Friday, December 19, 2008

November YOY Results for "Immune" Marin

More year-over-year declines for Marin. Rather surprising considering we were supposed to have "dodged the subprime bullet". At least that's what the Marin IJ once quoted our esteemed local real estate industry as saying.

From the Marin IJ:
Another month of plummeting home sales in Marin included a price drop of nearly 30 percent from November 2007, as discounted foreclosure sales continued to drive the Bay Area market. The median price of a single-family home in Marin last month was $790,000, down from $975,000 last year, MDA DataQuick reported Thursday. In October, the median single-family home price in Marin was $850,000. Realtor Peter Harris in Novato said bank-owned properties and short sales have made up about 85 percent of his business over the past year. ‘Prices are half of what they were,’ Harris said. ‘Condos are selling in the low $100,000s. We haven’t seen this for a long time.’
From DataQuick:

By the way, the graphic for this post is from a May 16, 2007 IJ article. I saved it knowing this day would come.

24 Comments:

Blogger sf jack said...

Good work, marinite!

In November 2008, there were 155 sales for about 2,000 Marin realtors.

According to MAR, there are 300 real estate offices in the county.

(Hmmm...)

If that continues?

Well, good luck with that.

Dec 19, 2008, 3:57:00 PM  
Blogger Marinite said...

That's like one RE office per sale during typical months.

Dec 19, 2008, 7:26:00 PM  
Blogger Matthew said...

I have to say that as much as I'm thoroughly enjoying seeing this housing bubble explode and home prices plunge, the most rewarding and enjoyable bubble that has burst to me is the smugness and attitudes about all things housing... that was the worst bubble of all in some respects and contributed to many of the terrible decisions many people made throughout this madness...

Lets recap some things we've learned or have confirmed through this whole mess...

We've learned or confirmed that...

That over dressed, over make-up'd slick talking Realtor driving the Beemer was the shill you thought she was and has since moved back in with her mom after divorcing her husband for greener pastures..

That the bonus sucking "Investment Banker" down there on Wall Street is a greed sucking criminal of the worst kind, and is, contrary to his salary, bonus and opinion of himself, a completely incompetent businessman and POS...

That Alan Greenspan was equally incompetent, a fake, and media creation and should retire to a home for the elderly, and, for god's sake, STFU...

That many of the Congress people like Senator's Graham, Dodd and Frank are (or were) nothing but slick talking politicians looking out for their own interests, but are actually incredibly incompetent and should be removed from any subcommittee dealing with this financial mess..

That Henry Paulson helped create this mess and profited handsomely from it...

That Wall Street and the stock market is a rigged game made for those on the inside..

That we witnessed the greatest transfer of wealth in the history of our country and are now all left holding a massive IOU to help pay for it in the form of Treasury Bills to fund our National Debt..

That there probably are not enough courts, judges, lawyers or jails to imprison all the criminals involved in this mess..

That Wall Street should bail out Detroit vice the US Taxpayer for creating this mess and all the residual damage it's caused..

That the US Dollar will be reduced to rubble in the future..

That Leslie Appleton-Young is an idiot (but one of many, mind you) and that Marin housing prices will actually see a 50% or better price decline from the peak.. forget her smug 30% comment..

That the Boomer generation really, really, really stinks in comparison to generations of past..

That Mortgage lending was a slick game that invited the slickest and slimiest to participate..

That who you are and what you've done really is more important than where you live and what you drive..

That, despite the attempts by the Fed and Congress and whoever else to inflate housing prices, that, eventually, the gig will be up and that mathematics and the simple laws of economics will cause housing prices to revert to their historic norms based on wages..

I could go on and on... you get the picture..

Now, on a brighter note, Merry Christmas Marinite and everyone else.. thanks for keeping this blog going... hope this recession hasn't taken too big of a bite out of your life or anyone else not tied to this Real Estate scam..

Dec 20, 2008, 6:53:00 AM  
Blogger Marinite said...

