Very Little Demand At Any Price
The News & Observer reports from North Carolina. “Danny Creech took the call last August. It was his bank, SunTrust. He owed the Atlanta lender $1.5 million, but the debt wasn’t a worry. Creech, president of Landon Homes in Raleigh, routinely borrowed to buy and build homes. When homes lingered on the market, getting an extension on the loan typically required only a two-minute call and a $150 fee. But this was no two-minute call. SunTrust wouldn’t be extending the loan terms. The bank wanted to be paid back. In 60 days.”
“Now Creech, who says he ‘never missed an interest payment, never been late on one, always lived up to my part of the obligation,’ is in default, facing foreclosure and fearing his future.”
“When SunTrust called his loans, he had to scramble. He sold two houses at a loss of $105,000. He persuaded smaller lenders to take on portions of the debt. After 60 days, Creech still owed SunTrust about $560,000. The loan officer told him that SunTrust could refinance the balance, but only if he paid $55,000 and agreed to pay a monthly interest rate of 8.5 percent on the balance. ‘I could get money from the mob for cheaper,’ Creech said.”
The Sun News from South Carolina. “Ever thought about hopping on a bus to go house shopping? Sounds odd, but the national trend - dubbed ‘foreclosure bus tours’ - is starting to roll along the Grand Strand. At least two tours are planned here…and experts predict that with the way the market is - buyers looking for deals with lots to choose from - the area is likely to see more.”
“‘I think they will be pretty popular,’ said Tom Maeser, a local housing market analyst. ‘Everybody asks to see short sales and foreclosures first … What it tells me is that we are in a wonderful time for buyers.’”
“‘It’s just like going to see a house,’ said Jarrett Bouchette, president of Bouchette Realty & Investments Inc., ‘there will just be a lot of other people going with you.’”
From Macon.com in Georgia. “Some subdivisions are like neighborhoods for ghosts. You may drive down finished roads beneath street lights, past empty lots. You might even pass a house or two. But nobody’s home. Other subdivisions may be half full of occupied homes with picture-window views of rubble.”
“The economy has taken a heavy, heavy toll on all the new construction in Bibb County,’ said Barbara Woodward, a real estate agent with Connie Ham Middle Georgia Realty. ‘Banks aren’t making construction loans. Buyers can’t get mortgage loans,’ she said. ‘Unless you’re the rare person who’s sitting on a lot of cash, you’re not going to expose yourself any more.’”
“ith the foreclosures on the new construction, banks are willing to take substantial hits to get it off their books, Woodward said. So those that bought their homes at full value, they’re pretty much out of luck.’”
“That’s a fear of Clara Hawthorne, who bought a house at full price in The Highlands off Mumford Road. There, developer Sivica/Highlands Development left houses and town homes half built and acres of red dirt. Residents and county officials say that until recently, erosion threatened to destabilize the streets. Sivica officials did not return repeated phone calls to their offices, homes and attorneys.”
“‘I don’t see us selling our house for what we paid for it in the next three to five years,’ Hawthorne said.”
“‘For the last 10 years. … a developer could get any reasonable cost they wanted. The price matters more today,’ Sean Frith said, adding, ‘It’s a bloodbath.’”
“Home values will rebound, Woodward said. ‘We’ve had a major correction and one that was probably, in some ways, needed,’ she said. ‘But everything converged at one time, so the pain is a lot broader and deeper.’”
The Athens Beacon Herald from Georgia. “Custom home designer Greg Jordan’s workload and professional focus has changed dramatically as the stormy economy has pounded the construction industry. Last July, Jordan, owner of residential architectural company The OldeCQ Homestead in Danielsville, had 140 sets of preliminary house plans set to go on the books. By December, he only had two.”
“‘People backed out or put their plans on hold because banks weren’t lending money so they could build the houses,’ said Jordan, who has been in the business for 12 years.”
“The number of permits to build new homes in Georgia dropped 75 percent since their peak in the first three months of 2006, said University of Georgia Terry College of Business Dean Robert Sumichrast in an economic forecast delivered last week in Athens. ‘That is a free fall,’ Sumichrast said. ‘Georgia’s single-family housing starts (new homes) are at their lowest level since the 1981 recession, when our population was about half of today’s almost 10 million people.’”
National Public Radio on Florida. “Single-family home sales prices in the Fort Myers-Cape Coral area of Florida fell 59 percent between January 2008 and January 2009. In January 2009, the median sales price was $94,900, compared to $234,000 for the prior year.”
“It’s not hard to find neighborhoods that have been devastated. On one block of Northwest Second Avenue, at least half of the houses on the street are vacant. There are a few sale signs. High weeds grow under the palm trees at one house. Others have their windows and doors covered by storm shutters.”
“But those who follow the real estate market here are starting to see some signs of hope. Brett Ellis, a real estate agent, sums it up: ‘Sales are picking up and the inventory is going down.’”
“A year ago, the median price for a home in Lee County was more than $225,000. Today, it’s less than $100,000. In recent months, prices have begun to flatten out. In some desirable locations, Ellis says, they may even soon begin to rise. Even optimists like Ellis hesitate to make too much of the recent downturn, however, in part because of the large numbers of adjustable-rate mortgages that are due to reset in 2010 and 2011.”
“Matt Zacharias, a general contractor from Lancaster, Pa., had some luck. He recently bought a three-bedroom, two-bath home with a pool and its own boat dock. He paid $182,000. Sixteen months ago, the house sold for more than $500,000. ‘The market down here, the prices are just too good to be true,’ Zacharias says. ‘I had to come down and check it out for myself. One thing led to another and here we are — I’m actually going to look at another property later as another investment property.’”
