Inventory of listed single-family homes, condos, and TICs in San Francisco increased 4.3% over the past two weeks to 1,399 active listings. Over the past five years listed inventory levels have increased an average of 5.5% in San Francisco during the same two weeks.
Current listed inventory is up 25% on a year-over-year basis, up 22% versus the average of the past five years, up 71% as compared to 2006. On the demand side of the equation, listed sales were up 15 percent in January with 275 properties sold.
The inventory of single-family homes for sale in San Francisco is up 38% on a year-over-year basis to 576 homes while listed condo inventory is up 18% to 823.
The percentage of all active listings in San Francisco have undergone at least one price reduction dropped three points to 31% while the percentage of active listings that are either already bank owned (84) or seeking a short sale (206) held at 21%, up 3% on an absolute basis over the past two weeks.
The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).
∙ San Francisco Listed Housing Inventory Update: January 31, 2011 [SocketSite]
∙ Will Pent-Up Demand Outstrip Pent-Up Supply? [SocketSite]
∙ SF Listed Sales Volume Up 15% In January Driven By Low-Cost Areas [SocketSite]
2006 5 yr I/O ARMs ripening?
Clearly the recast/re-set issue is a big factor in the rising inventory levels. The number of new listings of 2005-07 “apples,” listed at big discounts to the prior sale, is pretty amazing. If not a “tsunami,” a big wave nevertheless.
@badlydrawnbear — Consider that there is a lag between “ripening” and appearing as inventory. Even if someone defaults on the very first increased payment, last I checked there was on average ~14months between default and loss of the home. Don’t have any data on average time between a house going REO and being put out for sale but I think there is quite a backlog here.
@TC_SF I think you are taking my ‘ripening’ comment a little to literally.
I meant it more as people anticipating the I/O period coming to an end and trying to get out before the reset/recast, knowing the will not be able to afford the increased payment, and trying to avoid default and foreclosure entirely.
your comments on the lag time between increased payments, default, and foreclosure are spot on. Which is just another reason, in my mind, that we will not see any signinficant upward pressure on prices for some time.
Also reset =/= recast. There is a huge difference and not all 5 year I/O’s recast at the same time they first reset. My 2007 I/O will reset in February of 2012 but not recast until February of 2017 (when it amortizes over 20 years). If mine did reset today, the interest rate would drop from 6.25% to 3.05% which would save me $685 a month (after taxes).
Since I am not required to pay any additional principal on either my 1st or 2nd until 2017, I will refrain from doing so and wait another 6 years before I determine if it makes sense to exercise my call option to buy the place.
I don’t’ know; these figures leave me scratching my head. Where is the big super bowl jump? I’m just not that freaked out by these numbers. 576 single family homes for sale. Good luck finding anything worth buying in D7. 27 MLS Listed. 10 Under Contract. 4 Over $9M. A few odd listings including the LPH house @ 2679 California (just reduced 100k, fyi).
Just a bunch o’ wiggly lines I tell ‘ya. If you can see the effect of ’06 ARM resets in that data then you need to put down the bong …
“Current listed inventory is . . . up 71% as compared to 2006.”
“The inventory of single-family homes for sale in San Francisco is up 38% on a year-over-year basis to 576 homes while listed condo inventory is up 18% to 823.”
“The percentage of all active listings in San Francisco have undergone at least one price reduction dropped three points to 31% while the percentage of active listings that are either already bank owned (84) or seeking a short sale (206) held at 21%, up 3% on an absolute basis over the past two weeks.”
Just wiggly lines. 3/27, 2/28, and 5/25 loans – all very popular in the boom with nothing down – can’t have anything to do with these statistics.
I agree that it is possible that the market here is tanking even without any significant neg-am, re-cast/re-set etc. effect. Okay . . .
There are just so many factors, chief among them job losses. ARM re-sets from ’06 to now would generally see the interest rate reset DOWN.
That should be helping, not hurting the market.
