‘Perhaps Last Years Prices Were Illusory After All’
Well it’s desk clearing time and it’s going to be a lu-lu! “Dominion Homes Inc., which sells homes and offers mortgage financing services, said revenue from home sales dropped 46.2 percent in the second quarter, compared with the same period last year.”
From Hawaii. “The median home price on Oahu was $639,000 in June, short of the record of $668,300 set in May. There were 1,836 single-family homes and 2,582 condominiums actively being marketed in June, significantly higher than the inventory at the same time last year. Inventory levels are back up to the same levels as 1999, said economist Harvey Shapiro.”
“Inventory levels for condominiums more than doubled in June of this year compared to last year, with 2,582 condos actively marketed last month compared to 988 at the same time last year.”
“Local home prices are dropping a bit. Interest rates may soon escalate. ‘It may cause a little more foreclosures than we’re used to in the past,’ said Steve Higa, with the Hawaii Association of Mortgage Brokers. And that’s what some hungry home buyers are banking on. ‘You could get a better deal,’ said Higa.”
From New York. “The plateau of home prices in Dutchess County has now stretched more than a year, and, for the first time in what has been a long streak of year-over-year gains, average and median prices failed to exceed those posted a year earlier. The median price, $349,500, was down 2.2 percent from a year ago, and down $500 from May.”
From England. “House prices suffered their biggest one-month drop in June for more than five years. The drop of 1.2 per cent is significant, but not massive. The housing market has been enjoying a period of unexpected health recently, dubbed a ‘mini-boom’ because it was not expected to last that long. If the mini-boom is fading it will be no surprise.”
From Canada. “One of the country’s longest housing booms is finally running out of steam in Central Canada. After a string of record years characterized by heated bidding wars and double-digit gains in prices, major markets such as Toronto, Ottawa and Montreal are taking a breather.”
From Washington. “New construction and new listings have pushed inventory levels higher, broker Jeff Crandell said. ‘I don’t want to characterize it as a glut, but we’re substantially higher,’ Crandell said.”
“Since January, active residential listings have risen from 931 to 1,452 in June, according to Olympic MLS data. Median home prices hit a six-month high in May, rising to $254,950, but dropped again in June to $250,000.”
“One house Natalie Paige found in the Ballard neighborhood where she rents was about 800 square feet and cinderblock construction. ‘I’m not willing to pay a $1,700 mortgage for that,’ she said.”
“One bit of good news for buyers is an increasing number of homes for sale. King County reported 6,489 single-family homes for sale. That’s an increase of 951 from June 2005 and 462 from May.”
“Snohomish County had 3,483 detached homes on the market last month, up from 2,747 a year earlier and 3,255 in May. In Pierce County, 5,098 single-family homes were available last month, up 1,634 from last June and 381 from May.”
“Compared with a year earlier, condominium availability last month showed double-digit increases in King, Pierce and Kitsap counties.”
And from the Washington post real estate discussion. “Ashburn, Va.: I’m so mad at my neighbor. I bought my new home here in Ashburn last summer and plan to sell it next year (after holding two years to avoid taxes) to make a nice return on my investment. The problem is my neighbor is trying to sell his house (very similar to mine) right now and he keeps lowering his asking price.”
“Each time he lowers his price, I see my potential profits next year getting squashed. Doesn’t he realize he’s hurting the comps for all of his neighbors by doing this? I want to say something to him and tell him he should stop putting his interests ahead of his neighbors. What can I do to stop him?”
“Kirstin Downey: There’s nothing you can do. It’s his house. He may just be desperate to sell. Perhaps he has an adjustable rate mortgage that is rising, or maybe an option ARM that is resetting to a much higher monthly payment.”
“I hear from many, many buyers and sellers each month, and many sellers are finding the only way to sell a home amid this growing inventory is to cut the price. Perhaps last year’s prices were just illusory after all.”
Another great week, everybody! My thanks to those who support this blog. Please check back this weekend for news, your market observations and topics. Don’t forget to send in those housing bubble photos!
