Friday, February 20, 2009

DataQuick, January, 2005 to Present

(Click on picture for larger view)

As one commentor over at CalculatedRisk said, "it is nice to see marin get bitchslapped".

Source

Note: I forgot to mention that these data points are year-over-year percent (de)appreciation.

Update February 22, 2009: Due to the incredulity of one commentor regarding the previous chart, I made the following chart using the same DataQuick source:

(Click on picture for larger view)

For the Marin data series in the above chart, peak (June, 2007) to trough (January, 2009) is a -45.4% decline. For the Bay Area series, it's a -54.9% decline.

34 Comments:

Blogger The Tim said...

So succinct, so beautiful.

Feb 20, 2009, 3:57:00 PM  
Blogger Matthew said...

We'll repeat the same housing scenario so long as there are twits like old Leslie who are allowed to dominate the media... she makes my skin crawl..

Housing crisis my a__ !!! The housing crisis is over!! We're now in a period of correction from the housing crisis... Say that, Mr. President, and shape your policies from that position (the correct one) and you'll regain my support... till then, you're just another political hack of the RE machine destined to put forward expensive and failed policies over the long run..

Feb 21, 2009, 12:59:00 PM  
Blogger Al Czervik said...

I agree that prices have gone down in Marin, but I haven't seen any convincing evidence as to how much. I would be very much surprised if it has gone down as much as the DataQuick graph suggests.

As a commenter over at CR pointed out, the higher priced houses (over $1 million) aren't selling in Marin. That's driving the average down. It seems unlikely that the lower priced homes are down 40%, or there would be a lot more foreclosures. That may happen but I don't think it's happened yet.

Also, the graph seems to show prices up 20% to 30% as of early-2005. Does anyone know what is the benchmark date? Is the graph is suggesting that prices are down about 50% from early-2005? Seems unlikely.

Feb 22, 2009, 10:17:00 AM  
Blogger Marinite said...

Also, the graph seems to show prices up 20% to 30% as of early-2005. Does anyone know what is the benchmark date?

Huh? These are year-over-year data. So the "benchmark date" would be 12 months previous.

Feb 22, 2009, 12:30:00 PM  
Blogger Lisa said...

I can absolutely say from my very nice neighborhood in San Anselmo, prices are off a good 30% from peak. And hardly anything is selling.

We still have a long, long way, but it's very clear that properties that are actually closing escrow are at significantly lower prices. Anyone who bought over the last few years is underwater, even if they made a down payment.

Enjoy the big mortgage payment (plus taxes and insurance) on your declining asset, I say -);

Feb 22, 2009, 2:06:00 PM  
Blogger Matthew said...

I listed to Rick Santelli's rant again, and, I have to say, I love the guy... His comments and reading blogs off and on for the past 2+ years reminded me that it really is a war out there.. a war of ideas, emotions, facts, policies and sentiment to just name a few.. it's a war... trust nobody, especially when it comes to money and purchases... the larger the purchase, the less you or anyone should trust anyone associated with the transaction... that's what we've come to thanks largely to the RE and mortgage machines and all (ALL) the sleezeballs that work in it..

I agree with Lisa, house prices in Novato and San Rafael are off as much as 30-35% from peak and not really selling.. given the RE machine did such a number on the American psychy, we'll get a load of FB's who think they need to buy now "or be priced out forever"... too bad that sentiment will cause them financial pain in the future... there is nothing, absolutely nothing, that will bring home prices anywhere near where they were the last 2-3 years for the next couple of decades (easily).. those were ficticious prices that unfortunately scarred the thinking of many people..

$500K use to be a lot of money for a house in many places in Marin just 10-12 years ago.. it will be again when all this BS is over with..

Feb 22, 2009, 3:44:00 PM  
Blogger marin_explorer said...

