Thursday, May 08, 2008

Marin March Prices Off -23.33% from Peak

While poking around the SFGate.com database, I ran across this:

20 Comments:

Blogger Thus Spake Z said...

Was that the same article that talked about how prices are down from the peak two years ago but are still up by 75% over the past 5-8 years? That may have been in the Chron today... just don't remember.

May 8, 2008, 3:30:00 PM  
Blogger Lisa said...

And I love how the article never touched on prices before the bubble. Take that away and it would be very clear how ridiculous prices got in a few years thanks to...well, we all know what....no doc, zero down payment, IO, etc.

May 8, 2008, 5:53:00 PM  
Blogger marin_explorer said...

And I love how the article never touched on prices before the bubble...

And bear in mind, there was already excessive liquidity-driven pricing in the mid to late 90s due to the tech boom. Many of the recent transplants never saw home prices to incomes at sustainable levels, and many others have simply forgot.

May 8, 2008, 9:06:00 PM  
Blogger Lisa said...

"And bear in mind, there was already excessive liquidity-driven pricing in the mid to late 90s due to the tech boom."

When the dot com market blew up, I thought for sure RE would take a dive here, because people would be limited to their own incomes...no more stock options or gains on Pets.com to leverage.

But lo & behold, the floodgates opened & lending standards went out the window...so house prices not only stayed propped up but continued to increase.

Now take away zero down, IO, neg AM, pick a payment, no questions asked financing, and I have to believe we're in for a long, slow bleed in the Bay Area. Most people simply don't qualify for these prices.

May 9, 2008, 6:58:00 PM  
Blogger mountainwatcher said...

Hey Marinite, this site is advertising over on your forum.
http://roofmagazine.blogspot.com/
They seem to think things are great.
Houses are selling and life is good.
In fact, there is no problemo with the housing situation.
Whaa???

May 11, 2008, 12:29:00 AM  
Blogger W.C. Varones said...

Hey, what's the deal with the Grateful Dead retreat on marinpos.blogspot.com?

Is it still for sale? Where can I see a listing?

May 11, 2008, 9:18:00 AM  
Blogger marin_explorer said...

http://roofmagazine.blogspot.com/
They seem to think things are great.


That can only be a realtor. That pundit rag reads like 2005--there's no limit to wishful thinking it seems.

May 13, 2008, 12:47:00 PM  
Blogger marinite2 said...

Hey Marinite, this site is advertising over on your forum.
http://roofmagazine.blogspot.com/
They seem to think things are great.
Houses are selling and life is good.
In fact, there is no problemo with the housing situation.
Whaa???


To me, that sounds out right criminal. Anyway, I deleted the entry. I don't get over to the forum much; that is for you all to do with as you please.

Also, I've been putting in long hours at work and so that's my excuse for neglecting the blog.

May 13, 2008, 4:27:00 PM  
Blogger bob said...

I had a stupidly simple idea last night. Why not remove commissions from Realtors? With a commission, naturally any salesperson is going to harp up their wares and use whatever tactic they can to get you to buy. This explains the fear tactics Realtors use. Perhaps this is the biggest broomstick in the bicycle spoke because it is the start of where housing manias take off from: people are scared into buying, which in turn starts the whole stampeded all over again.

If Realtors were paid a yearly salary like most professions, perhaps there would be more honesty and less pressure put onto the buyer to make the decision. How this would be implemented, I'm not sure. But I can almost guarantee that this would solve a lot of problems.

May 14, 2008, 9:20:00 AM  
Blogger marinite2 said...

bob,

I think a simple hourly based wage would do the trick. The more they work, the more they get paid; and payment is not contingent on a sale. You would also get all the goodness of competition among agents.

Regarding fear as causing bubbles: I respectfully disagree. IMO it is out-of-control speculation/irrational expectations of future price gains in combination with an enabler, in this case cheap money/easy credit. Fear comes in at later stages as the motivator for people who would not otherwise pay the outrageously inflated prices of the day.

May 14, 2008, 9:42:00 AM  
Blogger bob said...

Marinite,
The whole fear thing is complicated. Most Americans -perhaps myself included- think that they 'deserve' a house because ever since the advent of the American middle class, owning a house has been seen as natural as getting married having kids, or going to college.

What's different this time around was that the bubble was national. and many outside of typical bubble states like California and New York experienced what could be explained as a threat to common thought: the unreasonable fear that prices would cause unaffordability. I come from TN. Homes have historically always been fairly easy to afford- even for lower wage earners. Yet the bubble hit there too. If you're a middle class family living in a state or area that has never had home prices threaten your middle class existence, then of course you're going to be strong-armed into buying because as mentioned- we all think we deserve a house, and not having the financial means to do so despite the fact that it was easily possible a short 3-4 years ago is a nightmarish scenario.

This is why to me, it was confusing that people in states that have experienced crazy bubbles like California STILL got driven like cattle into the mania, and what I still consider to be data manipulation, herd mentality, and fear.

The cause was super simple: Rates were lowered in 2001 which created a sudden swing in home buying, which the NAR reported as " record breaking", hence the stampeded was started, people panicked, and the rest is history.

So, I think we're both somewhat correct in our views. I'm not disagreeing with what you say by any means.

May 14, 2008, 11:42:00 AM  
Blogger Onthefence said...

