“They’re Back, Only Now They’re In Selling Mode”
The Albuquerque Journal reports from New Mexico. “Remember the investors who swarmed the local residential real estate market, buying up lower-priced new homes just a few years ago? Well, they’re back— only now they’re in selling mode. The number of existing single-family homes on the market is double what it was a year ago and greater than it has been since 2000.”
“That was the last year inventory surpassed 4,000, as it has again in recent months, according to statistics from the Albuquerque Metropolitan Board of Realtors.”
“‘Normally, we’d see two or three for-sale signs in a neighborhood (of ours). Now you can see six to eight,’ said Joe LaMendola, Centex Homes’ VP for sales and marketing. ‘We’ve always had resales as competition, but not to this extent. We find ourselves having to discount a little bit more to meet what the resales are asking.’”
“‘Look for how many homes are empty. There’s lots of them,’ LaMendola says. ‘We don’t have that many people transferring out of Albuquerque to have that many houses empty.’”
“‘When we see a whole bunch of (for-sale) signs on one street and run the ownership (through county records), very frequently we’ll find that almost the whole street will be owned by California investors,’ said (broker) Kate Southard. ‘I know that’s what’s happening because the tax bills are being mailed to out-of-state owners.’”
The Arizona Republic. “Dave and Karen Rysdam got a jolt when pricing their Glendale home to put on the market. They wanted to sell in the low $600,000s, but their agent recommended an aggressive price in the low $500,000s.”
“Surprised, the couple consulted an appraiser, who offered similar advice. Reluctantly, they listed the house for $519,900.”
“The Rysdams are among a record number of Arizonans trying to sell their homes in today’s slowed market. More than 50,000 houses and condos were listed in March, according to preliminary figures from the Arizona Regional MLS. A healthy market typically carries about half of that number, analysts say.”
“Investors are unloading homes. Those left over from the boom are trying to get rid of houses that are declining in value. ‘They are the amateur speculators of last year or the year before,’ Valley housing analyst RL Brown said, noting that big inventory means price softness. ‘Their ‘wink-wink’ loan of two or three years ago is about to change into a serious burden.’”
“The Rysdams spent about $20,000 upgrading the house for sale. The couple bought their house for about $205,000 in 1994 and didn’t pull ‘a penny’ of equity out. They are averaging a showing a day, but if they don’t get an acceptable price, they are prepared to walk away from a $30,000 deposit on a new house.”
“‘For us, the only real variable is what we get out of this house,’ he said. ‘The market doesn’t care how much I owe on my house. It’s irrelevant to what the market will pay for your house.’”
“Some agents say they are going on listing appointments only to find cranky and argumentative sellers. Agents are turning down listings because sellers won’t budge from their target prices.”
“‘If you go to a lawyer or a doctor, you are paying a lot for that opinion,’ said (realtor) Doreen Drew. ‘But in real estate, they argue with you, even though they are paying huge amounts for you to sell their house.’”
“But buyers still hold the upper hand, she said. And she has seen that directly at one of her listings. ‘The buyers want everything,’ she said. ‘Sellers don’t want to give up everything. In this house, the seller has reduced the price $50,000. In her mind, she has done all she could do. And now the buyer wants her two favorite chairs.’”
The Review Journal from Nevada. “The number of single-family homes, condominiums and townhouses for sale in Las Vegas rose for the third straight month, the Greater Las Vegas Association of Realtors reported.”
“Single-family inventory climbed to 21,287 in March, up 22.4 percent from the same month a year ago and 8.4 percent from February. There are nearly 6,000 condos and townhouses for sale, a 63.5 percent increase from a year ago.”
“Meanwhile, sales have plummeted. Realtors sold 1,605 single-family homes in March, down 36.3 percent from a year ago. Condo sales were down 47.2 percent to 341 units.”
“To assure recovery and accelerate absorption of excess inventory, prices must adjust to reflect the ‘realities of the market,’ especially buyers’ expectations, Houston developer Jim Noteware said.”
“‘Very simply, buyers will not re-enter the market until they are convinced that prices have hit bottom and are beginning to recover,’ he said. ‘Sellers must therefore make price adjustments necessary to bring buyers back to the market. The alternative is continued suspension in transactions, overall market uncertainty and the costs associated with both the carry during this period of suspension and the cost of uncertainty.’”
“Dollar value for homes sold during March totaled $604.8 million, down nearly 37 percent from a year ago. Condo and townhouse sales totaled $79.8 million, down 46 percent from last year.”
“A few years ago, it seemed as if everyone knew someone in Las Vegas who was getting their real estate license and cashing in on the housing boom.”
“Membership in the Greater Las Vegas Association of Realtors grew from 7,959 in January 2003 to 16,379 in January 2007. Statewide, the number of licensed real estate agents jumped from 17,718 in 2000 to 36,785 in 2006.”
“Realtors are working harder to earn their commissions. They’re having to pick up the phone for ‘cold calls,’ knock on doors and spend more money on marketing. Some are finding new careers or taking second jobs.”
“Instead of focusing on inactive licenses, (consultant) Jeremy Aguero suggests observers look at the number of agents in relation to overall population. That figure stood at 19.8 licensed real estate agents in Nevada per 1,000 population in October, the highest rate on record, the Nevada Division of Real Estate reports.”
“That’s 32.9 percent higher than the 14.9 licensed agents per 1,000 population in 1996 and 55.9 percent higher than the 12.7 figure in 2000.”
“‘Regardless of (home) price escalations or declines, it is highly unlikely that the volume of transactions reported between 2003 and 2005 will be repeated during the next 24 months,’ Aguero said, ‘and it will be difficult if not impossible to sustain this level of employment.’”
“Broker Tony Silva said Realtors need to educate their clients and be honest about market conditions. ‘It’s got to be both sides,’ he said. ‘You can’t get greedy on either side, buyer or seller. It’s not 2004.’”
“With subprime lending’s meltdown, Las Vegas will see a resurgence in FHA and VA home financing, Silva said. There are nearly 11,000 homes on the MLS under $304,000, which is the FHA loan cap, he said. Another 1,584 homes on the MLS are ’short sales,’ or homes being sold for less than the mortgage balance owed to the bank.”
‘Allure Las Vegas, despite the odds, is now nearing completion … sort of. The 41-story, 428-unit high-rise on Sahara Avenue, just west of the Strip, is expected to open in September. Yet market demand has plunged, due to more available inventory than sales, reports a Las Vegas-based business advisory firm.’
‘A total of 98,432 condominium units were built, planned or underway in the fourth quarter, yet only 4 percent had actually been completed. Allure was among the survivors. ‘We’ve seen a positive uptick in activity this year,’ said Bea Godwin, Allure’s vice president of sales and marketing. ‘We had a launch party for Tower Two last year, but that was during the market frenzy and things have changed since then.’
‘Nevada lawmakers heard pleas to step up regulation of the mortgage lending industry from people who said they were victims of fraudulent real estate deals. Carol Wolfe sobbed as she told the Assembly Commerce and Labor Committee on Wednesday about her ordeal with a ‘mortgage rescue’ company that told her she could keep her house if she signed over her title and leased the home. The house was soon sold to another company. ‘I had to move out, get an apartment and I lost everything,’ said Wolfe.’
‘Assemblyman Marcus Conklin, prime sponsor of AB440, said Nevada is a ‘hot spot’ in the nation for mortgage fraud, and ranks No. 1 in the per capita rate of foreclosures. The most common scheme uses fraudulent appraisals to boost the price of a home.’
‘Scott Bice, commissioner of the Nevada Mortgage Lending Division, said it’s time to impose criminal penalties. ‘It’s my belief that until some of the people that perpetrate these actually go to jail, it’s not going to make a big impact on the industry,’ Bice said.’
What was Scott Bice doing the previous three years during the boom? Maybe making sure he had enough staff to go to lunch with.
Scott Bice is not the villan here!
He has been knee deep in the US Mortgage collapse /fraud of 12/2005, that took nearly $1 billion in greedy assets down!
Also, most STATE positions are 420 mile north of Las Vegas, in Carson City. The state operates on limited staff. For those of you in NYC that would be asking someone from Buffalo to monitor your town! Meanwhile the fraud in Carson city alone probably keeps one man busy!
Besides the lenders were Federal! What was the Fed doing?
Hey Scott! How ya been?
LOL
Damn funny! Sure glad I’m no longer a broker.
The Mortgage Lending Division is headquartered in Las Vegas. The majority of the MLD’s resources are located there as well. As a former FHA bureaucrat, Bice did not have the necessary background experience to investigate operations such as US Mortgage. He would never have contact with such operations. As one of four “Branch Chiefs” at HUD’s Santa Ana HOC, his former duties primarily involved overseeing the examination of documents in closed FHA loans. Bice never should have been hired in Nevada. Unfortunately, Bice’s predecessor, Scott Walshaw, also lacked necessary experience. Bice focuses his agency’s resources on Mortgage Brokers who broker primarily FNMA/FHLMC loans instead of the high risk operations that also happen to fall under NRS 645B. Like his predecessor, there have been unnecessary losses under his regulatory helmsmanship. Bice has had three years to look at US Mortgage. Ridiculous.
