“Buyers Emboldened By Housing Market Glut”
The Journal Sentinel reprots from Wisconsin. “One good month doesn’t spell recovery, industry representatives said. But so far, February is looking good. The big draw: better deals this year than in 2006. ‘A property might be going at 98% of asking price, but that’s 98% of the last list price, not original price,’ industry spokeswoman Tammy Maddente said. ‘That property might have been on and off the market two or three times.’”
“‘What’s happened now is that we’re out of La-La Land and into reality,’ Donahue said.”
The Detroit News from Michigan. “In December, Ed Roland, joined Michigan’s growing ranks of desperate home sellers. He had already moved in with his daughter in Florida and watched helplessly as his Canton Township home languished on the market for nine months.”
“‘It’s vacant and we’re paying taxes and paying lawn service,’ said his daughter Judy. ‘We just thought, ‘Don’t mess with it: We’ll just accept whatever (the buyer asks).’ And what did the buyer ask? Pay the rest of this year’s taxes, about $2,400, on the home.”
“It’s unclear how common the practice has become, but buyers emboldened by the housing market glut are not ashamed to ask for it. ‘It’s just giving us extra cash that we didn’t think we would have before,’ said Jim Lorenz, who is preparing to move his family from Dearborn Heights to their new Canton home. ‘The people purchasing our house asked for the same thing.’”
“Metro Detroit’s down-and-out housing market may be a nightmare for sellers, but it’s a paradise for potential home buyers.”
“Just ask Keith Nida of Clinton Township, who bought a house in Roseville for $50,000 below its asking price. Before he found the house, Nida put an offer on another house, but the bank foreclosed on it before his offer was approved. ‘It was either bad luck or a blessing in disguise,’ Nida said.”
” There’s a huge supply of homes, condos and rental housing to choose from. In 2006, there were 45,998 residential properties that went on the market in Wayne, Oakland, Macomb and Livingston counties. That compares to just more than 14,000 in 2001.”
“‘The market is great if a person is looking to buy,’ said Ron Simpson, president of the Detroit Association of Realtors. ‘Property values declined sharply in the past year.’”
“University of Michigan senior research specialist Don Grimes urges some caution and realistic expectations. Buyers can get a bargain right now, Grimes said, but he questions whether southeast Michigan’s housing market will ever rebound to what it was a decade ago.”
“‘I have no doubt there are deals to be had,’ Grimes said. ‘But don’t go into it expecting appreciation except at the rate of inflation.’”
“Realtor Ron Simpson agrees that buyers who expect quick appreciation will be disappointed. Buyers won’t get a return on their investment until the economy improves. Until things get better, Simpson said, buyers should be prepared to keep any property they buy. ‘Is it a good time to buy a home? Absolutely — if you can afford to hold on to it,’ he said.”
“John Kurczak, a Realtor in Sterling Heights, said his clients are on the lookout for the best deal. Many buyers won’t even look at a property unless they can practically steal it, he said.”
“That is why Kurczak warns home sellers against holding onto a house for too long. He advises considering any offer and working with the buyer. ‘There’s an old saying in the real estate businesses that goes: ‘Your first offer is your best offer,’ Kurczak said. ‘Don’t get upset if the offer is too low. Sellers need to understand the buyers’ anxieties and work with the buyer; you have to give and take.’”
“Prices will drop another 10 percent to 30 percent in 2007 and begin to stabilize in 2008, said Kurczak, who has seen this up-down cycle many times in his 16-year career. ‘This is the storm we’re going through right now,’ he said. ‘We’re at our bottom; the only way to go is up.’”
The Pioneer Press from Minnesota. “Ever shop the clearance racks for condos? Bargain shoppers can save up to $100,000 Saturday on brand-new condominiums in Burnsville’s Heart of the City.”
“A mortgage lender slashed prices on the 34 available units after the original developer defaulted on the mortgage — resulting in the lender foreclosing on the property.”
“The Uptown Landing project was the first condo project in the Heart of the City. Three more condo developments are in the works or have been completed in the area.”
“Industry experts suspect the building sat almost empty for nearly two years after completion because of today’s soft suburban condo market and rising interest rates, construction prices and land costs. ‘Right now, a lot of contractors are running into trouble,’ said Larry Zielke, who handles foreclosures. ‘Foreclosures are up overall on individuals, but they’re also up on contractors.’”
“Springbrook sold only three Uptown Landing units after finishing the first phase in summer 2005. With almost no condo sales, the company soon defaulted on the mortgage.”
“Kapital und Zinsen, a company formed to acquire the debt, purchased the mortgage in February 2006 for an undisclosed amount, said George Zeller, the company’s chief manager. ‘We said, ‘How can we get this property back productive? In this market, we need to give people a reason to buy. Let’s make an offer that’s hard to refuse,’ Zeller said.”
