Friday, October 07, 2005

California Association of Realtors Antics

In a MSNBC article:

"People who cashed out three or four years ago intending to buy back in at a lower price are still waiting," says James Hamilton, president of the California Association of Realtors and manager of real-estate brokerage Re/Max Execs in Redondo Beach, California. He adds that California housing prices are expected to increase 10 percent in 2006. "If you arenĂ‚’t moving somewhere where the cost of living is lower, big mistake."

James Hamilton is dreaming if he thinks home price appreciation will be 10% in 2006. I am willing to bet him 5 to 1 that home price appreciation in California will be less then 5% in 2006.

The California Association of Realtors ( CAR) has this tremendous powerpoint presentation.
Below are my favorite slides:

It's bubblicious. :-)

Is that froth I see emanating from the green bubble?


  1. i love how they say "people that cashed out 3 years ago, waiting for lower prices are STILL WAITING". we cashed out 6 months ago and prices are indeed flat and beginning to decline.

  2. I don't think anyone cashed out four years ago intending to buy back in.

    Some of us (like me) did not buy because prices seemed crazy then. The fact that they are crazier now does not make them "a good buy" at previous prices. I'm probably at least as well off for not buying.

    The same thing happened with the NASDAQ bubble. A lot of people (like Bill Fleckenstein) were pointing out it was crazy back in 1997. It took three years for him to be proven correct. Three years ain't that long.

  3. Dave:

    I might even venture to say that appreciation may turn to DEpreciation in'06!!

  4. peter,

    price declines? "Its different this time"

    No way.

  5. Let me see- only about 14% of Californians can afford to buy the median price of a home in California currently- another 10% rise, will bring that percentage lower. Average price is around $580k right now - if Hamilton is right that pushes the median up to 640k- seems rather silly to me. Prices still rising and the number of people able to buy declining?

  6. I cashed out this August. Probably more luck than sense. I agree with the 5-to-1 bet. IMHO, the RE market will start tanking, in a "public" way, before Christmas. The media will love it -- they hate Christmas as a word/season because of its Christian origin. What better way to help ruin holiday sales and puff up their own viewership than to trumpet the end of real estate as we know it? Throw in some unexpected event, as always seems to occur, and poof! -- there goes the house.

  7. Download and save that CAR ppt presentation. It will make for a great laugh in 2008.