I remember looking in 2004 in Virginia Beach and if you did not put a bid in within an hour the house was gone. One of the first questions they wanted to know what type of loan you were going for because the loans from some agency would not get approved for the prices sellers were asking. It was government loans - might have been the fha or the va - but they would not loan the money.
That was a signal many did not stop when they needed too.
People wanted a house so much they were putting no conditions on it. They were buying houses without inspections. It was crazy. Not a time to buy after having seen in Connecticut housing drop a whole lot in the early ninties. The housing was not worth the money.
My oh my how times change. Now there is 12,000+ homes in the MLS, and oodles more FSBO. When the local paper runs certain types of stories on their website, the majority of the replies are people who left or plan to leave. The salaries are fairly stagnant, taxes jumping (cities are _NOT_ saving for a rainy day, they are buying $75,000 paintings for the new $50mil + arts center that they had to build to go with the new convention center that won’t pay for itself). Lots of citizens moaning about the tax prices. Alot of new cars on the road, but generally in bad taste (not many BMW M3 or M5 or Subaru STi or AMG or the like). LOTS of 22-24″ chrome rims, of course. Lots of condos in the pipeline. I had a number of friends buy recently, they hate renting. A number of places for rent, and I swear some $300K places are renting for 1000/month (388 bousch st. and what not). Lots of reduced on craigslist houses for sale, a number of first month frees in the rentals, and some big layoffs like Ford in Chesapeake and Symmantec in Newport News.
The citizens can vote so they are in control. Unfortunately, most people are stupid, so they vote the familiar name or based on the D or R next to the name. You deserve the government you have
thank you for the compliment
This comment is for Jerry from Richardson as well as VaBeyatch
When I lived there over 2 years ago, most people voted in the R’s and on the school board and city council most were either realtors or graduates of the Pat Robertson school - local businesses owners either did not vote or were part of the realty business - many deals went down over the 9 years I was there in favor of realty. Eminent domain for the Hilton and other such nonsense - People would complain but not vote out the problems.
I live in Norfolk now, not Virginia Beach…. but yea. I think Oberdorf(Spelling) will get the boot finally. It got close last race.
That issue remains that the people who are big in real estate, have lots of money and pay lots of taxes. So they will probably remain in control behind the scenes.
I just can’t wait to say “ON YOUR KNEES SELLER!” Then its time to buy!
“‘When we see a whole bunch of (for-sale) signs on one street and run the ownership (through county records), very frequently we’ll find that almost the whole street will be owned by California investors,’ said (broker) Kate Southard. ‘I know that’s what’s happening because the tax bills are being mailed to out-of-state owners.’”
CA equity locusts strike again..! They are worse than a biblical plague, and I am not religious…
California real estate always goes up.
It will comeback again…someone told me today!
Yeah, when Bakersfield is ocean-front, expect the prices to skyrocket
For us, the only real variable is what we get out of this house,’ he said. ‘The market doesn’t care how much I owe on my house. It’s irrelevant to what the market will pay for your house.
At least we have a seller here who understands how markets work.
Buyers don’t care and can’t afford to care how much the seller bought the house for or what the loan is on the house. This education process will take some time to reach the masses.
‘The market doesn’t care how much I owe on my house. It’s irrelevant to what the market will pay for your house.’
The market doesn’t care what one individual owes on his house, but it does care what lots of individuals owe. If many sellers are underwater but still able to make the payments, the consequence of falling prices is a withdrawal of supply from the market among those who can ride out the downturn, which has a stabilizing effect on prices. However, I predict this time will be different, as too much loose lending has put a large number of FBs in the path of future foreclosure.
However, I predict this time will be different, as too much loose lending has put a large number of FBs in the path of future foreclosure.
Well said.
Hence the large volumes of short sales.
This will get interesting.
Got popcorn?
Neil
no, but how about some Junior Mints?
If many sellers are underwater but still able to make the payments, the consequence of falling prices is a withdrawal of supply from the market among those who can ride out the downturn, which has a stabilizing effect on prices.
No it doesn’t, because those sellers also would have been buyers of another house if they had been able to sell the place. It makes no difference if they sell or not.
What drives prices is forced exit from the market (can’t make payments, foreclosure, death, etc), voluntary exit (flippers getting out to stop the bleeding) and builders unloading inventory at whatever price will sell.
At least we have a seller here who understands how markets work
No not really………..
but if they don’t get an acceptable price, they are prepared to walk away from a $30,000 deposit on a new house.”
Their original purchase price was $205k and they put $20k into improvements, and their realtor talked them into listing at $520. That’s a $195k profit, which is a nice chunk of change any way you look at it. I’ve got zero sympathy that the real price will be closer to their actual listing than the $600k they originally wanted.
Actually a TWO-ninety-five-K profit, minus commission or whatever.
Gotta fix my math; the profit would be $294k if they get their $519k asking price. An even better deal for them.
Yeah, but it is still not enough for them and if they don’t get their price they will take their ball and go home!
we can only hope these idiots continue to churn out those 30k deposit checks until the house sells….that’ll teach those damn builders!
At least the builder can still call it a sale, and just gloss over the cancellation in a few months. Look Wall Street, the Rysdams bought a new house from Builder X.
“For us, the only real variable is what we get out of this house,’ he said. ‘The market doesn’t care how much I owe on my house. It’s irrelevant to what the market will pay for your house.”
First lesson learned, now try tacking this one on: the market also doesn’t care how much you spent on improvements. Just because you blew out a couple of walls to put in a great room or added a koi pond, we don’t have to pay you back for such nonsense.
koi pond, too funny
if anyone is familiar with the north phoenix area, this house is in the Arrowhead Ranch area.. very nice indeed. But i don’t think its worth what they are asking for.
given a 6% appreciation over 1994 to today, somewhere around $400K would be acceptable, but then who said it was a sane market the last few years.
lets wait and see where the dice falls.
got cash?
You would have to deduct another 80k for gang banger and blight encroachment.
400K IS NOT ACCEPTABLE.
Unless of course you dont do your own taxes.
Hey, McCain told me that it was perfectly safe to walk around in N. Phoenix…
“Broker Tony Silva said Realtors need to educate their clients and be honest about market conditions. ‘It’s got to be both sides,’ he said. ‘You can’t get greedy on either side, buyer or seller. It’s not 2004.’”
As a buyer I can be as greedy as I want. Either accept it or keep feeding your alligator.
Yeah, funny how no one was telling the Sellers not to be too greedy a couple of years ago. Now, suddenly, the Sellers AND the Buyers can’t get greedy… I am the Buyer. I am the Market.
You can’t get greedy on either side, buyer or seller. It’s not 2004.’”
Oh yes I can. Why? Because I have time and I have cash. What do you have Mr. HomeDebtor beside a mountain and an overpriced stuccobox????
good point time is our side now
ahhh the winds of change are a blowing
on our side
sorrry
“Broker Tony Silva said Realtors need to educate their clients and be honest about market conditions. ‘It’s got to be both sides,’ he said. ‘You can’t get greedy on either side, buyer or seller. ”
Why won’t these d@mn buyers listen to me? Stop being “Greedy” and Buy something! I have bills to pay!
Why won’t these d@mn buyers listen to me? Stop being “Greedy” and Buy something!
OK so when an amateur flipper buys a house with a liar loan with the intention of flipping it, he’s not greedy, he’s “savvy”. But when a prospective buyer is waiting out the declining market, he’s greedy, not “prudent”?
I think broker Tony Silva needs to go back to adjective school.
This has been a huge issue of mine. I am sick of the local fish wrappers only looking at things from a “Sellers Point of View” but then I guess we all know who is placing all those adds.
Regarding the family in Glendale AZ, why do all the morons of this genre, put a “30k deposit” on a new house before they even sell their old house??? What stupidity! But, their stupidity is deeper than thought, when they make comments like, “we’re prepared to lose our $30k deposit” as if it is NO BIG DEAL…
Let’s face it, their current home is a drab, cookie cutter, stucco box, and so is the one they are probably buying in the valley. All I know, is that the air here is disgusting today, smoggy with a good amount of PM10 and PM5 to clog our lungs, and I can barerely see the moutains behind Cavecreek…the White Tanks, out by Surprise are completely invisible in the dust and smog from where I stand in N Scottsdale.
So much inventory, is yet on the sidelines. Phx metro was cheap for a reason. It should return to atleast 2003 prices, if not lower, because the quality of life is 1/2 as good as it was in 2002.
In the Scottsdale Airpark, nearly every building has a “SPACE AVAILABLE” sign, buy one of the cheeseball commercial realty companies….yet they KEEP ON BUILDING… more more more, how do you like, how do you like….more more more.. JUST LIKE that Disco song.
Open in another tab: accompaniment
Last night a little flipper came dancin’ to my door
Last night a little flipper Came pumpin cross my floor
She said “Come on baby I got a mortgage for love
And if it forecloses pray help from above”
In the midnight hour she cried- “more, more, more”
With a flipper yell she cried- “more, more, more”
In the midnight hour babe- “more, more, more”
With a flipper yell- “more, more, more”
More, more, more.