Places priced well seem to be selling, at least in southern Marin, despite what you've all said above. In some cases I've seen, closed sale prices that are up over 2006 levels, and I'm typically looking at places under $1M. Even with tighter lending standards, money is there. It's not the crazy market it was, but it's not crazy bad here either.

May 17, 2008, 9:51:00 AM  
Blogger Lisa said...

OMG, did everyone see the Marin IJ today? Big article on the "crumbling" Marin RE market and a broker who is thriving on REO properties.

Unbelievable, smack and center on the front page. We've gone from "God's Country" where price declines are impossible to the only RE agents who are busy are specializing in distressed properties.

It's about f***** time, is all I can say.

May 18, 2008, 1:17:00 PM  
Blogger sf jack said...

"'I think this has close enough parity to foreclosures that took place during the Depression'"

"County foreclosure sales in April nearly doubled the previous month’s sales."

*****

In housing slump, one agent swamped

By Jim Staats

Marin Independent Journal

Article Launched: 05/17/2008 05:17:36 PM PDT

"A crumbling Marin housing market is booming business for Coldwell Banker broker George DeSalvo.
The veteran agent deals in real estate owned, or REO, properties that have gone through foreclosure and into bank ownership. As more Realtors follow his lead, DeSalvo described today's market as the worst he's seen.

'I think this has close enough parity to foreclosures that took place during the Depression,' said DeSalvo, 55, a Novato resident who works out of Greenbrae."

http://www.marinij.com/ci_9295998

Or:

http://tinyurl.com/66y49e

May 18, 2008, 9:33:00 PM  
Blogger mountainwatcher said...

Loans are much harder to get now.

20% to 30% down and actual income verification required.

This is going to put a major voodoo on prices.
Even in southern Marin.

May 18, 2008, 11:47:00 PM  
Blogger Lisa said...

"Loans are much harder to get now.

20% to 30% down and actual income verification required."

Yep. In most parts of Marin, even with a 10% or 20% downpayment, it's basically impossible to buy something with a conforming $417K loan. And those Jumbo loans are tougher to get. And they should be, for heavens sake!!!

May 19, 2008, 8:40:00 AM  
Blogger bob said...

I just spent the weekend up in the Sierra foothills near Auburn. There was a big difference that I saw compared to last year. All during last summer when we went up there, EVERYTHING was for sale. It was absolutely crazy. It looked like the whole area had been bought by speculators and they were ALL getting out.

At the peak, I looked at prices up there, which at the height were actually not terribly far off from prices in the East Bay: 500k+ for anything decent. That's nuts for an area that essentially has no economy save retirees from the BA.

This weekend, while there were still quite a few homes for sale, there were certainly less than last year. There was also a distinct lack of RE related paraphernalia in the local newspapers, freeway billboards, and so on. Just a year ago, Real Estate was the only form of advertising you would see. Now that seems to have dried up, assumedly because they went out of biz or they have no business and can't afford to advertise.

Additionally, prices were down. Way down. As in I actually saw some homes- fairly modest homes- but homes that I'd consider decent in the 200-250k range. I actually like that area, so it was sort of a surprise. That's about a 40-50% decline over last year's prices.

In regards to Alameda, well I have to depressingly say that again- I've seen quite a few pending signs as of late, and as mentioned by onthefence, the prices aren't as high as last year, but they're only maybe at 2006 levels. So it seems like knife catchers are eager to jump in at even a tiny discount. Stupid.

May 19, 2008, 9:52:00 AM  
Blogger sf jack said...

I was away, too.

I just spent the weekend in north Tahoe and its a freakin' disaster up there!

It was a relatively quiet weekend, being just before Memorial Day Weekend, so we overheard several "woe is me in real estate" conversations involving the locals, including one guy with four houses who cannot get an offer on any of them.

Some of the people we talked with had either bought relatively recently, anywhere from a few months ago to a couple years ago (first time buyers, or single house owners) or they were serial house buyers over the last five years.

There was a division of sorts. Gen-X'ers were almost certain knife catchers, or knife catchers in the making... and the Boomers, with all kinds of fancy financing who are multiple house owners, appeared to be pretty much screwed.

Since the place (including the housing market) runs on Bay Area money... it's going to be interesting economic times up there for the forseeable future.

We'll see if the trips to overseas lands by Alt-A Bay Area types are replaced by driving trips to Tahoe and Yosemite and such.

Or maybe everyone stays home to save on gas and the environmen!

(Also heard a story about a place in Idaho near a resort town. 3000 sf house on 16 acres, "beautiful horse property", where the speculator-builder originally listed for $1.4 million, dropped it to $1 million and now cannot get an offer at $799K. He's exasperated and said "you can't build the house at cost for under $1 million right now...")

*****

I have to say:

"Many, many, many thanks to Alan Greenspan and the 'Do Nothing' Fed!"

May 19, 2008, 6:45:00 PM  
Blogger marinite2 said...

Thanks for that sf jack.

May 20, 2008, 9:41:00 AM  
Blogger marin_explorer said...

"...I just spent the weekend in north Tahoe and its a freakin' disaster up there!"

And that's the more desirable area in Tahoe. The price momentum has been building for years up there, so I can only imagine the frenzy of these last few years. So the flippers discovered the problems of that market--a highly seasonal population (including workers), too many ski rentals already, and high maintenance costs. How much research did they do? Genius, LOL.

May 20, 2008, 11:07:00 AM  

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