The Option ARM is more complicated than both the bulls and bears tend to make it. According to some of the data given by banksters, the Option ARM problem is more of a 2014-2015 and later issue on their balance sheets because they don’t expect significant recasts until then. If you look at data from federal government sources, however, you can see that Option ARMs are defaulting at quite a high rate compared to Alt A and Prime and not that far off from subprime.
In any case, looking at one particular factor is probably misguided. There are a lot of factors at play.
It also hard to make absolute statements based on the level of inventory, but up 25% YOY is significant. I’ll wait until months of inventory calculations are out for February to see if sales are similarly going up. The peak for months of inventory based on trailing 3 months is usually March.
Many Option ARMs have been converted into variable rate mortgages (low rates a gift from the taxpayer through Mr Bernanke), or they have already defaulted. Neg ARM were there to afford the unaffordable, now most have become upside from ’06 to ’09.
I am more concerned with rising interest rates that will follow inflation. If price inflation is followed with income inflation, then people will be able to afford higher mortgages and prices could come back up. If the upcoming inflation is there to make us more competitive (another name for “we’re globalized: you’ll be squeezed and you have no choice”), then RE could take a hit.
In this highly polarized society, I wouldn’t be surprised to see both happening. Valuable jobs will still be very decently compensated, while jobs where there’s 10 applicants for them will be paying less and less when inflation is factored in.
Else unions manage to pull their weight into the equation, of course…
Converted? Using what income?
Converted? Using what income?
@lol — “Many Option ARMs have been converted into variable rate mortgages (low rates a gift from the taxpayer through Mr Bernanke), or they have already defaulted.”
While there have been some defaults, I haven’t seen evidence of mass refi’s of Option ARM’s into regular ARM’s.
While sfregegade is correct that Option ARM’s are complex and heterogenous, in general since the point of an Option ARM is to allow you to pay less then the interest payment. Unless someone got a terrible deal initially, paying a fully amortizing rate would represent a higher payment then the minimum payment option. And as tipster pointed out, they’d need the income and appraisal to qualify for this.
It would seem that people would have an incentive to just ride out making the minimum sub-interest payment for as long as possible (until they hit the money cap). If housing prices are up by then great, if not just FC and/or BK to walk away from it all.
Since in general, the difference between the payment rate and the interest rate gets lumped onto the principle, higher interest rates cause the principle balance to rise faster and thus hit the money triggers for I/O and/or fully-amortizing payments faster. Since rates have been unusually low, I’d assume that people will hit these caps slower then initially expected.
unions? What unions? In the private sector? That’s a joke not even worth talking about.
I realize that every introductory macro textbook discusses union wage demands as a precursor to inflation, but that simply isn’t relevant anymore, especially in the Bay Area. Most unions are approving givebacks and furloughs.
As far as public sector unions, Proposition B was barely defeated, and if it would have passed the real income of unionized city workers would have gone down in the near-term future. Adachi plans to run it again (and again, and again) until it passes.
We’re almost certain to get rising interest rates (since we’re up against the zero bound), but it probably won’t be due to inflationary pressures and certainly won’t be due to union wage demands.
Option ARMs are old news. The non-existent “reset Tsunami” has been discussed many times 2 years ago and some stats were provided on SS to show there were not many actually left. Many went into the “jingle mail” wave of 2007-2008. Others got refied at less than 4% variable rate. Sure, many idiots (or wise ones, depending on how they come out today) couldn’t afford the real payment and decided never to repay. Have you missed the foreclosure catastrophe we had? It already happened, and is still happening, but we’re probably past the thick of the bell curve.
“While sfregegade is correct that Option ARM’s are complex and heterogenous,”
To be clear, I meant the effect of Option ARMs on the market are more complicated than both bulls and bears usually say on SocketSite.
“Since rates have been unusually low, I’d assume that people will hit these caps slower then initially expected.”
This is one of the reasons people give as to why Wells Fargo stated that their loans won’t hit caps any time soon. Usually it’s if the negative amortization hits a LTV or based on time if it doesn’t hit that LTV.