She don’t like debt slavery, she won’t sit and beg
But when I’m tired and lonely she sees me to bed
What tied you down and brought you to be me babe
What tied you down I need you here by me
Because
In the midnight hour she cried- “more, more, more”
With a flipper yell she cried- “more, more, more”
In the midnight hour babe- “more, more, more”
With a fliper yell- “more, more, more”
He lives in his own heaven
Collects it to go from the seven eleven
Well he’s out all night to collect a deal
Just so long, just so long it don’t kill his credit.
I walked the close with you, babe
A thousand miles with you
I dried your tears of pain, babe
A million times for you
I’d sell my soul for you babe
For money to burn with you
I’d give you all, and have none, babe
Just, just, justa, justa to have you here by me
Because
In the midnight hour she cried- “more, more, more”
With a flipper yell she cried- “more, more, more”
In the midnight hour babe- “more, more, more”
With a flipper yell she cried “more, more, more”
More, more, more.
Oh yeah little baby
she want more
More, more, more, more, more.
Oh yeah little baby
she want more
More, more, more, more.
LOL!
Billy Idol! Woo Hoo! How about, “House without a loan”
I’m all out of cash,
One more month,
Will bring a fall.
When the Sheriff comes
don’t call me on the phone
to just foreclose my home.
It’s easy to get loan,
It’s easy to groan
when I’m out of funds.
Le maison sans argent, house without a loan.
Le maison sans argent, house without a loan.
Le maison sans argent, house without a loan.
Le maison sans argent, house without a loan.
http://www.sternton.com/midi/m1/RebelYell.mid
Rebel Yell is a great song, but I think he is referring to the *ahem* distinguished disco song “More, More, More” by Andrea True:
http://www.youtube.com/watch?v=lX1lC-cIpek
why do all this genre, put a “30k deposit” on a new house before they even sell their old house???…*snip*… “we’re prepared to lose our $30k deposit” as if it is NO BIG DEAL…
A friend of mine contracted to buy a house before her current residence was sold. This was in February. Next door house went up for sale two weeks later. To date, after one price cut, neither her house nor neighbor’s has sold. My friend also said (in February) “We’re prepared to pay two mortgages for six months.”
This past Saturday she phoned me to ask me a “Catholic question”.
Which saint do you bury when you need to sell a house?
I told her St. Joe but he’s getting quite a workout lately and I wasn’t sure of his effectiveness. They’re going to do another price reduction but not as low as the smarmy realtor suggests (they’re in this situation from taking that jacka$s’s advice in the first place.)
“We’re prepared to pay two mortgages for six months.”
Sounds good. Then what’s PLAN C?
This downturn will start slow, but people simply do not have the funds to hold out this time.
I just had a “discussion” with a coworker on why he believed California real estate would always go up. He’s investing in California real estate while preparing to leave the state (due to the cost of living). Somehow he couldn’t make the connection…
Got popcorn?
Neil
Neil: Somehow he couldn’t make the connection… between what he was doing and his motivation for doing it.
what a dummy!
Plan C is paying rent after losing both houses….that is, if they can find someplace that doesn’t require a credit check.
Plan D is sleeping under the bridge
Any person that would sign a purchase contract with a builder that was not subject to their home selling is stupid . To put a 30k deposit down that isn’t refundable is stupid . I can’t even believe that builders are writing up these one-sided contracts .
I already sold my house and had a cash buyer and I still made my new purchase subject to my other house closing escrow or I would get my deposit back .
If the builder won’t allow your offer to be subject to obtaining financing ( with the rate capped ) as well as closing your prior escrow it isn’t worth it . Why anyone would sign a non-refundable deposit agreement in a market like this ,or any market for that matter is ,is just plain stupid . Never listen to the REIC when they tell you that “its always done this way “.
I’ve got to second you there, HW. I can’t understand why someone would sign a contract like that either. Or a contract that required me to use their lender. Or any of the other crap that builders got away with for the last four years or so. That can only happen in a buying frenzy. If you had to stand in line…
I almost bought a house from a builder in a marina back in 2002, but they insisted that I use their lender, and seemed offended that I wanted to put 25% down. Of course I walked away. I plan on buying a house in that area from an FB or a bank in another two or three years, on my own terms, for less than they were asking back then - and with inflated dollars as well. Maybe I can get the seller to throw in a boat
Wiz-
My personal favorite is the we have to see your Fico and your bank account before we decide to sell it to you or even though you have a lender you have to prequal with ours. The silence on the phone is always worthy of a chuckle when I quote them the law. i always tell my clients to tell them to f*** off with that nonsense.
lol
maybe you didn’t get the memo “they are not building any more land in AZ”
seriously this is a serious item the realtors bring up, that 70% of land in AZ is either reservations or parks, so you got only 30% left , so hurry up and buy before its taken up.. yeah they do fail to mention that 30% of infinitely large tract of empty scrubland is still infinity.
got cash?
People keep asking me when I’m going to buy a house here in Phoenix. Well today after being here almost one year ( one year and I don’t have to pay back my moving allowance ) I had to inform my co-workers that Phoenix was a environmental Disaster in the making. They were not happy.
Hey—where have you been? And where’s that weekly PHX inventory count? Inquiring minds want to know…
Yeah, PTF, we really miss those updates!!!
“Broker Tony Silva said Realtors need to educate their clients and be honest about market conditions. ‘It’s got to be both sides,’ he said. ‘You can’t get greedy on either side, buyer or seller. It’s not 2004.’”
———————————————————————————-
Are you kidding, Tony!? With 21 k single family homes available for sale (and this probably doesn’t include FSBO’s), the buyer will determine the prices or keep shopping.
Guess what Tony? We don’t want your stinkin listings!
‘You can’t get greedy on either side, buyer or seller. It’s not 2004.’
As somebody else noted above, its prudent. Don’t like my offer? Counter it or Reject it.
But then again, its this attitude that keeps me spectating. Until I see that sellers have dramatically lowered their expectations, the various things that need to be done to prepare us (My fiancee and myself) to enter the market… won’t be done (e.g., pre-approved mortgage).
Coworkers pointed out today that I had to pay the market price and I should “change my attitude.” I responded that my attitude was fine; if prices do not show a significant correction within two years, I’ll be employed in another state.
I accept the market price is not in any way determined by me (the market is too large). Now its time for the seller’s to accept that too.
Got popcorn?
Neil
“Coworkers pointed out today that I had to pay the market price and I should “change my attitude.”
I am guessing that THEIR attitude is changing to fear about now…
I am guessing that THEIR attitude is changing to fear about now…
Funny… everyone who tells me this is someone who plans to sell RE within two years…
Ugh… Mistyped… Should have been: Everyone who tells me I should change my attitude is someone who needs to sell within two years.
“‘Look for how many homes are empty. There’s lots of them,’ LaMendola says. ‘We don’t have that many people transferring out of Albuquerque to have that many houses empty.’”
If you would’ve opened your friggin’ eyes you would have noticed that these homes never were occupied and were never intended to be occupied. You caught the specuvestor flu and only now are the symptoms becoming obvious. Good luck with that!
Yes and fortunately the cure for the specuvestor flu is lower the price medicine.
Starve a fever.
“Remember the investors who swarmed the local residential real estate market, buying up lower-priced new homes just a few years ago? Well, they’re back— only now they’re in selling mode. The number of existing single-family homes on the market is double what it was a year ago and greater than it has been since 2000.”
I remember stories about how the investors had all left the market. Now it seems they are back again, driving down prices, as predicted on this blog many moons ago.
Yes, and I won’t believe the “investors” have left the buy side of the market until we have a month of No Sales At All, or of No Rentals Available. People who are buying now are still believing their “investment” is safe, usually in the It’s-Different-Here mode.
Yes, and I won’t believe the “investors” have left the buy side of the market until we have a month of No Sales At All, or of No Rentals Available.
Agreed. A coworker (conversation noted above) is looking to buy one more investment… It amazes me how 90% of the USA “is different.”
Got popcorn?
Neil
“very frequently we’ll find that almost the whole street will be owned by California investors,’”
You too can take a weekend course for 6K and then run off to Albuquerque to scoop up the riches. Whoooo-hooooo!
…scoop up the riches!
YAH WHOO!! There’s gold in them thar Hills!!!
lmao imploder
I live in Albuquerque and a couple of years ago I was looking for a place to rent. I answered several Craig’s list ads for houses on the westside because the rents were comparable to luxury apartment complexes but with the houses you get a whole lot more room.
I saw one place that I almosted rented on a street where the entire street was owned by the same inverstor from San Jose, CA.
The propert manager pestered me for months after I decided I didn’t want to live on that side of town.
“very frequently we’ll find that almost the whole street will be owned by California investors,’”
I’m very happy to know that my fellow Californians will have so much of their cash tied up in unproductive assets. For example, coworkers who claim they’ll buy in… obviously won’t be able to in a year (due to lack of a liquid down payment and inability to “leverage” existing real estate investments).
Real estate local? Not anymore!
Got popcorn?
Neil
I think that you hit on something very poignant actually. There will be a lot of Clownifornians that have severe cashflow problems in coming years…regardless of their income.
Got Cash???
“‘Look for how many homes are empty. There’s lots of them,’ LaMendola says. ‘We don’t have that many people transferring out of Albuquerque to have that many houses empty.’”
