‘July Is A Moment Of Truth’
A trio of reports on housing markets from the northeastern US. From Pennsylvania, “Home sales stalled in York and Adams counties in the first five months of the year. ‘It’s been flat, I’d characterize it as a high plateau,’ said Steve Snell of Realtors Association of York and Adams Counties. ‘We’re at a point where we’re staying constant at that high level. We can’t continue to grow as we have and not have some negative consequence.’”
“Jacob DeRooy, a consulting economist for the Pennsylvania Association of Realtors, sees it differently. ‘It’s evident what’s happening: We have a softening of the real estate market after five years of booming sales and booming prices,’ he said. ‘The prices of houses have been rising at a rate well above that of general inflation that could not be sustained for very much longer,’ he added.”
“The inventory, or number of homes listed, went up 73 percent from last year. But that’s not because of a slower market, Snell said, but rather because of a 43 percent increase in new listings.”
From Connecticut. “July might represent a turning point for the housing market and a good time for bargain hunters, some real estate agents said. ‘That big spring market never came,’ said realtor Jerry Dee. ‘There is a lot of inventory.’”
“The number of homes on the market has about doubled in the last year, and it’s not because more people are selling. In some cases prices are falling. In most cases, sellers might shave $10,000 to $12,000 off the price of their home to make it more attractive to the buyer. But in one case, a $449,000 home in Danbury was reduced to less than $400,000, said Don Fleming, a Realtor in New Milford.”
“‘This is a real transition point. July is a moment of truth. Sellers may face wake-up calls if they priced their house at the growth rate of previous years and they are not getting offers,’ said Fleming.”
“Dee is not sure he would call it a buyer’s market. ‘It’s an in-between market,’ he said. ‘I’m still out there every day. I have enough customers. I just have to spend more time with them.’”
The Boston Herald. “Three times hasn’t been the charm for would-be condo seller John Ryle. He’s cut the asking price on his Beacon Hill one-bedroom three times in as many months, but hasn’t gotten a single offer.”
“So this week, the 35-year-old told his real estate agent to look for potential renters in addition to buyers. ‘We just feel like maybe it’s a better idea financially to hold onto the place and see how the market looks next year,’ said Ryle, who is trading up to a Redding house.”
“Ryle isn’t alone. Real estate agents say more and more sellers who can’t line up buyers are deciding to look for tenants instead. ‘I can find a tenant to pay $1,500 a month for a one-bedroom Boston condo with my eyes closed,’ said Ryle’s agent. ‘If someone has a mortgage below $2,500 or even $3,500 a month, they can cover that through renting and move on with their lives.’”
“Sellers say receiving rent beats accepting low-ball offers or carrying two mortgages. ‘We’re thinking: ‘Why not just rent it and hold out for the real estate market to turn around?’ It always does eventually,’ Ryle said.”
From New Hampshire:
‘ Bad timing: City revalues homes at market peak’
I wonder how long the delay will be to reassess downward?
I wonder how many will contest next year when the market value is well below the appraised value? Some gummint appraisers are going to be mighty busy I suspect.
It’s interesting to mention the municipalities, the cities and towns. Not just the individuals or the financial institutions will be impacted by the implosion of the bubble. I am sure that many cities, small as big, will also go bankrupt. Municipal bonds won’t be the great and stable investment people think it is.
” ‘It’s been flat, I’d characterize it as a high plateau” said Steve Snell of Realtors Association of York and Adams Counties.
The roaring boom in the stock market in the 1920’s was a a gigantic speculative episode.
The most prominent and most to be regretted of the academic sages was Irving Fisher of Yale - as already indicated, the most innovative economist of his time. Heavily involved in the market himself, he too surrendered to the basic speculative impulse, which is to believe whatever best serves the good fortune you are experiencing. In the autumn of 1929, he gained enduring fame for the widely reported conclusion that “stock prices have reached what looks like a permanently high plateau.” (A Short History of Financial Euphoria, John Kenneth Galbraith)
Too Funny
David
http://bubblemeter.blogspot.com
Someone recently compared RE to a rocket loosing power after take-off. The permanently high plateau might look like this:
Captain: “We’re at a high plateau, we’re at a point where we’re staying constant at that high level. We can’t continue to rise as we have and not have some negative consequence.’”