Ben,
Love the blog. Enjoy my small donation ($50). I know its not a lot, but I hope it helps. Please don’t take it the wrong way, but I consider it a subscription to this wonderfull news source; thus, I can read your blog and know I’m not freeloading.
Thanks for everything,
Neil
This reminds me.
Ben - you should also put the “Visa” logo back up there alongside the PayPal one.
I’m guessing there are potential donors who don’t see it or even know what PayPal is, and this will be especially true as your site visitorship (is that a word?) continues to grow into the mainstream.
“Visa” is very recognizable in comparison.
Yes, please do put up the Visa icon; I would like to donate or subscribe. Your site is wonderful.
Wow! I feel like a total cheap-skate! I will increase my next donation.
My best advice for this troubled investor is to buy his neighbor’s house.
“Each time he lowers his price, I see my potential profits next year getting squashed. Doesn’t he realize he’s hurting the comps for all of his neighbors by doing this? I want to say something to him and tell him he should stop putting his interests ahead of his neighbors. What can I do to stop him?”
If he (or she) bought a new home in Ashburn last summer then I seriously doubt that they’re house has appreciated at all (or even kept up with inflation for that matter), much less brought a “nice return.”
And note that the doofus is talking this way about the loss of potential profits.
What’s he going to say when the neighbour’s sale price comps start giving him losses?
FB quote of the week– ROFLMAO!! I love listening to them as they sit on the PITI pot.
A new play on words: PITI Party.
Mr T: “I PITI the fool….”
Nice one.
OMG What if the rest of her neighbors get the same idea? They all purchased a long time ago and she just wouldn’t be able to compete. It’s not fair!
“My best advice for this troubled investor is to buy his neighbor’s house.”
Not only should he buy it, but he should pay more than the asking price, this would of course fix the comps.
If I were a seller, I would encourage all of my angy neighbors to chip in and “boost” the sale price. It’s a “win-win” proposal, that I don’t think they could logically argue with. That is, unless they started actually using logic.
Funny, I would’ve thought most people would be pissed because the higher values will affect their next property tax assessment. Ah, greed…
My rat bastard neighbor sold his Enron and WorldCom stock and totally screwed me on my investment!?!
I saw a similar plea today on the housing forum on Phoenix craigslist:
fence sitters 07/07 12:51:29
whats going on is a huge f–king glut of property. My property is in Gilbert. Interest rates up, bubbleheads poisoning the buyers, property much more expensive than 2-years ago…You would think with all the bad news, no-one would be buying anything, but thankfully, some properties are still selling. Just be patient, and don’t drop your price..
Dream on, Gilbert FB…
bubbleheads poisoning the buyers
I think we might be getting out of the denial stage and into the anger stage here :D.
“Each time he lowers his price, I see my potential profits next year getting squashed. Doesn’t he realize he’s hurting the comps for all of his neighbors by doing this? I want to say something to him and tell him he should stop putting his interests ahead of his neighbors. What can I do to stop him?”
Option 1 - Lube and lean FB
Option 2 - Buy it from your neighbor at an inflated price
Option 3 - Make up the difference to keep the sale price high
Option 4 - Ask David Lereah what you’re doing wrong ‘cus “Are You Missing the Real Estate Boom? : The Boom Will Not Bust and Why Property Values Will Continue to Climb Through the End of the Decade - And How to Profit From Them ” (his book)
Option 5 - Maybe you should sell now, drop your price below your neighbors before he does the same to you - BUA-HAHAHAHA
optioned unarmed - you beat me!
Option 6 - whatever happened to good-ol’ neighbor killing?
The problem is that those sorts of happenings tend to negatively impact neighborhood home values.
Kirstin Downey: “Wow. Interesting question. There’s nothing you can do. It’s his house, of course. It’s frustrating, to be sure. One word of advice: Don’t resort to violence.”
arson of the neighbor’s house may be a good choice. Just try to make sure that no one’s home at the time. If the neighbor happens to be home, well he/she deserved it for trying to bring down comps.
