4001 listing(s) found.
The number of listings found exceeds the limit for this search. In order to optimize system performance, the maximum number of listings allowed is 50.
ALERT!!!
At this time last year we had 2,900 listings (May 9, 2006).
Someone remind me how the supply/demand curve works on pricing when supply goes up (dramatically) and demand drops (significantly)?
20 comments:
You scared me: I thought that was a 404 error for this blog, i.e. page not found! I suspected too much bandwidth usage or something, so the plug got pulled!! ;)
As it stands, I suspect all those listings represents not just a drop in the market, but a freeze. I've seen houses on the market in my neighborhood, with not so much as a nibble. So the prices don't really matter, if nothing's moving anyway!
FWIW, I haven't seen the 'official' (read: flawed, skewed) stats recently from the CAR or DataQuick, but the hosts on the radio show "Moneywise Guys" (6-7PM on KERN 1410) said they've had clients who've seen their houses lose 20% since buying last year, per a recent appraisal!
The host said that if you asked him back in 2006 about expected prices, he'd have said maybe 3-5% appreciation, or MAYBE a 3-5 depreciation. 10% depreciation? Not a chance. 20% depreciation, and you're in tin-foil hat territory! Guess they haven't been reading the bubble blogs, or listening to those who saw this one coming....
But they've said it's happening, so there's some comfort knowing the laws of supply and demand haven't been suspended without warning!
FWIW, I have a mp4 of the radio show: I can send anyone a copy of the file (or a link if I can upload it) to hear the show themselves.
PS One of the hosts also ripped on one of these sub-prime mortgage specialists he heard on the radio last weekend, with this 'expert' telling everyone to extract home equity NOW to leverage into other investments, doing it before home values fall further... The host said he was actually MAD at the guy for dispensing such BAD advice.
those money wise guys are in bed with the mortgage industry. now they're singing the tune of housing bubble but last yr went it would have been helpful they had mortgage brokers on their show all day pushing arms and interest only. I listen to those guys and they are bought in my opinion.
adam smith -
Please send me the file to bakersfieldbubble@hotmail.com
Also, one of this blogs haters is a regular on the show, I won't mention here name. :)
Thanks
Also, the Stan and Susan Ferguson show is another perma-bull's on parade lovefest.
They had a broker on last week and between the three of them they were falling all over each other to call a bottom in the housing market...
*please ignore my spelling errors.
UGH!!!
The piling inventory is a big story. But we still haven't seen the appropriate correction. I don't have any stats to reference, but I'd guess that Bakersfield's median income is probably right around where it was three or four years ago, plus or minus a few percent. And of course today, compared to three years ago, you have higher mortgage rates and more stringent credit underwriting guidelines, which are now requiring down payments, albeit very small ones. All that being said, it's still much more expensive to own a home today than it was three years ago.
As I look at the landscape in Bakersfield, I don't see any positive fundamentals that will really drive demand. Obviously, the expectation of immediate profits is gone, and we all know that was a big catalyst behind the boom. Over the next few years, I think we're going to see negative job growth and economic growth as all the constrution workers, mortgage brokers, title officers, and other real estate related employment sectors shrink. To take that even further, I'd risk saying that Bakersfield might see it's median incomes fall slightly. Many of those big shot real estate types were pulling down large commissions, which will be hard to duplicate in other areas of the economy. And finally, with housing prices falling throughout the state, Bakersfield is going to see less net migration into the city. Although, I'm not totally convinced that was ever happening, but all the real estate people swore that people were leaving LA for Bakersfield in large numbers.
I'm very bullish on Bakersfield. I've been saying for some time that we would be seeing a 30% to 40% correction, and I still stand by that.
Dont' forget to add new houseing on top of that
You're right. New housing is going to be another factor. I noticed that some builders are still grading for new lots in the 99 Freeway / Panama Lane area. To say this market was overbuilt is an understatement.
But I left out one thing that is really going to drive demand in this market, and that's PRIDE OF OWNERSHIP. Nothing eases the anxiety of too much debt like good old fashioned, pride of ownership. Why should I buy that commercial property at a 3% cap rate? Ahh yes, pride of ownership. I almost forgot. If I had a dollar for every real estate lisitng mentioning pride of ownership, I'd be a rich man.
"I don't have any stats to reference, but I'd guess that Bakersfield's median income is probably right around where it was three or four years ago"
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Absolutely correct. I posted the stats in my post relating to Dr. Grammy.
"Also, our median HH income (adjusted for inflation) is the same as it was in 2001, according to his graphs, $38,600. However, our median price has gone from $93,400 in 2001 to $275,700 in 2006"
http://bakersfieldbubble.blogspot.com/2007/03/dr-grammy-claims-prices-will-rise-25.html
"but last yr went it would have been helpful they had mortgage brokers on their show all day pushing arms and interest only"
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So true.
eventually the house of cards will have to collapse and it's beginning to start.
I've been watching Shilo Estates for some time and came across a PAX Auction Exchange house auction on Clarisse St this past Saturday. The poor fella who 'owns' the home paid 450k for it in late '05. The auctioneer started the bidding at 100k and the live gidding ended at, I believe, 125k. Of course the auctioneer was not happy and then proclaimed that he already had an absentee bid of 300k???! So why didn't he just start at 300k, they preach of no reserves but it's a bit suspect...
By the way the house sold for the 300K + 10% for fees (to the buyer, not the seller). If the owner actually accepts the price he's lost 150k plus all the interest, gardening and pool service. Pretty good investment!
Real quick, this same owner had another house in Silver Oaks on the butcher's block, that was listed by an agent for 785k, it sold for 540k plus fees.
Thanks anon!
BB, I sent the MP3 file; any problems, let me know.
But I left out one thing that is really going to drive demand in this market, and that's PRIDE OF OWNERSHIP. Nothing eases the anxiety of too much debt like good old fashioned, pride of ownership.
Who has the pride of ownership: the bank, or the borrower? ;)
You'll see the widely-claimed stat that homeownership has risen to 70%, but that's misleading. Per the Mortgage Bankers Association, only 1/3 of so-called "homeowners" actually OWN the home "free and clear": so the true "homeownership" stat is more like 33%. The other 66% are paying on mortgages still.
For "homedebtors", most (3/4) have fixed rate mortgages; 1/4 have adjustable rate mortgages (ARMs).
So drive down any typical street, and 1 out of 6 homes (16%) on it are being mortgaged using ARMs. In Bakersfield, I'd suspect the % is much higher, as sub-prime financing was much more popular.
So yeah, that "ownership" word is bandied about much too easily nowadays, as if borrowing money from a lender affords the same pride of ownership or security as actually OWNING one free and clear.
But I guess the more honest claim of having "pride of debtorship" doesn't quite have the same ring to it, does it? :)
Just don't tell Nigel Swaby that the market is going south. He'll post a book report saying how we're all negative or haterz.
last check -
4,032 listings.
up to 60k off of the dr horton homes near old river rd. just the beginning
4,058 listing as of today (5/11/07)...
4,067 listing (5/11/07)
4,067 listings. And still building masses of new homes. What do the builders know that I dont?
For big builders its business. Remember their net proceeds from one area, it not their overall net. A loss in Bako, does not mean they are in a losing position everywhere else. The only construction company that may be safe right now is Lennar.
Remember they bought from TOM (Coleman) 10 years ago, and have encircled Bakersfield, they are like Hassle & Crooke, bought land so dirt cheap, no pun intended, they have huge profit margins to work with.
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