Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: Elroy Jetson who wrote (48523)	3/23/2006 11:00:51 AM
From: mishedlo	Read Replies (2) of 116555

Elroy this is interesting. It is a post from GuyLeap on the FOOL to my board over there. He seems to be seeing houses fall off the low end first as opposed to the high end. Is there something unique about Silicon Valley, jobs perhaps, stock options and bonuses? Everywhere else I have read, the rot seems to have been from the top down as opposed to bottoms up. here goes from GuyLeap..... there are few buyers in many areas especially in lower price ranges. I want to first thank this board for good info. I run a small real estate investment team in the Silicon valley and we became net RE sellers around June 2005 based a lot on all the good analysis by people on this board & by reading all the articles referenced. I don't own a T.V. & never watch or read much commercial news unless refered directly to it. NPR, barrons, HBR is about it. So this board has been a large chuck of my new conduit to the world. Thanks..... We have had a property in a not so nice area on the market for 180 days. I dropped the price in steps from $740k down to $697k but only got 1 offer! Like the poster says I was surprised to not get a few low ball offers every month. I think the lower end buyers are tapped out now. I did get an offer 3 days after the listing expired for 2% below list which I am jumping on. I planned to wait 1 month then relist at 5% lower. June to August this place was still hopping. In June we had a property sell in a week ~list ($600k) and in August we sold a property in 4 weeks ~list ($915k) & in Oct we sold a nicer place in a week ~list ($1.1m). I have been watching the higher end market here very close as I plan to list a property for ~$2m in 3 months. Starting about mid Jan I have seen almost a frenzy in the $2-$3m price range here. Several properties have been selling at 10% over list & selling in just a few weeks with multiple offers. It seems the market is splitting- low end buyers are gone- all of them that could fog a mirror got a giant 100% loan for 8 X there income before August 2005. Now there are no lower range buyers. The higher range buyers are doing fine & still want nice homes & will pay for them. They still need to move for jobs or kids or trade up or down reasons. Volume is lower but prices are holding up. That is my view from here. Stay safe out there. Guy-Leap.

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