The next bubble will be the murder bubble.
The Cycle Repeats Itself
The Denver Post reports from Colorado. “David Bahr was all set to sell his Denver loft last year and move to Chicago, but the housing market had other plans. The loft lingered for six months without a serious bidder. ‘We reduced our price by $25,000, but almost nobody came through (to look),’ says Bahr of his property. ‘Renting was definitely not our first choice, but we were stuck. It’s awfully nerve-racking to not have the place rented and have two mortgages.’”
“Bonnie Whitehouse of Henderson put her house on the market in March 2005. She planned to move to Europe and needed to sell quickly. When a buyer didn’t surface, she quickly found someone to rent it until she moved back. ‘The values had just fallen since I purchased my house. It wasn’t a good idea to sell it,’ says Whitehouse.”
“John Dunn says his Denver-based property-management firm receives calls every week from people who can’t sell their properties. First-time renters often misunderstand how the rental market operates.”
“‘A lot of people think, ‘My house payment is $1,900 a month, so I have to get that, plus (the property management) fee.’ Dunn says. ‘The payment has nothing to do with what the rental market is.’”
The Arizona Daily Star. “First Magnus, one of Tucson’s largest employers and one of the nation’s largest mortgage lenders, grew astronomically right up until it suddenly stopped writing home loans and laid off most of its work force on Thursday. How could the rising star that had never had an unprofitable month collapse overnight?”
“‘First Magnus was riding a wave created by an enormous amount of liquidity,’ said Chris Lamoureux, at the University of Arizona. ‘They were staking a lot on the continuity of that wave.’”
“‘We had tremendous momentum going as recently as three weeks ago,’ said Gary Baraff, company spokesman. ‘Three weeks ago we were at the pinnacle.’”
“‘When you start talking about bankruptcies at companies like Countrywide, you start wondering about the pillars of the industry,’ said Richard Beidl, a mortgage-industry analyst. ‘We have artificially allowed a considerable number of people into the home market to buy homes who shouldn’t have been in the market.’”
From KVOA News 4 in Arizona. “With lending giant First Magnus taking a big hit, real estate experts say Tucsonans will experience the re-percussions.”
“‘A lot of people in Tucson are obviously extremely scared. About a third of the borrowers in this market are not going to be able to get a loan,’ said associate broker Curt Stinson. There is a positive side to all of this. ‘There is going to be extreme opportunities to be purchasing homes here in the near future at drastically reduced prices.’”
“Larry Harvey i’s trying to sell 27 acres of land. ‘Before, it used to be so much cheaper to buy land and build a house. Now I think it’s going to be a flipside, with all the foreclosures. I think land is going to sit and people are going to go out and buy some foreclosures a lot cheaper than buying land itself.’”
The Arizona Republic. “Obtaining a home loan is going to get even more difficult. ‘The mortgage market has changed drastically in just the past few weeks,’ said Tom Miner of the Scottsdale-based mortgage firm Miner Kennedy Chmura Associates. ‘”We are getting calls from buyers who can’t close anymore because lenders want more documentation or money down.’”
“Cheryl Serbic wanted to buy a condominium in central Scottsdale. Earlier this summer, the restaurant manager qualified for an adjustable-rate mortgage that required little down. But a week before she was to close, her lender said she needed a bigger down payment. Serbic called other lenders and got the same bad news.”
“‘I didn’t think I needed a down payment. My friend bought last year without one,’ she said. ‘But if the housing market is going to keep going down. I’ll save and maybe I’ll find a better deal then.’”
The Tucson Citizen from Arizona. “Foreclosures in Pima County have increased by 76 percent over the past two years, from 1,078 new filings in the second quarter of 2005 to 1,896 filings in the second quarter of this year, according to Realty Trac.”
“Fewer houses are going up this year, though Pima County housing starts have risen steadily since January, according to the U.S. Census Bureau, which tracks construction permits. There were 592 new home permits issued in Pima County in June, up from 329 in January but still fewer than last June’s 792, the Census Bureau reports.”