Does anyone recall how one argument for a bust-proof SFBay RE market was a "strong economy". I suppose the same people didn't pause to consider how much our local economy relied on consumer credit--or on the other end, liquidity pumped into venture capital? So what happens when our lauded economy gets slammed on both those ends--and there's no hot air left to prop up Marin? Perhaps you can consult your guru, "re-discover your center" and duck out of reality a little further? Or maybe the Pharm industry can concoct a little pill to encapsulate the uniquely blissful Marin detachment? There's money on the downside.

Feb 22, 2009, 3:52:00 PM  
Blogger Al Czervik said...

Marinite--Thanks for the clarification. By my interpretation of the new chart, the market made a long top from 04/2007 to 07/2008 at an average price of about $850K to $875K. I don't count the two brief peaks above $900K as few homes would have traded there (the amount of fluctuation suggests some data reliability issues). At the current level of about $625K, the average is down about 28% from my “top”.

With respect to the “Bay Area” numbers, these include a lot of homes in eastern CC County, within whole neighborhoods and towns that were emptied-out due to foreclosures.

I'm definitely in the bubble camp but I think prices have been a bit stickier (so far) in Southern Marin. Buyers’ prices may have declined significantly but there are few transactions so it is difficult to say with certainty that the market has declined as much as the graph shows. Again, *mix is crucial*. If the expensive homes aren't selling then the average is skewed downward.

I know that Novato and parts of San Rafael have been hit pretty hard but most would-be sellers in Southern Marin are still attempting to ride this out.

Numerous posts on the Socketsite blog show that prices in more established neighborhoods of San Francisco (Russian Hill, Marina, Pacific Heights) haven't yet moved-down as much as some have been expecting.

In a comment on a previous thread, I suggested that it would be useful to look at price trends within condo developments that have a large number of very similar units (e.g. The Headlands, Eden Roc, Stanford Way in Sausalito). Have any condos in Headlands I gone on the market at sub-$500K?

For the record, I am a housing bear. Sold my home in 2003 and have been renting since then. I just don't think that these stats paint an accurate picture of what's going on in my area. Try buying a house in Central or southern Marin at 30% less than peak levels. I don’t think it can easily be done now. A relative just purchased a tract home in the Mariner’s Cove subdivision of Corte Madera; he paid slightly under $1 million (7% below asking). Have any readers been househunting from Larkspur south this year? What are you seeing?

If the charts provide an accurate reflection of the market in Marin, then a large swath of homeowners here are already underwater. And if so, there will be many foreclosures before this is all over. Obama's homeowner assistance plan won't be much help to Marin homeowners. Further, I haven't heard any discussion of what would happen if millions of people receive mortgage assistance and the market takes another dive.

This thing has a long way to run and I’m afraid we’ll get there eventually. This spring and summer should be interesting as the lawn signs start popping up.

Feb 23, 2009, 9:39:00 AM  
Blogger Matthew said...

Regardless of your thoughts regarding home price declines so far in Marin, the second graph is very telling in terms of pricing direction. I see no indication of a bottom anytime soon. Hell, no!!

People who are buying in Marin now and think they are getting "a steal" are going to be in for a rude awakening in a year or two. Dow at 1997 levels now and still dropping. All the internet and housing hype is being fully run out of the markets once and for all.

Why should the market be at 1997 levels or earlier, but housing cling to 2003/4 levels still? If you think that relationship will hold, you should be buying homes left and right. Me? .. nah.. lots of froth still in housing, esp in the prime areas like NY, SF, BOS, PNW, Marin etc

What's the next bubble or employment driver ? What about here in Marin? - biotech probably... (even though I know they havn't given up on housing for another round - it's incredible really).. we're too damn broke as a nation to convert to electric cars and all the infrastructure that comes with that technology, just yet..

Whatever the next bubble the Fed and Congress target, it won't have the same economic impact as housing or the internet did this las go. Think that froth is gone.. That was something to watch, though, wasn't it? Those Wall Street pigs had a field day with us all the last dozen or so years.