I see lots of empty homes in my zip code as well (San Diego — 92127). Soon after dark, you can drive past whole subdivisions of recently-built homes with no lights on as evidence of occupancy. I am really curious to know who holds the bag on all of this excess inventory, and how it will be disposed of without causing a price collapse. Any thoughts on how to explore these questions?
RANCHO BERNARDO is one of the locations I’m watching in SD. Currently it looks like all the old people in the 55+ communities are undercuting each other pretty bad.
I agree with your statement about all the empty homes. My wifes parents live in Poway and when I drive around over there you can pretty much point out the foreclosures / FB’s.
RB / Poway is going to get crazy in a couple of years.
I think the coming situation can be best described as a cemetery: rows upon rows of tombstones, each with a name on it we do not know. However, we do know that it’s a dead person…and lots of them.
“I see lots of empty homes in my zip code as well (San Diego — 92127). Soon after dark, you can drive past whole subdivisions of recently-built homes with no lights on as evidence of occupancy. I am really curious to know who holds the bag on all of this excess inventory, and how it will be disposed of without causing a price collapse. Any thoughts on how to explore these questions?”
I think they’re mostly builder owned. Same story in northern NV. Staggering numbers of completed homes, unoccupied.
“I think they’re mostly builder owned. Same story in northern NV. Staggering numbers of completed homes, unoccupied.”
My guess, too. At what point does the truth get revealed?
“At what point does the truth get revealed?”
That’s a great question. It’s the rotting carcass under the rug that can only be ignored for so long. Every house represents cash burn. As the spring selling never materializes, builders will be forced to make some serious decisions. Either cut the prices dramatically, or get into the property management business.
They won’t get into the property management business.
In the paper the other day, the Donald T. Stering Corporation announced that they had just lined up over a $Billion credit facility to acquire properties in LA and LV. Of course, they mostly buy up condo towers and rent them out, but maybe they’ll consider flat communities as well - if they’re cheap enough. This announcement is pretty big, Sterling usually raises money a few hundred million at a time.
“They won’t get into the property management business.”
Oh, I don’t think they will either. It was a facetious comment.
Could that be a prelude to Sterling moving the LA Clippers to Vegas?
when they become vandalized, unoccupied - except by squatters, what would you do if you were mayor? I would bulldoze the lot of them….
The time may come when these places will become more valuable after they are burned down. That’s when We’ll see a lot of “fire sales”.
“Never underestimate the power of incentives”. - Charlie Munger.
Got a match?
I’m suspicious every time I watch the news and see a McMansion go up in flames . . . . the only logical way out for these FBs?
You can go by some of these developments where the homes have never been occupied and can actually see bleached out swaths on the carpet because the windows have never had window coverings from the day of completion.
LOL.
Wow.
I drove up through The Vistas in Sparks this weekend to look at a rental. The amount of new construction was staggering. I got lost and ended up on a new streets that weren’t yet on the map. It seemed like the houses were getting finished, then going up for sale immediately. Numerous houses in a row on a street would be for rent or sale followed by several in various stages of construction. It was like this on every street! If you add all that unfinished inventory to the current inventory the future looks even bleaker for Real Estate. All these homes were built up in the hills with windy roads, no thanks with the nasty ice and snow we can get in the winter.
We come from the lack of ice and snow,
From the land of sun where the sweet deals blow.
The hammer of the Fed
Will drive our FeeBs to new lands,
To fight the horde, to sing and cry:
Foreclosure, I am coming!
(anguished wailing…)
The Arizona Republic. “Dave and Karen Rysdam got a jolt when pricing their Glendale home to put on the market. They wanted to sell in the low $600,000s, but their agent recommended an aggressive price in the low $500,000s.”
“Surprised, the couple consulted an appraiser, who offered similar advice. Reluctantly, they listed the house for $519,900.”
…“The Rysdams spent about $20,000 upgrading the house for sale. The couple bought their house for about $205,000 in 1994 and didn’t pull ‘a penny’ of equity out. They are averaging a showing a day, but if they don’t get an acceptable price, they are prepared to walk away from a $30,000 deposit on a new house.”
…“Some agents say they are going on listing appointments only to find cranky and argumentative sellers. Agents are turning down listings because sellers won’t budge from their target prices.”
“But buyers still hold the upper hand, she said. And she has seen that directly at one of her listings. ‘The buyers want everything,’ she said. ‘Sellers don’t want to give up everything. In this house, the seller has reduced the price $50,000. In her mind, she has done all she could do. And now the buyer wants her two favorite chairs.’”
Today: Profiles in (Seller) Greed and Denial
Tomorrow: Profiles in Humility and Acceptance
Give the damn buyers your chairs you fool .
I’ll buy her chairs, but I don’t want her house.
LOL exactly Wiz. Some people are just blinded by stupidity.
HARM: The Rysdams are in pretty good shape really - $300,000 profit - minus $20,000 minus carrying costs for 13 years. I’m guessing they are competing against sellers that cannot drop their asking price below their mortgage.
Timeout. Does anybody really believe that this couple has never tapped into a single penny of that $300,000 profit that is burning a hole in their pocket? I don’t believe that for a minute. Let me see their credit card bills.
‘The buyers want everything,’ she said. ‘Sellers don’t want to give up everything. In this house, the seller has reduced the price $50,000. In her mind, she has done all she could do. And now the buyer wants her two favorite chairs.’”
Ummmm,… Mr Seller…….a little advice for you - if the buyer wants the chairs, give ‘em the chairs. If you don’t, those two chairs will be the most expensive chairs you’ve ever owned.
From the buyer feeding the squirrels in 2004 to the seller giving up their favorite chairs in 2007, my how the RE world has changed. Just give them f___ing chairs.
I was thinking the same thing.
We will also need letters as to why you want me to buy your overpriced POS.
Great idea.
“From the buyer feeding the squirrels in 2004 to the seller giving up their favorite chairs in 2007, my how the RE world has changed.”
The worm has turned.
“From the buyer feeding the squirrels in 2004 to the seller giving up their favorite chairs in 2007, my how the RE world has changed.”
I want the chairs, table, all of their fine wood bookcases, and the stupid squirl served well done with a nice Chianti and lima beans.
Seriously, how long will it take sellers to wake up? Oh yea… that takes fear. (Looks at watch.) We’re almost there…
Got popcorn?
Neil
I believe it was ‘fava’ beans (from Silence of the Lambs), but I get the picture
. Oh, and you forgot to ask for a little “alone time” with their teenaged daughter.
I believe it was ‘fava’ beans (from Silence of the Lambs),
aaagh! Miss-quote by me. It was fava beans.
Oh, and you forgot to ask for a little “alone time” with their teenaged daughter. You haven’t seen how pretty my fiancee is.
I’d rather have their furniture. 
it rubs the lotion on its skin, or else it gets the hose again
Good one
:)
Everything you give the buyer you DON”T HAVE TO MOVE!!! My wife freaked out leaving the washer and dryer the first house we sold. Then I bought her a brand new set at the next house. She’s a lot more flexible now.
If you don’t want to leave it, take it out of the house before you start showing.
I don’t care what the market is like, if you leave SOMETHING in your house while its being shown, some weenie buyer will ask for it to be included in the purchase price. So take your crap out unless you plan on using it as a bargaining chip when you try to sell.
Good call! Any sharp real estate dude/dudette these days will be hip to that when staging the home: “Hide anything you don’t want included in the sale, folks.”
Oh, how the worm has turned indeed . . . .
“And now the buyer wants her two favorite chairs.”
Give up the chairs or give up your ass….is this really a difficult choice? Be glad the buyer isn’t asking for a “date” with the 19-year old daughter thrown in.
I’m sick to death of reatwhores advising buyers to be “reasonable”. What was so reasonable about a-hole owners demanding “nice buyer” letters (way back when) along with the muti-bids? They made us grovel–it’s their turn to get the screws turned a little bit.
“it is highly unlikely that the volume of transactions reported between 2003 and 2005 will be repeated during the next 24 months,’ Aguero said, ‘and it will be difficult if not impossible to sustain this level of employment.’”
I think the dude meant 24 years.
Re Las Vegas. Anybody else catch last night’s “Apprentice” episode wherein the remaining candidates were to develop marketing campaigns for the second Trump Tower in Vegas? I don’t know how many months ahead these things are taped, but the story was, Trump Tower One was sold out, Trump Tower Two available - is it actually built? If not, will it ever be?
Chump Towers
the second Trump Tower in Vegas?
Yes, but actually I think that’s one of the few that will STILL succeed.
First, it has a superior location next to the high-end mall and across the street from the high-end Wynn and Venetian hotels. (Wynn charges $10 just to enter the Ferrari dealership, has the only golf course remaining on the Strip, the Venetian has a major convention center, etc.)
Second, the Trump brand name is vastly more powerful than any other real estate developer and the TV show is worth a lot of sales to status-seekers. Compare the publicity effect of The Apprentice with other fame-making shows like American Chopper or Miami Ink.
Third, Las Vegas is still a smallish city that draws party/resort crowds from the vastly larger Southern California metros. There’s solid demand for choice developments, even as the cookie cutter suburbs melt in the heat.
its different in Vegas.