Matthew, this video is for you:

http://www.youtube.com/watch?v=T4YbXnPqQrc

PS - I completely share your sympathies

Dec 20, 2008, 9:44:00 AM  
Blogger Matthew said...

Thanks for that link Marinite.. Oh, the pride that clip instills to me of my country... I had forgotten about the POSs who ran Freddie Mac and Fannie May into the ground, and should have certainly included them with the Investment Bankers in my little diatribe yesterday...

What also gets my goat is listening to the pundits on MSNBC and elsewhere defending the CEO compensation packages... like it takes a unique genius to run a company into the ground and leverage (and leverage) bets and make money provided there or no such things as corrections or downturns... after all, they are the leaders of the free world and our capitalistic ways... bunch of over paid, over hyped bozos..

I think I heard a comment to the effect that "if we limit their compensation to under $1M (or the President's salary of $400K), you won't get the talent to participate any longer"... oh, friggen please.. yea, righto... What are all those Harvard MBA's going to do then?.. create a new industry? ... please... most of those schmucks have no choice but to work on Wall Street, so cut their pay by 500% or more and it won't make a difference in the talent pool... none... nadda... what talent anyhow? I'm not impressed at all (!!!), and can't emphasize that last point enough... overpaid, greedy, criminals who behave like babies when their toy was taken away... As if what they are doing for a living is rocket science or brain surgery... oh, friggen please..

Dec 21, 2008, 7:04:00 AM  
Blogger A. said...

Who said that Marin was "immune" from the bursting of the real estate bubble in the sense that prices would not drop at all in nominal terms?

I agree that Marin property is overpriced and much of it poorly built, but the decline in prices has not been nearly as steep as most of the Bay Area. Especially if you remove Novato. A purchase in (say) Corte Madera has certainly held its value over the last 3 years better than (say) Walnut Creek.

It's California that's the problem. This state has led the nation in over priced real estate especially in the southern part of the state. The state is fiscally reckless and the residents don't seem care. They just voted for $30 billion in additional bonded indebtedness at a time when the state has an extreme budget deficit and can't sell its bonds.

Dec 21, 2008, 2:10:00 PM  
Blogger marin_explorer said...

Matthew, great rant...basically sums up my sentiments. Man, I'm so angry too.

it takes a unique genius to run a company into the ground and leverage (and leverage) bets and make money provided there or no such things as corrections or downturns

Exactly. There's a reason corporations are failing: gross incompetence. Is there really any wonder why the exec level has paid more attention to quarterly gains than any long term strategy? I would say grotesquely large compensation packages play a part, as does the credit bubble. Time for these alleged leaders to man-up and take "creative destruction" where it hurts.

However, has the average American behaved any better? Seems that many have an overblown sense of "financial genius", reinforced by their selection bias of bad advice from their peers. As a reminder of their ongoing ineptitude, consider the flipper activity in foreclosures. As the downturn ensues, I wonder how many will scramble into the next nefarious scheme, or actually work on developing legitimate end-user focused businesses, and not the typical top-heavy BS? The credit contraction will be a killer--and the corporate bums know it already, which is why their hands are out. Face the abyss, you bastards.

Dec 21, 2008, 2:52:00 PM  
Blogger Matthew said...

A, no doubt on southern Marin fairing better than the rest of the Bay Area, but that Corte Madera home your looking at or living in will be worth 20% less this time next year... bank on it..

I agree completely w/your comments on the state's fiscal discipline (or lack thereof).. it looks like the state may follow the lead of Vallejo... dem dere are dark clouds on da horizon for CA..

Dec 21, 2008, 10:47:00 PM  
Blogger marinite2 said...

Who said that Marin was "immune" from the bursting of the real estate bubble...

Oh, puhleeze. Where have you been? Did you just tune in?

Especially if you remove Novato.