Btw, this is the link that tc_sf provided earlier that described how poorly Option ARMs are doing:
http://www.lpsvcs.com/NewsRoom/IndustryData/Documents/2010%2012%20Mortgage%20Monitor.pdf (page 7 and 8)
@lol – “some stats were provided on SS to show there were not many actually left.” If you have a link to this I’d certainly be interested in it.
But baring data, my assumption is that many people will come to the same conclusion as Rillion above and make the minimum possible payment for as long as possible.
“Since I am not required to pay any additional principal on either my 1st or 2nd until 2017, I will refrain from doing so and wait another 6 years before I determine if it makes sense to exercise my call option to buy the place.”
I believe he was referring to an I/O, whereas someone with a Option ARM could in general pay even less then the interest due.
“Usually it’s if the negative amortization hits a LTV or based on time if it doesn’t hit that LTV.”
This is also my understanding. Note that one thing I have not seen in many analyses is the fact then even if the loan doesn’t have a separate LTV trigger to go to I/O vs fully amortizing, the borrower can always run the balance right up to the fully amortizing trigger then just switch to I/O to keep the balance from growing.
i.e. If you have a 125% of original loan trigger to fully amortizing, then you can make the minimum payment until you hit 124%, then switch to I/O until you hit the time limit.
Some analysts seem to assume that people will blindly run past the 125% limit and then be recast right away into fully amortizing.
“some stats were provided on SS to show there were not many actually left”
The report linked above shows there still are some — about half the number of subprime and half the number of Alt-A, by the classifications in that doc.
Option ARM bonds are still available (at a discount, of course):
“Home loans that inflated the U.S. housing bubble by giving borrowers the choice of cutting interest payments in exchange for higher loan balances are fueling the fastest gains in the mortgage-bond market. Prices for senior bonds tied to option adjustable-rate mortgages, called “toxic” by a government commission, typically jumped 6 cents to 64 cents on the dollar in the past month, according to Barclays Capital. The next best-performing class of home-loan securities without government backing rose 4 cents. Option-ARM debt tumbled to as low as 33 cents in 2009.”
http://www.bloomberg.com/news/2011-02-02/top-stories-business-and-finance.html
Many went into the “jingle mail” wave of 2007-2008.
Why would anyone do that? Most of them allowed you to pay virtually nothing for about 4 years. A rational borrower would hold onto them for 4 years then stop paying and wait 3 years for the bank to come calling. File BK and buy another 4 months. If you need to move, rent it out until the recast and stop paying, file BK the day before the FC.
We haven’t seen virtually any of them default yet. Those foreclosures probably start this year and string along for the next 3-4 years. I don’t think there were many of those loans until 2005. That means the earliest ones hit this year or next at the earliest.
I haven’t found the SS posts that had the links, but I have something better than that.
Calculated Risk did this piece last month. Let me repost the most relevant part, that was known already in 2007-2008:
Looking at the 2nd chart, it appears there is another wave coming in 2011 and 2012 – but probably not a large wave for several reasons.
First, many of the loans have already defaulted. There is a difference between the original recast date, and the actual recast date – because negatively amortizing loans hit the recast ceiling earlier than the original forecast – and those loans have already defaulted (or have been modified).
Second, some of these loans were modified (Option ARMs and Alt-A loans were targeted by the banks for internal modification programs), and some of these borrowers have probably refinanced – the few that had some equity.
And he is a pretty bearish guy.
my link didn’t work. Follow the link under my name.
On Unions and inflation. Anyone following action on GM today has noticed the gift to the employee. GM owes a lot of its recovery to the unions/employees. The employees took paycuts, made dear sacrifices. GM is appeasing the beast that was barely dormant.
I think unions will gain momentum in the next few years. We have a Dem President after all. Government cheese has gone in some part into the government which has big unions.