“Mayor Jim Burch prefers to dwell on the positives. Just a few years ago, he and other elected officials worried about how, with rising costs, housing in the city was being priced beyond the means of teachers and police officers. ‘It’s kind of solved that problem,’ he says. ‘Affordable housing is back. That also attracts business. It also attracts residents to come into our area. We should take advantage of that and we will.’”
“Economist Hank Fishkind, like others who watch the housing market, notes it’s not possible to know you’ve hit the bottom except in hindsight, after prices have begun to rise. He agrees though that Cape Coral is probably close to the bottom.”
“And eventually, Fishkind says, most of the city’s oversupply of houses will be absorbed by the market. ‘I think there’s no doubt about that,’ he says, ‘but it will be the houses that are in the best of locations. There are some houses that are in such far-flung locations in such scattered development patterns, that there may be very little demand for them at any price. Some houses will be abandoned.’”
The Miami Herald. “Florida’s mortgage crisis worsened significantly in the last three months of 2008, with a stunning one in five home loans one month or more past due, the highest delinquency rate among the 50 states, an industry group reported. Of those, 8.95 percent were in foreclosure — representing 320,315 homes.”
“‘The equity theory says that even if you are capable of paying off your mortgage, you might let the loan go into foreclosure if the outstanding balance on the loan is more than what you might think the house is worth,’ said Andrea Heuson, a professor of finance at the University of Miami who researches the real estate market.”
“The being the case, she said, the Making Home Affordable plan would have a limited impact because it does not address the question of principal reductions.”
“Subprime loans, which are no longer available, were given to borrowers who had limited or spotty credit histories and are blamed for sparking events that led to the global financial meltdown and subsequent U.S. recession. ‘We knew Florida had a particular problem with these loans, but only 40 percent are current — that’s six out of 10 that are delinquent. Across the board, Florida has issues,’ MBA chief economist Jay Brinkmann said.”
The Palm Beach Post. “A Delray Beach firm tasked with redeveloping the Heart of Boynton is proposing a scaled-back version of a controversial project that once included a seven-story condominium building and 600 townhouses and condos. Gone is the height. The tallest building will be four stories, according to the proposal. And gone is the size. The plan now includes less than 360 housing units.”
“‘It’s a totally different proposal,’ CRA Executive Director Lisa Bright said.”
“By any measure, retail shops and restaurants should be beating down the doors to take space at the Canyon Town Center. The new palm-tree-lined shopping center west of Boynton Beach is in the midst of thousands of new homes - including homes built by a Canyon affiliate, GL Homes. More important, no other shopping centers are nearby.”
“But since late last year, leasing activity has slowed at the 200,000-square-foot center at Lyons Road and Boynton Beach Boulevard.”
“Caryn DeVincenti, who bought a home three years ago in the Canyon housing development, is one homeowner who can’t wait for the center to fill up. Local, national or regional, she just wants to see stores that will allow her to shop and eat near her home. ‘It’s one of the main reasons why we purchased here,’ DeVincenti said.”
The News Journal. “With the U.S. dealing with an economic slide that has cost millions of jobs, the number of vehicle repossessions is expected to rise 5 percent this year. Joe Taylor, whose Florida-based company insures repossession companies, said licensing and training are the answer to avoiding such violence.”
“‘If a guy is just put right on the street without training, the potential for violence is very, very high,’ said Taylor, who runs Insurance Services USA.”
“A Daytona Beach repo company hasn’t seen the violence in this area. J. Patrick Altes, president of Falcon International Corp., said, ‘We are repossessing vehicles at an unprecedented rate, but we are finding less violence.’”
“He said his repossessors are dealing with more sophisticated people, who are less likely to resort to confrontation and violence. ‘We are dealing with real estate agents, investors, business professionals, builders, concrete guys — not professional con artists,’ Altes said.”
I’ll be on the road out toward the California border for a couple of days. I’ll check in when I can.
Wave as you pass by.
“The price matters more today,’ Sean Frith said, adding, ‘It’s a bloodbath.”
I’ll try not to cry myself to sleep tonight. Really. I promise.
Price always mattered to buyers. It was the banks making the loans that didn’t care, for about 7 years…
Technically, it was the investors buying the loans that didn’t care but why quibble among friends?
Many of whom, as “investors”, occupied themselves by shorting various markets after buying such loans…which today’s hapless taxpayers are paying for.
And then the hedge fund guys came in and gutted company after company…”investor” after “investor”
The big-time bloodbath for commercial RE, lenders and their insurers hasn’t even begun yet. They are merely in the process of filling the bathtub with warm water, examining the straight razor and just…thinking
I saw a new store opening up in a locak strip-mall. “Bloodbath n’ Beyond”
Lol.
fishkind-” I can’t see”!
who pays these idiots- the gubermint
Mar 10, 12:17 PM EDT
Bernanke calls for overhaul of nation’s regulatory structure to avoid future financial crises (Dah….!)