RE bulls had no qualms about including Novato in the Marin RE stats (it is in Marin after all) when the bubble was rapidly inflating and everyone thought of themselves as RE geniuses. And now that the bubble is popping, we should have no qualms with reporting stats that also include Novato. Same goes for San Rafael, Fairfax, etc and all other areas of Marin that are hurting.

And I must say that the tacit implication in such statements, namely that Novato (and San Rafael and Fairfax and wherever else) does not count as "Marin" is rather offensive. Granted, county borders are rather arbitrary, but let's at least place our biases and prejudices out in the open for all to see.

A purchase in (say) Corte Madera has certainly held its value over the last 3 years better than (say) Walnut Creek.

Ah yes, the last refuge of RE bulls in denial. The desperate comparison to other markets in the Bay Area and/or beyond. "It's not as bad here." No one here ever said Marin would fare worse than these other "armpit" areas. I never made such a claim anyway. I only claimed that prices would come down. My off-the-cuff prediction was 35% peak-to-trough for the market as a whole and I still hold to that prediction not that it really matters what my prediction is especially since we still have to await the alt-a, stated income, etc. blow-ups. I just want to do my part to discredit some of the many myths about Marin RE. And the "Marin is immune" myth is high on my list.

Dec 22, 2008, 10:07:00 AM  
Blogger Matthew said...

Regarding that Corte Madera home we're chatting about or any other home in Marin for that matter, it really boils down to two very different points of view on why home prices increased so much during the bubble.. It would appear our "A" poster is likely in Camp 1. That's the Fundamentalist Camp... People in that camp believed home prices increased 2-3-4 fold in 8-9 years for fundamental reasons.. It has been my experience these past 2-3 years that people in that camp also tend to believe that we're not experiencing any sort of climate change and all that science and evolution stuff is a bunch of mumbo jumbo..

Camp 2 is the Non-Believer or Contrarian Camp... As you might guess, I'm in this camp... People in this camp tend to believe that home prices increased 2-3-4 fold over those 8-9 bubble years due largely to fraud, incompetence, greed and a host of other temporary inflators, coupled with a good dose of human greed, envy and ignorance..

If you are in Camp 1, you should be buying homes in Corte Madera right now cuz it's just a matter of time before those fundamental drivers take hold of the market again and home prices resume their climb... after all, we're not making any more land and you might be priced out forever.. not sure what you are waiting for frankly, as this is a once in a lifetime buying opportunity...

If you are in Camp 2, the show is only about 1/3 or 1/2 way over, because far too much discussion remains on the mortgage / credit / debt side of this discussion and far too little has been made on the historic price / wage / real economy side of this discussion...

Even some folks that say they are in Camp 2 sometimes need to be reminded that there was never 4-5-6-7 multiple offers on that property they were trying to buy during the bubble years because 2-3-4 or 5 of them were not qualified buyers based on historic standards for income/expenses etc...

And, I should remind my fellow Camp 2 friends, that those bidding wars were the creation of the greed and fraud ridden RE industry at large under the carefully crafted eye of all those fat cat, greedy, slimy Wall Street Investment Banker thugs who wanted us all hocked up to our eyeballs in debt over houses, so we could end up paying them all our residual income (and then some) the rest of our working lives... ah yes, that was the real scam in all of this... a coast to coast working serfdom for Wall Street..

Dec 22, 2008, 8:24:00 PM  
Blogger Al Czervik said...

Clearly, it's not great news for home prices or anyone working in the Real Estate Industrial Complex. However, I'm skeptical of figures comparing average or median sale prices in Marin vs. historical periods. Sample sizes tend to be small. Also, the product mix in Marin is very diverse...aggregate statistics can be skewed by a small number of high-dollar sales (or lack thereof).

With respect to the number of sales per licensed agent or real estate office, the 80/20 rule applies. A small fraction of those 2,000 realtors have always accounted for most of the sales. Many of those real state "offices" are located in the homes of less-than-active brokers.

