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O.C. housing market literally 'on fire' | housing, market, county - The Orange County Register

O.C. housing market literally 'on fire' | housing, market, county - The Orange County Register

By JONATHAN LANSNER

Orange County's housing market speed – by one measure – quickened 8.2% in the past two weeks and sped up 48.8% in a year. The latest Orange County home inventory report from Steve Thomas and ReportsOnHousing.com – data as of March 15 includes these thoughts …

Here’s the big secret: the housing market is literally on fire and homes are flying off the market. Further, the housing inventory is running on empty; the foreclosure and short sale distressed inventory is at a low not seen since they started flooding the market back in 2007; and, the last time demand was this hot in the month of March, it was the tail end of the housing bubble, 2005. Why is the housing market such a big secret? All of the major housing indices are based upon closed sales. The S&P/Case-Shiller Index, the Federal Housing Finance House Price Index, and Dataquick are sources for newspapers and the nightly news. They are all snapshots of sold activity of the prior month. Sold activity is also a reflection of pending sales thirty to sixty days back. Reports of February closed sales were homes, for the most part, placed into escrow in December and the first half of January, the slowest time of the year for housing. Those numbers are in no way a barometer of today’s market.

Thomas' signature housing measurement is his "market time" benchmark. It tracks how many months it theoretically takes to sell all the inventory in the local MLS for-sale listings at the current pace of pending deals being made. By this Thomas logic, as of March 15 – we see …

(Photo by Justin Sullivan/Getty Images)

Staff

• Market time of 1.86 months for Orange County buyers to gobble up all homes for sale at the current pace vs. 2.02 months two weeks ago vs. 3.63 months a year ago vs. 2.68 months two years ago.
• Of the 8 Orange County pricing slices Thomas tracks, 7 had faster market time vs. 2 weeks ago; and 6 improved over a year ago.
• Orange County homes listed for under a million bucks have a market time of 1.58 months vs. 6.08 months for homes listed for more than $1 million.
• So, basically, it is 3.9 times harder to sell a million-dollar-plus residence!
• And just so you know, the million-dollar market represents 21% of all homes listed and 6% of all homes that entered into escrow in the past 30 days.

Here's the recent data for listings; deals pending; market time in months; latest vs. 2 weeks earllier, a year ago and 2 years ago. Note: k=thousand; m=million ...

Slice	Listings	Deals	Market Time (months)	2 week ago	1 yr. ago	2 yr. ago
$0-$250k	1,170	779	1.50	1.64	3.41	1.94
$250k-$500k	2,279	1,757	1.30	1.42	2.89	1.82
$500k-$750k	1,391	743	1.87	2.17	3.74	2.74
$750k-$1m	701	233	3.01	3.13	4.21	3.89
$1m-$1.5m	498	146	3.41	3.66	6.63	6.55
$1.5m-$2m	308	44	7.00	6.41	6.30	7.42
$2m-4m	399	42	9.50	10.97	10.58	12.04
$4m+	247	7	35.29	61.25	20.00	27.75
All O.C.	6,943	3,738	1.86	2.02	3.63	2.68

[1](MCT)—The U.S. housing market disappointed
Warren Buffett last year, but he hasn’t
given up hope. Buffett said in his annual
shareholder letter, posted this weekend,
that he was “dead wrong” when he predicted
last year that the rebound in U.S. home prices
would begin within a year.

This year, though, he’s betting again that the
housing market will recover, and for an interesting
reason: hormones. As Buffett explains it,
the housing market is currently depressed because
young Americans have stayed at home rather than
going out and setting up their own households.

“People may postpone hitching up during uncertain
times, but eventually hormones take over,” Buffett
wrote in the letter to shareholders in his
investment company Berkshire Hathaway. “And while
‘doubling-up’ may be the initial reaction of some
during a recession, living with in-laws can quickly
lose its allure.”

That is not the entirety of his argument. He also
says that home builders are not creating enough new
supply. As a result, the excess inventory that
built up after the financial crisis is slowly
disappearing, paving the way for new demand.

During an appearance on CNBC on Monday morning,
Buffett said he would buy up millions of U.S.
homes if it were possible.

Data out Monday seemed to support Buffett’s
contention. The National Association of REALTORS®
announced that the number of people buying
used homes in January rose to a 21-month high.
As usual, the annual letter was an opportunity
for Buffett to provide a candid assessment of
Berkshire Hathaway’s wins and losses, most of
which were in the volatile energy sector.
He said his entire $2 billion investment in
a Texas utility company may be wiped out unless
natural gas prices rise substantially.

“In tennis parlance, this was a major unforced
error by your chairman,” he wrote.
Buffett also used the letter to reveal that he
has chosen a CEO to succeed him at Berkshire
Hathaway—he just refused to provide the
identity of that person.

©2012 the Los Angeles Times
Distributed by MCT Information Services [2]
- RISMedia - http://rismedia.com -
Warren Buffett Is Betting on Housing
Posted By susanne On March 3, 2012 @
12:01 am In Business Development,Business
Outlook,Consumer News and Advice,Finance
and Economy,Home Owner News,Real Estate,
Real Estate News,Real Estate Trends,
Today's Marketplace,Today's Top Story

Warren Buffett: Housing Market/CNN

On Friday, the Census Bureau reported
that home builders are on pace to add
just under 700,000 housing units a year.
Buffett says in normal times we need
about 1 million or more homes to keep
up with household formation. Housing
economists have been talking for a
while about how rising household
formation and the relatively slow pace
of construction of new homes could lead
to a recovery. "The prospects for household
formation are stronger than people think,"
says housing economist Thomas A. Lawler.

The question is when the number of buyers
will catch up with the supply of houses
already on the market, many of which are
sitting vacant because of foreclosures.

Buffett seems to think that the oversupply
will be exhausted soon. When that happens,
Buffett believes we could see a rebound in
the economy as well. In fact, Buffett says
the weak housing market is a major reason
the economy has created so few new jobs since
the end of the recession.

As a result, many have said that Washington
and the Federal Reserve should do more to try
to boost the housing market. Buffett disagrees.
He says new stimulus measure probably won't work,
and anyway aren't needed. "Fortunately,
demographics and our market system will restore
the needed balance [in the housing market] -
probably before long," writes Buffett.

For more info:
http://finance.fortune.cnn.com/2012/02/25/buffett-on-housing/