“…The patchwork of U.S. financial rules dates to the Civil War. Congress, the administration and the Fed want to strengthen the system to avoid any future financial crises from plunging the U.S. economy and many others into recession”
Yup..Airmobile chopper Ben and the US Cavalry finance boyz are gonna straighten out this financial mess just like Gen. George A. Custer straightened out that pesky bunch of indians lollygagging and sleeping at the Little big Horn River….CHARGE!!!!!
http://hosted.ap.org/dynamic/stories/B/BERNANKE?SITE=WIMIL&SECTION=HOME&TEMPLATE=DEFAULT
I was going to dispute that, but you are correct — Fishkind’s client list, prominently posted on his firm’s website, includes a number of Florida cities and counties, among them the City of Ft. Myers, as well as the United States Department of Justice. That’s a lot of wrong advice and a lot of doltish forecasting for which a lot of taxpayers paid a lot of money. Now I’m even more enraged than usual when I see Fishkind’s name. CUE THE SEAL.
http://www.fishkind.com/client.html
People pay for the sort of advice that they want. If it doesn’t look like they’re going to hear what they want to hear they’ll just keep looking until they find what they’re looking for. AFA government goes, “lots of big expensive houses appreciating wildly” sounded good. “Be really really careful” sounded bad. Guess which advice they paid for?
“He said his repossessors are dealing with more sophisticated people, who are less likely to resort to confrontation and violence. ‘We are dealing with real estate agents, investors, business professionals, builders, concrete guys — not professional con artists,’ Altes said.”
funny stuff, Ben.
You beat me to it.
You smell that? Do you smell that? Fear, son. Nothing else in the world smells like that. I love the smell of Fear in the morning. You know, one time we had a sub-division Repo’d, for twelve hours. When it was all over I walked up. We didn’t find one of ‘em, not one stinkin’ FB or GF body. The smell, you know that Panic smell, the community. Smelled like… victory. Someday this housing bubble’s gonna end…
Sincere apologies to Robert Duvall and entire film crew of Apocalypse Now (1979)
Those people are to professional con artists as Jesus Christ is to Christianity. I had to read it twice. The dry humor had the subtleness of using a sledge hammer to crack an egg.
ROTFL
+1 on the dry humor bit.
But I think there is another reason on no violence. They’ve given up. These are people with luxury cars/SUVs that no longer have a need to commute. Many are probably one step away from leaving the nation back to wherever they came from. If you were a mortgage broker and you knew how many of your clients were under water… where would you end up?
How much do you want to bet ‘business professionals=Realtor? ™
This is Floria 1924-1938 all over again. The boom is gone. Good luck cleaning up after that bust. California is going through it too, as is Nevada, Pheonix, and …
Got Popcorn?
Neil
I know a woman who does repo for JD Byrider. She generally starts by knocking on the front door and asking if she can repossess the car now. That tends to throw them off their game, as no one thinks of getting violent with this little chubby woman who is asking so nicely. It’s only if they say no that she sneaks back after dark, along with the spare key that JDB keeps for every vehicle until it’s paid off. I dropped her off for a few late night snatch-and-drives. She’s surprisingly spry for a little chubby woman.
maybe I could get a pt job here in CA too!
lol
Part time? Fugghedaboudit. They’re looking for hard-working full-timers to keep up with the demand!
RE: repossess the car now.
Front page story in the WSJ on the auto re-po biz, which is having real trouble because snatch fees have fallen from $450 to $200, as thousands have poured into the field.
Plus, the deadbeats have become more steathy and cunning, because they know with the current credit situation once they lose possession of what they have, there ain’t gonna be a another financed replacement.
The dude the reporter went out with spent 10.5 nightime hours driving 350 miles out in his F-450 wrecker and only came up with 3 of 9 cars he expected to grab.
So a gross of $600.00. Pay the side-kick $150.00; depreciation and mileage for the truck @ $400 leaves a whopping net of $50.00 for the owner, less a Grand Slam Denny’s breakfast.
Piss poor money to be potentially shot at and chased with BB bats.
Knoeing that part of SC, most of the driving was probably on narrow back roads.
“Piss poor money…”
Exactly, HD. One of the repo companies I used to work for is having a hell of a time with the big financiers like Ford Motor Credit, GMAC, etc. because they are paying their bills very late, if at all. The inventory at the auction yards is backing up, and the resale value of the automobiles are way down. Another problem is that the used car lots can’t get any creditors lined up that approve their used car customers. It’s a vicious circle.
Interesting though that even if you make your payments on time for your business, the bank itself is driving you into foreclosure by demanding payment in full. Now that’s a good business model and will really help in an economic recovery………sarcasm off.
“Now Creech, who says he ‘never missed an interest payment, never been late on one, always lived up to my part of the obligation,’ is in default, facing foreclosure and fearing his future.”
“even if you make your payments on time for your business, the bank itself is driving you into foreclosure”
The article which Ben posted talks about refusing “an extension on the loan” which is different from calling in a loan before its due date. I have a problem with the latter, but not the former.
Right, and with every possssssible wind-at-your-back and horseshoe lodged firmly where the JT is going to “have to fit” I suppose all… of us would have never missed a payment?
I’m sure I’m not the only poster here who’s dad used to say: “Anyone can act like they have class when they’re “winning”, it’s when things are tough that we find what you’re really made of”.
Yup, my class act can’t locate me 1/2 the time because I love slumming so much
Interesting that Amex is doing exactly that. Paying $300 to select people who pay their balance off in full by a certain date.
and amex then closes the acct. anyway.
I’d take the $300.
But I’m quite sure they won’t close my account and they know it too.
Darn!!!
IIUC construction/commercial real estate loans like this aren’t for any long period like 15 or 30 years, but rather are traditionally re-negotiated after every 2 years or so.
In today’s climate, I’m sure this means the cliff that construction/commercial real estate is going to fall off will be much steeper than that for residential real estate.
I have a friend who speculated in 5 commercial real properties in LA back in 2007. I’m sure the piper wants to be paid this year.
“Now Creech, who says he ‘never missed an interest payment, never been late on one, always lived up to my part of the obligation,’ is in default, facing foreclosure and fearing his future.”
