Friday, October 20, 2006
The L-Man: A Correction is Needed in SF
“[David] Lereah [chief economist for the National Association of Realtors] expects real estate prices to continue to fall in most U.S. markets. In areas that experienced the largest price appreciation in recent years, a correction is needed, he said, this time citing San Francisco as the best example.”
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17 comments:
Well, it sure took a long time for him to realize that real property wasn't that promised "never goes down in value" asset. I think we have finally reached a point where even the most bullish in real estate investing are recognizing that the prices climbed too fast for too long, ignoring the fundamentals associated with affordability.
Have a drink/weed and don't anguish over this old old story. Friday nite.
No David, SF bay needs more than a real estate correction.
We need a Real Estate Correctional Institution, for you and your RE flim-flamming buddies.
I recommend Alcatraz. Views!!! Views!!! Views!!! Cosmetic Fixer, bring your tools! (bastard files, that is, for all you rat bastards). Easy commute from your charming, cozy cell to the exercise yard!
It's hard to believe that he's actually got the nerve to write another book on real estate.
Coming in February, according to the linked article.
sociopathic personalities are unable to feel shame,which can be advantageous in our society.i'm sure we can all think of a few examples.
Have a drink/weed and don't anguish over this old old story
Anguish? Maybe you should pour yourself another drink.
you should pour yourself another drink
Hey, it's Saturday after all! I agree, this one's for you!
There were a lot of sale signs in MV and up panoramic today. Isn't it a little late in the season?
Yes, there are a lot of for sale signs out there. All those people who couldn't get last year's price this year are still trying. Marinites are a stubborn bunch that's for sure. I looked at some houses in Hamilton today. Houses that last year were selling in the very high $900Ks are now selling in the mid $800Ks. If you are short sighted then this dead cat bounce is a good time to buy. If you are longer termed then just wait.
Wow, you are right!
So many for sale signs in MV.
Greed?
Too late for premium prices.
Oh well, I'll wait for a deal.
David Lereah's New Book
http://tinyurl.com/w3tvy
David
Bubble Meter Blog
Off the immediate topic here, but I just got back from a multi-state vacation that took me across Tennesee, Virginia, Maryland, North Carolina, and Pennsylvania. Many of us observe exactly what we see in our own areas, many of them in bubblezones- I being from the Bay Area, CA.
So it was interesting to see that there does indeed exist a nation-wide bubble in just about every state I saw. The difference is that in some of these places, like Nashville for instance, the prices are not exactly a bargain, but still about 1/3rd the cost of back here in CA. People there and in many of the other less bubbly areas aren't neccesarily not buying because prices are too high, but more because they have been reading the reports of a slowdown, and most spectacularly in California and New York. Indeed, in most of these Southeastern cities, all you have to do is drive about 10 minutes out of town and wallah- instant farmland. Even with this seemingly endless supply of cheap land, nobody seems to be buying, which is the opposite of California where people have stopped buying because they simply cannot afford- no matter how much they make.
The most vulnerable of these off-bubble areas I saw was lancaster Pennsylvania and Asheville, NC. I mention Asheville because there isn't much industry there other than retirement homes and service industry, yet homes were somewhat high( for the area) -150-300k. This is out of whack with their economy, so I assume that they will have a hard fall once the reasons for buying vanish.
The rural parts of pennsylvania were equally bad because these homes were actually pricey. In the 350-450k range, which is high given that the closest city was over an hour away ( Philadelphia) and there again wasn't any industry to speak of there.
All said, there is a national bubble, but some areas barely got onboard at the very end and though cheaper, are seeming to stall out just like the most expensive areas. Buyer sentiment is perhaps the most powerfull ally in bringing the prices back to substainable levels.
I returned yesterday and as usual, the number of homes for sale seems to be multiplying like mad. You get used to seeing literally 4 signs per intersection every weekend, but leaving for awhile and then returning to see it again after seeing a part of the country that doesn't have this issue is almost comical and astounding at the same time. The Bay Area is and will fall hard if this kind of non-selling, massive oversupply continues.
anon -
Thanks a lot for sharing your cross-country observations. Info like that is priceless.
I read it somewhere recently mentioning that some towns are becoming ghosts towns. Due to over extended developments and retreat of buyers, some towns are becoming empty. There are only buildings left.
I think what was also interesting when I was traveling around these cities was that many of them were shockingly clean, well-kept, redeveloped, and had a general sense of freshness that you simply don't see in the Bay Area anymore.
Nashville in particular had a brand new 25,000 sq foot fine art museum housed in a beautiful art deco building that had been a postal processing facility in the 30's. It also had a almost new country music hall of fame, a large bridge going over the river that had been converted into a pedestriam walkway, and lots of neat old buildings that had been restored. There were not any bums, garbage, or general dirtiness you see in SF. Asheville was much the same way, and to an extent, Valley Forge PA.
It was indeed an eye-opening trip because while I know how everyone in the Bay Area talks about how gorgeous their cities are, I saw plenty of other cities that were perhaps just as, if not more beautiful than here, and at a fraction of the cost. It does make one wonder.
"I saw plenty of other cities that were perhaps just as, if not more beautiful than here, and at a fraction of the cost."
So true! Despite all our justifications for living here, the world outside the Bay Area can actually be a lifestyle upgrade.
Tracking the upscale Marin County (CA) zip code of 94904, we find that there are 23 reduced out of 39 total active SFR listings. You math fiends already calculated that out to 59%(!) reduced, I'm sure.
I don't want to even talk about Days on Market...
There are two communities within that zip code: Kentfield and Greenbrae. In March, Greenbrae had eight SFR's on MLS, while today there are 15.
All per Zip Realty.
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