No argument, ask any of the top agents in the County and they'll tell you that they're making less money and that pricing is soft. I just think that the Marin housing market is less transparent than the outlying counties...the numbers don't tell the story as well.

For apple-to-apple comparisons, it would be interesting to look at price trends within condo developments with a large number of closely similar units. For example, The Headlands I on the hill above Marin City. In the mid-90s, the standard 2BR/2.5BA floorplan was going in the mid-$200s. In the period from 2001-2003, prices of these units were approaching $500,000. At the peak, I think these units were at or above $700,000. I haven't been to any open houses at that development lately but prices seem to be coming down.

Probably every reader of this blog has a large condo development near their home where price comparisons over time can be made.

A couple of signs of the times, the Frank Howard Allen office in Sausalito has disappeared after 20 or 30 years at the south end of town. Peg Copple & Associates, a well regarded brokerage in Sausalito moved into a large office space near the mid-2006 market peak and subsequently downsized into smaller digs.

Dec 29, 2008, 2:46:00 PM  
Blogger Lisa said...

Hi All,

I've been out of town for a bit, but came back just in time to see the IJ's cover story on foreclosures (Sunday 12/28). I had to laugh at the headline...."Residents work with agencies to restructure loans, save their homes." THEIR homes? Excuse me?? Not until you've made your last mortgage payment, dude.

Anyway, the county had 2,223 foreclosures in '08, up from 1,151 in '07 and 554 in '06. And with AltA and Prime resets coming, the numbers will only get worse.

In '08, about half the foreclosures were in Novato. But even precious Mill Valley had 109, Belvedere/Tiburon had 35 and San Anselmo had 77.

A house on my street in San Anselmo sold for about 30% less than it would have fetched during the big bubble years. All my neighbors are talking about how terrible the market is, so people are starting to get it.

The next thing for them to wrap their heads around is that we may NEVER see these prices again in our lifetimes, as the toxic loan products and no-questions-asked global securitization that made bubble prices possible are gone for a long, long time.

Dec 30, 2008, 6:46:00 PM  
Blogger Matthew said...

"Clearly, it's not great news for home prices or anyone working in the Real Estate Industrial Complex."

Disagree with that comment.... completely!! Clearly, high home prices (or the unraveling of those prices) is what has caused the massive problems across the country (including within the RE complex for that matter)... The historic meltdown of this country's financial backbone and all the related happenings across the country were brought to us all courtesy, soley, of high home prices and the "products" and fraud that got them there and all the shenanigans that the fed and Congress are pulling in trying to keep them there..

The unraveling of high home prices and all the hell that goes with it is what has been transpiring for the past 12-16 months all over the globe... (accelerated this past amsummer/fall of course)..

That's right.. High home prices and all the BS that caused it and all the hell that those high prices brought with it is the problem still and will remain the problem until we reach equilibrium...

We'll see more fat cat Realtors in Southern Marin moving shop and downsizing in the near future I'm sure.. many more small time RE hustlers will soon be looking for more honest work elsewhere..

So, I think it's great news when home prices are going down and great news for the bloody RE complex as well (as much as that pains me to admit)..

Dec 30, 2008, 9:23:00 PM  
Blogger Lisa said...

"So, I think it's great news when home prices are going down and great news for the bloody RE complex as well (as much as that pains me to admit).."

Amen. Why is it a good thing to have so many "homeowner" debt zombies? Why is it a good thing that folks are paying 40%+ of their income to "own" the roof over their head? Why is it a good thing that people were allowed to take on levels of debt that leave them unable to function without "home appreciation"?

And our local MSM should stop referring to foreclosures like they're the ugly stepchild. "Discounted foreclosure sales" ARE the market for the foreseeable future simply because they are priced in line with local incomes. Imagine that.

Dec 31, 2008, 7:36:00 AM  
Blogger Al Czervik said...