“‘You can still drive anywhere and see homes being built, being remodeled, tons of infrastructure projects, said Don Wehbey, an economist with the Arizona Department of Economic Security. ‘The activity out there hasn’t been halted.’”
The Nevada Appeal. “The realities of home ownership have finally hit Northern Nevada, and the truth, for some, can be summed up with one word: Foreclosure. July statistics released by RealtyTrac show Nevadans experienced the greatest foreclosure rate per household this year.”
“A Northern Nevada Realtor said the foreclosure trend here, accompanied by the cooling market, is a means to a more ‘realistic’ future.”
“‘In the last couple years when the market was very high, I’d show doctors around, and they’d say ‘I have student loans, I can’t afford to live here,’ said Kathy Tatro, a Realtor (in) Carson. ‘Our cost of living shouldn’t be higher than our wages.’”
“‘Right now, it’s hard to be a Realtor, it’s hard to be a lender, it’s hard to be in the title company - in the long run, the market change is a really, really positive thing,’ said Tatro.”
“The long run may not come soon enough for several local real estate investors, who stand to find themselves homeless, and, at the very least, with credit in shambles. The state documented a total of 11,514 foreclosure filings during the first quarter of this year, an increase of 66 percent from the previous quarter and more than double the total reported in the first quarter of 2006.”
“Those dealing directly with beleaguered homeowners say the number of bankruptcies resulting from foreclosure locally has gone up ’substantially.’”
“‘We’ve seen an increase of about, I would say 150 to 200 percent in persons coming in who have a foreclosure pending or are in arrears on their primary home,’ said Carson City bankruptcy attorney Stephen Young. ‘The main problem seems to be in good times people were refinancing their homes to reduce debt caused by overspending, not budgeting back before they refinanced.’”
“‘So, they overspend, they accumulate credit card debt, refinance to eliminate credit card debt and the cycle repeats itself,’ he said.”
“One Carson-based mortgage broker said things could get worse. ‘This is the beginning of the foreclosures,’ said mortgage broker Kesa Pascal of Trans-Western Investments. ‘In Washoe County you get 40 defaults a week. As these foreclosures are happening more, lenders are going to cut more.’”
“‘The mortgage industry was stretching people so thin - there were some strange loans. The change is positive and it’s weeding out people that shouldn’t have been in there in the first place,’ Realtor Tatro. said.”
“‘What’s happening with the mortgage industry is a very positive thing,’ she said. ‘I just saw an editorial cartoon with two bankers, one saying to the other ‘What’s the deal with people with bad credit not buying housing?’”
The Salt Lake Tribune from Utah. “Max Johns of Salt Lake City should not be having a problem qualifying for a mortgage. His financial house is in order, and his credit score is well above the minimum most home-loan providers have had in place for years.”
“But Johns, a construction contractor, is having problems qualifying for a home loan. Sitting in a bank office a couple of weeks ago, Johns was told that although he probably would have qualified several months ago for a real estate loan, he no longer does. ‘My credit score is only a little bit below what they want now, but they definitely aren’t making any exceptions. It’s frustrating, he said.”
“Stung by widespread losses, investors are now demanding higher lending standards to reduce the risk that those loans will end up in default. ‘It’s back to more traditional lending standards,’ said Glen Ogden, president of the Utah Mortgage Lenders Association.”
“‘There’s not a day goes by that some new guidelines don’t come by my desk,’ said Michael Blackham of VelocityLoan.com in Holladay ‘There are more loans being denied than in the past.’”
“Brady Devoe of Sun Valley Mortgage in Layton said one change affecting many first-time home buyers is the increased difficulty finding a loan to finance 100 percent of the purchase price of a property.”
“Many young families in Utah have purchased homes in recent years through ‘no down’ loan programs, he said. ‘A lot of potential home buyers are going to need at least 5 percent to 10 percent down now.’”
