Prof Schiller calls the bottom in housing?

O

OCMan_IHB

New member
I heard on the radio that Prof. Schiller (from Yale) said that the housing bottom may be near or now (something along that line). Is this true? Does anyone have any links? May be on national average but I don't think that's the case in So Cal.



RE agents are saying in good neighborhood there aren't that many houses on the market and waiting for the price to come down more is not a wise thing to do. I can't believe people are still saying this kinda stuff. There are fewer houses on the market because they are not selling and sellers are getting them off the market, I think. May be there are some Chinese/Taiwanese putting down 100% cash but that's gotta be a minority, right?



I'm little confused here. Unemployment is still rising (at slower rate, I give you that) and outlook is not good. Getting jumbo comforming loan is tough. What do they mean it's good time to buy a house or the bottom is near?



Do we (this blog reader and participants) still think the price will go down 2 to 3 years more and stay there for another 2 to 3 years?
 
[quote author="OCMan" date=1241670993]Do we (this blog reader and participants) still think the price will go down 2 to 3 years more and stay there for another 2 to 3 years?</blockquote>


Yes, prices will still fall.
 
is this the article you're talking about:



<a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=a_VRNwDoMsuA&refer=home">Investors Should Buy Stocks, Real Estate, Yale?s Shiller Says </a>



<blockquote>By Jeff Kearns



May 5 (Bloomberg) -- Investors should brave the risk of ?economic chaos? and buy stocks and real estate, said Yale University professor Robert Shiller, whose 2000 book ?Irrational Exuberance? predicted the market?s collapse.



?I?m less pessimistic than I was a few months ago,? Shiller said of U.S. equities in an interview in New York. ?The price-earnings ratio is about average, and by that you might say it sounds like one should be in the market and have a balanced portfolio that has a good share of stocks.?



The Standard & Poor?s 500 Index trades for 13.9 times its companies? annual profits, up from a 24-year low of 10.1 in March, after the gauge rallied 33 percent since March 9. Its average price-earnings ratio for this decade is 19.4, according to data compiled by Bloomberg.



Shiller, who helped create the S&P/Case-Shiller home price index, warned in an August 2006 interview that there was a ?significant probability? that housing market declines would accelerate and push the U.S. economy into a recession. He said today that an increase in pending home sales in March and February?s drop in properties on the market are ?positive? signals for U.S. housing prices.



?Having a good fraction of your portfolio in stocks, not zero, is probably sensible now,? he said. ?People should be in real estate as well because that has a chance of rebounding. It has to be about diversification, about spreading risks.?



The S&P 500?s advance from a 12-year low during the last two months may falter because unemployment is rising, he said. Joblessness in the U.S. is projected to have risen to 8.9 percent in April, according to economists surveyed by Bloomberg.



?The big thing is that we don?t know,? Shiller said in an interview at The New Yorker Summit: The Next 100 Days. ?We could have a huge rally like the 1933 to 1937 rally. That happened in the middle of a depression so it could happen now.?



Stock Swings



The S&P 500 added 41 percent in 1935 and 28 percent the next year before slumping 39 percent in 1937. The benchmark erased its 2009 loss yesterday after home sales beat estimates, boosting confidence the global recession is easing. The benchmark plunged 38 percent last year, the most since 1937.



?The unemployment rate is probably going to go up substantially more, we?re going to have more economic chaos, confidence will come back to a lower level again,? Shiller said. ?It?s still a seriously cloudy picture and there?s substantial risk of further substantial home price and further stock price declines.?



The S&P/Case-Shiller index, a gauge of home prices in 20 major U.S. cities, slowed its decline in February for the first time since 2007, according to data released April 28. The index has retreated 31 percent from its 2006 record.



The number of Americans signing contracts to buy previously owned homes jumped 3.2 percent in March for the first back-to- back gain in almost a year, the National Association of Realtors said yesterday. The number of houses on the market dropped 1.6 percent to 3.74 million, the group said April 23.



To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.

Last Updated: May 5, 2009 16:15 EDT </blockquote>
 
[quote author="OCMan" date=1241670993] May be there are some Chinese/Taiwanese putting down 100% cash but that's gotta be a minority, right?



</blockquote>


I have many friends and relatives in Taiwan that have been bugging me for the past few weeks about buying in Irivne. They have cash and are chomping at the bit to own an Irvine property. The word in the street in Taiwan is that now is the time to buy in Irvine and they want to know if I have time to look for properties for them. My advice to them is to wait a couple of years as prices will probably be lower then. Their reaction to being told to wait is deep disappointment.
 
[quote author="OCMan" date=1241670993]I heard on the radio that Prof. Schiller (from Yale) said that the housing bottom may be near or now (something along that line). Is this true? Does anyone have any links? May be on national average but I don't think that's the case in So Cal.



RE agents are saying in good neighborhood there aren't that many houses on the market and waiting for the price to come down more is not a wise thing to do. I can't believe people are still saying this kinda stuff. There are fewer houses on the market because they are not selling and sellers are getting them off the market, I think. May be there are some Chinese/Taiwanese putting down 100% cash but that's gotta be a minority, right?



I'm little confused here. Unemployment is still rising (at slower rate, I give you that) and outlook is not good. Getting jumbo comforming loan is tough. What do they mean it's good time to buy a house or the bottom is near?