@ Matthew:

Perhaps you misunderstood the gist of my comments. I wasn't making a value judgement about the goodness or badness of housing price declines. I was just noting that they exist and are a problem for people who rely on the wealth embodied in their home values, as well as the people who make a living based on a vibrant housing market (which includes more of us than you might imagine).

That said, allow me to make a value judgement. I am a renter, having sold my home (a bit early) in 2003. The unraveling of the housing market is destabilizing the economy in ways that are becoming difficult to predict.

None of us is completely safe. I don't own a depreciating home, my retirement funds were in cash for most of 2008, my job *appears* to be secure, and this last year was a pretty good one for me at work. But I'm not crowing about this.

In modern times, there have never been more dangers lurking. My Fortune 500 employer could go bankrupt. My money fund could turn-out to own a bunch of toxic paper. The State of California could raise taxes. My town could go bankrupt and be unable to provide essential services. These are all things beyond my control.

Consider the California State employees who are being furloughed and may be paid in IOUs within a couple of months if the budget crisis isn't resolved. A year ago, they could not have imagined this happening.

So, before engaging in Schadenfreud, consider whether you are really as secure as you think you are. Also consider whether you have any friends, family, or other loved ones who have been adversely affected by recent events.

Your numerous posts come across as expressing glee about the collapse of the housing market. I agree that home prices are currently too high and will likely come down a lot but the damage to our economy/ financial system is no source of glee for me. A lot of innocent people will be hurt by this...I hope I'm not one of them. And for your sake, I hope you escape harm as well.

Dec 31, 2008, 12:40:00 PM  
Blogger marinite2 said...

THEIR homes? Excuse me?? Not until you've made your last mortgage payment, dude.

Not even then. You still have to pay property taxes for as long as your name is on the deed.

Dec 31, 2008, 1:35:00 PM  
Blogger marinite2 said...

Also, keep in mind that the low rates affect only people who refinance. Not new buyers. Also, jumbo loans (which make up the vast majority of loans in Marin) are unaffected. So low rates are not much of a saviour for us despite what your local realtor/agent might want you to believe.

Dec 31, 2008, 1:38:00 PM  
Blogger marinite2 said...

Clearly, high home prices (or the unraveling of those prices) is what has caused the massive problems across the country (including within the RE complex for that matter)... The historic meltdown of this country's financial backbone and all the related happenings across the country were brought to us all courtesy, soley, of high home prices and the "products" and fraud that got them there and all the shenanigans that the fed and Congress are pulling in trying to keep them there..

Exactly right (IMHO).

Dec 31, 2008, 1:40:00 PM  
Blogger marinite2 said...

So, before engaging in Schadenfreud, consider whether you are really as secure as you think you are. Also consider whether you have any friends, family, or other loved ones who have been adversely affected by recent events.

Agreed. But the security of ourselves, friends, family does not mean we should do everything in our power (i.e., congress, the fed) to return things to the way they were. It does not mean we should encourage the continued existence and continued growth of the problems that got us into this mess.

This is a sticky situation to be sure. On the one hand you want to protect people. On the other, you don't want this mess to continue and you want to set us on the right economic path.

However, if people drank the coolaid and massively exposed themselves to the downside of this fiasco then really they have no one but themselves to blame. The MSM is partly to blame as like it or not it is there job to educate the masses. This predicament was readily foreseeable. This blog and many others are testament to that statement. I saw this back in 2003 but it was only until 2005 where things got SO out of whack that I felt I just had to say something... hence this blog. Personally, I am not that heavily exposed to this mess and I hope most readers of this and other related blogs is not totally exposed. But no one, as you point out, is totally isolated; it's not possible to be totally isolated for the reasons you mention. That's part of our frustration. We all have to suffer for the stupidity of so many who drank the coolaid. That's life I guess.