I think in many instances from the bubble era financing, the developer loan amount included an interest reserve held by the bank to pay the interest on the note for some portion of the duration of the loan. In essence, the developer may never have used their own money to make payments, they were made from this reserve. Eventually, the bank has to settle up.
CrackerJim,
I suspected as much that or a similar financing scheme was going on? All during the boom, does anyone ONCE recall hearing a builder cryin’ the blues about how the bank’s got his n*ts in a vice? That the payments are k-i-l-l-i-n-g him!?
Not that “I” heard? Since there were bidding wars ( for new homes fer’ cryin’ out loud? ) it was more likely that the bank tracked closing for some kind of clawback? Whatever the case, it should be only too obvious that builders had it too good for too long. Just like the benefits you’d imagine from “free crack”.
Looks to me like he made every payment on time but one, the loan repayment. Unfortunately that is the critical payment.
loan sharks aka the mob make better deals than banks.
Are the banks/credit ever going to get their feet held to the fires for usury fees etc?
““Florida’s mortgage crisis worsened significantly in the last three months of 2008, with a stunning one in five home loans one month or more past due, the highest delinquency rate among the 50 states, an industry group reported. Of those, 8.95 percent were in foreclosure — representing 320,315 homes.”
1 in 5 in foreclosure, huh? How many homes have MTGs (as opposed to being paid off)? 50%? If so, that means that 10% of all the homes in FL are in foreclosure. That’s a mind-boggling statistic. Yes, we knew it was going to happen. But still, just think about what that means!
All those people who are foreclosed are locked out of the housing market (thank god) for at least the next 3-4 years. Those homes need buyers; and that’s 10% of all the homes in the market coming on the market at pretty much the same time. Also, ownership rates are at record highs (still), so it’s not like there’s a bunch of new people to jump in and buy them up.
Unmitigated disaster, that’s what we have in FL. It will be a decade before our market recovers (you heard it here first) and get’s back to any normal supply/demand balance. Prices will eventually stop going down, but they aren’t going anywhere but sideways for a long, long time.
I’ve said that Florida never will recover, but you and I, while not on the same page, are in the same book. Fishkind and I aren’t even in the same library.
I do a lot of work in Florida. So many people I worked with were buying condos, land, etc, with dangerous loans (I/O with balloon payments were typical for lot loans, for example)
Since Florida is a fraud-friendly state, it’s also going to be hard to deduce which foreclosures were actually a person’s primary residence, and which ones were solely a get-rich-quick scheme. That’s why it’s outrageous that the handouts BO proposes have no provisions for establishing lack of fraud (owner occupancy, truthfulness on mortgage application, etc.)
About 50% of all homes are paid for NATIONWIDE. I would bet that the average in Florida is somewhat less.
RE: Unmitigated disaster, that’s what we have in FL.
LMAO…foreclosed homes aren’t gonna be the only problem for southern states.
Wait until the government of Mexico collapses due to the anarchy caused by the drug cartels and 100 million want out.
Then you’ll have increased hordes of beaners takin’ what little work you have now for under-the table peanut wages.
Plus, the residents get to pick up the tab for all those refugee welfare costs, which the Feds pay lip service to, but never ante up the bucks to pay for.
Then again, maybe the nationalized GSE’s will buy all the surplus inventory and give it to the new arrivals to mop up inventory.
Hasta la vista baby!
So the repo men are dealing with ‘real estate agents, investors, business professionals, builders’ — unprofessional conmen.
There are so many CON men in cahoots appearing in this HOSING Bust that they are crawling under the doors and through the windows to suck FB and GF blood while it’s still pumping and even if it’s stale. The REIC Wolf Packs roamed free, ran wild and had a grand old time during the “Good Years” Now comes the crows, ravens and the Repo-man after the scraps.
Funny thing though, everybody really knew or knows it now. The FB and GF, the RE brokers agent/in-house title companies/assessors/brokers/lenders, MSM, local and State Gov’t taxing agencies, Wall Street and the FEDS… They ALL KNEW IT!
…and Poof!…Surprise!…Surprise…and Shock now that the FRAUD is out of the Bag and it’s the entire Nation that is totally Bankrupt, Crashing and Sinking.
The Bailouts, Fraud and Waste really piss me but the phony moral indignation and “We never saw this COMING” Bull$hit really FROSTS my fuzzy little butt
Daily Cathartic Rant..over
RE: The Bailouts, Fraud and Waste
I don’t think we’ve seen anything yet.
Roudini says that the entire portfolio of scam mortgages needs to re-written and the US govie to take all the toxic waste off the fraudster books.
If the answer is “Nien”, then according to Dr. Doom it’s a 36 months run-out for the quasi-Depression.
Stressed out now? Let’s talk in 3 years.
Man, am I glad to be single with grown kids.
“Ever thought about hopping on a bus to go house shopping? Sounds odd, but the national trend - dubbed ‘foreclosure bus tours’ - is starting to roll along the Grand Strand. ”
Theses seem like a pretty crappy deal for the shopper. You get dragged around to houses you may not want to see, or stuck at ones you thought you wanted to see.
For the used house seller they’re a great deal. Lots of potential buyer/suckers at once. You might get a sense of urgency if more than one person is interested at a particular house.
There was a story on CNN the other day about a young man with a wife and son going to a house auction and they are interested in one particular property in Flushing, Queens NY that has an opening price of $90,000. Long story short, he gets it . . . at $230,000 and it needs work to be brought “up to code.” They showed the house and its obviously a typical little old dump. The likelihood that this family has an income to support that mortgage is probably very low, IMO.