“The condos, originally priced from $175,000 for a one bedroom with 862 square feet to $325,780 for a two-bedroom with 2,021 square feet, now range from $134,900 to $229,900.”
“Uptown Landing ‘had some difficulty with the way the units were designed,’ Burnsville Mayor Elizabeth Kautz said. Kautz put money down on a condo at ParkCrest on Nicollet, a mixed-use building in the Heart of the City. She’s been waiting for her house to sell to move into the unit.”
“The market influenced Klingelhutz Construction Co. of Chaska to change its plans to develop Nicollet Plaza, a two-phase condo project in the Heart of the City, said Pat Pauly, general superintendent. Klingelhutz began building phase two first, a $12 million, 70-unit building, instead of phase one, an estimated $20 million, 140-unit building.”
“‘You’re better off being $10 million in the hole rather than $20 million,’ Pauly said.”
“In today’s market, it’s not unusual for developments to stall or go into foreclosure, Zielke said. But it’s more typical for projects under construction to default on their debt. It’s unclear what happened with Uptown Landing, but one thing’s certain: ‘Somebody lost money on this deal,’ Zielke said.”
From the Wisconsin link:
‘Like many in the housing industry, the lender isn’t sure why conditions soured last year. ‘The economy was flying, interest rates were good, everything was good. There was no reason for the housing market to tank. But it did,’ LaFond said. A five-year housing boom abruptly ended last year as supply ballooned and demand evaporated.’
From Michigan
‘It may be a sign of how tough the housing market is in Michigan. Some Genesee County home builders have decided to try an approach often seen at car dealers and furniture stores. It’s an inventory clearance sale on brand-new homes. The Builders Association of Metropolitan Flint is just putting the finishing touches on its first-ever inventory clearance program. It will take place the first two weekends in March with as much as $30,000 to $50,000 off in some cases.’
‘Builder Tim Mahler is a prime example of the impact the slow resale housing market is having on new home sales. Houses like a 2,300-square-foot, four-bedroom home with a three-car garage, landscaping and electronic and security upgrades were selling briskly from the late ’90s until mid 2005. And then the eagerness to buy moved to a trickle.’
I am still waiting for the ‘industry’ to come up with a non-bubble answer as to why so many markets, away from the coasts, experienced simultaneous ‘housing booms.’
A sign that prices are in la-la land is when you can buy a new house with better design, quality, cheaper than a resale house just down the block. sellers, especially in southern ca, are still trying to cash in by asking for outrageous amount. just wait till the $1 trillion subprime readjustment and see how long and how tough these sellers can hold out.
Nick, I’m also finding that a lot of SoCal sellers are still stuck in 2005. A terrible case of denial for all these folks. I would say that new home prices have been lowered about 10% this past year (more if you consider discounts and incentives), but the resellers just haven’t caught on. There are a few who have made adjustments, and those are the few who do end up selling their house.
It is not that sellers are not caugh on… many of them are just stuck because they can’t lower the price.
I know a few people in foreclosure in MI. One couple told me the mortgage company BEGGED for a quick sale. They’re in for a real ride.
If they won’t lower the price, the bank will do it for them!
In MI banks are in a bad position because if it can be shown that they didn’t act in good faith in giving the loan, they can’t go after the difference. A stated income or no Doc loan just begs for not acting in good faith.
You’re right — but usually, I check the assessor’s data for last sales price, and many overpriced resellers bought before the bubble, prior to 2000. I think many just won’t settle for a smaller profit than what they would’ve gotten in 2005.
Nick;
You’re waiting for an “honest appraisel of industry conditions” from people with a stake in “there is no bubble” and those who live in “soft landing” land.
Ain’t gonna happen. You already know the answer but those guys will never say it.
Do
I think the problem of these areas is going to be worse than reported. As the coasts became less and less affordable, money started flowing into these areas. I was working with a company trying to sell foreclosed properties in upstate NY and it was amazing the ‘investors’ inquiring about this property from places like Florida since they were priced out of their own market and looking for other RE markets yet to explode.
Just like in ’99 when every city was going to turn into the next Silicon Valley, in 2005 every town was going to be the next Mecca for retiring boomers.
applies to austin and some other cities ,but the mid west ?
I’m still looking for all of these retiring Boomers. Most of the Boomers I know are still working. With no plans to retire anytime soon.
Arizona:
The Baby Boom started in 1946. The first boomers will be 62 in 2008, the earliest most can retire. They have not and will not be a factor in this run up, save for the “boomer speculator” of which there were quite a few and have already or are about to get their clock cleaned.
If real estate depreciates up North (it is) and they can’t sell the old homestead (they cant), they will not be a factor in the next 5 to 7 years.
I’m a Boomer (1951) and I do not plan to retire. A lot of my friends plan to retire but not to Fla, Cal, Az or Las vegas but to N. or S. Carolina, Tennessee etc. Cheap states.