Actually, our best bet is to pull for China and India like hell, and hope the "buy American or buy Western" campaign has a few years left in it.. and I'm not talking about just T-Bills either (which is a must).

Feb 24, 2009, 4:16:00 AM  
Blogger sf jack said...

Perhaps the "scariest" thing for fairly recent homedebtors in southern Marin is the fact that houses are not moving.

Scant volumes presently could mean prices falling (significantly further) in the future.

And what does the below say about southern Marin, in a place where median household incomes were once $180K/year plus (Bel-Tib)?

Why are businesses closing up shop?

*****

"Slumping economy hits businesses in Tiburon

Mark Prado

Posted: 02/15/2009 05:52:07 PM PST

For years, downtown Tiburon's eclectic mix of restaurants, galleries, apparel and other stores have attracted town residents and tourists alike.
But poor winter sales and vacancies have left a handful of large empty storefronts and put residents and town officials on the alert about the health of the business community.

'How was our fourth quarter? Disastrous,' Tom Wright said last week from the Opia Gallery along historic Ark Row. 'I think everyone in town suffered.'"

http://www.marinij.com/marinnews/ci_11703979

Feb 24, 2009, 9:50:00 AM  
Blogger sf jack said...

Also, thanks for the great work with the data Marinite!

*****

And to answer my earlier question...

I used to think the grouchiness in random Marin individuals I came across was not always predicated on their financial state.

I thought that reports from Lisa or Matthew about negative attitudes locally was overstated.

That is no longer the case.

Recently, after I witnessed a public display of jackassness by a Tiburon resident, a bystander said the obvious.

"There's a lot of people in Marin who way overpaid for their houses and now they're all freaking out."

Feb 24, 2009, 10:03:00 AM  
Blogger Lisa said...

"There's a lot of people in Marin who way overpaid for their houses and now they're all freaking out."

I rent in a beautiful neighborhood of $1M+ homes in San Anselmo, and I can definitely report that fear has set in. Several of the homes on my street changed hands during the last of the bubble years, and neighbors are now watching the most recent sales come in at significantly lower prices than peak. 30% less, easily. And most properties simply aren't selling.

If you carry a 30-year mortgage, you are basically paying double for your house over the course of the loan. So, that $1MM house is a total debt load of $2MM including interest. No wonder people are freaking out -);

SF Jack, I'm not one who is prone to exaggerating. It just feels "quieter" around here, like there's less of a swagger. I think it's the gulp stage. I still don't think people have fully grasped that if they bought during the bubble years, their home may NEVER again be worth what they paid for it.

And yes, as this whole debacle picks up steam in the "nice" neighborhoods (job losses, loan resets, etc), then it's safe to say we'll see an increase in bad behavior from hopelessly sunk FB's.

Feb 24, 2009, 8:03:00 PM  
Blogger Matthew said...

Has anyone in a position of power and authority stated that; "Houses are still too damn expensive and prices need to come down substantially still in order for us to retart our economy again" ?

Hell, no... but that's a fact, jack..

I'm really (honestly) beginning to think that, perhaps, Benny Boy Bernanke doesn't get it.. he was blabbering again today about the importance of staving off foreclosures... he's obviously a deep thinker in total grasp of the situation.... just like this time last year when he declared "the subprime problem is contained".. yea, righto Bernie boy..

These guys wearing the policy suits and running their mouths on TV need to realize something pretty soon, which is doing nothing is probably the smartest thing they can do for this country now and over the long term...

BB thinks because he's got a job, he needs to do something... sorry fella, the Fed has done too much and too little already in critical areas... now you need to step away from the microphone, shut up and take off to Miami for 6 months and let the market work through all your past Fed and Congressional mistakes which allowed this monster to get out of hand... bu bye Bernie..

Feb 25, 2009, 7:52:00 PM  
Blogger zarkov01 said...