There was an article on edmunds.com about people torching their gas guzzling SUVs which have upside down loans. One enterprising car salesman offered to have you car burned so you can buy a new car with the insurance money. He called it the “rotisserie” program!
Voltron seriously, tell me your joking!?
I’ve seen an increasing number of homemade “for sale” signs on the backs of gas guzzlers.
I don’t think Yankees do that. Except the Soprano types.
Just the same, it is interesting that Kirstin bothered to warn that violence is not a good alternative.
You know, I realize that we are all joking about using arson as a solution, pretending to be serious.
However, this faux seriousness about fradulant/violent solutions is somewhat reminiscent of the sort of casual talk you see on some of the “creative investors” forums, where people are genuinely recommending strategies of fraud.
Ashburn is south of the Mason/Dixon line.
But yeah, most folks living here are us Yanks who fled the rustbelt.
Burn it down! Your neighbor will collect his price, and your comp wouldn’t be affected
OMG that has to be classic. Someone frame that…. I would love to see what TXChic has to say lol
Since TxChic57 has not weighed in yet, I will quote from an old boss of mine that had a classic line for this sort of situation:
“Suresuresure..Fuck’em…Next!”
She weighed in on the Craigslist thread - something about telling the neighbor to “go pound sand”.
“Each time he lowers his price, I see my potential profits next year getting squashed. Doesn’t he realize he’s hurting the comps for all of his neighbors by doing this? I want to say something to him and tell him he should stop putting his interests ahead of his neighbors. What can I do to stop him?”
And Al Franken claimed on SNL that the 80s were the “me” decade. “This is what you can do for me–Al Frankin”.
“Each time he lowers his price, I see my potential profits next year getting squashed. Doesn’t he realize he’s hurting the comps for all of his neighbors by doing this? I want to say something to him and tell him he should stop putting his interests ahead of his neighbors. What can I do to stop him?”
Yak! Patooey! This is why I irrationally (and probably immorally) hope these greedy, exceedingly stupid people get squished. The indignation of these newly “rich” homebuyers (note he bought only last summer) is astounding. So, his neighbor is gonna keep him from making a “nice return”??? Oh, criminy…I fear there will TRULY be blood in the streets…people who are capable of thinking that way usually react to adversity in the lowest possible way.
i think this sounds like a bitter buyer getting his comeuppance.
About time. Next meme: Bitter Flopper.
“Bitter Flopper” is copyright 2006 sm_landlord. All rights reserved
Each time he lowers his price, I see my potential profits next year getting squashed. Doesn’t he realize he’s hurting the comps for all of his neighbors by doing this? I want to say something to him and tell him he should stop putting his interests ahead of his neighbors. What can I do to stop him?
This is too rich, this has got to be a plant. Is this guy for real? This is, well, BWAHAHAHAHA!!!!!!
Yes, it does seem a little planted. Perhaps a little housing bubble cynical hoax.
Each time he lowers his price, I see my potential profits next year getting squashed. Doesn’t he realize he’s hurting the comps for all of his neighbors by doing this?
I agree with you, Mort — this plaintive wailing smacks of a false-flag operation by a clever renter. If it IS genuine, it’s quite possibly the funniest thing I’ve ever read in here.
Here is another from that transcript that Ben missed.
Mountain Lakes, N.J.: I’m in a similar situation, where I’m trying to sell my townhouse and my neighbors are unhappy that I’ve lowered the price. But I’ve moved to a new area and have to sell so I can close on my new house — I don’t have the luxury of holding the place for a year, because I can’t afford double mortgage payments. It’s not that I’m not neighborly — I just don’t think being neighborly means that I have to drive myself into bankruptcy.
Kirstin Downey: Thank you. Good point.
NEVER buy until you’ve closed on your old house. NEVER.
It’s too much money and at stake. The only exception to this rule is if you are wealthy enough to service two mortgages for several years.
How about if you own place free and clear and can put down a sizable downpayment (i.e., 50-65%) on the new place? I have afriend in this position and I told him that I see no problem with it if he feels he he neds to buy due to relocation.