The problem is the auction, where people are pressured with that sense of urgency. This buyer got himself and his little family into such an emotional state over getting this house. That it had a “value” (according to who?) of $500,000 a few years ago is meaningless.
Young man, if you feel pressure at an auction, just take yourself and your money and go home. You and your family will thank me.
If you feel pressure, it means take a trip to the loo and get a drink, and pee, and then do some stretches and then sleep on it for a few days. Deep breaths.
Just walk away. Hurrying can cause accidents.
I’ve done lots of stupid stuff that I occasionally regret, but one thing I’ve never regretted is not spending money.
That knowledge has saved me a boatload of money.
“I could get money from the mob cheaper”
Oh puhleeze. Is it just me or were these guys so spoiled by the Endless Fountain O’ Money that having to pay the same rates as anyone else in business is simply unthinkable for them?
What really chaps my hide is that they’ve sucked all the lendable capital out of the system for -legitimate- ( Non-REIC Ponzi ) enterprises and even still, the only thing they remotely care about is their own skin?
Had any ONE of us gone to a bank in the last decade w/ a perfectly viable biz plan ( other than building/flipping houses ) we’d have gotten a stern lecture about the liklihood of failure! Not the REIC. It’s “How much do you need to get started?”
Getting the money is not the problem. The results of paying it back is the real difference. We have been saying all along put some skin in the game and you will get your cash. No skin no cash. Obama considering reducing your principal if you don’t pay v. Big Sal brutally torturing your family before setting them on fire. Which loan has a higher chance of being repaid?
crying over 8.5%…what is this country gonna do when rates are higher.
and that reminds me….can someone explain to me why rates are not skyrocketing? is it as simple as the demand for u.s. treasuries?
michael,
In fairness, I believe the article said that was a “monthly” rate, but even still, Suck. It. Up and be a man fer’ crissakes!
We’ve had our local bank go under and if you’re like me you’ve had about enough of nickel-dime “builders” bringing down entire communities. Why was there no provision in place to make payment if homes ‘didn’t’ sell? Or was that just beyond the realm of possibility?
I posted this last night but it was late and no one saw it but me so here is my life update again in case anyone cares or is interested.
I had an offer of 245,000 on a property for two months and no one from the bank bothered to respond in fact they kept losing my paperwork.
My agent finally loses the listing and it is re-listed with another agency and re-priced at 230,000. I change my offer to 230,000 and bingo, there are 11 other offers on this property. I go up as high as 250,000 and I still didn’t get it. I am sure that was a good thing anyways.
I found another house ( that is the easy part) I offered 256,000 they countered at 299,000. I came back with 260,000, now this is on a home that was built in 1999 and sold for 215,000 in the year 2000. The sellers said firm at 299,000. My realtor told them that there are NOT two classes of homes out there, the comps ARE the REO and short sales as that is the ONLY thing selling out here.
I know I was offering to much, at that point I didn’t care anymore,my landlords were breathing down my neck!!! They need to move back into the house I am renting from them because of the economy, his health and a bunch of other reasons. I have until April 03rd to get out of here.
When the other home deal went sour and they said no deal, I knew what I had to do….give up!!
I finally said “SCREW IT” and opened Craigslist, found a rental listing that had been posted only seconds before and snagged it.
Do you know in the lapse of less than five hours yesterday I found a house for rent, drove by, made appointment and a signed lease.
I spent 1,000’s of hours looking for a house to buy that I could pay a pre-bubble price on. FOR NOTHING!!! Complete waste of my time.
My fate is now sealed for anther year in a rental ( new landlords current and up to date on payments etc..) they just got married and combined their lives but with two homes, they decided to rent his out. Nice home, 1.5 acres, 1500.00 per month, nice pool, they will maintain the water system and I will do the pool. It saves me a bit on water salt each month.
Landlords are fine with my four dogs, one cat, two birds. Get this!! NO pet deposit, getting the keys on Sunday. I gave first and a damage deposit.
I can’t believe how easy getting a rental was compared to trying to purchase a home in this Fu@ked up market.
To that lady from yesterday crying over “their” loss, cry me a river and drown in it. You don’t know the meaning of disappointment and frustration.
Because of the housing bubble I am stuck renting for another freaken year of my life.
So lets add this up, since 1999 we have been renting, first in The Bahamas, then in Montreal, now here in Florida where we thought we could live the “lifestyle” what ever the hell that means.
We have tons of cash, credit scores that banks smile over and we still can’t buy a home to save our lives unless we want a crap shack or just be fools and over pay. I almost did that…..scary to think that just because I didn’t want to have to move into another rental I almost screwed up my plans for home ownership that is AFFORDABLE.
Oh well, we get the keys on Monday and I have several weeks to get the hell out of this one.
I am going to try really hard to stop looking at the MLS listings and just live my life, show my horses and enjoy the nice weather for the next year.
I am still going to read this blog every freaking day like I always do, thank you Ben and all of you other guys for giving me hope that one day I will have my dream home for under 200,000.
BTW, my the wife of my new landlord was telling me that in 1998 she purchased her dream home ( it is lovely) I checked, and she only paid 25,000 for the land and 130,000 for the house to be built, 2600 under air with bells and whistles….go figure I almost bit the bullet and spent 260,000 on a similar home.
Anyways, I am now making this post extremely long and I hope that someone enjoyed reading it.
Regards,
SKB
“I change my offer to 230,000 and bingo, there are 11 other offers on this property. I go up as high as 250,000 and I still didn’t get it. I am sure that was a good thing anyways.”
Houston….. we still got a speculation problem.
That of course is a problem, even my realtor ( 30 years in business) says she has NO clue how to list and price anymore.