One can only hope that the pain and suffering, despite all efforts to keep the bubble inflating, will be sufficient to motivate those with the power to reduce the likelihood of this happening again. We can only hope that our state govenerment, as an example, will finally learn to create sustainable budgets and anticipate economic declines in the future instead of spending and committing ourselves to programs that assume the good times will roll indefinately.

Tough love to be sure. But that's what is required IMO. So let's stop whining about foreclosures, dwindling 401Ks, house-funded retirements, housing ATMs, etc. Instead, let's start facing reality. Let's start looking in the mirror and engaging in some deep self-examination and the roles we played in this mess. Then, let's take proactive actions to see to it that this is not likely to happen again, that we do not have an asset bubble-based economy. In other words, let's stop think of ourselves and feeling sorry for ourselves, and instead start thinking about future generations and how our actions today affect them.

Dec 31, 2008, 1:56:00 PM  
Blogger Matthew said...

Al..

thanks for the honest feedback on my last post..

Yes, I will admit that I am thrilled that housing prices are imploding and that the RE Industry, which includes Realtors, Mortgage Lenders and all the fat cats living off on top of the heap down there on Wall Street and at Fannie Mae and Freddie Mac are all being put in their place... thank god, really.. they created this unbelievable monster, and it was and remains a massive monster that never should have been allowed to be created and let loose on this country (and the middle class in particular)... it has caused holy hell.... and all for a few years of easy money by some select few amongst us who supposedly held the keys to the treasure chest and American Dream... a bunch of BS..

I think my job is secure as well, but who knows.. As I've posted before, I take no pleasure, at all, in anyone losing their job because of this unless the individual contributed to the problem in the first place (such as realtors, builders, investment bankers, mortgage lenders etc).. they are all schmucks to me and gamed this thing to the very end and continue, even today, to try and game it some more.. schmucks - all of them... my opinon of course..

Housing and finance should not be the backbone of the US economy... Yes, therein lies another problem this monster created... we've got more kids wanting to get their MBA and Realtor licenses vice their MS degrees in engineering or science... Why? Well, our economy rewarded that path, that's why... too bad... too bad for them and too bad for our future economy..

Housing needs to be put in a secure bottle once and for all..

Dec 31, 2008, 2:49:00 PM  
Blogger A. said...

marinite2:

You did not answer my question. Who (name him) said Marin property was immune? I'm trying to point out your strawman arguments.

For the record I was an early predictor of RE bubble and sold my house in 2005, and continue to rent. So don't fling labels like "denier" at me, which is offensive because that phrase resembles "Holocaust Denier." I was, and continue to be an extreme bear on RE, and that includes Marin.

The fact remains, some parts of the Bay Area have suffered a lot less than others. If you had to buy real estate somewhere, then Marin, especially southern Marin, was a better choice than most places. If you disagree, then tell me where property has held up better?

Jan 1, 2009, 8:24:00 AM  
Blogger A. said...

Matthew says:

"It would appear our "A" poster is likely in Camp 1. That's the Fundamentalist Camp... People in that camp believed home prices increased 2-3-4 fold in 8-9 years for fundamental reasons.."

Absolutely not. When did I say that home prices increased for fundamental reasons? You are making that up out of whole cloth. Quite the opposite. I was among the earliest to say that the increase was a bubble defying fundamentals. Moreover I would not buy in Corte Madera or anywhere else. Property is still overpriced there and elsewhere. I simply picked that place as an example, not because I thought anyone should buy there.

Jan 1, 2009, 8:30:00 AM  
Blogger sf jack said...

Hey A. -

Perhaps southern Marin has not seen the same percentage price changes as elsewhere; though maybe it just has some catching up to do...

The real problem with buying in southern Marin is that one often has to deal with the much higher than average "asshole-to-regular person" quotient locally.

There should exist a discount just for that.

Jan 1, 2009, 8:56:00 AM  
Blogger marinite2 said...

There should exist a discount just for that.

A-holes travel in flocks.

Jan 5, 2009, 10:54:00 AM  

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