RIIIIGHT!!!
Can you read?
NOT Vegas…this particular location and developer… Vegas is doomed overall.
“From the buyer feeding the squirrels in 2004 to the seller giving up their favorite chairs in 2007, my how the RE world has changed.”
And so are the Trump buyers when they go for resale. However, I agree with John, these properties will initially sell.
But Trump’s name alone isn’t enough. Otherwise, explain all of his unsold properties in Palos Verdes California? Hmmm? That condo complex that he loaned his name to in Florida?
In some areas Trump on the building sells. In some his name adds no value.
Got popcorn?
Neil
“Can you read? ”
no
I understand what you are saying though, a location next to some BS car dealership that charges admision to breath on a vehicle, and the “Trump” brand are a no-miss opportunity. Oh yeah,. the party crowd flush with dough.
I may go out and buy right now, on your recomendation.
Thanks
dude chill!,
there are stupid ppl. everywhere with bukoos of money, we are talking about the uber rich .01% of the world population, and to them price doesn’t matter, exclusivity does. and what Trump provides is that ‘exclusive’ factor no matter how asanine it may sound to us working stiffs. and this seems to be one location where the donald ‘might’ be able to pull it off.
things to look for is how much skin does he put in the game, i.e does he has his own real money involved, unlike the licensing fiasco in FL, where only the novea rich, rather wannabe rich, fell for.
Prediction. In the next ten years, the world-wide uberrich will get the a$$ kicking of their lives. Now, a gated community in Paraguay would fill fast…
point well taken.
I was fired up at work, scanning the articles. Just got home and prescribed the proper meds for a nice relaxing evening of doing taxes.
Prediction. In the next ten years, the world-wide uberrich will get the a$$ kicking of their lives.
LOL!!! (*gasp*, OMG that was sooo funny…. You … were… kidding, right?)
Prediction. In the next ten days, more and more of us will become grumpy as we attempt to complete our annual ordeal with Uncle Sam.
the uber rich will get richer and the middle class will shrink even further into the pit…is it really that hard to see THAT coming down the pike????
1040
Schedule D (PART II; 10 LINES)
Schedule E
EIC
After completing on 15th March
1120-S
4562
4797
Scedules K-1
Taxes are FUN!
And only TWO State rerturns to round it out.
ughh…
Ummm. . .
I don’t mean to be rude, but very few of the “uber rich” (or the uber cultured or the uber educated) would consider the Trump name to be “exclusive.” He is a buffoon. He can still sell to uber wannabees maybe, but even they will eventually figure it out.
we’ll see!
I think Trump will cut & run.
The Trump Towers and MGM City Center are being bought by Asians at 1/2 price due to the declining dollar. The Strip in Vegas is like owning beach front property in Malibu. Go back to your basics Location, Location, Location. The declie in prices is uneven in every city.
What part of “Las Vegas is a sh*thole in the middle of nowhere” don’t you understand?
Trump Tower 1 is set so far back it might as well be on Industrial Rd, not Las Vegas Blvd. I was there about two weeks ago, the curtain wall was almost to to the roof. It’s perfect for Las Vegas - a generic building with the most tacky gold glass Trump could find.
Trump Tower 2 would be a curse on the city if it succeeded
“Remember the investors who swarmed the local residential real estate market, buying up lower-priced new homes just a few years ago? Well, they’re back— only now they’re in selling mode.”
This statement is annoying, yet humorous. These clowns deserve to lose their @sses. Anyone still wondering why prices skyrocketed need only read this.
Inventory up enormously from just last month. More inventory to come as teaser loans reset, flippers bail out and foreclosures hit the sales channel.
Sales down and almost certainly heading further down. Why? Because almost nobody can afford to buy a house at the still inflated prices using conventional loans. People who would like to sell and move or sell and move up can’t - basically because they simply can’t sell. There just aren’t any buyers at their fantasy price and if they drop the price they would have to bring money to the table to sell.
In short it’s starting to sound like the RE market is locking down. It’s like Japan in the 80s and 90s, fifteen straight years of declining real estate values and low or negative economic growth. Everything, and I mean everything, points to this getting a lot worse and lasting a long time.
Meanwhile, on Wall Street and in the Main Stream Media, the conventional wisdom is that we got jobs, we got growth, we got optimism, we got some profits so everything is rosy as can be. Real Estate problems are confined to those nasty poor sub-prime losers and can’t possible effect the rest of us.
But it wasn’t sub-prime losers who were pulling out equity for Beemers and trips to Europe. It wasn’t sub-prime losers who were buying 4 tract homes in Arizonia sight unseen. It was Mr. Joe Greedy Middle-Class and his wife Mrs Jane Wanna-Be-Rich. There are millions of Joes and Janes and the results of their greed and stupidity has yet to be factored in to the markets.
Binko predicts a decade long real estate meltdown frosted with a hard recession or even a little bitty depression. When it all sorts out we’ll be a lot poorer in a great many ways. But, hey, houses will be very very cheap.
Speaking of foreclosures, the San Diego trustee deeds number for March is out. The drop in February to 408 (from 457 in January) was a statistical blip as we all expected. The March number is 509. March 2006 was 106, March 2005 was 28.
http://www.sddt.com/Finance/graphs/f24dfbf237ac4c339a5230af2ef.png
Notices of default show the same trend, now at 1517 for March 2007.
http://www.sddt.com/Finance/graphs/925c51f96d17f897d7cd5004520.png
If they legalize the 30 million illegal aliens, that means they would need 1 million more houses.
where are they living now!
well, at least 80 of them were arrested in a house in westside Phoenix.
They go for the group discount.
“So why would investors choose to sell now?
Southard says she believes it’s part of a cycle: Investors buy a place and rent it out for a year after hunting for a tenant for a few months. Fourteen months from the date of purchase, the lease expires and the renter vacates, leaving the owner with the next few months of mortgage payments and a home that needs maintenance.”
What a load of BS. They’re hoping to get out before everything tanks in Albuquerque just like it’s doing in CA. Problem is ‘it’s different here’ - not too many people want to live in these crappy developments and finding a good job is hard work. Besides, very few people were able to rent these places anyway. I had people begging me to make them any offer for rent when I was looking around.
…and what’s it with these “coyote fences?” To me it looked like the yard of a prison. And I was in an upscale neighborhood. (No offense Albuquerque residents.)
Those are to keep the swarms of buyers away…
Albuquerque gonna be like Tucumcarri real soon like.
its just down I-40 if your driving fly-over land
And I’ve been from Tuscon to Tucumcari
Tehachapi to Tonapah
I’ve driven every kind of rig that’s ever been made
I’ve driven the back roads so I wouldn’t get weighed
And if you give me
Weed, whites, and wine
And you show me a sign
I’ll be willin’
To be movin’ …
But not to New Mexico…
“‘If you go to a lawyer or a doctor, you are paying a lot for that opinion,’ said (realtor) Doreen Drew. ‘But in real estate, they argue with you, ….”
“Oh Gawd, yea lady, you Realtors™ are right up there with Surgeons and Supreme Court Justices…. LMFAO”
I’m glad you said it and not me. I don’t want to sound like us lawyers are the brightest tools in the shed, but what the heII. I went to school for 7 extra years. Surgeons go for upwards of 12 extra years (sometimes more). Doesn’t make us better people or necessarily smarter, but when you pay for our opinion, I hope it’s better than an ex-stripper who has been in the business for the last 18 months. Actually, I’d trust anyone who has spent the last 3 months reading the posts on this blog over ANY realtor I’ve ever met.
What are you talking about! She probably is still stripping Friday and Saturday night to keep the constant income:)
Doctors and lawyers charge by the hour - you know who they’re working for because you’re paying them. Realtors work on comission, so they’re working for the deal, any deal.
My last agent told me (with some smugness) that he was just like a psychiatrist to his clients - in other words, he had to listen and fix all of their problems, as being in escrow was a most difficult time.
I fired him. I can use a real estate attorney for transactions - at least I know I will be getting what I pay for.
We interviewed one guy who gave my wife one speil and me another one. We don’t stand for that from our kids or anyone else.
FB: “Doctor, I’ve got a bad case of overleverage and it’s making me sick!”
“Dr.” Doreen Drew: “What are your symptoms?”
FB: “Sleeplessness, stress, a general feeling of doom’n’gloom from that option-ARM reset staring me in the face. I just can’t go on like this, doc. Is there anything you can do for me?”
“Dr.” Doreen Drew: “Can you afford to sell or refinance into a FRM?”
FB: “Nah, I’m already at 120% LTV, plus the place has dropped 15% in value.”
“Dr.” Doreen Drew: “I think I have a solution for you, but it’s not for the faint-hearted. Have you ever heard of ‘organ donation’?”
Ha! I thought this was funny.
“But buyers still hold the upper hand, she said. And she has seen that directly at one of her listings. ‘The buyers want everything,’ she said. ‘Sellers don’t want to give up everything. In this house, the seller has reduced the price $50,000. In her mind, she has done all she could do. And now the buyer wants her two favorite chairs.’”