“The prospect of falling housing prices has rattled Johns, the borrower who was told his credit score was too low under new lending guidelines. ‘Maybe it wouldn’t be a good idea to buy anything now, anyway. Who knows what’s going to happen next?’ Johns said.”
‘More than 50,000 existing homes are currently on the market in the Valley. But if some of you potential buyers out there feel you still don’t have enough options, there are plenty more on the way. Hundreds of new homes are currently being planned or already springing up from the ground across the East Valley.’
“Homes in the Palacito neighborhood will range in size from 1,350 to 2,533 square feet and cost from the $160,000s to the $220,000s. The Terrafina subdivision will have houses ranging in size from 1,581 to 3,239 square feet and cost from the $190,000s to $270,000s”
These prices are still too high.
Many folks in my office bought homes in Maricopa in the last two years. Most paid between 300k to over 400k for houses ranging from 2300sf to 3200sf. Some of them could already be down 100k and counting.
I feel sorry for them. But they got on the tulip train and desearve what they get.
tulip trains & turnip trucks for all…
reading the comments at the AZ republic story it looks like sentiment has changed…
Beware! The builders, developers, and real estate people are running for public office. What do you think is their agenda? Know who you are voting for in the coming months.
‘Maybe it wouldn’t be a good idea to buy anything now, anyway. Who knows what’s going to happen next?’
Gee. What an earth shattering idea, “don’t spend your money, save it for a better time.”
Real gem in the Denver Post Friday I think for people having a hard time getting their mortgage through. It divvied up the advice based on a reader’s credit. Advice for those with poor credit: get a second(80/20). Astonishing, how about save up a down payment.
I’m shell shocked the post would advise that. 80/20’s… they’re gone! Heloc’s? Tougher to get. I was very happy to see my credit union has gone from a 125% cLTV limit to a 95% cLTV limit on HELOC’s. (”temporary… as in the next 30 months!).
Got popcorn?
Neil
“pb to au”??? lead to gold??? I love it!!!
“First Magnus, one of Tucson’s largest employers and one of the nation’s largest mortgage lenders, grew astronomically right up until it suddenly stopped writing home loans and laid off most of its work force on Thursday. How could the rising star that had never had an unprofitable month collapse overnight?”
Carl Spackler: Cinderella story. Outta nowhere. A former greenskeeper, now, about to become the Masters champion. It looks like a mirac… It’s in the hole! It’s in the hole! It’s in the hole!
In the Hole, Indeed~
RE “Investor”: “This looks like it could be gravy”
Oh Jesus! I just watched Caddyshack last week and that bit had me laughing my ass off. “Cinderella story, out of nowhere…”
Ha! thanks.
I thing all of this “credit tightening” is pure nonsense! You want proof that it’s just a figment of the media’s imaginiation?
I’ll have you know that I have no less than 8 loan and refinance approvals in my Spam folder just since yesterday.
Yeah, and what about those dancing aliens or couples or hat dancers in those Flash ads on forum sites?
There was a lot of enthusiasm in the stock markets on Friday. Over the weekend, some German bank had to be rescued (they played the borrow short, loan long game), that money market company for futures traders filed for bankruptcy and traders get to mull over the real problems in the housing bubble. Just because some bankers get to borrow a bit cheaper doesn’t mean that liar loans are going to get defaulted on. The Fed wants to curtail speculation without the house of cards falling in on him due to a credit collapse. That’s a hard line to walk.
I guess the Fed could monetize houses but I don’t think that the Fed wants to be a real estate broker or property management company. What do you do with all of the McMansions out there that were speculations? In tough times, you want a small place that’s efficient, right?
“In tough times, you want a small place that’s efficient, right?”
Especially with how volatile natural gas prices have been. I wonder how many McMansion owners will have to close off entire portions of their house this winter to save on heating?