Also, I remember an interesting idea from Krugman’s book “The conscience of a liberal” in 2007. He missed the subprime crisis, then the full blown RE/debt crisis, but he had something right: Social progress is moving in a pendulum fashion. Up to the 1920 it was the “gilded age”. Tge GD reversed this up to the 1970s when Reaganism undid a lot of the social progress. An essential part was reducing unions from 30% to 13% of the labor force. He sees the pendulum going back in reverse. Maybe he’s wrong again…
People will put up with any system as long as putting up with it is more likely to put food on their table than not putting up with it.
All revolutions start with hungry people.
Not too many hungry people in this country. All our poor people are the fattest humans on planet earth.
Yeah, the plight of the malnourished obese. I was behind a family who paid with food stamps yesterday. Mom twice too big. Paid by the food stamps: typical ignorant diet made of pizza and discounted TV dinners with 0 vitamins, 0 fiber, all fat and empty carbs. You’ll see the kids in a few years lining up for diabetes, heart disease, overweight treatment. We save a little today by feeding them trash or letting them feed trash to their kids, but we’ll all pay for it soon. The social stigma of eating crap should be stronger.
LOL, those “loan mods” from the banks and mortgage servicers kept the loan balance the same, but dropped the interest rate to 2%, and had it rise 1% per year for 5 years until it was a fixed 7%. The original loans were at around 6% and the borrowers couldn’t afford them. As soon as the interest rate hits 5%, 100% of them will redefault. They are all underwater, but paying less than rental value so they continue to pay off. The banks got to keep the loans on the books at full value that way – no writedowns which would have made the banks insolvent.
Those who did not get loan mods usually had around 4 years paying the minimum, neg am amount until the loan recast. At that point, they could start paying the amortizing amount to keep the amount of negative amortization just under the limit for another year. So if you had a recast limit at 120%, you paid the minimum until it hit 119.9% and then started paying the full amortizing amount for one year because as long as you did that, it didn’t recast. At that point, they would default.
But just because the loans have defaulted doesn’t mean the banks took the house back. A friend of mine has not paid one dime since 2008. Still has the home. The banks are taking years to foreclose.
So if you got one of the early neg am loans in 04, you didn’t stop paying until 08 at the earliest, and like my friend who hasn’t paid one dime since 08, you still have the place. The earliest ones are just starting to hit the foreclosures now. Then we have 3 years of them.
The only exception I know of were the hard money lenders who lent on a second mortgage and took the homes back if there was any equity at the time of the default. Those guys were ruthless and quick.
So someone who lost their job in 07 and tried to refinance via a hard money lender was foolish – they didn’t know the banks would not come after them. The hard money lender came right after them, but those were the exceptions. The vast majority are just now starting to hit the foreclosure process and we have years and years. Most all of them will default because they are all underwater, they cannot bring cash to a refinance and they can’t qualify or afford the fully amortizing loan amount anyway.
lol, I hope you are right about imminent union strengthening. Unions are a necessary counterpart to the growing political and economic force of corporations and expanding income inequality.
But I’m not nearly as optimistic as you are. The only real, existing union presence is public employee unions, and they are in for a rough ride. With over 9% unemployment and another 7% beyond that underemployed, there isn’t any upward wage pressure.
We are seeing commodity inflation, and people will pay more for some things – clothing, food, energy, health care. But other things continue to disinflate – notably housing. Without wage inflation, my bet is that the bottom 2/3’s standard of living will simply continue to erode.
Very interesting.
What the Gov’t and banks have done is basically build breakers designed to break the reset/recast tsunami into smaller manageable pieces. They also built levees and are hoping the tsunami will ebb back quietly.
Just imagine what would have happened without all this meddling? Just imagine a world where all of tipster’s and LMRiM’s predictions have come true. Yikes.
On one hand, I hate this intervention because it punishes the wise and prevents the natural cycle “do something foolish, get punished for it, learn your lesson then slowly forget” that takes 10-15 years. No one has learned anything except be smarter than everyone and get out before things go south, but the foolishness is still lingering.