I posted above on the same comment. If the seller was smart they’d give ‘em the chairs and throw in a BJ for good measure. Far less painful than the reeming they’ll be taking 6 months from now if their sucker, er, I mean buyer, decides to walk.
No, no, the buyer wants her to FEED THE CHAIRS to her Realtor……
“‘If you go to a lawyer or a doctor, you are paying a lot for that opinion,’ said (realtor) Doreen Drew. ‘But in real estate, they argue with you
Doh-reen is a perfect example of how high up the totem pole realtors think they are. Doreen how long did it take you to get a license? A week or two? I’d be willing to bet it takes a little longer to become a doctor. Soon Doreen will be getting lessons on how to run the fry daddy at the burger doddle! DA.
A realtor is more like a salesperson than a professional. Do they consider used car salesmen to be professionals? I’ve never once heard of a realtor telling a client that it’s not a good time to buy.
it is a good time for tranactions any kind of transactions
now a realtor comapring themselves to a doctor or lawyer
is just ridiculous.
some of these realtors in nyc act like they are mba’s or ceo’s
self absorbed cheeseballs
Some of them probably are or have been.
‘professional’ is a skanky term to me….it can mean ANYTHING, e.g., “i am a Professional stripper”…..all the term means to me is that you take/make money in whatever job you do, i.e., you neither work for a non-profit nor are a volunteer
Yeah, what is a professional if a realtor is a “real estate professional”? I would say it would take at least 5 years (being humble) for a hardworking, motivated, intelligent person to know what I do in my profession. Most likely it would take closer to 10.
I bet it would take me 6 months, tops, and I would know everything I need to know about being a real estate agent. This is what is so funny about these gold-miners that jumped into real estate. They are going to think they can jump right back out and get real jobs. Good luck. I sure don’t fear that competition. I’m sorry you greedy fools but that “professional” you added to your name merely qualifies you to pour my latte or grease my weasel.
You beat me to it. My my… what an inflated sense of self-worth. It makes me want to borrow an oversized trout from txchick and just go to town on these idiot realtors.
a lot of people still have not got the Word. Buddy’s sister at easter brunch yesterday was all happy/relieved/proud to have just closed on new condo at Sky (Skyy?) in las vegas. thank god her unit is on opposite side of where that other tower is going up!! also got new house boat time share. also expensive looking new Benz…
it’s fun, like seeing pictures and learning about a thing in the classroom, then to actually encounter it in thee wild… i started to mention the blog, but then filled mimosa and ham sandwich again instead…
I like this image, catspit. You could be any of those inncouous people I see refilling their glasses and sandwich plates at any party anywhere. Only in the secrecy of the blog do you dare to share your skepticism about RE Always Going Up. I too have taken to agreeing with a lot of goofy statements in the It’s Different Here genre, rather than argue.
Im inclined to believe that the “its different here” comes form the mouth of a recent buyer looking to console the cognitive dissonance of his recent foray into his local real estate market.
az Lender.
Nah, we are just worn out over the everlasting optimisim.
Stage 1 -pointout the bubble
Stage 3 Proof the bubble topped {ie burst}
Stage 4 why bother they are hopeless governmental dreamers.
{why wouldn’t we all remain confident thet the FED wil inflate us out of this mess?
Oh because they can’t! Is why?
The bubble didn’t burst because RATES were too high!
To inflate the FED would have to REVERSE the process of taking money {ie currency} from the system.
The banks are in high gear trying to elliminate cash currency….because of transportation costs.
Sure the M3 “blinkity blink” on paper accounts is racing @ 20%, but it will take currency “printing presses” to hyper inflate..and that is NOT even phisically possible at the moment!
But those blinkity blinks on the account statement means some body borrowed the money……borrowed money is reversing.
aka defaulting.
look at your bills, are they “NEW”?
but it will take currency “printing presses” to hyper inflate..and that is NOT even phisically possible at the moment!
I do not share this view. How difficult would it be to stop printing one dollar bills and start printing one thousand dollar bills? Not difficult at all. There will not be any waiting time for craftsmen to hand carve their designs on soft metal since the $500 (McKinley) $1,000 (Cleveland) $5,000 (Madison) $10,000 (Chase) have been printed before and the master plates are available. The $100,000 (Wilson) is already in production, but this bill is only for internal use by the Fed and Treasury.
A few years ago I was in Asuncion in Paraguay and if you need a good laugh the try using their public bus transportation. People pay with very physically small paper money that is all tattered and held together by a few fibers in the middle, and change is made with equally tattered paper money. It reminded me of the totally ragged out small paper money of the Monopoly (TM) game I played as a kid with my siblings.
Got 10% down?
(A) We can basically accept the fact that the bubble has burst. (B) We have had a move back to FICO scores being the main thing lenders look at. (C) We also have lenders looking closely at documentation such as incomes before granting a mortgage. (D) We have had a massive fallout of sub-prime mortgage brokers. (E) It appears 99% of “exotic” loans are history for the vast majority. (F) The money centers (banks and Wall Street) are becoming very cautious where property is concerned. (G) It’s also obvious that property is way beyond (still) the income means of many, many wanna-be home owners and incomes will take years to reach the point where the majority can buy without submitting fraudulent information concerning their assets and incomes.
Anyone want to try and convince me that the future of property ownership in the forseeable future looks rosy? I think we have a recession in the works and, in fact, it is already here in places like Michigan and Ohio but has yet to spread but it will. Of course, like Iraq, we can expect the dummie in the White House to repeat his usual spin. “We are winning in Iraq.” Now, and he’s already spinning it via fake and distorted employmernt numbers, “The economy is strong and healthy with only 4% unemployment.” That might be correct but what kind of incomes and what kind of jobs are the other 96% employed at and how many are working 2 or 3 jobs to keep their act together?
What I’m about to write is 100% true……I live in an area (Thousand Oaks, ca.) where the property ranges are between $650,000 to over $1 million if you try and buy now. The other day I saw my neighbor fixing a Domino’s Pizza Delivery sign onto the roof of his car. This is a man in his early 50’s. I have no idea what this is about or if he has lost his main job. He’s a warehouse manager or something and is certainly what Lou Dobbs would call, “middle class America”. If that’s a good example of G.W Bush and his “strong economy” we are in for a lot of hurt.
Apparently the future of property ownership in trailer parks is not yet in jeopardy. None of my borrowers is in default. As further anecdotal evidence I submit a report of a trip I took down Route 13 in Delaware last fall, where there were a great many McMansion developments with few or no cars parked in them, and one or two trailer parks full to busting with autos, pickups, boats on wheels, you name it.
Your point (G) I believe is the essential one (income/wishprice mismatch). FICO SCHMICO, documents schmocuments: no more 100% loans by anybody to anybody anywhere. Buying on margin was the fuel behind the 1929 debacle, here we go again.
“(D) We have had a massive fallout of sub-prime mortgage brokers. …(F) The money centers (banks and Wall Street) are becoming very cautious where property is concerned.”
D) is clearly not true. There has been some fallout, but it is not massive. Wait 6 months that will be massive. (LOL, tongue in cheek)
F) Wall Street already has its hands out setting up for the gov bailout a la the savings and loan fiasco. Wall street has not stopped its program, the buyers of the MBS products and derivatives have stopped their purchases.
So other than those two minor observations a very succinct picture of the near term future (2 -5 yrs).
We are doomed.
Even the damn fico scores are being manipulated now.
http://www.chicagotribune.com/classified/realestate/realestate/chi-0704050446apr08,0,4899173.story?coll=chi-classifiedrealestate-hed
Hoz, the proper expression is “We are freakin’ doomed!” (crediting the Mogambo Guru).
I have to sell Illegal mp3’s on dvds just to survive.. But hey I have a JOB!
Either he’s really hurting or he discovered Dave Ramsey his number one suggestion for getting out of debt is to get a 2nd job as a pizza delivery guy. I like listening to him. A financial guru who actually has some financial sense…. ie. don’t buy it if you can’t afford it (duh!!!) Anyway, he seems to have a huge audience which is growing in CA, so I hear.
“Realtors are working harder to earn their commissions. They’re having to pick up the phone….”
And I’ll bet they’re breaking a sweat!
“‘When we see a whole bunch of (for-sale) signs on one street and run the ownership (through county records), very frequently we’ll find that almost the whole street will be owned by California investors,’ said (broker) Kate Southard. ‘I know that’s what’s happening because the tax bills are being mailed to out-of-state owners.’”
And I hope those CA “investors” take it in the shorts, big time.
That’s not a hope, it’s a reality. I can hear the CA investrors now doing Marlon Brando “the horror….the horror…”
CA RE investor says “I could of been a contender.” after giving back 5 of the ten houses they own back to the bank.
“But buyers still hold the upper hand, she said. And she has seen that directly at one of her listings. ‘The buyers want everything,’ she said. ‘Sellers don’t want to give up everything. In this house, the seller has reduced the price $50,000. In her mind, she has done all she could do. And now the buyer wants her two favorite chairs.’”
I am not siding with either party here, but I think they are both being jerks. I guarantee they are both looking at the outcome as either winning or losing.
The seller should just give up the chairs, unless the are valuable antiques (which they probably aren’t).
or
The buyer should just buy his/her own f’in chairs.