In the end, she told me to find a nice rental and keep in touch, she didn’t want me to over pay either.
I had no clue whether I was getting a good deal or not. I certainly now realize that waiting is better than buying.
There was a sick feeling in my stomach to let go of 100,000 cash out of our savings.
I am going to re-invest again for another year and then who knows.
Maybe I will never buy a house and at this point, I honestly don’t care anymore.
Today I feel much differently than I did yesterday which is a great thing.
I hope that someone enjoyed reading it.
I did. I was frustrated my last move was into another rental (really nice… but still). But between the move and now I’m glad we’re renting (really glad). Oh, some frustration over price… but its easy to get over.
It will be a different market in a year. Oh, there will still be wishing prices… but reality will have sunk in. More Realtors ™ will refuse to pay the marketing costs of overpriced listings.
In Florida, you have time.
Got Popcorn?
Neil
Thanks Neil, your wisdom and support are exactly what brings me back to this site over and over again!!
I read it last night. I just don’t care to respond to your supposed sob story.
$1500 * 120 (let’s call it the HBB standard price multiplier) = $180k house on 1.5 acres with a pool. Sounds like you did pretty good to me. My house payment is more than that for less.
If not owning is breaking your heart so bad, then it’s not ‘overpaying’. Call it the whiner premium and get it over with.
Ok dog thanks,
I am not sure how to respond, on the “supposed sob story” comment.
I thought this message board was a support system for people like me that were affected by the bubble and their own personal experiences.
I understand your point on the whiner premium, I guess I am not willing to pay for it.
Well, it is hard to work up sympathy for someone who is freakin doomed to take the most sensible path. Sounds like you will be OK for now.
Three countries in three years. Sure you’re ready for the extended stay?
“Three countries in three years. Sure you’re ready for the extended stay?”
No, three countries since 1999, that works out to 10 years husband works for a Federal Government Agency and we were posted overseas.
We moved to the USA to stay for good last year.
I have never asked for “sympathy” as I don’t need anyone to feel sorry for me.
Perhaps a bit of empathy would be nice considering most of us here on playing for the same team.
Thanks anyways, I set myself up for comments both good and not so good by posting my business on this forum.
I like to share my housing bubble story with others.
Feel free to share yours.
SKB,
Liked your story.THX.
SKB….I enjoyed your post. It was interesting and well-written.
Sorry you’re getting grief for sharing your personal experience. Seems some folks have a bad case of the green-eyed gazongas. Try not to let it get to you.
“BTW, my the wife of my new landlord was telling me that in 1998 she purchased her dream home ( it is lovely) I checked, and she only paid 25,000 for the land and 130,000 for the house to be built, 2600 under air with bells and whistles”
Guess when I told you this months ago you didn’t believe me, a HBBr.
Just kiddin
Well be patient. I’ve been waiting since grad school to buy a house - about 10 years. I don’t mind renting in fact love the low cost and flexibility. The one reason I want to own is to put down roots - literally. I love to garden. Nice gardens take decades to mature. But such is life. If I don’t get to buy for five more years so be it. I’ll be 50. But will still have 3 decades for my garden. Maybe longer. Very good genes in the family. All grandparents were healthy and active in their late ninties. My potted plants on the patio keep me happy for now and are portable.
Be carefully of those deadly DC RE Step n’ a Half Vipers that hide in the grass. It’s a jungle out there
Anon,
Thank-you, I hear you I have also been waiting for 9 years due to our prior living arrangements with my husband’s job taking us overseas.
I also love to garden and lucky thing about this new rental is that they had put in raised garden beds years back. The beds have been just sitting there waiting for someone to come and get them going again. I now have something to do for next year or two while I continue to wait this out.
I plan on growing tomatoes, hot peppers and lettuce.
Sounds like we are the same age too.
SKB,
You capture the frustration that many hard-working, mindful homeseekers face… but look at it this way: if you were more fortunate in your previous searches, you might very likely be facing severe economic hardship today.
The real estate market has been anything but rational fo the last ten years. The thing for a rational person then would be to avoid it.
In the long run we’re all just temporary renters, enjoying a brief but hopefully wonderful time on this planet. People are just way too hung up on home ownership.
Spykeeboi
“anything but rational” LOL!
Kind of sums it up. I don’t object to anything SKB shared, other than the characterization that “renting is a piece of cake”.
I beg to seriously differ! It-is-NOT. Flaky LL’s are a dime-a-dozen and most would love nothing more than to sell out from under you if given even a HALF way decent offer. Please keep us abreast your experience as this develops. Sounds almost too good to be true.
We went through several “long term investor” type LL’s that swore up and down “they’d -never- sell!” Ha!
Mom? Meet the under side of the bus!
I’m here to tell you that renting does have its downside. I’ve been looking for new digs for like three months now and it is, to say the least, a royal pain in the arse. Craigslist bites the big one. So do some realtors. One lease I was handed by a realtor was like 10 pages and the only way I’d ever get my deposit back is if I stripped naked and sat in the middle of the living room and didn’t move a muscle.
I finally found something I can live with and the LL is a really nice good ole dude. One page lease. Pay me on time, don’t wreck the place. That’s it. He’s owned the place forever. My last LL was pretty decent, too. But the complex has really deteriorated at a rapid pace, real creepy folks moving in and coming and going. I don’t have the heart to tell him, he’s got a lot invested here, and I don’t want to be the bearer of bad tidings.
Sheee-it. I hate packin’ and moving, too, and have to get primed for that. I don’t have all that much stuff, or so my buddies tell me, but it sure seems like a lot to me.
palmetto,
I have to say that I have been very fortunate over the last nine years of renting.