On the other hand, what kind of world would it be without this intervention. Sure many fools would have been crushed. But everyone was a fool in 2003-2007. 10% official unemployment sucks. 20% or 30% would touch everyone, every family, even high earners. Especially high earners. In retrospect, this intervention was a rather smart move, if often deeply flawed and diverted to mostly serve the interests of bankers.
But what this intervention does is actually lengthen the issue. Bubbles are being inflated. Goods still flow in from China, promissory notes flow back in the empty containers (that was a good analogy, whoever wrote it first). The previous imbalances are still there, because breaking the status quo would make the future masters of the universe angry. Anyone wants to see nuclear China send their ships to have us pay the debt, like the French did with the Mexicans during the pastry war.
“On the other hand, what kind of world would it be without this intervention.”
There were much more useful options for intervention than the status quo, extend and pretend, that is currently being pursued.
But agree totally that the “let everything fall to pieces” austrian prescription was simply madness.
“I believe he was referring to an I/O,”
Correct. I owe exactly the same amount today as when I bought the place. None of that neg-am funny business for me. Back in 2005 I passed on offers for some of that funny money. Whenever I’d be at one of the street fairs in SF there was always some mortgage brokerage company passing out fliers advertising 1% teaser rates, option-arms, and 100%+ financing.
Fortunately right now I like the place I live and its per sq ft cost is comparable to what I was paying when I rented after adjusting for the taxes and deeded parking spot. And over the short run its only going to get cheaper as I don’t see Helicopter Ben raising rates 4% in 12 months right as the 2012 Presidential elections are ramping up. Not that the Fed would ever let politics influence its decisions but I’m not anticpating a sharp rise in interest rates until late 2012 or early 2013 at the earliest.
What we need is the kind of intervention that gets us back to 1% teaser rates, 0% down and no documentation.
Until then, new buyers have to pay 5 times the monthly payment, qualify for it, and pay one billion trillion times the down payment. So that kind of intervention only cushions the fall a bit.
3 years ago, 30 year mortgage rates were 5.6%. Today they are 5%. Not much intervention, given all the extra requirements (a real downpayment, a real payment, documentation to qualify, etc.), if you ask me.
Regarding my interest in data, I had seen the delinquency/default data I was looking for any data to show refi-‘s out of Option ARM. Also, badlydrawn bear was originally referring to 2006 vintage loans. I’d assume that earlier vintage loans with 5-year recast triggers are more represented in the ranks of deliqunecy/default.
Regarding the CR post, It depends on your definition of some and many. The post mentions $1 Trillion of Option ARM’s still facing recast as of Feb 2010.
The CR post also links to some analysis of Wells Fargo’s Option ARM’s portfolio, which is larger then any other institution and skewed toward California, and is critical of the Credit Suisse analysis.
http://healdsburgbubble.blogspot.com/2009/05/reset-chart-from-credit-suisse-has.html
Requoting from that blog:
“If you’re paying close attention you’ll notice that something doesn’t add up. Wells Fargo, who holds more Option-ARMs on its books than any other institution, states in their last 10-Q filing:
Based on assumptions of a flat rate environment, if all eligible customers elect the minimum payment option 100% of the time and no balances prepay, we would expect the following balance of loans to recast based on reaching the principal cap: $4 million in the remaining three quarters of 2009, $9 million in 2010, $11 million in 2011 and $32 million in 2012… In addition, we would expect the following balance of ARM loans having a payment change based on the contractual terms of the loan to recast: $20 million in the remaining three quarters of 2009, $51 million in 2010, $70 million in 2011 and $128 million in 2012.
In short, Wells expects $56 million in Option ARMs to recast due to the loan balance reaching 125% of the value of the original loan and another $269 million to recast based on the terms of the loan. Given that we’re talking about a portfolio of over $100 BILLION of these loans, this means ESSENTIALLY NO LOANS WILL RECAST due to the negative amortization limits or contractual terms before 2012.
Both assumptions seemed suspect, yet, they are in fact true. Looking at page 55 of the Golden West 10-K from 2005 we read:
…most of our loans are scheduled to have a payment change without respect to any annual limit in order to reamortize the loan over its remaining life at the end of the tenth year or when the loan balance reaches 125% of the original amount. We term this reamortization a “recast.” Historically, most loans in our portfolio have paid off before the loan’s payment is recast.