According to DataQuick Mill Valley had 14 home sales in January 2009 with a median price of $782.5k. Using the 2000 census, I estimate the median family income for Mill Valley at about $150k per year. Thus the median price to income ratio is about 5. While 14 is a pretty small sample, I get similar results for other Bay Area cities. The historical ratio is about 3. This means prices need to fall about 40% if income says constant. I make a conservative estimate and say Mill Valley property needs to fall at least another 30% from now to restore some rationality to the market.

One should note that we are in a severe recession and prices tend to overshoot on the way down. Therefore a 50% reduction is possible. That would put the median price at $391k! I suspect most Mill Valley residents would spit in your face if you suggested a 50% decline, but they will come to their senses eventually, but that might take another 3 years. Many property owners are still in deep denial. Here in Contra Costa County a house is on sale across the street from me for about $730k. It too is over priced by a factor of 2.

Feb 26, 2009, 7:15:00 PM  
Blogger Marinite said...

Off topic. But was the Madoff "fraud" itself a fraud? Some of the points here make a lot of sense:

http://waronyou.com/forums/index.php?topic=4598.0

Feb 27, 2009, 3:59:00 PM  
Blogger Matthew said...

I'll tell you a good use of taxpayer money.... produce and run a series of commercials that contradicts all the lies and greed in the RE, Mortgage and Banking industries... sort of like home finance 101... call it the "Get Out of Debt American" series...

Knock holes in everything you see on TV and junk mail from the sleezeballs in these industries... things like "Your banker can't wait to lure you into debt up to your eyelids so he can reset your CC terms and profit from your misery, so don't take out that credit card".. or "Who cares how big the Jones' house or car is, they're scared sh--less right now"... or "Carlton Sheets, Donald Trump, Flip this House Guy and those other RE mogul schmoes you see on late night TV are all con men"... or "Set a personal example of restraint to your kids, unlike our government..." or "Don't buy the hype and, sure as heck, don't buy a house until prices come back down to earth"... or "What Really Happened in our Financial Markets”… or “The Real Housing Crisis Ended in 2007"... you get the idea..

Yes, given the cost of all the inaction that we see today, I'd say producing and running a series of commercials like the above would be money well spent... I bet if you put that to a referendum type vote to the American public, it would pass..

Feb 28, 2009, 7:15:00 AM  
Blogger Holland said...

This is from Jim Rogers' recent blog:

"I expect to see social unrest, civil unrest in the United States a couple of years from now. Yes its changing the entire situation in the United States, the US is the largest debtor in the history of the world. There is a dramatic change taking place.

The world`s century is moving from the west to the east, to Asia and many people have not figured this out yet.

Yes, you are going to see a lot of turmoil in the United States in the next 3, 4, 5 years."

Mar 1, 2009, 8:18:00 PM  
Blogger Alarming said...

Did you see this?

"FEDS GRANT EMINENT DOMAIN AS COLLATERAL TO CHINA FOR U.S. DEBTS

BEIJING, China — Sources at the United States Embassy in Beijing China have just CONFIRMED that the United States of America has tendered to China a written agreement which grants to the People’s Republic of China, an option to exercise Eminent Domain within the USA, as collateral for China’s continued purchase of US Treasury Notes and existing US Currency reserves.

The written agreement was brought to Beijing by Secretary of State Hillary Clinton and was formalized and agreed-to during her recent trip to China.

This means that in the event the US Government defaults on its financial obligations to China, the Communist Government of China would be permitted to physically take — inside the USA — land, buildings, factories, perhaps even entire cities - to satisfy the financial obligations of the US government."

Put simply, the feds have now actually mortgaged the physical land and property of all citizens and businesses in the United States. They have given to a foreign power, their Constitutional power to “take” all of our property, as actual collateral for continued Chinese funding of US deficit spending and the continued carrying of US national debt."

Mar 2, 2009, 10:08:00 PM  
Blogger Alarming said...

As for my previous post, it is a rumor so far.

Mar 2, 2009, 10:40:00 PM  
Blogger Marinite said...