Now that’s not a sign that the boomers are booming. Simple fact is that most of the baby boomers are flat broke and on the verge of being busted. Baby boom bust here we come ? No. I forgot. We are already there. Hey boomer you are gonna end up busted busted busted.
LOL!
Very true. The magazine “Accounting Today”, (I bet thats an exciting read) said that the Boomers have an average saving of $70,000. Most are banking (no pun intended) on their home equity and pension/social security.
I don’t plan to retire buy I could have in 1998 when I sold my big company. I still invest in real estate (not lately) and buy and sell businesses.
Boomers will not save real estate. They will in fact be a drag on the economy.
Seventy five percent of Americans live from paycheck to paycheck, yet they keep advertising the “rich baby boomers” who will buy the planet and quit working at 55 years-old. I know a ton of baby boomers and they are screwed financially like anyone else. Worst yet, their kids are coming back home to live with them, after college. Here’s a headline from last week:
“WASHINGTON (AFP) - Americans spent more than they earned last year as the economy steamed ahead, pushing the personal savings rate to negative 1.0 percent, the deepest hole since the Great Depression of the 1930s. The figure, published last week by the US
Commerce Department, means that not only did Americans spend all their income, they dug into savings and used credit to buy more.”
Of this number, I was really surprised to see the 25-34 age group has a negative 16% savings rate.
Do you have a link for this?
If true, this is significant as these people make up today’s first time buyers and tomorrow’s move up buyers. So much for demand.
I’ve been searching and cannot find anything right now. It was a few months ago I read this statistic.
Surprised about that age group?
LOL!
Only ones in that age group not negative in savings are trustafarians. Of which San Francisco has a fair number, I might add.
In northern CA, almost noone I know in that age group even has a savings account and a 401k account is for “later”. Everyone has pretty much given up on the idea of owning and assumes their parents will gift them the downpayment money when they need it. The others are playing on buying or inheriting when the parents die - that is the full sum of thier plans.
It’s probably more than that. 16% is just the official number.
Every day I thank my lucky stars I was too selfish to have any kids. I was able to “retire” (from paid employment) in my 30s as a result of not having that obligation and expenses.
txchick57: Do you want to adopt me? I can drive myself to the pediatrician.
txchick57: Seriously, you were smart. Kid’s are expensive pets that you never stop paying for. Both mine are 30 plus, both marries twice. No end in sight…..7 grandkids (mine and step)…if nature didn’t make you love them, you’d leave them in the woods at 3 weeks.
To each their own. My kids mean more to me than all the riches on the planet. Raising them isn’t always easy - we’ve had to make sacrifices - but they’ve added a tremendous sense of fulfillment, purpose, and happiness to our lives.
Sammy, I’m with you on that. Obviously kids are a major expense, but when it comes down to it, my kids are about the only real reason that I exist and give me true purpose other than simply satisfying my own desires and then dying. They are my legacy and will be the only proof that I ever existed. If everyone was just thinking about themselves and deferred having kids due to financial reasons, we would become extinct. I hope some of what the anti-kids people say is in jest (or a defense mechanism since they weren’t able to or given the chance to have children), if not I feel a little sorry for them.
I am well educated, successful in business and never been arrested in my life.
Both my kids did it all, drugs, jail, kids out of wedlock, etc etc etc.
Was I a bad father? I don’t know, probably. There is no manual on raising kids.
Maybe I don’t know how to raise kids. Subsequently, maybe I shouldn’t of had them. They were great until they were 13 or so. One is 29 the other 30. Still problems. Go figure.
You always love them because we are programmed genetically to do so, but simply put some people shouldn’t have kids. The jails are full of someones kids.
98% ? WTF who would offer that
got blog ?
‘A property might be going at 98% of asking price, but that’s 98% of the last list price, not original price,’ industry spokeswoman Tammy Maddente said. ‘That property might have been on and off the market two or three times.’”
That comment frosted me. Tammy just wants to flaunt that 98% figure. Oh yeah, Tammy, just as long as you got 98% of something, right?. Why don’t you tell us the percentage off the original price?
If the property was on and off the market 2-3 times, the sale price could have been 20-30% off the initial listing price. They leave it up to us to do all the digging in the county records.
There are soooo….many projects out there that were just horrendously bad ideas.
Incurable crap lay-outs; over improvements for neighborhood; shoddy construction quality; numerous and bizarre adverse economic influences-you name it, it’s all out there.
Cost to Cure=$$$ Billions and billions-if there even is a cure.
Of course an honest and ethical appraisal industry would have indicated as much, but as all the bloggers here know, these attributes weren’t in favor by the lenders in their frenzy to collect their origination fees.
The slide into financial oblivion for legions of FB’ers hasn’t even started yet.
I went to look at some “condos” that used to be an old mill. For starters they are asking about 200-230K for 1000Square feet. Not too bad, untill you actually saw them.