“I wonder how many McMansion owners will have to close off entire portions of their house this winter to save on heating?”
What you said….and do they ever add in ANY of their other expenses, like food, gas and car maintenance, phone (both landline and cell), cable, and whatever else they may have. For me, if it doesn’t pencil out and if it doesn’t leave me in the black, I walk away. Plain and simple. Living below your means is the only way to go but it seems to be SO difficult for some to do.
I’m sure there are MANY McMansion homedebters who have many regrets now.
BayQT~
Here here sfbayqt. I also take into account all the incidental costs (gas, electric, car insurance, water, garbage etc) when calculating what the true cost of owning a house.
SFBAG — Renter in SF here. Aren’t those expenses a wash when you’re renting if they aren’t included? I pay above and beyond my rent for all of those except H2O. Or did I get screwed? Probably the latter. D’oh.
“In tough times, you want a small place that’s efficient, right?”
Even in good times you want a small place that’s efficient. I should think. That way you, efficiently, can save money and resources for ‘just in case’ times, as well as just plain old living your life without running around like an exhausted rat buying and taking care of cheap crap.
That’s the way I went, and I get happier about it every single day. Especially when I drive by jammed in McMansions with expensive toys parked in front with ‘For Sale’ signs on them, which I saw in increasing numbers when I drove around this weekend. I mean, REALLY increased numbers, along with more ‘For Sale’ realtor signs than I remember there being even a few weeks ago.
I agree. We’ve focused on energy efficiency for years, even when gasoline was .99 a gallon (remember those days, not so long ago??). We’ve recently downsized from a 3 bedroom house to a 3 bedroom apartment and my only resentment I feel is that I was stupid to allow myself to accumulate so much junk. I’m hoping the majority of our declutting project will be done by Labor day.
It’s getting harder to me to understand the appeal of so much space. I understood it better once but it seems like just extra to clean and maintain now.
Hi Olympiagal,
I was stationed at Ft. Lewis 1976-1978. Are you near the fort?
Pretty near. I’m in rural Thurston County.
Don’t worry about the German banks just yet. Last week Greenspan went to work for Deutschbank uber alles. hehehehehehe
Listening to the Real Estate cheerleaders on 97.1fm in LA/OC yesterday. Saying their a direct lender, they can loan, yada yada yada.
Than saying they can fund loans up to 417K no prob., but higher amounts are still available though the ability to get them is tougher.
What their really saying is if we can pass the Trash come on in. Otherwise, leave a message and we’ll get back to ya /wink.
Can you say “Sheople Sheerers”.
‘A lot of potential home buyers are going to need at least 5 percent to 10 percent down now.’”
I repeat that excluding FHA (VA, etc.), I expect 25 percent down payments to be the norm during the darkest days of this downturn.
We’re already almost at 30% for jumbo!
Got popcorn?
Neil
As far as I am concerned, if you don’t have a 25% down payment, you have no business buying a house.
Ziprealty.com is showing 63,000 home for sale in the Phoenix area. WOW!!
It crossed 63,000 yesterday morning, up about 800 over last week. Looks like the spring selling season didn’t do much to reduce inventory.
No worries, the Superbowl is coming.
Instead of the Feds bailing out the MBS holders ,how about the banks refusing to give easy money on these new building projects unless the builder puts up a big stake, (like 60%) . That will stop alot of the retarted building . I’m sorry but I just can’t stand builders building a bunch of homes that will end up vacant . The water supply can’t cover alot of this building anyway in some of these areas and I don’t see alot of new roads being built .
I have been to County meetings on building permit approvals and it’s just a kangaroo court in which they ask the builder to testify on all the objections and they accept the builders word and the builders fake witnesses they parade into the meeting . Its a joke .I went to one of these public meetings one time and the witnesses for the builder seeking a permit didn’t even live in the project that would be affected by the builder .The bogus builder witnesses stated that they were simply interested in purchasing in the project in question .So, the board took the testimony of the interested buyers over the testimony of real owners that actually lived in the project that would be harmed by the new construction .They are all corrupt and one time I almost punched a builder out after a meeting ,but thank God I backed off at the last second . I can’t stand greedy liars in bed with Planning Commissions .