I bet they have made it personal. People had better start realizing the negotiations are not always about winning or losing. Sometimes they are about getting what you need not just what you want.
Who knows, the buyer could be giving a decent house at the right price over a couple of chairs…and like-wise, the seller could be giving up a good buyer and a good deal over the same stupid chairs. It funny how attached people become to objects.
Regardless of market conditions, if one is ready to buy or sell, one better be willing to give a little or a lot. I believe that there has to be a point whether it be a pair of chairs, a couple of grand, the timing of the transaction, etc. that you just have to make the deal work.
The seller should just give up the chairs, unless they are valuable antiques (which they probably aren’t).
Now I want to see the stinkin’ chairs.
Maybe it’s a couple of these (not reproduction):
Barcelona chairs
http://www.highbrowfurniture.com/seating/products/barcelona/
I messed up the link in previous post.
those prices must be wrong….
not!
The situation in the housing market right now is ABSOLUTELY a zero-sum game. I am not even willing to play it right now, but I am pretty sure that the vast majority of buyers right now will later find out they were not “greedy” enough.
From the buyer feeding the squirrels in 2004 to the seller giving up their favorite chairs in 2007, my how the RE world has changed. Just give them f___ing chairs.
——————————————————————————
“Just give em the F$$king chairs!” = the new RE mantra for 2007
Seriously LOL. Wife is all, “exactly what are you reading?”
Again, I will never understand why people like Mr. and Mrs. Glendale Shitbox allow reporters to print what they paid for their place. If you think we’re nasty, imagine what the few buyers that exist will do to them and their 300k “equity”. From the looks of that box of theirs, they’d be lucky to get 250K.
I have no problem “understanding”. Once you realize that most people are complete idiots, you’re not surprised by anything.
she knows THAT!!!!!
txchick
how mant line is your Schedule D PART I?
mines 0
PART II?
mines 10
I learned a neat trick to make Schedule D much easier. Instead of actually writing in the transactions, I just attach my Merrill Lynch statement (the part showing capital gain transactions), and on the actual Schedule D form I just say “See attached Merrill Lynch statement.” The first time I did this I was afraid the IRS might object. They didn’t object, and I’ve been doing it ever since.
I just printed mine out - 9 pages of Schedule D worksheet. Gainskeeper is my friend.
9 pages……….yikes
BIG jump in San Diego active foreclosures (not yearly total) today. From 3167 Friday. 2854 beginning of last week. Oh, and biannual property taxes are due today.
http://www.foreclosure.com/search.html?st=CA&cno=073&z=&tab=f
(3491 today)
If memory serves, this is a ten-fold increase in ten months.
I can’t believe the one realtor compared herself to a doctor or lawyer. How insulting! It takes at least 11 years of school and training to become a doctor, 7 for a lawyer.
Well, it took her 7 boxes of cracker jacks before she got the RE license as a prize.
Actually, not to be picky, but you can get to be a doctor in 8 years (4 years undergrad, 4 years med school). People who take longer are going for specializations, but 8 years is pretty typical if you are not planning on being a specialist.
True, but one way or another you still have to do the residency…
“Actually, not to be picky, but you can get to be a doctor in 8 years (4 years undergrad, 4 years med school)”
the original poster was more “right” because they said 11 years of school and training. You can “be” a doctor in 8 years, but you can’t work as a doctor with just an MD. (think Michael Chrichton-nonpracticing MD)
You can get your “MD” in 8 years, but you can’t practice with that (can’t get a state license). you’ve gotta do a residency too.
everyone must do college and Med school. That’s 8 years.
Then in order to get state license, you must have 1 year of post-med school training and pass Step 3 of boards. After this you can get a state license, but nobody will really hire you. (I guess if you lived way out in a rural area with no doctors they might, or on like an indian reservation or something. But no “real” doctor jobs will hire you after just 1 year of training, because you’re not board certified.)
For almost all the jobs you must have college/med school plus residency AND be certified in a specialty. Minimum residency is 3 years. (that’s for like internal med, pediatrics, family practice, etc). A long residency is 7 years (like some surgeries).
Then after that if you want to sub-specialize it is usually 3 years of fellowship. (that would be for like cardiology, plastic surgery etc).
Thus, your minimum practicing doc did 11 yrs of school and training. Many do more. (15 years for me as example: 4 college, 4 med school, 3 residency, 2 fellowship, 2 research)
Disclaimers:
you could probably work with 9 yrs of training if you worked at a rural urgent care or something. Or if you were on indian reservation, or in a severely underserved area. But those types of jobs are very few and far between.
second disclaimer:
there are a few programs (not many) where they allow you to combine collge/med school down to 6 years. (I think U of Michigan is one such program). thus, it would shave 2 years off of your total. these programs are also not common, and are falling out of favor.
Just be smart folks. Beats the heak out of being bright. I have a wonderfully diversitified portfolio and bought railroad stocks some time ago. Look 2 to 3 years ahead and you will be rich. The mass media and MSNBC are always at least 6 months behind. Start to look at infrascture plays and water plays. Companies like Flour, Cemex and GE.
My best to all of of you.
Did you really mean Flour?
I think you may have meant another similarly sounding company.
I think Flour s/h/b Fluor.
HUGE difference! Beware the transpo!
Thanks, symbol flr.
PG_
Of all the lame investment ideas.
Rails gap up because Warren Buffet bought.{when, filed when, how long ago?}
Interesting how this NEWS which isn’t news surfaced today after several of the rails were either downgraded or individually reported that Q1 is a bust dating from 3/30 to 4/3.
Reminds me of the GM fiasco by Kregorian {Tricinda}
Rail traffic for 2006 was FLAT. that’s right F L A T.
{except for coal aka thx to a lawsuit from 2005}
Q1 is down 4.7% and last week traffic report was the worst weekly report for the year minus 8.7%
I think some BIG TIME SHORTS just got set today, in those rails!
“Time to foldem” !
Kenny Rodgers
The railroads have spent tens of billions in the last few years to eliminate bottlenecks and improve operating efficiency. Traffic may be flat, but it cost them less to ship the stuff. And they probably charged more to do it.
As a reference to my post. About a year ago, in response to a poster’s post for yield, I suggested KYN. Look at the chart and the yield. Up 40 % plus the yield.
God bless to all of you.
“‘If you go to a lawyer or a doctor, you are paying a lot for that opinion,’ said (realtor) Doreen Drew. ‘But in real estate, they argue with you, even though they are paying huge amounts for you to sell their house.’”
Perhaps because you’ve been handing them a line of BS for so many years - up to and including last year - ‘Wait until the spring selling season.’
Well, they listened and now they want top dollar - as you guaranteed (’Real estate never goes down’).
Start by admitting to them you’re a lowlife liar - maybe that will help them see the light and lower the price.
Or how about that advice last August to “wait til January to put your house on the market because *interest rates are going down*” !!!! That was a big realtor line up here.
I think Casey has joined the list of California losers on New Mexico property.
http://iamfacingforeclosure.com/properties/guadalajara-dr-rio-rancho-nm/
foreclosed.
That is too funny to see your post right after his first two self-serving posts. Asking him if he was on drugs made me crack up. I’m glad I wasn’t drinking any Jack at the time. I would be licking my monitor right now. You don’t waste good Jack, no matter how funny the moment.
He (Casey) was on Suze Orman this past week and she was stupid enough to sit there and call him INTELLIGENT. what a bimbo…..
actually with his recent self-promo, i smell wannabe ACTOR!!!!
Interesting. I could see him being the “star” of a documentary like Grizzly Man. Instead of meeting a tragic end in the jaws of a bear, Casey gets eaten by a house.
if Casey Serin is Bigger than Gary Watts we need more “Professionals” playing ping pong “Professionally”
Im going out tomorrow and getting a new bag.
I was mad at her for even putting him on the show. He is a publicity hound of the worst kind, i.e., no talent and no sense.
Just remember that Suze Orman was pushing RE up until the beginning of this year, more than a full year after the majority of people here saw big trouble.
She was also pushing stocks…”especially for 2007.” Maybe if she’s talking gold stocks or SLV, but it seems unlikely that Centex will be hitting any new highs real soon.
Great advice, Suzie!
Man, that is a butt-ugly house. It looks just like an explosive bunker that I once helped clean out,in a military base (don’t worry, I had permission…)
Here’s an article in the Boston Globe that argues losses in home value benefit owners. Is this a bit twisted or is there any logic to this:
If the house loses value at a 2 percent real annual rate, Arlo and Amanda will enjoy an additional increase in lifetime consumption to $97,839 a year. That’s an increase of 2.4 percent. This happens because they will benefit from declining real estate taxes and insurance, measured in real purchasing power. Their home equity and net worth will be less. But their lifetime consumption — the money they can spend on things other than shelter — will rise.
http://tinyurl.com/38ebks
Is this a bit twisted or is there any logic to this:
The logic is correct. What the article forgets to note is how much Arlo and Armanda would have saved if they had waited to buy at the market bottom.
Got popcorn?
Neil
bingo
OMG this is awesome that the MSM is beginning to push the *benefits* of dropping home values for the owner.
