And some days the same stuff seems so outrageous it just makes you angry.

Nov 6, 2006, 8:23:00 PM  
Blogger Marinite said...

Exactly.

Nov 6, 2006, 8:25:00 PM  
Anonymous Anonymous said...

Marinte...You are the best!
I love your blog above all others on any topic at all.

Nov 6, 2006, 8:58:00 PM  
Blogger Veronica Lodge said...

"In this case, poor data led to a policy action that amplified speculative activity in the housing and other markets. Today...the housing market is undergoing a substantial correction and inflicting real costs to millions of homeowners across the country."

"Poor data? And it took them over 5 years to discover this problem? Well, why not? After all, poor data can lead a country into war.

The dead cat's out of the bag now. Will he bounce in Marin next spring? Probably, because the National Ass. of Realtors will be able to convince the very last of the greater fools that it's a great time to buy a home.

Maybe those 3 featured homes with the sticky prices will finally sell.

Nov 6, 2006, 10:39:00 PM  
Anonymous meltormay said...

Marinite,

The yellow sh*t box on Shoreline is like a Mill Valley bubble billboard.

I pass it often and think about the state of real estate in Marin.

Consider the quality of life for the potential buyer.

You will be living very close to a noisy high traffic road.
You will be right across the street from the 7-11.(more noise, more traffic, more strangers)

You will be living next door to another POS with a fixer upper car that has been in the front yard for many months. (in the rainy season it gets a festive tarp).

The POS next door has been in a state of construction for quite a while and will probably continue to be.

But wait, this is Marin.....

I'm sure it will be worth millions soon.

Hey, Slurpees and Big Gulps are right across the street!

Nov 7, 2006, 1:42:00 AM  
Anonymous Anonymous said...

NYTimes has long article on RE in Phoenix, the tidal wave is just beginning.

Nov 7, 2006, 9:21:00 AM  
Anonymous Anonymous said...

Here’s a marketing idea: since winter is fast approching, perhaps they could sweeten the deal by throwing in a set of golf clubs and a pair of shorts.

Nov 7, 2006, 9:45:00 AM  
Blogger mktmakr said...

Don't mean to rain on everyone's parade, but check out the flood of cash that's about to hit (mainly)Wall Street, but also San Francisco/Marin:

http://www.bloomberg.com/apps/news?pid=20601109&sid=aqH6cACPmrMo&refer=home

I know it's hard to comprehend, but the AVERAGE bonus for ALL 25,647 employees of Goldman Sachs will be $397,707! Check out the numbers. $36 billion in bonuses from just the 5 largest investment banks!

Don't be surprised if you see an uptick in prices and sales in Marin real estate in January!

Nov 7, 2006, 9:47:00 AM  
Anonymous pothead said...

I'm still not sure if I should be admiring ordecrying your ability to get fairly personal info and your willingness to post it.

Knowing the loan amounts is one thing. Digging into someone's employment history and previous cities where they lived is a bit much though. How would you like to have that kind of scrutiny shined on you? And then blogged? I know, they agreed to be in the NYT, but still..

Nov 7, 2006, 11:30:00 AM  
Blogger sf jack said...

anonymous #919,472 said:

"Here’s a marketing idea: since winter is fast approching, perhaps they could sweeten the deal by throwing in a set of golf clubs and a pair of shorts."

******

THAT is freaking hilarious. The most entertaining thing written here in months.

I would add that they should also throw in a pair of skis and a tanks' worth of gas for the drive to Tahoe in the SUV.

And a T-shirt that says on the back: "I bought in Marin not too long ago and my house went up 40% in two years!"

[And the matching shorts should have imprinted on the hindside: "And I'm now trying unsuccessfully at the Marin Bubble Blog to pass off that statement as a joke..."]

Nov 7, 2006, 1:11:00 PM  
Blogger Marinite said...

Ok, so I removed the reference to what the owner does for a living mainly because it is irrelevant anyway. But at least I didn't provide the names of the businesses she started.

For the record, information about me is all over the Net. I could care less. And if people wanted to blog about it for whatever reason, I'd be honored mainly because it is all stuff I am proud of.

Nov 7, 2006, 1:11:00 PM  
Blogger sf jack said...

mktmkr said:

"I know it's hard to comprehend, but the AVERAGE bonus for ALL 25,647 employees of Goldman Sachs will be $397,707! Check out the numbers. $36 billion in bonuses from just the 5 largest investment banks!

Don't be surprised if you see an uptick in prices and sales in Marin real estate in January!"

********

Average?

What's the median? Or better yet, the average of the lower 2/3 or some such reasonable figure.

And further, if all these GS employees are so gifted/smart to be earning those bonuses, they are probably smart enough to figure out that the "January in Marin/SF/NYC" they should be buying in... is probably closer to 2012 than 2007.

There may be a January uptick - who knows? But they're not stupid, after all.

Nov 7, 2006, 1:18:00 PM  
Anonymous Anonymous said...

Exactly what I was thinking SFJack.

Most people who actually HAVE money are pretty careful with it. They may think twice about taking their bonus $ and cutting it in half by buying real estate right now.

Nov 7, 2006, 10:33:00 PM  
Anonymous Anonymous said...

"Exactly what I was thinking SFJack."

Furthermore, if you have that kind of money you won't be buying the majority of the shit houses that make up Marin's housing market. You will buying the nicer houses in Tib or Sausalito etc. So the sales price in the County may go up, but the sorts of houses most people are interested in will still be coming down.

Nov 8, 2006, 5:08:00 PM  
Anonymous Anonymous said...

Please go look at 612 Canyon Road in Novato where you will find a "house" with no walls or interior - GUTTED - for $975,000. The lot is over an acre but I have been there and it is mostly all hill and most of that hill WILL MOVE with a good rain storm. As the owner of a garden design business for 25 years I can professionally tell you that the tree work/dead tree/debris cleanup there will cost at least $40,000. Trust me. They claim the Dead once partied there ergo....

Nov 9, 2006, 2:32:00 PM  
Blogger B. Durbin said...

Pontius Pilot?

(envisions a Roman governor going up against the Red Baron in classic Snoopy style)

I think you mean Pilate, but thanks for the mental image.

Nov 12, 2006, 1:00:00 PM  
Blogger Marinite said...

LOL! Good catch. Shows how much proof-reading I do. Ahahaha. I have to change that; how embarrassing.

Nov 13, 2006, 8:29:00 AM  

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