Re eminent domain rumors... I for one don't believe it for a minute.

Mar 2, 2009, 10:51:00 PM  
Blogger Matthew said...

When it comes to obtaining and preserving power and money, little surprises me anymore... that said, any US proposal to mortgage land and property to pay government debts would be dealt with swiftly by the media and then the American public (yea!), and the party responsible would be swept out of office quickly, as they should... so, I doubt it...

Back to housing and debt... the boomer generation (and I'm one) are a bunch of total misfits (losers) when it comes to running a country and leading a world... I mentioned biotech as the possible next bubble industry.. still could be given all the vanity and narcissistic sh__birds in our generation... however, I suspect that the real boomer businesses of tomorrow will be those that feed off of depression, obesity and misery.... yes, they will certainly will rule the day.... you need this book, tape, cd or pill to forget that you lost your butt in the real estate scam and are now divorced, jobless and overweight as a result... this thing will fix you... they’re already popping up left and right.. expect more.... our modern day carpet-baggers...

Okay, my sarcasm is a bit thick today, but it’s hard not to see these things coming.... just like the housing bubble and crash...

Mar 3, 2009, 4:51:00 AM  
Blogger Matthew said...

The scam of alllllll scams is unfolding right before our very eyes.... imagine that...

I'm changing my prediction on home prices.... 1997 prices (vice 99 prices), here we come..

Mar 6, 2009, 4:44:00 AM  
Blogger marinite2 said...

The scam of alllllll scams is unfolding right before our very eyes....

Which one are you referring to? There have been so many foisted upon us of late.

Mar 6, 2009, 2:28:00 PM  
Blogger Matthew said...

Why, of course, the Mother Lode of all Scams... Residential Real Estate...

Mar 7, 2009, 7:01:00 AM  
Blogger Matthew said...

In addition to highlighting many of our human weaknesses and faults, the most facinating part of this scam to me was the fact that many of the principal scammers themselves (the Wall Street Boyz and RE Complex Boyz and Girlz) started to believe their own scam towards the end and doubled, or trippled or ten-folded their bets... Just goes to show you that if you tell a lie long enough, you might even begin to believe it yourself...

now, that's priceless..

Mar 8, 2009, 11:38:00 AM  
Blogger marine_explorer said...

"...the fact that many of the principal scammers themselves (the Wall Street Boyz and RE Complex Boyz and Girlz) started to believe their own scam."

I recall speaking to a CRE exec at Grubb-Ellis in SF way back in 2005 who knew there were to be massive defaults, at least in sub-prime. At the same time, he somehow convinced himself there was no bubble, particularly in Marin where he lived. Funny contradiction.

Regarding scams, has anyone considered how far this fiasco extends? I'm talking about the depth of business that built itself around credit expansion. It's not just the retail sector...think of the local startups who didn't require a viable business model, as long as they got continual injections of venture capital. Anyone think Google's immune to a protracted downturn (or depression)? I think they're toast too.

Mar 8, 2009, 2:08:00 PM  
Blogger mountainwatcher said...

Southern Marin still seems sticky.
It's hard to believe that this area is immune to the systemic infection.
Any theories as to why prices are still so far out of whack?

Mar 9, 2009, 12:20:00 AM  
Blogger marinite2 said...

Any theories as to why prices are still so far out of whack?

I know a few people in Marin who are in the following situation:

One person bought a 2300 sqft house near Molino Park in Mill Valley up on Panoramic Hwy. She paid $125k originally. Now she wants to sell it. She tried selling it for $1.2 mill. Now asking around $850k. All she gets as offers are what she considers "low balls". Turns out she HELOCed out all her equity, refinancing to an interst only loan. So by "low ball" she means less than what she owes. So basically, she is asking buyers to give her a bail out.

Ditto for some other, generally younger, folks I know.

Don't confuse asking price with market reality.

Mar 9, 2009, 10:40:00 AM  
Blogger Lisa said...