I know the site where the Fed shows its “repo” transactions, but does anybody know if there’s a place where they show if the borrower actually paid back the money at the end of the term and got their MBS back from the FED?
“…it’s just a kangaroo court in which they ask the builder to testify on all the objections and they accept the builders word and the builders fake witnesses they parade into the meeting . Its a joke .”
Sweet Mother of Jebus, Housing Wizard! I about blew a gasket reading this! You probably heard me cussing? Just a minute ago? Aren’t you in AZ? Not that far from Washington state, well–that roar of outrage was me!
Every single word is sooo true. Right next to my keyboard is a big ol’ pile of project proposals, full of lies, falsehoods, and treachery, supported by prostituted consultants and lawyers, a pile of elaborate deceit such as would make Satan himself feel inadequate.
I’m glad you didn’t punch out the builder, though.
Okay, I’m going to go lie down for a bit, until the veins in my forehead stop pulsing.
Oh by the way , I was able to stop one bogus permit ,but I had to threaten lawsuit . I’m to old to fight any more .
Olympiagal, it’s sounds like you know alot about the process . It’s a stacked deck ,no question .
Inventory skyrockets, buyers are locked out, and the reset wave is here. The economy is now rolling over.
It’s different this time alright.
Wonder how long this will take to shake out. In Tucson, we’re still seeing the same houses we’ve been seeing all year, relisted over and over and over again at delusional asking prices.
“‘A lot of people think, ‘My house payment is $1,900 a month, so I have to get that, plus (the property management) fee.’ Dunn says. ‘The payment has nothing to do with what the rental market is.’”
- May I give you a country boys translation to would be sellers;
“Your asking price has nothing in common with what the market selling price will be.”
OK, Mr Dunn. What is your HBB handle?
People have been using that quote here for at least a year.
These people did not do the rents multiplier check before buying the house. If they did they would not be thinking that rent should equal their payment + fees! Greedy FBs!
Good start, I guess. What should this go for, Ben? Cool place.
http://flagstaff.craigslist.org/rfs/399322340.html
“significant instant equity”
Ditech is wrong…. people aren’t smart…
I’m alternate between chuckling at “instant equity” and blowing a fuse at that phrase.
I guess I wait until the instant equity becomes as much as the transaction price!
Got popcorn?
Neil
Maybe half that. Yes, the bubble made it up to Jerome. I heard they were building $800k spec houses there.
Wow, in Jerome? That’s amazing for a tiny, former mining town in the middle of nowhere. There’s a cool saloon in town called “The Asylum.” Seems so appropriately named now.
800k spec. houses in Jerome ? No, tell me it isn’t true . Better yet ,tell me what the employment opportunities looks like in Jerome . Does anybody know how far Jerome is from Sedona ,and doesn’t Jerome get snow in the winter ? I don’t get it . Does anybody know if Cottonwood is booming ?
Cottonwoods booming alright..in forclosures. They are so overbuilt it is silly. So is Clarkdale. So is, oh you get the idea.
cute dog
The lot size is .045 acres, which is about 2200 sq ft. The house square footage exceeds the lot size. You flush your toilet a night, and the whole neighborhood wakes up.
Good start, I guess. What should this go for, Ben? Cool place.
http://flagstaff.craigslist.org/rfs/399322340.html
That’s my sister’s house. No kidding. Be nice -);
I like it a lot. Ben says it’s worth half of asking. How low is she willing to go?
“I like it a lot. Ben says it’s worth half of asking. How low is she willing to go?”
Contact info is on the Craiglist listing.