“It’s evident what’s happening: We have a softening of speed after five minutes of booming away”
“The altitude is up 73 percent from two minutes ago. But that’s not because we’re loosing power, but rather because gravity has increased”
“We’re seeing a quite normal, minor correction in altitude”
“Now’s a great time to get onboard”
“We’re going to have a soft landing”.
http://patrick.net/housing/calhouse4.gif
“High plateau” — maybe. Permanently — sure, just like in 1929.
nice CALL David!
est advice I got from a Wall Street Bond Trader with 25 years experience. “The Trend is Your Friend” Look at chart of S&P Housing, or PHM, KBH, LEN. The spin stops here
‘That big spring market never came,’
________________________________________________
Oh Great Pumpkin where are you??
Wasn’t the spring selling season supposed to be the moment of truth? Someone keeps moving the goalposts.
They can move the goal posts all they want, buyers have taken the ball and gone home.
I’m waiting for the big winter rush when shoveling, egg nog, and open houses all coincide.
The ball has sprung a leak, and the air is hissing out…
“Ryle isn’t alone. Real estate agents say more and more sellers who can’t line up buyers are deciding to look for tenants instead. ‘I can find a tenant to pay $1,500 a month for a one-bedroom Boston condo with my eyes closed,’ said Ryle’s agent. ‘If someone has a mortgage below $2,500 or even $3,500 a month, they can cover that through renting and move on with their lives.’”
Can someone explain this paragraph to me… My math says that $1500/month does not “cover” $2500-$3500/month…
Maybe that is why I think RE is overpriced… I am using some ancient math that needs updating.
Yeah, you can just hear the collective gasp, as people realize, ‘you mean the rent won’t cover the mortgage?’ Instantly, the rent/buy ratios’ importance is revealed.
It’s the “new math”!
Dont forget to include the TAX deduction and depreciation…
Negative cashflow still ::akakblao, well if I transfer this into my 401k /IRA… the montlhy contributions can be deducted….oh I better get a job, now that I can’t sell real estate full time!
“Sellers say receiving rent beats accepting low-ball offers or carrying two mortgages.”
What about a renter makes the mortgage go away?
Anyway it isn’t that bad. By renting you can continue to deduct mortgage interests plus now all expenses as well. The rent is income but the deduction value is, in the early years, larger than the rent. Then there’s depreciation, a way to take loses against other income in a declining market; something you cannot do with a simple home sale.
Real rough: monthly rent x 120 = current worth. Less and you make money renting, more nad you are better off selling. If you cannot sell for a higher multiple then it may make sense to rent at a loss and wait for either price appreciation or the tax depreciation to change the formula.
If you rent out your property, mortgage interest and depreciation are deducted against the rental income. If your costs exceed your rental income, you may not be able to deduct the loses against other income unless you make less than $100,000 and play an active role in renting the property.
If you end up selling the property for more than you paid, you will have to pay deprecation recapture and if you also risk losing your capital gains tax exemption.
Ceretainly. I wasn’t interested in giving comprehensive tax advice. There’s also the increasing likelyhood of runn up against the AMT.
Still for a lot of circumstances rent a house with a $2500 mortgage for $1500 can make a lot of sense compared to that alternatives. My only point was to show that the calculus wasn’t simply rent v mortgage.
didn’t the AMT get suspended/stopped by Congress a couple months ago, or am I wrong on that?
now ,now robert,rent multipliers in fabulous rohnert park california are running about 520 for 15 year old tract houses in this new buyer’s market.it’s a special,special place and prices are fully justified by all the chinese billionaires that are projected to retire there in the next few years.
I ran away from a 273 multiple even though it was massively cash positive; long since paid off and with low taxes, insurance, etc. I just didn’t think leaving that much appreciation exposed to a single sector was wise. I went to extremes in predicting the future; rents double because of inflation or prices halve or some combination thereof. I wanted none of that.
Man, you got me with rohnert park california. I had to look it up.
I ran a few calculations with the 120 multiplier and gee whiz those are some really low numbers. Fact is, in the Bay Area a 200 multiplier would be, or at least seem like, a steal– which just how so messed up things have become.