”
I find CR generally very good and I realize he says this,
“There is a difference between the original recast date, and the actual recast date – because negatively amortizing loans hit the recast ceiling earlier than the original forecast – ”
But 1st, I find the analysis in the Healdsburg blog post compelling that given recent interest rates it would be difficult to hit the LTV cap by now (and note his extremely conservative assumptions for interest rates going forward). He does use as an example a loan where the min payment is only fixed for one year, having the min payment stay low longer makes you hit the LTV cap quicker.
Secondly though, as tipster & I point out, and contrariety to the assumption Wells made above that people pay the minimum payment 100% of the time and blindly run into the 125% LTV cap. It seems that rational borrowers would run up to 124% of LTV then switch to I/O payments. (Note that in tipster’s example he had the person paying the fully amortizing amount. I do not think this is necessary as you need not shrink the loan balance, only keep it from rising to 125%. I believe making the I/O payments will keep the loan balance the same)
Speaking of Pacific Heights inventory, -1 more. 2737 Divisadero St just went into contract after knocking 500k off its list price on 2/1. The market is responding quite well. Oh, this same place sold in 2007 and had a tax basis of $4.5M. No idea if any work was performed in between. Actually, the 2007 transaction looks like it might have been a trust transfer or something??? Nevertheless, I am blown away by the rate of home sales in D7.
-1 more! 1810 Lyon just went into contract! Crazy.
That was an eye opening chart in that blog post, tc_sf. I hadn’t realized the minimum payment goes up so quickly. It’s up 65% from 2004?
I don’t know anyone whose income is up that high from 2004. Those loans are probably all in default by now and heading for foreclosure.
Note the clever language in the Wells Fargo filing: “If all borrowers make the minimum payment… blah blah blah”.
I’ll bet very few of them are actually making the minimum payment any longer, mostly because they can’t afford it, but also because they are paying way more than the place is worth.
On a $500K loan taken out in 2004, their current minimum is $2668. Interest only on a $640K loan at 5% is less than that! The value of their home has probably dropped to $400K, yet they are paying as if it was worth $640K.
The graph assumed a rising CODI, when in fact it fell. The minimum payment is probably now about the same as the fully amortizing payment! Those people are all paying the fully amortizing amount on a severely underwater loan.
Interest only at 6% would have been $2500, and many obviously could not afford that in 2004 (which is why they took this type of loan), but that’s about what they are paying now.
What a great deal for Wells if anyone is actually paying on these! They’ll never be able to refinance!
“It’s up 65% from 2004? I don’t know anyone whose income is up that high from 2004.”
It is possible. Although the specific case I am aware of it was only 63%.
As noted in the commentary about the chart some Option ARM’s forestalled the increase in minimum payment for up to 5 years. Additionally, I’m not sure if in all cases the minimum payment can rise above the interest payment. i.e. if the 7.5% increase were to push you above the I/O then you need only pay the I/O.
As I mentioned above, these Option ARM’s were very heterogeneous and many different specific cases probably occurred.
Unless a bank happens to mention what the common case is, as golden west did above with the 10-year 125% triggers, it can be hard to estimate the distribution of loans with differing terms.
tc_sf,
The minimum does go up and over the I/O with the 7.5% annual reset. Plus interest rates keep going down, so the amount needed for I/O is less, but the bank still moves the reset payment up. In fact rates on these loans are great and minimum payment can be up over full amortized as well. Paying it off in 20years for the amount of your original minimum.
New thread started about option-ARMS, guess the editor got tired of this inventory thread being derailed.
One thing I found interesting in the article was that it put some numbers on the question of how many of these the banks have modified already.
@sparky-b — I may be wrong, but my general impression is that you would generally have the option to pick between a minimum payment, I/O, 30-year amortizing or 15-year amortizing payments.