Do we (this blog reader and participants) still think the price will go down 2 to 3 years more and stay there for another 2 to 3 years?</blockquote>


Prof Schiller is misinformed. We still have a long way to drop when the bottom of the market was January 1996. The reason you are not seeing a lot of houses on the market is twofold. Organic sales which is a person instead of a bank selling a house on the market is less the 50% of all sales. And it will get worse as prices drop as they will not sell because they are if not already underwater and to try to compete with foreclosures makes it even worse as they are getting low ball offers. The banks are sitting on a lot of empty houses and are not putting them on the market. At the end of last year there where over 19 million empty homes and condos in the US. The banks are hiding all this shadow inventory and hoping for the bailout by the government. Remember every foreclosure that the banks sell they take a hit on their books so where is the incentive for them to put that many on the market. The bankers are just saving their jobs. We are at the start of a 1 trillion reset on Option Arm and Alt A loans till the end of 2012. These loan mods are not working as they usually go belly up 6 months down the road after they rework them. At the end of summer 700,000 people on the 79 weeks of unemployment are going to lose their benefits couple this with the country losing a half a million jobs every month which the experts expect to continue to the end of the year. And Orange county is tied with Detroit in the amount of job loses. Yes 2010 and 2011 are going to be nasty and homes prices will continue to drop as foreclosures will hit even higher numbers than you can imagine because of job losses. Zillow just said 1 in 5 home owners are underwater so if there is a family emergency, job loss, divorce they can not sell it is another foreclosure waiting to happen. Short sells work maybe 5% of the time but mostly its the 2nd saying no dice and it goes into foreclosure anyhow. So Prof Schiller can sit in his Ivory Tower and spew garbage all he wants, what does he care his job is safe and he will continue to make his 6 figures for life and hopes he calls the bottom of the market to further inflate his ego. These jackasses are a dime a dozen. This is a good time to buy if you are going to live in your home for more than 10years and you have a solid job and need the tax advantage otherwise stay away...
 
[quote author="OCCOBRA" date=1241673639]Organic sales which is a person instead of a bank selling a house on the market is less the 50% of all sales.</blockquote>


425 closed sales in Irvine so far this year.

73 of those reported as short sales (17.2%).

79 of those reported as REOs (18.6%).

Remaining 273 sales were "organic" (64.2%).



for Orange County:

8060 closed sales so far this year .

1490 of those reported as short sales (18.5%).

3126 of those reported as REOs (38.8%).

Remaining 3444 sales were "organic" (42.7%)



<em>per MLS 5/6/2009</em>



-IR2
 
[quote author="IrvineRealtor" date=1241675938][quote author="OCCOBRA" date=1241673639]Organic sales which is a person instead of a bank selling a house on the market is less the 50% of all sales.</blockquote>


425 closed sales in Irvine so far this year.

73 of those reported as short sales (17.2%).

79 of those reported as REOs (18.6%).

Remaining 273 sales were "organic" (64.2%).



for Orange County:

8060 closed sales so far this year .

1490 of those reported as short sales (18.5%).

3126 of those reported as REOs (38.8%).

Remaining 3444 sales were "organic" (42.7%)



<em>per MLS 5/6/2009</em>



-IR2</blockquote>
I'm not surprised there are more organic sales in Irvine as Irvine still have WTF prices so those organic sellers can still sell and walk away with some equity in their pocket.
 
I question how "organic" some of those sales really are. Many of the properties I profile on the blog are people who have doubled their mortgage and cannot afford their payments. The fact that they still have a little equity left when they sell doesn't make the sale any less distressed.
 
To have a better balance in this thread, can somebody with access to better information post the # NODs, # NOTs that have been delivered to Irvine households since February 1st ?



I have seen quite an increase in NODs.



Or are some of these people defaulting on their mortgages as a "negotiation technique" to get some sort of help from the government, banks, even though IR says that pretty much many Irvine residents fall out of help programs because the size of their mortgages.
 
[quote author="Rocker" date=1241697696]To have a better balance in this thread, can somebody with access to better information post the # NODs, # NOTs that have been delivered to Irvine households since February 1st ?



I have seen quite an increase in NODs.



Or are some of these people defaulting on their mortgages as a "negotiation technique" to get some sort of help from the government, banks, even though IR says that pretty much many Irvine residents fall out of help programs because the size of their mortgages.</blockquote>
*PAGING Graphrix*
 
[quote author="Rocker" date=1241697696]To have a better balance in this thread, can somebody with access to better information post the # NODs, # NOTs that have been delivered to Irvine households since February 1st ?



I have seen quite an increase in NODs.



Or are some of these people defaulting on their mortgages as a "negotiation technique" to get some sort of help from the government, banks, even though IR says that pretty much many Irvine residents fall out of help programs because the size of their mortgages.</blockquote>


I have seen a big increase in NODs for Irvine as well. The refi Nazi says... No loan for you! NEXT!



Since Feb 1st in Irvine:



NODs = 342.



NTSs = 115.



Total in some state of foreclosure or have been foreclosed on recently = 494, including prior to Feb. 1st = 683.



IIRC, I posted the total number less than a month ago and it was just below 500. So that is quite the increase since then to 683.
 
A couple of good sources with links of what is really happening in this market. The second link is a little long but if you read it all you will be rewarded, look at the NOD numbers and it mind numbing. Very sad. He nails it because until unemployment losses stop there is no use expecting anything to get better. What is really fascinating to me in a morbid black way is watching California circling the drain. It's like watching a train wreck but you can not take your eyes away. I am not happy about it and ticked at how out of touch the people in charge just don't get it. Get rid of the Unions and overpaid civil pensioners. Mister Mortgage is also a good source for the latest crazy in the market also...



A few links:



http://housing-kaboom.blogspot.com/2009/05/has-median-stopped-cheerleading.html



http://www.doctorhousingbubble.com/...ial-market-analysis-produces-no-green-shoots/
 
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