I have to admit I would be amazed if things went that low.
‘I can find a tenant to pay $1,500 a month for a one-bedroom Boston condo with my eyes closed,’ said Ryle’s agent. ‘If someone has a mortgage below $2,500 or even $3,500 a month, they can cover that through renting and move on with their lives.’”
Here’s a wacky new solution:
You find a tenant to pay $1,500 rent to partially cover your $3,000/month mortgage, and you move in with your parents.
Exactly…
You forgot to include the guaranteed long-term appreciation in excess of $1K-$2K month, which will make these investors whole when they sell.
Oh Waitress! Please send a shot of “painful ass-pounding” over to my friend Mr Ryle sitting at the corner table! Thanks!
I just looked up Dying A Slow Death and this is what I came up with:
Sellers say receiving rent beats accepting low-ball offers or carrying two mortgages. ‘We’re thinking: ‘Why not just rent it and hold out for the real estate market to turn around?’ It always does eventually,’ Ryle said.”
That’s pretty good Crispy.
LOL! I was thinking the same thing.
This Ryle guy is the poster boy for why real estate markets are slow to change directions, but when they do, they grind down slowly, painfully, and unstoppably. This guy will hold on until the bitter end and throw away a few hundred thousand dollars waiting for the “turn around” that just never seems to arrive soon enough.
Banks and credit card companies love guys like this. They are their best customers.
Watch the “Secret History of Credit Card”.(there is a link to watch the documentary online at the website)
A marketing genious came up with the idea of getting people to take credit with them by offering a 0% interest teaser.
You can watch Secret History of the Credit Card, here.
Correction. You can watch Secret History of the Credit Card, here.
Correction.
You can watch Secret History of the Credit Card, here.
“Eventually” my a**. Like in 2020, I suppose. It is ‘turning around’ right now. Good luck renting until it bottoms out and turns around again. Getting tired of these stupid, misleading pronouncements byt these self-proclaimed experts.
Actually not a bad strategy, depending on how long “hold” means. In a growing area, if you can hold on for 10 years, you’ll probably be okay.
Skippy,
Are you shi&*(ng me? Ten years with your jewels in a vice, bamboo shoots under your finger nails, and all your friends taking vacations to the south of France? These folks will be off like a bride’s nighty..!
“Ryle isn’t alone. Real estate agents say more and more sellers who can’t line up buyers are deciding to look for tenants instead. ‘I can find a tenant to pay $1,500 a month for a one-bedroom Boston condo with my eyes closed,’ said Ryle’s agent. ‘If someone has a mortgage below $2,500 or even $3,500 a month, they can cover that through renting and move on with their lives.’”
I’d love to own a depreciating asset with a burn rate of $2K-$3K per month. That is $24K-$36K per year. Who (realistically) has that money to burn?
“Sellers say receiving rent beats accepting low-ball offers or carrying two mortgages. ‘We’re thinking: ‘Why not just rent it and hold out for the real estate market to turn around?’ It always does eventually,’ Ryle said.”
“Eventually” may turn into 5-10 years. I hope Mr. Ryle has deep pockets or a rich uncle.
Channeling the post-2000 dot-com/telecom mania …
I’m going to hold Nortel (NT) at $70. These stocks always come back eventually.
I’m going to hold Nortel (NT) at $60. These stocks always come back eventually.
I’m going to hold Nortel (NT) at $50. These stocks always come back eventually.
I’m going to hold Nortel (NT) at $40. These stocks always come back eventually.
And so on and so forth. Sigh…
I bought it at about $1.00 and doubled my money.
Well. You must believe in reincarnation!
I think this is the place: MLS 70354751. He paid 214K for it, owes 175K. It’s tiny, so even at $305 it’s still over $750 per sq. ft; even for Beacon Hill that’s a high price. And the lux amenities. No wonder he has no takers.
Somehow it is not a surprise that the RE section of the Herald would misspell Reading.
“The inventory, or number of homes listed, went up 73 percent from last year. But that’s not because of a slower market, Snell said, but rather because of a 43 percent increase in new listings.”
Looks like more new math.