The contract may specify a increase (or a max increase) of the minimum payment option at certain times. But my impression was that you still have the option of the I/O, 30 or 15 payments even if the calculated “minimum payment” is larger then these other options. Hitting specified time/money triggers will eliminate your option to chose the minimum payment or I/O options.
See http://www.federalreserve.gov/pubs/mortgage_interestonly/
Yes, and it resets every year. You have those options with the minimum going up every year. If the minimum goes up over I/O then that gets eliminated as an option. It can even go up and over the 30yr. giving you only 2 optons.
Also, you can do and I/O+ a fixed amount option sometimes. So a 5th option.
Pent up supply appears to be holding steady over the past couple of weeks. Currently, 1572 homes are in some state of foreclosure (NODs, NOTS, bank owned) in Ess Eff. This is compared to 1580 homes two weeks ago. Standard disclosures about noise in the data; information deemed reliable but not guaranteed.
Regarding pent up demand, sfgate has the results of a Harris poll.
Among renters in the western region while 70% eventually want to buy a house, only 7% are considering buying within the year. 17% within the next two.
http://www.sfgate.com/cgi-bin/blogs/ontheblock/detail?entry_id=82986
7% actively seeking to buy in the next year?
In the city of SF, where 70% of people rent, that’s … 7% * 70% = 4.9% of the population looking to buy. In the next year?? 40,000 people in the tiny city of San Francisco actively “considering buying within the year.”
Pent-up demand? That’s through-the-roof demand!
Then again, the Harris poll could be wrong …
J(NLB), I don’t think the children in renter households will be looking to buy. And I don’t think the renter couples will be looking to buy two homes. Knocks out ~ 50% of that demand.
Then you need to exclude those who couldn’t possibly put together the down payment or qualify for the loan for an SF home – excludes maybe 90% of the renter pool right there? Suddenly that demand doesn’t look so great. In 2010 all that demand only bought about 4500 places.
So .. what you’re saying is that even though 4.9% would LIKE to buy, only 0.49% actually CAN buy in any given year.
That’s fine, though. Not everyone is cut out to be an owner 🙂
AT, once again, you should probably know/read things before you talk about them:
”
Harris Interactive conducted this online survey within the United States via its QuickQuery(SM) online omnibus service on behalf of Trulia between Jan 20-24, 2011 among 2,079 U.S. adults aged 18 years and older. The sample included 1,339 homeowners and 683 renters.”
fluj, You are the one that needs to read closely. I did exclude children. J(NLB) did not. Maybe you should cut out the reflexive “Aha, you’re an idiot” response to everything. Stop and think for at least a few seconds before you hit “Post”.
No, you went on to say all sorts of things about necessarily subtracting one renter from couples, hypothetical down payment subtractions — even though that’s an obvious given in the first place, etc etc. AT stands for “Assistant Tipster.” You weigh in on everything and always with the same endgame. You shouldn’t.
Hee hee, fine, criticize me for pointing out “an obvious given” that dramatically lowered J(NLB)’s number. Next time, I’ll only point out subtle, hard to discern issues.
And there’s nobody named “fluj” posting here who ever used to talk to “AT,” one. Secondly I don’t think everyone I disagree with is an idiot. Far from it. However I know you to be someone who spins, lies, skews to tangents when he’s proven wrong, goes “Interent dictionary definition” more than his fair share, and frequently speaks out of turn on topics he knows little about. You were the one who felt a need to bring the word “idiot” into the dialogue. Not I.
“Among renters in the western region”
Let’s also not forget that the western region is not SF or even the Bay Area. People’s desire to be homeowners here is also moderated by price — it’s a two-way street.
I agree completely, sfrenegade. High prices mean that homeownership is even more prized and exclusive than in other less expensive cities.
“High prices mean that homeownership is even more prized and exclusive than in other less expensive cities.”
Right, but that’s what I mean by “two-way street.” SF’s high prices also discourage new settlers and discourage existing residents. It might be that renters in Montana actually have more motivation to buy houses than renters in SF.