We are the kind of people that are low key, we will try to fix things first on our own before bothering the LL’s.
We take care of things, and even though we don’t own these homes we have always taken pride in them as if we did.
As being former homeowners ourselves we know how we would want a renter to take care of a home we might have rented out.
I was lucky to find this newest one on Craigslist that literally had been posted only moments before I stumbled upon it.
When I was looking at this home with the future LL”s there were numerous calls on it. We feel very blessed and I am glad that I acted quickly like I did.
It was only seconds after my realtor telling me the news on our offer that I was driving in my car to do a drive by of the rental.
It all happened so fast, it was meant to be no doubt.
palmetto,
“the only way I’d ever get my deposit back is if I stripped naked and sat in the middle of the living room and didn’t move a muscle.”
DinOR,
Thank you, we have been lucky with our LL’s over the last nine years.
We have had six landlords in 9 years and next week it will be seven landlords in 9 years.
We have moved so much, sigh…but each time we have had a positive experience. I hope it lasts…:)
My current landlord was/is great and we are actually friends with them. We developed a friendship when we started renting this place. We will continue to socialize with them when they move back in so it will be weird to come back here as a guest and not the tenant entertaining them. They do love the decorating that I did and plan on keeping it exactly the way I have it, which is nice.
My new landlord e mailed me today to tell me that we can have the keys on Monday, we get the place for the rest of the month for free. They said decorate any way you would like and they are sending out a crew to clean the house and a landscaper to fix up the yard.
I do feel very blessed indeed.
Thank you
You are blessed. Great LL.s Fab!
Thank you for making my point more sympathetically than I did.
The_Overdog,
While I’ve all but lost interest in charts tracking median prices… and… sales volume it’s still important ( to me ) to dispell myths at every turn.
For all our better intentions, we ‘do’ have a tendency to generalize here. Not nearly AS bad as Bulls but when you say “It’s -always- better to rent”, “Everyone that bought after ___ is a GF/FB” etc. you open yourself up to the same deserved criticism that they invited upon themselves.
As I’ve said before, renting isn’t what it used to be? Not that long ago, homes that were in the Rental Pool ’stayed’ there! Now that whole inventory thing is so in flux! How many C/L postings do we need to see that say: “For Sale, Rent or Rent2Own or..?” before we get the picture?
Spykeeboi,
Yes, I do see your point…I guess home ownership does have some appeal or this website and it’s thousands of readers wouldn’t exist lol.
Yes, I am fortunate that my offers have fallen through, call it impatience or temporary insanity.
Today I am glad I am moving into another rental.
Thank you,
I am coming up on my 2 year anniversary of my current lease. I have a really cool house, a pool, 1+ acre lot, hardwood floors, a sun room, 2 fireplaces. My LL pays for pool service. Just last week I had a team of 5 workers who spent the whole day cleaning the property up…trimming bushes, putting in new pine straw, pruning trees, mulching,etc Cost to me $0. I have 2 dogs and a cat. I also painted several rooms, basically dispelling the 2 big myths of renting.
All this for the low low price of $2K a month. I’ll keep renting for another 20 years if need be as long as the cost to own is higher than the cost to rent. And if I have to move, oh well, I pay movers $2000 to move me and I spend a weekend packing and a weekend unpacking. Not really the end of the world and certainly better than buying now and losing tens if not hundreds of thousands of dollars in equity over the next year or two.
God loves you. You may not feel it right now, but he/she does.
LOL, Eggman.
I know God loves me..
Thanks
He/she/it/we -
I posted a similar comment a couple days ago about the same type of situation. You will absotively posilutely NOT regret having to wait at least a couple years. Once the bulk of the Alt-A and Option-ARM crap resets during the next couple of years, that increased inventory will just continue to drive home prices down for years to come.
The banks don’t even bother listing upwards of 70% of the take-backs they already have on their books from Subprime et al (at least according to sources I’ve read). Just wait for them to dump all that crap on the market too.
Spock and Horta (tunnel digging thingee) during mind-meld– Paaaiiin, paaaaaiiiin!!
Spock and the Hortas!!!!!! The trubble with tribbles!!! Allow Balok to serve you up a serving of Tranya!!!!!
Next Shoe To Drop,
It is nice to be sharing this boat with others no doubt.
Yes, I have witnessed myself with many, many homes in this area that have been abandoned, deemed REO properties by the Tax appraisers office and yet, just sitting, sitting and sitting…waiting for??????
I feel much better today about my new rental.
I am even looking forward to the new digs.
Congrats sister!
Put in an offer on a REO and will find out tomorrow if it flies.
Tired of renting also, for all the reasons you mentioned.
Again, congrats on your score!
Best Always,
Leigh
I hope you’re right since here in Maryland, the Bubble is deflating at a glacial pace, and we still have plenty of idiots who expect prices to “shoot back up!” next year… argh!
They’re hoping Obama will buy all those houses from them for the full loan value so they don’t have to dump them. Once politicians quit talking about bailing out (re-inflating) the housing market and start talking about bank capital levels instead, banks will start dumping those REOs at whatever price it takes to get them gone. Then housing will be truly affordable again.
Definately wait. Prices are still coming down. Be careful they don’t ‘appraise’the house at bubble prices. Wait a year or two and you will get your house on your terms.
“I could get money from the mob for cheaper”
Perhaps SunTrust’s marketing department could make lemonade out of this. For example, “Yes, we’re more expensive than the mob, but we won’t break your legs if you default.”