Rats leaving a sinking ship.
This so reminds me of that scene in Spinal Tap where the Tap’s manager explains to Rob Reiner that the reason they’re playing 1500 seat auditoriums instead of 15,000 seat stadiums isn’t because they’re losing popularity…it’s because their audience has gotten “more selective”.
Yeah,
Spinal Tap conveys the ultimate sense of where things are now. And if you don’t like that you can lick my love P*&*!
“Sellers say receiving rent beats accepting low-ball offers or carrying two mortgages. ‘We’re thinking: ‘Why not just rent it and hold out for the real estate market to turn around?’ It always does eventually,’ Ryle said.”
‘I can find a tenant to pay $1,500 a month for a one-bedroom Boston condo with my eyes closed,’ said Ryle’s agent. ‘If someone has a mortgage below $2,500 or even $3,500 a month, they can cover that through renting and move on with their lives.’”
How do you cover a $2500 mortgage with a $1500 Rental payment Mr Agent ? And Mr Ryle, how many years of bleeding cash will you tolerate before finally accepeting the “Low-Ball” offer for your 1 bedroom apartment ?
“We’re Thinking”
Yes, just not logically. Try breaking out the calculator wise guy.
The other issues is finding a tenant. My stepfather rents 2 and 3 bedroom apartments, and is having trouble finding tenants that have average credit. No matter good credit and references.
The past couple of years have been a boom for bad credit purchasers, so who is going to rent the 1 bedroom apartment for 1500 a month in Boston? Either a student, or someone who has a less than stellar track record.
Either way Mr. Ryle is in for a rough learning curve, as dealing with tenants, and HOA’s at the same time might prove beyong his limited capabilities.
Wait untill all he hears are the neighbors complaining about the music, or the stench, or anything else that the tenant is doing with the “investement” and he wishes that he had taken those lowball offers. IDIOT!
I’ll rent from him and have him take off $100 to cover the winter days when I’ll have to garage the car for snow removal. If not, I’ll go somewhere else with a garage spot built into the price.
Right now, it’s a renter’s haven in the greater Boston area and as I’d predicted, the supply of speculators (who will then have to rent out instead of the quick/spot flip) have made it difficult for landlords to have any pricing power.
Thus, the “rents are rising!” meme turns blue and chokes to death in its infancy. Poor baby; never had a chance.
When economists say average rents are going up 5%, what they mean is NYC=+25%, everywhere else, 0%. Our current lease here is going to be our last.
average tenants these days: the ‘cream of the crap!’
they’re the ones who couldn’t swing a sub-prime loan.
Yeah, what about us bubble watchers?!
Aren’t we the elite subdivision of renters?
No. We most definitively are not as we know what we want, and what we want is to pay less money, therefore the landlord is stuck with us paying little (I still pay the same as in 1999) or the threat is that if they raise our rent, we go elsewhere. Not a good prospect for landlords when the going is tough. They want dumbasses whose rent they can hike every 6 months, and that will stay put!.
We are the elite, and our landlords are lucky to have us, as we are also rare.
Yep, mine cringed when during small talk I mentioned I was looking to buy (maybe 6 months ago). He also cringed when I mentioned current asking prices. Looks like I’m still around.
We are the cream of the renter crop. It’s just us and, as you said, those who couldn’t even get a subprime loan.
Sure, we may drive a hard bargin, but my landlord can faithfully count on a rent check by the 1st of the month and he knows we aren’t going to wreck the place. There is alot of vale in this for a landlord.
The way I see it, we are the “treasury bonds” of tenants. We are going to pay less, but we are not going to default either.
Exactly. I like the expression:
“The way I see it, we are the “treasury bonds” of tenants. We are going to pay less, but we are not going to default either.”
Also, I have learned that when a “rental property owner” tries to squeeze maximum rent out of tenants, they often have to sit with an empty apartment for a longer time. And when they do find a tenant, those tenants often stay a short period of tim, like a year or less.
…or the ones who read this blog and chose not to buy with a crazy loan and crazier prices…
renewing our lease here on long island for another year - whaddya know, no rent increase.
Hanging out with you guys makes my head swell.