"Don't confuse asking price with market reality."

Amen. I am seeing more short sales and foreclosures coming on in Marin, and not just in Novato and San Rafael. So when the reality of the market price is finally accepted, there's no way the FB will be made whole financially. I expect this to mushroom in Marin as the year goes on.

BTW, a report from the trenches....I met with my CPA last week who said lots of clients are coming in for taxes this year in a world of hurt..unemployment, huge levels of debt and big stock market losses were the common themes.

Mar 9, 2009, 11:12:00 AM  
Blogger mountainwatcher said...

Thanks for those replies.

That makes sense.
There has to be a lot of sorting out of unrealistic expectations.

I was aware and waiting for the bursting bubble's consequences.
I must confess, I didn't think it would do this much damage.

Does anybody have a prediction about the bottom of this?

Mar 10, 2009, 1:20:00 AM  
Blogger Matthew said...

Through dumb policy change after dumb policy change, Washington and the Fed are trying to legislate and monetize the US consumer into a particular spending pattern that puts life back into the economy... only problem is, that is a temp solution and most Americans are not buying it any more..

Here is how it works Timmy and Bennie, Barrack and Nancy now that America's tide has been gone out and we've seen all the naked swmimmers flopping around in the mud, people are much, much less inclinded to buy stuff if they have job fears... they are also less likely to buy little consumer stuff (clothing, trips, furniture, appliances etc etc) until the big stuff (house, house, house, house and then maybe car) are well in hand...

got it ? nobody is going to be plunging into this new economic world order that you are trying desperately to create until housing resets.. till it does, people will be saving for a better time to buy that house first.. then perhaps the car.. then all the other consumer stuff / fluff that you watch prices on so carefully in computing your elementary CPI index..

So, wanna fix the economy and not spend a trillion dollars doing so ? Open your eyes and recognize that housing remains too expensive and that it needs to come down substantially in order to restart and then maintain a healthy economy... it's stil way out of whack even according to your (nmt 31% pay) rules...

So, quit with the economic diatribes and BS policies that will fail or mean nothing over the long term and remove all programs and policies that are preventing housing prices from resetting to historic norms... let them crash.. take the pain... let the zombie banks go under.. stick some tough polices up the Banking, Mortgage, NAR and REIC's backsides.. then invest your borrowed money.. just like we consumers are waiting to do..

Mar 12, 2009, 5:08:00 AM  
Blogger marine_explorer said...

"...Washington and the Fed are trying to legislate and monetize the US consumer into a particular spending pattern that puts life back into the economy... only problem is, that is a temp solution"

Matthew, it sounds like you've connected the dots on the larger fiasco at work. It strikes me that everyone is trying to re-ignite a consumerist economy, which ironically has proven to the unsustainable--leveraging more spending will only prolong the problem. Affordable housing is a positive side-effect of a balanced economy, but I doubt it's the cure-all either. If we were to rewind back to a point in time when the SFBA had reasonably affordable housing:incomes, that might suggest how healthy our local economy has been the past decade. But, since perhaps the 90s, the overhead problems here have somehow been misinterpreted as "wealth". Everyone convinced themselves it was deserved--while distancing themselves from the underlying problems with their "lifestyles".

Well, now we're seeing the eventual effect of our "collective wealth", which essentially is a paper illusion. Get past all the hype and leverage, and what's left? I suspect a long, grinding downturn is in our future until people and businesses recognize real needs and begin to address them--ie producing a real product that improves lives, and doesn't feed off the credit system.

Mar 12, 2009, 6:14:00 PM  
Blogger Lisa said...

DQ's February numbers are out today. 19% of sales last month in Marin were foreclosures. Wasn't it in the single digits last year?

Can't wait to see what the IJ has to say about this.

Mar 19, 2009, 6:54:00 PM  
Blogger Marinite said...

And the median price in Marin down -26% from $775K to $573K, year-over-year.

Mar 22, 2009, 12:22:00 PM  

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