LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
Real Estate View From California

By: Rick Ackerman, Rick's Picks


-- Posted Tuesday, 11 July 2006 | Digg This ArticleDigg It! | Source: GoldSeek.com

Rick’s Picks

Tuesday, July 11, 2006

For investors who’d rather be smart than lucky 

“There is no housing bubble!” That would be no mere permabull talking, but rather a delusional, frothing-at-the-mouth, head-buried-in-the-sand, deny-it-unto-death permabull. One clinical notch below these nut-jobs are the ones who recognize that a housing bubble exists but think any danger it could pose to the U.S. economy would be limited to areas where real estate prices went bonkers.

Finally, there are those, such as my friend Jas Jain, who understand that the imminent real estate collapse will implode prices not only in Atherton, Rye and Boston, but in such relatively docile markets as Muncie, Trenton, Tulsa and even Vernon, Texas. That’s because home prices are set at the margin, and if just one homeowner in a cul-de-sac of $800,000 homes gets in trouble, forcing him to liquidate his property for, say, $570,000, a sale at that price will effectively pull down the prices of all of his neighbors’ homes. It works the same way at the macro level, so that a glut of homes for sale in California will eventually depress home prices in Peoria, Biloxi and Camden, Maine.

Jas, who lives in California, monitors the real estate market there very closely. He pays attention not only to the statistical picture but to the anecdotal, allowing him to zero in on price softening before it becomes statistically obvious. His latest observations, which I have reprinted below along with some tabular data, will I am sure be of interest to many of you. Here’s Jas:

California Crucial

Why focus on California housing? Because it is a big deal – it represents some 25% of the dollar value of  U.S. housing, or $7-$8 trillion! Someone from North Carolina pointed out to me that the housing is doing great there, but in fact it represents no more than 1%-2% of the dollar value of the nation’s housing stock. A 20% drop in the price of California homes has the potential to take the U.S. and world economies down with it because of the leverage, reckless lending practices (pioneered in Southern California), and the globalization of the financial system.

The most important development during the past two months is the increasing numbers of price reductions in the areas that I monitor on a regular basis. For example, during the past three months, the median listing price of SFH (Single Family Homes) in Santa Clara County is down from $895K to $849K, and in Santa Cruz County it is down from $820K to $799K. Most of this is due to the price reductions in the listings that existed. Another important development is the very low levels of sales for the seasonally strong period. The current pending sales are at the same level, or lower, than what they were during the winter months. The most ominous sign for the future prices is the mushrooming of the inventory on the market. I will let the statistics and a case study do most of the talking.

Santa Clara County

Table 1 summarizes the deteriorating supply-demand situation. The current level of the Sales Pending is the same as during the end of November and February, while the listings are lot higher.

Santa Cruz County

Table 2 summarizes a supply/demand picture indicative of a dead market, with very few buyers and an increasing number of anxious sellers.

The situation is exemplified by a case study of a listing that I know of personally and other listings in the same development, which was built during the last 6-7 years. I visited the home after it had just been  bought and the development’s early phase completed. 

The homes from this development that are listed for sale are one to six years old, per the listings. Here is a partial list of homes for sale in this development: 

97 VISTA POINTE DR

33 VISTA POINTE DR

77 VISTA POINTE DR

21 VISTA POINTE DR

72 VISTA VERDE CI 

92 VISTA VERDE CI

52A VISTA VERDE CI

60 MONTEREY VISTA DR

NUEVA VISTA AV

38 QUINTA VISTA ST

10 PORTA VISTA CT

316 SUNSET VISTA

308 SUNSET VISTA

4 YARRO CT

33 PELICAN DR

108 PELICAN DR

63 PASEO DR

123 PASEO DR

50 VILLA ST

18 VILLA ST

62 VILLA ST

54 VILLA ST

126 LIGHTHOUSE DR

30 LA JOLLA ST

12 LA HACIENDA ST

39 LA HACIENDA ST

How many of the above are “flippers”? You can see that there are multiple homes for sale on some streets. There was even an article in the local paper about “sign pollution” in the Santa Cruz area! By the way, with changes in zoning there is plenty of land around this development for many future developments. The current housing bubble was God’s gift to the developer, who broke ground at the height of  the tech bubble, when scam stock-options money was bidding up the prices in Silly.con Valley.

Tehachapi Area

Table 4 summarizes the situation that is getting worse by the day for the anxious sellers.

***

San Francisco Seminar 

The Hidden Pivot Seminar in San Francisco is a “go,” with only a firm date remaining to be set. As of now, it looks like it will be held in early February, so please let me know via-email  if you’re interested in attending.

The two-day class is geared to teaching traders of all skill levels the rudiments of my proprietary Hidden Pivot System. Post-grad mentoring in a chat-room is included so that students can master the techniques learned in the classroom in a real-time setting. 

A Student’s Experience

Here is what one of my grads, Hunter Reynolds, had to say recently about the chat room: 

"We have all come a long way. I think everyone here is making a little $$, or we would be doing something else by now. I can honestly say I am up about ten percent, maybe a little more, since your class.  I am pretty conservative.  I just trade from the long side, but I'm getting really good at picking the hidden-pivot reversal points for the uptrend!"

Dates are not yet firm for a fourth seminar to be held in Sydney, Australia, but it looks like it will take place either in November 2006 or February 2007. The class is filling up, so do let me know soon if you’d like to attend.

***

Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2006, Rick Ackerman. All Rights Reserved. www.rickackerman.com 


-- Posted Tuesday, 11 July 2006 | Digg This Article | Source: GoldSeek.com




 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.