1. The “condos” where divided into 2 classes. A single bedroom with a den, and 2 bedrooms without a den. The difference? the den had no windows!. Average windows for the whole thing was about 3. Talk about dark and gloomy.
2. As it was in a converted mill, floor to ceiling where nice and tall, but the averave width of the damn thing was about 15′ With Pergo installed they look just like bowling alleys with windows at the short end of the rectangle opposite the door.
3. The floors obviously had to be pergo, with granite counters, but being an old building, the floors where not exactly level, and with pergo, you got that inimitable broken jigsaw puzzle look, that only broken pergo can give. Not the best option, as what SHOULD have been done, was to raise and level the floor, not use the old one….(Of course you could rip out the old one, but that would entail gutting the building vertically as well.)
We ran from there, and have never even been back to look into the new building. They had a good oportunity to do somenthing decent, and they completely blew it. Last I knew they where offering to pay 5years worth of HOA fees for the f*cked buyers… HAHAHAHAHAHAHA… Hope that the building lasts that long!
“I have no doubt there are deals to be had,’ Grimes said. ‘But don’t go into it expecting appreciation except at the rate of inflation.”
And don’t even expect that for several years to come. In fact, expect some depreciation.
“Realtor Ron Simpson agrees that buyers who expect quick appreciation will be disappointed. Buyers won’t get a return on their investment until the economy improves. Until things get better, Simpson said, buyers should be prepared to keep any property they buy. ‘Is it a good time to buy a home? Absolutely — if you can afford to hold on to it,’ he said.”
No newsflash here. That’s typically the way real estate works.
“The condos, originally priced from $175,000 for a one bedroom with 862 square feet to $325,780 for a two-bedroom with 2,021 square feet, now range from $134,900 to $229,900.”
Now THIS is what I’m talkin’ `bout. Need more declines like this.
2000+ sqft for $229K - Move that development to Davis, Ca and I have 45% downpayment waiting for it >; )
To live in Burnsville? It would need at least another 50% decrease to make it worth it. It’s 45 minutes from there into the city in no traffic, and there’s never no traffic.
I read in that same article that my old stomping grounds has witnessed median prices drop from $131K to $107K in a matter of 4 years. I knew it was bad but wasn’t aware that it moved to that point. Could we see median go under $100K? I think it’s in the realm of possibilities when you look at the economic outlook there. Don’t forget they have super high unemployment and the governor is looking at raising taxes even more. That will create more jobs!
In the same article they say, “DO take your time, to a degree. The increased supply of homes gives buyers an opportunity to evaluate properties. But don’t procrastinate. ”
I don’t know who they think they’re kidding. Supply has gone from 14K available homes in 2001 to 46K homes available in 2006.
Neil…pass some popcorn. We’ll eat it as we watch the bubble deflate from one of the 3 Detroit casinos…this summer when it’s warm of course.
munch, munch, munch.
This is getting entertaining. Any buyer who takes at least 30 days to shop for a home in almost any market it going to realize that waiting pays… and pays…
It amazes me how the nation is in denial.
Is the stock market set-up for a St. Valentine’s day massacre?
Food for thought?
Got popcorn?
Neil
“Prices will drop another 10% to 30% in 2007. … We’re at our bottom, the only way to go is up.”
Hmm, very interesting definition of a bottom. Think I’ll await the anticipated 30% decline so as to miss today’s “bottom”. Call me a dope, but the minus-30-percent “up” movement is one I can skip. Thanks.
No sh!t! Which is it–the bottom or 30% left to go!? Big difference.
“Prices will drop another 10 percent to 30 percent in 2007 and begin to stabilize in 2008, said Kurczak, who has seen this up-down cycle many times in his 16-year career. ‘This is the storm we’re going through right now,’ he said. ‘We’re at our bottom; the only way to go is up.’”
Am I the only one who went “huh?” If real estate is going to lose 10-30% this year, then how are we at the bottom, and can it only go up. Sounds like there’s going be some serious blood in the streets before we see appreciation again.
The “bottom” apparently refers to anything below appreciation. It’s sort of like the surface of the water….. you can drown in the top 6 inches, or at the bottom of the lake.
Both are at the bottom of air…..
Yes, but being 6 inches below the surface of the ocean gives you the chance to surface. At the bottom of the ocean you will be crushed before you run out of air.
La Lawyer:
I live in Florida and I am a Real Estate Broker, a Business Broker and a Mortgage Broker. I’m 55 and began buying houses at 19. This is the fourth and worst bubble I’ve seen. Let me drop my pants and I’ll show you where every “dog” has bit me, so I know which dog’s to pet and which to keep at a distance. (Sorry for that mental image)
Losses of 50% or more are likely in the more “bubbly markets”. This market is a train wreck and at this writing 2/12/07, it’s only begun. 2007 should be fun to watch, but if you don’t learn from it, it’ll only be entertainment.
We are approaching the best time most of us will see in our lifetimes to make money at real estate. Timing is everything. Pay attention! Research!