It feels like a bona fide well-deserved superiority complex over those “RE only goes up” cultish ballyhoos!
OK! Lets stop self-congratulating ourselves how smart we are! So far the smartest guys were the folks who were selling all the ugly homes less than a year ago and the RE agents pocketing their 6% commissions.Give it time and 15-20% decrease in prices and half of us will be out buying the “bargains” (that will depreciate further 30%).
If you had been reading here for long, you would know many posters/lurkers did sell last year.
Smart enough to get off the tracks when we hear a train coming.
Props to bombo-buster, some guys I know are selling right now here in Cali and putting over $1million in the bank. This is a good blog, but following its prevailing advice has cost me serious money over the last couple of years.
Stealth troll/realtor alert!
but Skip how many people do you know who owe more than their homes are worth and their costs go up as their ARM’s adjust? Of course the guys who got lucky in their timing are going to be telling you about it. But the ones losing their shirts are hiding quietly in the corner. If you had bought in ‘04 and sold in ‘05 great - you’d have made money. But without the 20/20 hindsight you probably would have mistimed something. SO maybe the blog cost you. More likely, if you are patient and become well educated, you will be one of the few to buy at the bottom and will be far wealthier in the long run.
skip,
A couple of years ago I was still 4 months from even knowing what a blog was. My first housing blog got it’s first comment in March 2005, so I doubt you even read here until last summer. Give it a rest.
The rent I pay on a new home in Boise is $895- market price to buy it is approx $190k and the local market is in a “soft landing”. Am I dumb for not buying the place and ending up with a higher payment in a questionable market?
Paying too much for rent is what I would call “temporary easily remedied dumb”. Buying right now is what I would call “stuff me into permanent hell with no chance of escape dumb”. Spend your time looking for a cheaper place to rent.
I’m a renter with a FICO score above 800, who always pays 2-3 days early. In short, a landlord’s dream. Unsurprisingly, my rent hasn’t been raised a cent since I moved in two years ago.
I have been advising friends that a good FICO score may be an extremely valuable asset to possess over the next five or so years. It is extremely important to protect one’s FICO score by not getting in to a home which is about to lose 30%+ of its value.
I’m starting to hate being a landlord. We rent-out an apartment in the top floor of our house. Every time we find a new tenant (about once a year) we pray they won’t be a scammer or a meth fiend. So far its just been somewhat OK people who have had a few problems like paying their rent on time or being annoying or breaking things (waaaaah the cermanic floor tiles) or breaking the lease. The fact is we can pay our mortgage, just over $800/month, without the $525 from the apartment. So maybe we’ll take if off the market and live a little leaner. I’m just glad I’m not an FB who needs the apartment. So many of them have no idea what it is like to be a small-time landlord.
I think what he’s saying is that there are lots of people out there willing to pay as much as $3500 a month in rent. The $1500 figure is just his starting example.
$3500/month would buy you a palace even in San Francisco. Somehow I don’t think there are “lots” of people who can afford to pay such a sum.
$3500 a month would let you buy a $675K house at 30 yr/20% down/6.75%…
Are you assuming an interest only or Option ARM for the loan, or is a palace in San Francisco the same as a crack house in East Palo Alto?
So if there’s alot of people willing to pay 3500 for rent, presuming rent is 30 percent of income, that would mean they all make 140K+… and don’t own a home…. and want to spend 3500 instead of 3400 instead of 2500 instead of … Hrm… for some reason, I just don’t see this demographic being very populous.
$3500 a month would let you buy a $675K house at 30 yr/20% down/6.75%…
Are you assuming an interest only or Option ARM for the loan, or is a palace in San Francisco the same as a crack house in East Palo Alto?
Sorry, I meant “buy” in the colloquial sense. I should have typed: $3500/month will RENT you a palace in San Francisco.
::presuming rent is 30 percent of income, that would mean they all make 140K+… for some reason, I just don’t see this demographic being very populous.
Oh I don’t know, I was thinking about playing on the bench for the Celtics for some additional income and from what the league’s union dictates, I should be able to get around $400-$500K for keeping the pine warm.
