Wednesday, October 24, 2007

Bakersfield housing market crashes!

Latest numbers for September 2007 are out. From DQNews.com:

Bakersfield DOWN 16.23% Year over Year.

Keep in mind this does not include incentives. If the incentives were included, prices would be down over 20%.

Another measure to use is price per square foot. Based on the numbers from KernData.com, we are now down 20% from the peak on price per square foot. Also, prices are now back to the level they were in early 2005.

All of you who chose to listen to the REIC and were told "it was a good time to buy", "they are not making anymore land", "real estate only goes up", etc... Remember this during the next speculative mania. If you ask barber if you need a haircut...

Finally, things are not going to get any better. Right now we are seeing 150-200 notices of default per week, sales are down 85% from the peak and credit has tightened. All of these things were predicted here on this crappy blog at the beginning of the year and over the last few years on all the other bubble blogs. Those who listened, you have been spared the misery and all those who didn't listen, good luck.


17 comments:

David said...

amen brpther amen

Funny Circus Bears said...

Price per square foot is the most accurate measurement of value. Sales volume has been in a freefall for quite some time, but prices have been fairly sticky. That stickiness has now failed and the next year or more should be quite kind to patient buyers.

TheFunSucker said...

I've been renting for 2 yrs and am getting impatient! I want a house to call my own and do with it as I wish. That said I think the market has much more to go till bottom, not that I really need to buy at the very bottom but I want to be close!

So where do folks see the bottom??

I am hoping for '98 prices to return but am guessing we'll see '02/'03 prices as the bottom. The problem is the timeline....it's just not happening fast enough!

WaitingToBuy said...

As my forum handle alludes to, I with ya funsucker!

HermesAurelius said...

We won't see a decline to 98' prices, however its highly likely that we will decline to 02' prices. The target for me is about $125/sq. foot. There is a new home (2300 sq. ft.) across the street from me that, in my humble opinion, is the deal of the city right now. It's selling at $124 sq. ft. for about $100,000 loss. Nice house, got to be a short sell. Either this is where the market is heading or the buyer of this home is getting the deal of the century. Funsucker and waitingtobuy, if you're looking to buy, feel free to start now and don't offer more than $124/sq. ft. You might offend some, but you may also end up with a willing and stretched thin seller/developer/bank.

Cautiously Optimistic said...

I take issue with your
statement,"things are not going to get any better". This correction that we are experiencing is no different than any other industry experiences. The real estate industry will come back, it will just take a few years for it to happen. The exact same thing happened in the dot com boom where the speculators drove the stock prices up to unsustainable valuations.
Real estate is still the best investment by far. As prices come down, this will open up opportunities to people that had been priced out of the market over the last couple of years.

golfer_X said...

Price per square ft is not a perfect system either. Big houses will nearly always have a lower $ sq/ft than a small home. Your are unlikely to see 1000 sq/ft homes at $100 per. But you will probably see 3000 sq/ft homes at $80 a sq/ft next year. Down here in the IE I've already found hundreds of BIG new homes under $100 sq/ft. Perris, San Jacinto, Hemet, Murrietta, Lake Elsinore etc all have many big homes under $100. Homes under 3000 sq/ft are still higher and the smaller the home the higher it is. Land value does not change whether it's a big home or a small home and that's a fair portion of the price. If your looking for $100 a sq/ft, then look at the bigger homes. If I can find them down in the IE you sure as hell should be able to find them in BKfield.

Beth said...

Perhaps I have a different view on the real estate market. Buying a home is just that....buying a home, a shelter, a place to live, to avoid paying rent, to have some income tax deductions, to be able to be a HOMEOWNER.

I don't view it so much as an investment like a stock or a annuity or a mutual fund. I don't believe I would go to the internet and check the value on my house each month before I write my check for the house payment. Even tho someone purchasing a home now might see their "value" go down a bit over the next year or so, as long as they realize they are going to be in the home for 3-5 years then they should be fine. Beats paying rent!

I also think this goes to the mindset of "entitlement". Somehow, people now feel "entitled" to make a profit (hence home vs investment)--score a deal. Perhaps that is a contributing factor to the market we now find ourselves in --- people who were buying houses over the last few years were doing so mainly to profit...they gambled and they lost....now they are in a pinch because values have dropped and they are not able to sell/make 50K and repeat the cycle again.

Lone Ranger said...

cautiously optimistic said...

"Real estate is still the best investment by far."

Housing, on average since 1950, returns less than 1% per year in constant dollars. I guess I don't understand the concept of investing.

beth said...

"buying a home, a shelter, a place to live, to avoid paying rent, to have some income tax deductions, to be able to be a HOMEOWNER."


Until the 20 or 30 year mortgage is paid off, a person is not a homeowner. You are simply a debtor "renting" from a lender.

Sounds more like RE agent con jobs to me.

hankmeister said...

I paid $65 per sq ft for the house I bought in April of 2002. If prices fall to that level again.. well it would be bad for everybody. Can we say deflation?
My sources downtown tell me there were something like 63 new residential permits issued for all of September. That is way off normal.

Funny Circus Bears said...

Why buy now when you could buy for significantly less later on?

Every month you wait saves you money.

Realestateslasher said...

Looks like the time is near for the Tough to get good deals add to the trust

Peahippo said...

Here in the Midwest, the denial is as strong as anything. It's as strong as the denial I had to hear about during the dotcom stupidity. People love money so much that they refuse to admit they are in the class they truly inhabit. The poor are trying to live like the middle class, and the middle class like the rich.

If some sallow Midwesterners in Nowheresville MI think they can become rich by "investing in housing", then it must be APPALLING to see what fairly money-wealthy Californians think about finance.

P.S. What's our good buddy Jason Thoele doing nowadays? Is he still trying to con people into buying his crap homes by using the "instant equity" lie? I find it amusing that some dweeb tried to sell Thoele my identification for $500 over that little incident. Apparently, if you cross the "Real Estate Mafia", you have to expect a bounty on your head.

Bakersfield Bubble said...

What's our good buddy Jason Thoele doing nowadays? Is he still trying to con people into buying his crap homes by using the "instant equity" lie?
___________________________

LMFAO!!

He is over at Bakersfield.com and he acts like nothing is up. That house was listed as a short sale a month back, however, I am not sure how it turned out for him - except the "instant equity" was GONE!

calm said...

need help!! if i buy a house now for $325,000 30year 6.1% $2640 montly payment new construction is that house going to fall way below the price i am buying it for know? or should i just wait until next year to buy until next year!!! what to do?

Lone Ranger said...

Calm,

Wait a couple more years. You'll pick up your dream home for way under $100 PSF.

Ignore the noise from all RE agents, brokers, and anyone else making a living on commission.

Funny Circus Bears said...

The median price in Bakersfield has declined $50,000 in the last year alone, and is still dropping every month.

Why would you buy now?