I was first introduced to the housing bubble idea by a guy named Rich Toscano. He was a self proclaimed data nerd who made an extremely powerful and eye opening powerpoint presentation to a group of us taking a mortgage finance extension class back in late 2005/early 2006. He started a website, piggington.com, where he laid out his case for the upcoming housing bust. He tracked the San Diego bubble throughout the bust and always had a bunch of nicely put together graphs looking at inventory, price history, and various relationships (price/rent, etc).
His graphs and commentary became more positive over the past year as prices had fallen and various affordability and price/rent relationships all showed signs of bottoming. So it didn't come as a huge shock to learn that he recently bought a house after renting throughout the downturn. I recommend readers here check out his graphs which I find helpful when thinking about my own situation. I don't necessarily share all his views and future predictions when it comes to macro topics, but I think his rationale for buying is interesting to read through. Rich seems to actually be somewhat late to the party as many of his informed, wise readers have posted stories about their own housing purchases over the past few years. But I think it really says something and it goes back to my point about the market getting healthier as we see financially conservative, educated buyers picking up properties based on their need and desire for shelter (rather than speculation as was often the case in the past). Rich admittedly is not trying call a full bottom, but he has made it clear through his excellent graphs and his personal actions (and those of many of his readers), that buying has become a very compelling proposition.
As an aside, I found myself smiling when I read the following discussion about the lack of inventory in San Diego (and LA and Orange County). Lots of people frustrated with the current situation and hoping for an increase. I see it as bullish since clearly there is pent up demand and the market should be able to absorb a good amount of inventory without a big negative impact to pricing. Remember, they (and I) are looking at year over year inventory so seasonality is not the cause. Also note the discussion on what some of the housing related stocks have been doing recently...
Interesting, thanks, will have to revisit Toscano's site. Closer to home, here's the continuing saga of and data points for Sunset Park's Horrible House/Non-House on the Hill:
ReplyDelete1328 Hill, 6440 sqft lot
Sold 7/07 with a house on it: $1,050,000, $163 per sq/ft for the land.
Sold 10/10 in that special kind of deal that smacks of the 1 percent (with a partially demolished house): $575,000, $90 per sq/ft for the land.
Now vacant and offered today with PLANS! $950,000, $148/sqft for the land, and, I guess, for the PLANS!
Let's see what happens next...
On 1328 Hill: Gaby Schkud, the realtor who lives next door to 1328 Hill bought the house after seeing it slowly fall into the banks hands. I think it is a little suspect. I think she had inside information, and was able to broker a deal at that price....something doesn't quite seem like that was a regular sale on the open market. She must have known the banker's agent and had other 'ins' with the bank....kinda sucks for us regular folk looking for a deal too.
ReplyDeleteIs this type of thing not regulated? How could she get a Sunset Park lot essentially $300,000 under market?