Being the “old guy” at times has it’s advantages. Good Hunting!!
I threw up a little in my mouth at the imagery. Just kidding.
I don’t have your years of experience in watching bubbles, but reviewing the graphs, old newspaper articles, and anecdotal evidence, I don’t think anyone has seen a real estate bubble like this (unless you were alive in Florida in the late 1920s-1930s).
LaLawyer; You are correct. Even I am not that old.
Make some money! The time is upon us!
WOW - someone sorta in the REIC — you better watch out - David Lereah and crew will be after you.
As someone looking to purchase in the SF Bay Area, thanks for confirming that I’m doing the right then and waiting.
RE Agent Kurczak makes his bold prediction that “Prices will drop another 10 percent to 30 percent in 2007…” and then immediately remembers his NAR talking point memo and plugs in the obligatory “We’re at our bottom; the only way to go is up.”
This rubbed me the wrong way too - prices will fall by a two digit percentage in the next year, but now’s a great time to buy!?
Well let’s see. MI has a deteriorating job market with little hope of any improvement in meaningful employment. Housing values are plummeting with a glut of homes on the market. The winters are very long, cold and dreary. Summers are humid and mosquito infested. If there is not a large migration out of the rust belt during the coming years I will miss my guess. It is so much easier to succed in a growing vibrant area. But what do I know?
Warm Climes, I was a student at the University of Michigan during the 1970s. This was when the US auto industry was first starting down its long, slow road to, well, the shape it’s in now.
I can clearly remember that my classmates sensed that something big was up, and that they’d better find their futures outside the state of Michigan. And that’s what many of us did.
I’m from the Lansing area…got out IMMEDIATELY after college. All my high school classmates who stayed are literally working at Wal Mart and McDonalds (I’m not kidding).
Sometimes I miss MI (especially the cost of living–they basically GIVE away houses there) but there’s simply no opportunity. It’s hard because all my family is still back there and I know I can never go back unless I want to be unemployed or underemployed. It’s just not worth it.
Since you are from the area and know people there, why did this happen?
‘Houses like a 2,300-square-foot, four-bedroom home with a three-car garage, landscaping and electronic and security upgrades were selling briskly from the late ’90s until mid 2005.’
Selling briskly in Michigan was never like Fl or CA with people overbidding asking prices or with investors standing in line to order 5 houses in a new subdivision. (I know of some crazy Michiganders that went down to Naples to do that.) Prices are dropping primarily because of unemployment - in that sense there is a bubble. Same result -different weights to the factors. Prices did get slightly out of whack slightly because they always had slightly exceeded inflation until 2005. But the nail in the coffin was the economy.
“Selling briskly in Michigan was never like Fl or CA with people overbidding asking prices or with investors standing in line to order 5 houses in a new subdivision.”
I beg to differ. In 2001 if you were shopping in the low end of average you couldn’t find a home to stay on the market long enough to bid on. It was crazy. People were in the buy now or be priced out forever mindset. That didn’t get to FL until ‘03. People got out of that mindset and prices leveled off. Now people believe that there is no help on the way in terms of jobs and prices are plunging.
There may have been pockets in some “in” cities like Royal Oak and others in Oakland county. But, Wayne and Macomb county wasn’t crazy. In Grosse Pointe, we never saw huge increases…prices slowly got out of whack through the entire 90’s and early 00’s. Prices here are down to what they were in the mid 90’s it seems.
I don’t consider Redford in the “in” city classification. There was a mass rush to buy houses in the $80-$90K range. In Westland prices quickly skyrocketed from the $80K - $100K range to $125K - $150K. Also not an “in” city. Canton and Livonia might be “in” cities but they went crazy too. Western Livonia and Canton went from $140K in the mid 90’s to $250K in early 00’s.
We won’t talk about Royal Oak. You’re right about that being a special circumstance. Same with Ferndale and Novi.
Look at Macomb Township in Macomb county. It went insane there. Prices also went crazy in the outlying areas like Howell, Brighton, Romeo, and Monroe. Areas like Warren didn’t experience any type of huge jump. Other established East Side communities also had no real jump. I would say that the established communites on the east side were the exception not the norm.
That’s probably it…my perception is colored by the east side established communities (always said GP’ers were provencial). You can a AA to the market that got a little bubbly and Troy that stayed modest. But, even Macomb Township only seemed to get pricey because they were building McMansion subs next to older housing stock, but they were still available for under $300K. You must admit there was no place in Michigan where there was the type of appreciation like was seen in the specu-investor areas of Fl, CA, AZ in just two years (fueled by sub-prime). Actually, because Michigan was in a recession during the years sub-prime lending was rampant, we may see a leveling off in foreclosures just when those states really heat up.
I’ll give you nowhere near the bubbly like FL. The ones that have fared worst in the state so far are the communities I mentioned. The drop is not over by a longshot in MI though. I can’t imagine how many “little” service business people will hit the road if Jennifer gets her 2%. All that extra paperwork…all that extra expense….CRAZY!!