“a $449,000 home in Danbury was reduced to less than $400,000, ”
—————————————————————————
we keep hearing about the price reductions, but we almost never see this followed by “and then it sold.” Sellers are chasing the tail of the market but never catching it.
for 49k I’m in
Me too - off of a $200K home, though.
This is the most hilarious part:
“said Ryle, who is trading up to a Redding house.”
So Ryan has a $3500 mortage on his one bedroom condo (that he can’t sell) and is trading up…? Too bad human cloning is illegal, the NAR would kill to get hold of his DNA.
whaddy wanna bet he has an option-ARM on the new place so that the payments are manageable “until he sells the condo?” (smirk)
A 1 bedroom condo for $400K? He must have one of those realtors who says: “buy the starter condo, in 6 months you can sell it and get your dream house with the appreciation.”
What if his $3500 mortgage is an option-ARM too? $600k seems reasonable for a condo in Boston?
it only took 7 years last time, adjusted for inflation
I can do that standing on my head
Bleeding $12-24K/yr for 7 years (and this is assuming non-exotic financing) is as easy as “standing on your head”? Better you than me, pal. My definition of “buy-and-hold investment” is something that generates POSITIVE cash flow. But then again, I never learned the Realtor “new math”.
‘We’re thinking: ‘Why not just rent it and hold out for the real estate market to turn around?’ It always does eventually,’ Ryle said.”
————————————————————————-
RE values mirror inflation over time. That’s all. When the masses get that pounded into them the hard way, they will understand this fact, until the next RE mania 20 years from now.
Did you say masses, or asses? (snickers)
The sad thing is, people used to know this. The conventional wisdom was that you didn’t buy a house if you didn’t plan to stay for at least five years, at which point you might do a little better than break even. So many people wanted to believe this “20% annual appreciation ad infinitum” nonsense that all wisdom, conventional and unconventional, flew right out the window and got replaced with a “clap if you believe” mentality. That’s all very well when you’re a kid and you still believe in fairies, but as an adult it’s more important to exercise critical thinking skills. Maybe as human beings we need to get hurt and learn this lesson over and over again every 80 years or so.
“Maybe as human beings we need to get hurt and learn this lesson over and over again every 80 years or so.”
It does seem to be the flaw in the design…
80 years will take you from toothless to toothless, diapered to diapered, and bald to bald!
Isn’t that the underlying theme of the Kondratiev cycle?
About the time the last person that can remember the mistake dies, the mistake gets repeated.
But here’s the complexity. The great Keynes once said something to the effect that ‘when all around you are acting crazy, it becomes crazy to act sane.’ He was definitely a momentum investor.
The problem with counting on the long term is that it’s largely irrelevant to most homo sapiens–we just don’t life long enough for the long term to matter.
Skipintro sounds a lot like waiting to pounce and Vinnie
Save the broken record comments and come up with some data or argument to support it!
Keynes was no mean speculator. We would need more context to judge, but I suspect there was more than a little irony in the delivery of that line.
‘Why not just rent it and hold out for the real estate market to turn around?’ It always does eventually,”
I really dont hear anyone from Wall Street saying the NAS will be hitting the 5,000 market. But how can that be ?
Some folks were wondering if things would change after July 4th. With the reports we’ve seen today, it looks like it might have.
The realtor is using Upside Down Newton Calculus Physical Math to do the calculations.
The Home ATM is empty…now the consumer needs help. See http://www.dailybreeze.com/business/articles/3277661.html
“The slowing economy also is depressing income growth, so a greater percentage of take-home pay is going toward necessities and less is left over for debt payment.”
Odd, I could swear we’re being told the economy is growing, jobs are growth is wonderful, why can’t we pay our bills ? Oh yeah, the credit industry with it’s 30% credit card rates and the fleece them with ARM loan guys along with the it’s always a good time to buy real estate cadre have better lobbyists then the rest of us.
Some truths are eternal:
Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.
- Charles Dickens, David Copperfield, 1850
Oh yeah, the credit industry with it’s 30% credit card rates
I dunno about you but I get about 2% back on what I spend.
If there is a company forcing people to borrow money… I want it stopped!
Is putting them in a postion that with 30% and higher rates the only payment they can make does not even reduce their balance a good thing ? We’re talking a loan that can NEVER be repaid.