LOL
““Matt Zacharias, a general contractor from Lancaster, Pa., had some luck. He recently bought a three-bedroom, two-bath home with a pool and its own boat dock. He paid $182,000. Sixteen months ago, the house sold for more than $500,000. ‘The market down here, the prices are just too good to be true,’ Zacharias says.”
I wonder if this deal will still be “too good to be true” when Zacharias gets his first $10K property tax bill. Or finds he’s paying anywhere between $5-10K per year for homeowner’s insurance.
Time will tell.
I have a feeling that Matt Zacharias of Lancaster knows what he’s doing. My guess is that he’ll plow the house under and start rotating crops. Those Amish folk — they’re pretty canny. Good bowlers, too.
Luv,
Jen
The Amish are also wonderful in the building trades. They did some of the construction and remodeling work on one of the houses I grew up in. Fabulous work and super-courteous workers. Even our dogs liked them.
Here’s something else that’s cool about Amish construction workers: They clean up when they’re done. As in, cleaning up well enough that you could sit down and have a meal on the floor.
Regarding the Amish, NPR did a loan segment, and the Broker who did their loans said they never have defaulted on a loan, ever. The Broker said they are the most honorable people both financially and socially, and great to do business with.
The Amish are also wonderful in the building trades. They did some of the construction and remodeling work on one of the houses I grew up in.
Hmmm..I didn’t think they’d have time after building all those fireplaces!
“I’m actually going to look at another property later as another investment property.’”
You go, specuvestor. What an original and novel idea. Look out trump, here comes chump!
BIL doesn’t want to pay the mortgages on the homes he has, but is itching to snap up all the new deals nearby. After spending 250K each for 2 out of town specuvestments, he is going nuts watching nearby homes sell for a lot less, 100 to 150K.
As we edge closer and closer to the stock market bottom, this clown talks about stopping 401-K contributions to fund the acquisitions. He’s been DCA-ing down the whole time. You can’t fix stupid. Some people think yesteryear’s prices are going to return soon. What’s more, they don’t expect rents to drop further.
Your BIL sounds like a real prize. He’d take the gold at the RE loser olympics.
This same clown bought Countrywide shares at $18 last Summer. Later it was acquired by BAC in a (0.1822) stock swap. BAC was trading under $4 prior to today’s bounce.
Have a couch for your sister to sleep on?
I thought conventional wisdom was that if something is “too good to be true,” it probably isn’t true. We still have a revised conventional wisdom being acted upon by people like Mr. Zacharias, which tells me we’re still not anywhere the bottom.
He’s going to love Florida. There’s no free lunch here anymore.
The prices are too good to be true - “true” in this case meaning something you can depend on. They’re going down much further.
OT:
i’m the joker that was going to put a bid on that studio city hse,
just got laid off,
with just the wife’s inc. we would be just saving a little bit after exp., so i called my lanlord and got the rent knocked down $200/mth
so i wont be ‘re entering’ for now- i cant believe how easy it was to get a rent reduction,
congrats!
socalreenter
Sorry to hear about your layoff. You seem like a decent guy. Sorry to hear adversity came a’knock’in.
Don’t worry about finding a great house down the road. You will. It will be even nicer than the one on Kraft. We are awaiting to re-enter too, with a one stop payment plan.
If not already posted, Postcards from the Recession - California’s Inland Empire:
http://www.latimes.com/news/opinion/la-oe-straight8-2009mar08,0,480698.story
“I haven’t slept well for about a year. For a while, I woke up at night to check on my daughter’s Honda, which was broken into repeatedly. We knew it was a prime target. But recently it was stolen from in front of her friend’s house, in the 15 minutes she left it to go inside. On Presidents Day, my ex-husband and I drove to a towing yard in San Bernardino near the Colton border to retrieve what was left of the car when police found it. The guy who brought it to me shook his head.”
Stripped. Everything gone but the fast-food trash the thieves had strewn on the floor. “I’ll call the salvage guy for new door panels and seats,” my ex-husband said. Then he rolled his eyes. “He only takes cash, but my tax refund’s gonna be an IOU, right?”
“A few days ago, police were at Maria’s; someone had tried to carjack her son at gunpoint for his truck. And from my kitchen window, I saw police at a house on the next street. After work, my youngest and I smelled smoke on that street, so several neighbors and I ran to see whether the elderly widows on the block were OK. The fire was put out quickly, but one man said to me, “A bad day on this street.” Earlier that morning, police arriving to evict a woman found her dead. A woman in her 30s, in a rental house, who’d lost her job some months before and was being evicted, had hanged herself.”
A few months ago, we joked that “burglar bars” for windows would be a booming business. I don’t think we missed the mark on that one.
Fueled by the Class Warfare rhetoric BO espouses, our underclass will feel empowered.
Just returned from almost a month on the road. Saw honest-to-goodness “ghost towns” in Georgia, similar to the ones in the article Ben linked - for example, about 60-70 developed lots, maybe 20 houses built and the pool and small clubhouse in - and just four to six houses occupied. It was very eerie and I couldn’t imagine who will buy any of the spec houses. The owners living in there must have stomach flips every time they pull into their driveways.
“Brett Ellis, a real estate agent, sums it up: ‘Sales are picking up and the inventory is going down”
Tell Brett I won’t buy until the price is less than zero.
Here is Florida it is a similar situation…or worse actually.
It’s all about price…first thing anyone wants to look at is short sales…problem is short sales are a pain to deal with…the banks don’t get back in touch and offers go on for 6 months without a response….foreclosures are another story…once the bank owns them they want to get rid of them…
Tanya
Lakewood ranch Real Estate