Tell me about it, hubby is an attorney and I do the books for a small business that involves parts and labor. I agree there is more to drop-the foreclosures are everywhere, even in GP. The Chrysler restructure will impact north Oakland. However, I will stick my neck out and say that at least CA will exceed MI in foreclosures by 2008. That market had velocity, a high percentage of subprimes/stated income and home values more out of whack compared to income.
Also should mention that the property tax increase limit had an impact on “move-up” communities such as GP and Birmingham (both communities went to the state because it was slowing the market in 03-04.) Why move when property taxes double? We downsized to half the square feet in early 2005 when I saw the handwriting on the wall and we are paying about the same in property taxes.
For the past decade our winters have been dramatically warmer and dryer here in Minnesota than what we’ve historically experienced. Since the Midwestern climate is more temperate, our energy costs tend to be lower. Over the past four years my total annual household energy cost (gas and electric combined) has run between $1000 - $1200.
When I read the accounts of Texans, Arizonans, or Californians paying $300 - $500 per *month* in summer electric bills, I flinch in horror and sympathy. I don’t care how cold it gets here, I’ve never had that high of a monthly energy bill. Not in December. Not in January. And certainly not in any other month of the year. After all, through most of April - October we can leave our windows open, with only periodic bouts of closing the house up and turning the a/c on.
I’m glad you enjoy your home regions. I enjoy my cheap energy bills and fresh air.
When I read the accounts of Texans, Arizonans, or Californians paying $300 - $500 per *month* in summer electric bills, I flinch in horror and sympathy.
Certainly not coastal Californians - many of us don’t even have air conditioners. It’s the one aspect of life that is actually cheaper here than everywhere else.
In central nothern CA, my average bill for a 1000 sqft home is 115 a month. PGE rakes us over the coals coming and going.
I live less than 5 miles from the ocean in So. Cal, and my A/C bill hits $300 in the summer. Might have something to do with my 50 year old Stucco house letting in the heat in the summer, and the cold in the winter
I agree. I used to think we would move to warmer climes when we retired. Not anymore. It’s cheaper here and we can easily afford to get away for a month in winter for a break. We only pay 1,500 gas/electric per year for 1,700 sq. ft.
In the heat of FL summer my electric bill has NEVER exceeded $150. In winter I average between $30 in a no air conditioning month and $65 in a normal month. I couldn’t imagine spending $300-$500 in electric!
That’s because you don’t live in Gainesville. Typical homeowners (SFH) pay $220-280 and up! I only pay $30-70–it pays to rent.
GRU is a rip-off and it shows… G’ville is No. Ctrl. Fl–I mean, the climate isn’t even that bad, but GRU’s electric rates are outrageous.
Count yourself lucky. Down in South Broward where I live my bill runs $400 a month. That is with the A/C on 24/7 in the summer and running the pool pump a couple hours a day. I only paid about $140 in San Diego…never had to run my A/C & didn’t have a pool. It sucked moving here…in addition to the increased utilities, my car insurance DOUBLED! I was in South Florida sticker shock for several months.
Homoaner, where in Minnesota? Are you in the Twin Cities metro area? I have been thinking about moving there, buying a modest (1000-1600 sq ft) house and wondering if the real estate is coming down there at all? Lurking at the city-data forum, folks claim the prices will keep going up slightly this year.
It’s humid in the summer only two weeks.
No hurricanes
No floods
No tornado’s
No people with a NY accent
Tigers are now summer fun
Property taxes and insurance are reasonble
My grandchildren live here
Tripleplay….retired at 59 in Michigan
I posted this on the last thread, but thought it worth repeating here:
BearStrns is apparantly sitting on a large subprime index trading position that got crunched in the last week. Losses already about $200 million according to the rumors. That loss won’t kill them, but apparnetly it’s a huge position (estimated at $2 billion) so the losses could get big if they can’t get rid of it.
Kewl. Couldn’t happen to a nicer bunch.
In one of my more sober moments this wknd, I wondered if maybe these places didn’t sort of “front load” bonuses for this year into last year because they knew they were sitting on these fungoid positions and wouldn’t be putting up the same numbers this year.
Well, at least Merrill wants to get in to the business in the worst possible way. Perhaps they can sell this junk to them…78-80 market today.
” wondered if maybe these places didn’t sort of “front load” bonuses for this year into last year”
Now that’s a conspiracy theory I can relate to. It would make a lot of sense to do just that. You know 07 is going to bite, so you make 06 “unbelievable”…..I can easily see this calculation being made.
Oh, and yes, Bear is THE worst.
That must be the one Kass was mentioning in that blurb I put here on Saturday. 60 bid anyone? he said
2 billion here, 10.5 billion there…soon it’ll add up to some real money…
I think that losses like the ones rumored at Bear are significant but not nearly as huge as the negative knock-on effects when the subprime market dries up.