Do they get a choice of new rims or a plasma TV to make the 30% payments on, or does the credit card company decide that too?
Here’s my problem with this line of argument. We’ve made laws that require people to pay money back or face legal repercussions. In your perfect world, stupid creditor charges 30% to stupider debtor who defaults. Creditor loses since there is nothing to collect.
This world . . . laws are changed to create new permanent debtor status, protecting stupid businesses from themselves, allowing loans to people they know will never pay them back.
You can’t protect stupid people from themselves, but you can prevent the lawyers and politicians from chaining stupid people to debts forever.
I can’t say I was fond of the system where I got to watch people load up on consumer crap and declare multiple bankruptcies. Fact is you can still stiff debt for pennies on the dollar.
You can’t pass enough laws to protect stupid people from themselves.
I’m not fond of a system that protects STUPID businesses. If a business lends money to stupid people expecting the government to “protect” them, then they aren’t any different from the stupid people (just more powerful). When two entities go into business together, they gauge the other’s ability to fulfill their end of the bargain. We don’t allow them to hold a gun to the other’s head to enforce.
Ok, so I prefer a system that enforces contracts and protects those entering them in good faith. You prefer a system that does not enforce contracts and protects those entering them without good faith.
Yup, you’re a lawyer alright.
A precursor of things to come
“The number of homes on the market has about doubled in the last year, and it’s not because more people are selling.”
Can you believe this Realtor’s statement? Inventory has doubled, but not because people are selling. May be the inventory has doubled because so many people are buying? Yeah, thats it. You’d have to be a FOOL to buy a house from this Realtor.
Naw - he’s right.
The number of people selling is substantially less this year than last.
Now the number of people *trying* to sell is another matter entirely
Aaron Spelling’s Holmby Hills mansion can be yours for $150 million:
http://tinyurl.com/rxs7b
Another greedy agent getting screwed.
http://seattle.craigslist.org/est/rfs/178702051.html
The fact is that this place will be lucky to be sold for $500K.
Yawn, another old 1800 sqft raised ranch with no curb appeal and a tiny kitchen. I’ll bid $140K.
That house looks like a turd. If it were a choice between that and renting for life, the latter is the preferred choice.
But the “Realtor Speak” in that ad is great:
I need cash, so I’ll sell for minus 75K.
BUT you get “instant equity” by buying my depreciating asset.
The only thing going for the house is it’s Bellevue location which is extremely desirable (to many, not me). Unfortunately for him, the house is ugly as sin. And I am exceedingly suspicious of his proclamation that the house is worth 600K with 20k in remodels. Both numbers raise eyebrows to me. Bend over buddy, time for some action.
‘Why not just rent it and hold out for the real estate market to turn around?’ It always does eventually,’ Ryle said.”
Once again, the coach turns back into a pumpkin, and the bagholders turn into “long-term investors”.
I just saw the T Mobile TV advert that features a realtor (replacing the previous ads motor mouthed teenaged girl).
Very funny advert.
” It’s a buyers market!” “It’s a sellers market”. ” Have I been drinking?”
Saw that one, too. Very funny. IMHO, the person who wrote that commercial lurks on Ben’s blog.
“Three times hasn’t been the charm for would-be condo seller John Ryle. He’s cut the asking price on his Beacon Hill one-bedroom three times in as many months, but hasn’t gotten a single offer.”
OK, Ryle, fess up. Did you used to post here as BeaConst?
I would like to hear about that Bellvue agent really get screwed by selling at a BIG LOSS. That is one ugly house. One thing true, the phantom equity does belong in Phantom Lake
He’s not much of an agent if he can’t be bothered to list the amout of bedrooms, bathrooms, sewer , water supply, taxes etc. Why no inside shots ?
From the ad, it sounds like it’s in the middle of a remodel. Probably 2 x 4’s with no sheetrock yet.
What a dufus.
” ‘We’re thinking: ‘Why not just rent it and hold out for the real estate market to turn around?’ It always does eventually,’ Ryle said.”
Could be in for a long wait, 20, 30, ..50 years, …forever.
But the ARM is resetting for sure.