Only 1.5 baths in a 2,600 sf, 4 bedroom house? I think not. I would subtract the cost of adding 2 full bathrooms.
Is that tiny little room with the clawfoot tub the master bath?
that’s a beauty–but still seems to high. I think many sellers don’t realize that their cookie cutter houses just don’t appeal to buyers. My friends who are trying to sell live in the typical square house identical suburbs.Makes it impossible to stand out from the surrounding houses for sale. It’s like everyone is trying to sell the same toyota matrix except in different colors.
“‘I didn’t think I needed a down payment. My friend bought last year without one,’ she said. ‘But if the housing market is going to keep going down. I’ll save and maybe I’ll find a better deal then.’”
Finally, the lenders are bringing back some sanity…even if the potential FBs are having trouble getting over their entitlement mentality.
Saved by the bell…
Now its just an American problem. The rest of the world will have a soft landing and no loan default problem.
http://news.yahoo.com/s/afp/20070819/bs_afp/marketsfinanceeuropeeconomyproperty_070819042114
This problem is Global.
Two years ago the Economist magazine ran a cover “After the Fall”, predicting a world-wide bubble burst. They had data in Europe and Asia on the run ups in prices and where the bubble had already started to burst. They did say it would be worst in the U.S. because of Greenspan’s cheap credit policies.
OMG!! Liar, Liars pants on fires!
As a kid I lived in Tucson during the early ’60s where my father was employed by a large home builder. One day the company was flying high and the next day the banks quit funding. I recall my father telling me that he went to the banks and announced that unless they got funding for operations they wouldn’t survive. Banks said no and they didn’t. You are going to see this happen again. Happened in the late ’70s. Happened in the early ’90s. One thing those of us who have been around can say. The business is cyclic. Only this time, as I view it from my secure tenured position, it is going to be worse than the early ’60s, late ’70s, and early ’90s. A lousy deal for those of you who are employed in real estate related businesses unless you provide a service lender REO department’s need.
Houses are sprouting around me faster than mushrooms. WIthin a 3 mile radius over 1000 have been built since March and a developer just broke ground last week for another 6300 home community.
In one small part of the existing Gladden farms subdivision there were 19 homes for sell yesterday, all 5 to 6 bedroom homes. That doesn’t include the 200+ new homes being built the next street over - Lenner. ( Where are these 4 and 5 children families coming from? or does everyone have home businesses?)
I told one of my employee’s that is sort-of homeless, just wait in 6 months you can squat in one of 100 homes here and noone will know you are there or care.
“I told one of my employee’s that is sort-of homeless, just wait in 6 months you can squat in one of 100 homes here and noone will know you are there or care.”
He’ll have no idea; he’s a hermit.
On the side: been looking around for a month long vacation rental in Park City, for when my lease is up. (September is off season, should be very affordable). Not only are there ever more sites for ‘rental by owner’. So I made it a sport to click on the calender, to see what’s actually rented for next winter. Answer: so far nada, squat, nothing. Yet, they have to ask high prices in order not to destroy the comps, or to make their overpriced investments work. Hearing about some ‘out of town’ owners (yes, some Californians) who invested in the next town over and think they can get same rental revenue as here. A number of owners advertise their places as ‘deer valley’ and they are 20 miles from town by car. Imagine you don’t know the surroundings, and think you don’t need a car for your vacation, only to be stuck out there.
“‘The values had just fallen since I purchased my house. It wasn’t a good idea to sell it,’ says Whitehouse.”
Memo to Whitehouse:
Homeprices are still falling while renters wear and tear the hell out of your place. Also, last time I checked, rental rates keep dropping.
On top of that, it would not surprise me if you were cashflow negative on the house every month.
I was on the phone last week with a friend in the Title business in Tucson. She was absolutely shocked about First Magnus and is now very worried. About 6 months ago she bought a house. I had even referred her to this website but since she was “in the business” and all of her friend in the business felt that the Tucson housing market was only going to be flat, she bought. I was flattened.