No it’s not correct. First of all property taxes are used to fund local government spending. If spending goes down, taxes can go down. And if spending doesn’t go down, taxes can’t go down, regardless of whether property values go down. They’ll just raise the rates.
Second, insurance covers liability, theft, and repairing fire/weather damage. The first two have nothing to do with property values, and the cost of the third will decline a bit as material and labor costs come down. But by far the bulk of the variation in RE prices is the cost of the land, which has nothing to do with insurance costs.
No bubble here
D-FW home starts fall nearly 35%
07:16 PM CDT on Monday, April 9, 2007
By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com
Homebuilders hit the brakes in the first quarter, cutting Dallas-Fort Worth starts by almost 35 percent.
Local housing starts totaled less than 8,000 units - the lowest quarterly total since 2001, according to a report released Monday by Metrostudy Inc.
At the same time, sales of both new and pre-owned homes fell in the first quarter.
Pre-owned home sales dropped by 5 percent while purchases of new houses were down 7 percent from a year ago.
The slowdowns in the D-FW housing market are continuing a trend that started in 2006.
Inventories of homes for sale have been rising.
“The builders are acting appropriately to the market,” said David Brown, who heads the Dallas office of Metrostudy Inc., a homebuilding research and consulting firm. “It’s a significant pullback in starts but what needed to happen.”
Because of the cutback in building, the number of new homes in the production pipeline - both under construction and completed - fell to 26,466 units, according to Metrostudy. That’s down from a recent high of 30,117 homes at mid-year 2006.
Builders sold 9,917 homes in the first three months of 2007. It was the third quarter in a row that new-home sales have topped starts.
“We’ve seen demand for new homes slow down a bit,” Mr. Brown said. “We’ve seen less investor activity and with the subprime loan market tightening up, we’ve had some purchase cancellations.”
But Dallas-Fort Worth is faring better in the housing shakeout than many other major U.S. markets, he said.
“Although closings are expected to be down slightly in 2007, the area should perform favorably in comparison to housing markets on the East and West Coasts because of the strong job growth and affordability,” Mr. Brown said.
Sales declines in the pre-owned home market so far in 2007 are on par with last year’s slight decreases.
In March, real estate agents sold 7,961 preowned single-family homes, 7 percent less than in the same month of 2006, according to statistics from the North Texas Real Estate Information System.
The median home sales price last month was $149,000, up 2 percent from a year ago.
There were 11 percent more pre-owned homes on the market in March that a year earlier, with more than 47,000 houses listed for sale in North Texas. That works out to about a 7.5-month supply.
“The 5 percent downturn in overall sales for the quarter is not consistent across the city, ” said Bob Edmonson, a vice president with Allie Beth Allman & Associates. “There are several parts of town that are nicely ahead of last year’s numbers.
“I think we are back into a more normal sales pattern, with these negatives coming off an unusually strong market we experienced in 2005 and early 2006,” he said.
“Builders sold 9,917 homes in the first three months of 2007. It was the third quarter in a row that new-home sales have topped starts.”
goin the right direction, though materials at this point are peanuts.
Troubling trend: Foreclosures continue to climb
http://www.thetimesnews.com/onset?id=573&template=article.html
“Predatory lenders and credit card companies, and a changing job market are primarily behind rising bankruptcies and foreclosures, Huffman says.”
When will they ever start to blame the damn, dumb borrowers? I hate reading this victimization B.S.
Subprime blame game………
http://money.cnn.com/galleries/2007/real_estate/0704/gallery.paly_the_subprime_blame_game/index.html
Novastar ripoffs:
http://tinyurl.com/33y3y9
Parade Magazine last Sunday - usually containing more useless and mindless fluff than all the CBS, ABC, and NBC morning shows combined - finally told something true about real estate brokers
On page 10 one of the myths they exposed “Your broker wants to get the highest price for your home”
per PARADE:
“”REALITY: Most brokers just want to get a deal done, says John T Reed, author and published of the Real Estate Investor’s Monthly newsletter. “They will tell you they will be pushing for the highest price” “But agents may often be pushing for the first reasonable offer”"
He blames it on among other things the fact that commissions with their often 4 ways splits (MLS, listing agents, buying agents, selling agents etc means the absolute commission dollar difference to the broker - for a high price sale versus a moderate prices sale - is really not that much
In other words - bottom line is move the goods during the exclusive period - and who cares if the buyer is losing 100k - the broker is taking a very small hit relative to his/her total commission - itself already divided up
Note when brokers recommend a listing price - they don’t do any kind of step-downs on commissions even as the price ends up being dropped many thousands below list
If that were the case, for example in the case of gross commissions that might start as high as 6% might then rachet down to lets say a gross 4% - asssuming the broker (using their supposed professional expertise) gave what turned out to be a misleadingly high initial sales price promise to induce the homeowner to sign the exlusive sales contract.
Today brokers are incentivized to promise the moon, and their is no signficant penalty when the numbers are completely wrong
Brokers often try to justify their outrageous commissions on their ability to advise on proper pricing in certain markets - so it seems odd (but no surprising) brokers never offer step downs on commissions for pricing mistakes
“Realtors are working harder to earn their commissions. They’re having to pick up the phone for ‘cold calls,’ knock on doors and spend more money on marketing. Some are finding new careers or taking second jobs.”
“would you like ketchup with for your fries ?” HA HA HA !! Beer Me !!
Good value still to be found in San Diego:
http://tinyurl.com/2zzdhg
The lot isn’t even big enough to make it worth scraping the wreckage off the property.
I followed up on HarryD’s earlier post about Parade magazine and ended up checking out their archived articles - stumbled onto this August 2005 quote:
“But according to David Lereah, chief economist for the NAR, ‘The reason we’re in this boom is the biggest generation ever—the boomers. They are in their peak earning years and spending on real estate at a record-setting pace. Will the boom last forever? No. But it will last as long as the boomers are in it—probably another 10 years.’ “
Anyone else watching the dollar take a dive?
http://quotes.ino.com/chart/?s=NYBOT_DX&v=s&w=5&t=l&a=2
Thanks, crisrose. I was in a bad mood about the phony jobs report because I figured my anti-$US plays would suffer at least temporarily. Turns out, no not much.
Does that mean inflation is coming back?
They’re Back…
I see debt people
Surprised, the couple consulted an appraiser, who offered similar advice. Reluctantly, they listed the house for $519,900
I hope these hardheaded sellers dig their heels in Hard, lose their $30k deposit, sit in their stupid frigging chairs pouting until next Spring’s SURPRISE !!!
Stupidity MUST be a Matter of Principle with these NUTS. They’re damned lucky those Hungry Squirrels didn’t carry them Off.
Let’s see if this works:
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Nope, the blog software ate it. Sorry…
Still looks cool. what was it?
Vampire Squirrel.
Quote above says
“Realtors are working harder to earn their commissions. They’re having to pick up the phone for ‘cold calls,’ knock on doors and spend more money on marketing. Some are finding new careers or taking second jobs.”
The quote would be more accurate if it said:
“To earn their commissions, realtors are working harder, having to lie more frequently, and making increasingly bizarre claims about following a code of (rarely enforced) “ethics”
They’re having to pick up the phone for ‘cold calls,’ spend more time harassing For Sale By Owner sellers all day long, and actually getting off their fat butts to knock on doors and spend more money on marketing hoping to find credit worthy buyers idiot enough not to have heard of any real estate bubble, but smart enough to have some actual cash to put down on some overpriced property.
Some brokers are now finding honest work more suitable to their level of skill that might add some value to society, including such occupations as street sweeper, car wash scrubber, or degreaser at McDonalds.”
I haven’t read the entire thread yet. And Albuquerque is in much better shape than many other places. Most bubble places here are the newly built places on the far west of the city. The older, and established places have not been overly saturated and I see most homes reasonably priced still getting sold. The new homes out west were just as bubbly and speculated as Phoenix, LV, Sac, etc. For every CA flipper, I hope they lose their arse. I walked through a home in my neighborhood yesterday, and they are wanting $220K for this 1600 sq ft home with no yard. That still seemed high to my observation. I paid $299K for a home in Apr 06 and it is still appraised at $325K, in the same development as this other 4 yr old home. Mine is 2700 sq ft and .10 acre yard (large enough for me).
300k still seems like a lot of money to the likes of little ol me. Especially, in Albuquerque.
Big wapo article on fraud. Another nail in the coffin.
“Housing Boom Tied To Sham Mortgages
Lax Lending Aided Real Estate Fraud”
http://www.washingtonpost.com/wp-dyn/content/article/2007/04/09/AR2007040901463.html?hpid=topnews
My Bad Math for Las Vegas but here goes:
“Meanwhile, sales have plummeted. Realtors sold 1,605 single-family homes in March, down 36.3 percent from a year ago. Condo sales were down 47.2 percent to 341 units.”
The above equals about 2000 homes/condos were sold in March 2007!!!
“Membership in the Greater Las Vegas Association of Realtors grew from 7,959 in January 2003 to 16,379 in January 2007.
2000 homes/condos sold each month x 12 = 24,000 homes/condo sold in one year in Las Vegas.
This means each real estate agent on average will sell 1.5 homes each during 2007. Tough life!