‘I can find a tenant to pay $1,500 a month for a one-bedroom Boston condo with my eyes closed,’ said Ryle’s agent. ‘If someone has a mortgage below $2,500 or even $3,500 a month, they can cover that through renting and move on with their lives.’
Sounds like a loss of $1000 to $2000 per month ($12,000 to $24,000 per year) to me. How many people can eat that sort of loss while themselves paying for rent or another mortage on the place they actually live in?
Question: I’ve seen numerous people here post the amount a person paid when they purchased a property. Is the amount paid public information and more importantly, is it listed somewhere on the listing site? Sorry if this is a dumb question but I understand that knowing what someone paid (or owes) on a property is valuable information when one finally does decide to buy.
You can find purchase prices on Zillow, it’s public info. There is no way they’d put that on a MLS listing though, it’d kill the sale in a heartbeat if you found you were paying 5X what the previous guy did. I don’t know if what he owes is that relevant.
Thanks Mo $$$. I figure knowing the purchase price will give me an indication of whether a person can negotiate (when the time comes) or not.
It doesn’t give a reliable indication because the property’s owner may owe more then they payed due to a HELOC or refi.
Zillow uses county deed and municipal tax assessor records, which are public records. It many places now, these records can be accessed directly online, and some allow searching by name as well as address, which is handy. Zillow doesn’t show mortgage amounts, but county land records do; you can see if someone has refi’d, or if they inherited a house (usually shows up as a sale of a nominal value of $1 or $10) Also liens, foreclosure notices, etc.
Zillow does show the last couple of sales on a property information section ,as well as recent comp sales that have taken place in the last 16 or so months . It shows sq. footage ,land sq footage . Zillows provides graphs for the area for the last 10 years on the appreciation etc. Alot of useful information ,but you can’t go on what they say the current value is . Right now they have my property estimated a 35K over what it could fetch based on the current comps .
There are obvious defects in Zillow’s estimates, not the least of which is that it has to go by the information in the public records; no one from Zillow has inspected the actual house. However, the aerial photo fly-by view feature is pretty cool.
Beacon Hill property is very expensive and I always thought that you had to be a millionaire (with real assets) to live there. If you don’t have a vehicle and work in Boston, it sounds really nice. But you have to be able to afford it. Everything is expensive down there but there is a lot to do as well. I’d guess that he’s looking for a lot more than $1,500 for his place.
I wouldn’t mind renting it out for long weekends.
you’re thinking of exclusive mt vernon street and louisberg square areas. i haven’t been to beacon hill in years but, surprisingly, there were parts with many affordable apartments - typically cheaper than back bay - in addition, of course, to the very expensive ones in the nicer sections. i lived in several in the 80s. cockroaches were a problem in those old buildings and parking situation was dreadful. i’d have to park so far away (way other side of charles st often) i occasionally forgot where and had to wander about the city looking for my car. good thing i was young and had time to waste. ;> -jb
Haven’t seen any comments on the Pennsylvania part of Ben’s post. The York-Adams county area is the area immediately north of the Baltimore metro area. For years, people have been moving into southern York county (Shrewsberry, Loganville and Glen Rock) and commuting 40 to 60 minutes into Crabtown. Adams County (mainly Gettysburg, but includes some of the Hanover area) also has become a bedroom community for Baltimore and even NW Washington, DC. Traffic on I-83 from Hunt Valley into York has become untenable at rush hour, both in and out. People from Adams County fill Route 15 and I-270 at the same time. Part of the slowdown mentioned in the article is a direct reflection of bubble activity in Maryland and the DC area. Rates are up and the number of buyers is down. Derooy and Snell are just spouting the party line.
‘I can find a tenant to pay $1,500 a month for a one-bedroom Boston condo with my eyes closed,’ said Ryle’s agent.
One thing I know about being a landlord….you better have your eyes wide open (not closed). At least here in the state of California, you better cross all your t’s and dot all your I’s in the rental contract and be very very careful who you rent to. I’v known people who have had there homes destroyed, had tenants living in their homes up to three months without paying a dime in rent, causing them grief. I would keep the rent low to attract a good tenant so they will be inclined to stay longer. Being a landlord is a liability and big responsibility. It is not something you do with your eyes closed!