Funny how all this bad news comes just after the bonus checks cleared.
exactly. that’s what I was trying to say above while making up new words in the process
The whole loss apparnetly happened in the last few weeks with the subprime meltdown…. Bear bonuses got paid in early January.
Can you give us a source ? When will it hit the news ?
my source is mainly a bond trader from a different firm…may never hit the news if the loss doesn’t grow.
Kass mentioned it on Street Insight last week without naming the name. It’s on the bits bucket thread on Saturday.
–
Buyers over the past three years have been mostly stupid and impulsive people, but even the stupid people can see what is going on now. Another thing working against the sellers is that the number of stupid buyers keeps going down every time a home is sold. Replacement rate is lower than the exhaustion rate. Odds keep getting worse for the sellers.
Jas
Very true, Jas.
But even though stupid people can see what’s going on NOW, they often have a hard time seeing what may be coming next.
“It’s unclear how common the practice has become, but buyers emboldened by the housing market glut are not ashamed to ask for it.”
heh. I check the HGTV forums now and then; there is a forum for Buying and Selling Houses. Most of the folks posting there are trying to sell to either move up or have already moved for job reasons. They all have had their houses on the market for months, painted, spruced up, decluttered, changed agents, and had multiple open houses. Mostly they try to cheer each other up and give hope the houses will eventually sell. Some hard-headed advice about lowering prices but a lot of resistance to that idea.
One recent thread was a “update from sellers”
http://boards.hgtv.com/eve/forums/a/tpc/f/9384011632/m/7751078403
Been on the market almost 6 months now. We had an offer that the people backed out on (due to their financial reasons), another offer for 20,000 lower then what we are asking (we are only priced at 180,000) AND they wanted all appliances and our brand new plasma t.v. Come On people! We are hoping. I’d like to be out before end of the summer…still plenty of time I hope!
Waaahhhhh! Remember when buyers had to write letters espousing their qualities as a prospective homeowner?
Tough nuggies sellers!
I think if I was in this position the truly rational thing to do would be to calculate what the house would have been worth in 1999 and offer it for that. I’m sure someone would bite your arm off to buy your house. Problem solved. That is unless you bought after 1999. Worse still, if you bought after 2004. They’re probably to all intents and purposes under water already.
So no way out.
Did you see this response? Talk about the pot calling the kettle black!
Gail_D
Posted Feb 10, 2007 05:23 PM Hide Post
quote:
another offer for 20,000 lower then what we are asking (we are only priced at 180,000) AND they wanted all appliances and our brand new plasma t.v.
You know…that just bugs me. SOME people are getting SO greedy just because they think sellers are anxious or desperate. The nerve of asking for the TV! Window treatments I can see. Appliances…that’s actually not so odd…but your TV?
I guess she never read about the people having to write begging letters to seller to allow them the privilege of overpaying by 40%.
She never read or heard of builders giving away granite kitchen sinks and SS appliances either. Burn, baby, burn!
Greedy? Ohhhh, that’s rich.
“Prices will drop another 10 percent to 30 percent in 2007 and begin to stabilize in 2008, said Kurczak, who has seen this up-down cycle many times in his 16-year career. ‘This is the storm we’re going through right now,’ he said. ‘We’re at our bottom; the only way to go is up.’”
How can this be happening in Michigan, when we all know that the bubble was limited to a few isolated coastal pockets?
Heathen! Blasphemer!
Orlando, FL housing implosion! 16 months of inventory-to-sale ratio, while interest rate was below historical average
http://orlrealtor.com/Files/PDF/Orlando8YearHistory.pdf
this is good, how/where did you find it?
test
What I dont understand in Orlando is there were still 1300 places sold…who is still buying??? I mean the 1300 was still higher than 01 or 02…and from what i see the New Construction is the only ones budging on price….I have been waiting to buy for a couple years now to be able to afford as a single $40,000 a yr…what can I actually afford…..nothing…
one more thing….this was on the front page of the Orlando Sentinel Sunday.. http://www.orlandosentinel.com/orl-250grand1107feb11,0,5755214.story
one more thing….this was on the front page of the Orlando Sentinel Sunday.. http://www.orlandosentinel.com/orl-250grand1107feb11,0,5755214.story
one more thing….this was on the front page of the Orlando Sentinel Sunday.. http://www.orlandosentinel.com/orl-250grand1107feb11,0,5755214.story
and in addition to that link make sure you check the graph and the pictures on there…they are really telling on the state of housing here…
mike “weez”
Ok
Ok.
Ok .
Weez; there is always a “floor” level of activity in any market. A 30% decline in sales YOY is a disaster but that means 70% of the sales made last year are happening.
There is the the second wave of stupid money that thinks we’ve bottomed out at. Plus, the “have to’s” that for other circunstances have to buy or sell.