Discussions about traditional lending standards, money down, totally useless. I brought up the liar and NINJA loans that I had been worry about since 2005. Even very simple math - ie 2.5 times your earning is roughly a good estimate for the amount of house you can afford. Everything thinks that all very interesting but times have changed. Those things happen to someone else.
Now there is fear in her voice. Friends are getting laid off, but she is “secure”. At least for the time being.
As for those McMansions. I don’t think they will go to waste. Just wait for the phone call — “Dad. Mom. How about me and the kids come and stay a while until we can get back on our feet?” Those extra bedroom and going to be full. good thing that 3 or 4 car garage is big enough for the extended family.
Yeah, add another empty house to the excess inventory list…
But you what, I don’t think that is such a bad thing. It wasn’t that many years ago it was normal for two generations to live in a big house together. I would love to have my daughter and son-in-law with my two grandaughters live with us, it would be nice. Maybe an unintended benefit of this housing melt-down might be a bringing of families closer together ? I know it isn’t workable for everyone, but maybe a good thing for some. My daughter is an RN though, no financial problems there
If I had to live with my family, as dysfunctional as we are, we would probably all kill eachother.
Anybody know a ticker symbol for undertakers?
If the FEDs are going to bailout homeowners then we all might want to consider being homeowners and get that free handout. So what if our kids and grandkids have to pay for our excess. We will be dead.
That’s my feeling at this point.
Sorry everyone.
A bit OT, but can anyone advise what rentals go for in Santa Cruz? Something for a 4 member family (friends).
Hi Lost in Utah,
Check Craigslist.
shoulddathotathat - thanks
With apologies to Napoleon XIV…
They’re coming to take my home away, ha-haaa!
They’re coming to take it away, ho-ho, hee-hee, ha-haaa!
To the money farm, Where life is beautiful all the time and i’ll be
Happy to see those nice young men in their sheriff coats, and they’re
Coming to take it away, ha-haaa!
You thought it was a joke and so you laughed, you laughed when I had said
that losing it would make me flip my lid.. RIGHT???
I know you laughed, I heard you laugh, you laughed you laughed and
laughed and then you left, but now you know I’m utterly mad… And..
They’re coming to take it away, ha-haaa,
They’re coming to take it away, ho-ho, hee-hee, ha-haaa.
I read PostSecret every Sunday morning. People mail an artistic postcard with a secret they’ve never told anyone, and the blogger posts some of the more moving ones. Here was one of my favorites:
http://bp1.blogger.com/_a7jkcMVp5Vg/RseyidTLm1I/AAAAAAAABao/A7UJxRF_KfM/s1600-h/blather.jpg
We live in Los Angeles near The Grove and have been going there since it opened in 2002 or so. Last Friday night we went to dinner at The Cheesecake Factory and it was empty. It was startling, we have never seen it like that. After dinner we went for drinks to The Ranch House and it was equally empty. It was eerie. My wife and I think people are worried about their mortgage payments and are not spending on dinner and drinks.
Noticing the same at certain restaurants where we live. We think it’s the same thing. Emptier restaurants reflect the increase in For Sale and For Rent in surrounding neighborhoods as the domino impact starts to hit. And …it is far from over.
Just spent the weekend in the Village of Oak Creek (Sedona’s adjoining town). You know . . . tourist mecca, gorgeous red rock country, idle rich, movie stars, blah-blah. Well, I tried to make a reservation at the big name sushi spot in town. No dice! Said they were closing up at 8:00!! WTF?
I go to plan B; the new Szechuan place in West Sedona (relatively upscale) for sushi carry out. Again . . . 8:00pm on a Saturday and you could’ve shot a cannon through the place. Come on! There were four hostesses at the front desk thanking me profusely for my order.
Summer tourist season, one of the hottest destinations in Arizona, moneyed residents? Anyone still need convincing? The evidence is out there .