Also, a lot of the activity happening now is 9 months to a year old. Remember Toll Brothers and the other major builders are reporting 40 to 50% cancellations. That means 50 to 60% of the deals made for new houses went through.
We do not want the market to go to zero and it won’t. If it does the price of a house will be the least of our worries
Meanwhile, changes a-brewing at Home Depot:
http://news.google.com/news/url?sa=t&ct=us/3-1-0&fp=45d0e7467a923c69&ei=M8nQRZelDIbOpwKllcCRAg&url=http%3A//www.washingtonpost.com/wp-dyn/content/article/2007/02/12/AR2007021200745.html&cid=1113368644
BTW, I was in Home Depot a couple of times recently. Store traffic WAY below what I recall back in 2005.
sorry today is my first day posting…didnt mean to post that 3 times…
I just thought you were excited!
- ok -
A young baseball player just bought a condo in a friend’s building here in Tampa for 2 million. The owner was the real estate agent. If fools keep doing this, the comps will never go down. The pre-construction price for this unit was something like 400k (two years ago). My friend, who rents in the building, is appalled. The building, a highrise on Bayshore and Platt (for those who know the area) is badly built, with the cheapest materials. Almost all of the units were bought by “investors,” whose prices haven’t come down at all, even though none of the store spaces beneath have sold or been leased.
I think the realtor should be held to task for ripping this dumb guy off, but, of course, she’s celebrating.
Don’t worry every professional sports player is up to their eyeballs in real estate “investments” — its fad with them too for now. I remember when they were all buying auto dealers and after that is was dot com stocks (remember when they were partnering for options?).
Still, it keeps the lunacy going. This guy, who is very young, just got a 5 million per year contract, so what does he care? I bet the realtor/owner didn’t tell him his property taxes would be 50k a year on a place he plans to only occupy occasionally, and that is crappy, in a poorly built building.
These horrible realtor/investors are really without conscience. They don’t care they’re selling junk at outrageous prices, and that the fools buying it won’t ever get their money back.
I remember Herbalife in the 1980s. It started out with really good products, but the greed factor quickly perverted tens of thousands of distributors, who couldn’t sign up suckers fast enough. When it crashed, the company came out with really awful new products at very high prices to make up for the difference, but it never regained its popularity. The good old products are still there, but who wants to wade through the muck to find them?
I wonder what is going to happen when real estate finally crashes and there are millions of people holding the bag. Tampa is ALWAYS behind the times on everything, so it may be a while before the locals realize they’ve been had.
> remember when they were partnering for options?.
Yep, I was in a company with 30 employees and they got an ex-NFL pro bowl QB to be a spokesperson. The jerk got more stock than I did for a lot less work.
This is another reason that median prices are more important than averages - the extravaganza of the rich does NOT shift the median.
“Sellers need to understand the buyers’ anxieties and work with the buyer; you have to give and take.’”
What buyers? What anxiety?
*laughs
Yeah, I’m really anxious to jump into an overpriced house. *yawns. Wake me up in a year !
Like many in the housing industry, the lender isn’t sure why conditions soured last year.
LOL! Where does Ben find this stuff???
“John Kurczak, a Realtor in Sterling Heights, said his clients are on the lookout for the best deal. Many buyers won’t even look at a property unless they can practically steal it, he said.”
Ahha………..now your speaking my language John.
OK……my offer is cash and it is the 1999 price plus 3% pa and no further negotiation will be entertained. Offer remains good for 7 days.
Updates are now online:
http://madisonhousingbubble.blogspot.com/
Southern California house prices continue to be outrageous and that’s why inventory is growing and when spring come, inventory will double and still not sell. Nothing will sell until sellers realize that the boom is over and that they must lower their asking price at least by 15% or more to sell. Buyers are wise to the idea that eventually prices will drop and from the look of things, they are certainly willing to wait it out. It’s a buyer’s market and there’s no turning back …it will run for at least the next 2-3 years. Prices will go down if the seller is serious about selling. The longer a house is on the market, the more they will have to lower the price. Buyers are smart buying — they’re not in a rush. They know how inflated the house prices got during the boom and they aren’t going to buy unless the house price is really good. Sellers need to wake up and fast if they want to sell. If they don’t, when their houses will “live” in inventory. Californians are last and very slow to wake up to to the bubble burst. People don’t have the money or salaries to pay for outrageous housing. Many Califorians are retiring and just moving out of the state for affordable housing. California is too expensive for such a lack of quality of life — the state has way too many problems now and in the future — there’s no more California dream — it fading away a long time ago.
“Prices will drop another 10 percent to 30 percent in 2007 and begin to stabilize in 2008, said Kurczak, who has seen this up-down cycle many times in his 16-year career. ‘This is the storm we’re going through right now,’ he said. ‘We’re at our bottom; the only way to go is up.’”
- Says the man standing on his head. We can’t blame him really, he is upside down after all.