Do you know what’s scary though? There are so many people out there who bought their new house before selling the old one. And these are families who would appear to be quite intelligent otherwise.
t.g.i.d.c.t.!
Ooohhh!! One More
Germantown, Md.: We live in a townhouse with a neighbor who is selling a “handyman’s special” almost 10 percent under what we just bought our place for, which also needed some work. Should I start kicking myself for buying too high, or talk to the neighbor about their low price. I don’t think their agent is very knowledgeable since they’ve been on the market for over a month without an open house and are showing by appointment only.
Kirstin Downey: This line of discussion — how people are reacting to the lower prices being offered by their neighbors — strikes me as great fodder for a news story. Please e-mail me, downeyk@washpost.com, with your stories. I’m sure it would make a really interesting story.
And please remember, we love to hear from readers. We depend on hearing from you to do our jobs well in monitoring the market.
I’m going to sign off now. Hope you have a great weekend. It’s beautiful out there today. Thanks for joining me. Love your great questions. Bye!
“sucks to be you. I’m done with this column; I’m going to the beach now; buh-bye.
I’m busting a gut. Oh, man. That last part from the Washington Post, I just can’t help but feel one of us or like maybe Ben maybe wrote it as a joke. It is just too perfect. Are you kidding me? I hear that story all the time from the neighbors but I never thought I’d see it in print. Gather everyone in the neighborhood! “We have to stick together, DO NOT LOWER YOUR PRICE or you are a TRAITER! It doesn’t matter the financial consequences to you, take one for the team! It takes a village!” Hey, Genious, your house is only “worth” what it is now because everyone was bidding this thing up like it was a dinner with Buffet on Ebay. And now someone else wants to cash out (assuming they are making anything at all) and YOUR greed is all that matters? You are getting exactly what you deserve. The flippers motto is going from “price it up as high as you can” to “I hope I have a chance to f him over before he f’s me!”
Flipper’s motto: “f or be f’d”
“Beggar thy neighbor”
Or, bugger thy neighbor. Whatever works I guess.
That depends on which side of the Mason-Dixie line you live (and I will leave it to each of you to interpret this remark favorably for your own location
A friend of mine is an agent and last year sold a condo for a person who just wanted out quickly and without counter-offers, and priced very low accordingly. The agent got calls from a number of others in the business, bashing her for lowering the comps. But all she was doing was following the seller’s instructions.
A single sale priced outside of the norm shouldn’t make a bit of difference to anyone.
This sort of thing happening now just illustrates how divorced from fundamentals prices have become.
When prices are in line with fundamentals, one crazy sales price (high or low) really doesn’t have much or any effect on the market.
Excellent point. But as recently as early spring I saw a house listed ridiculously high for the ‘hood and the listing actually said “Price based on MLS# abcdefg sold 1/1/06″…it will work the same on the way down. I wish there was a site where everyone could go and make comments on open houses and appointment tours of homes on the market…some way to compare notes, kind of like an MLS public commentary section. That would be fun.
genius idea
“he should stop putting his interests ahead of his neighbors”
This is the very definition of a selfish person: someone who puts his interests above mine.
… I bought my new home here in Ashburn last summer and plan to sell it next year (after holding two years to avoid taxes) to make a nice return on my investment.
Gee, I thought you were supposed to live in em.
Used to be that selling after only two years was a surefire way to lose money.
It seems that living in one’s investment property is kind of a step down from renting. You experience a similar quality of transience, but unlike when renting, you actually have to be careful not to cause any damage to the place.
Hell, I remember buying my first condo in 1997, the advice then was 7 years in the break even point.
Yea and in 1997 you had to have the following to get a loan:
1) Paystubs for last 3 months
2) Information on all debts (car payments, credit card, etc.)
3) Savings information (401K, cash, etc.)
4) Personal reference/contacts
It used to be painful to get a loan now the radio ads say “getting a loan should be as easy as ordering a pizza”….I kid you not.
It is almost like all rules, common sense, checks and balances, and sanity completely evaporated after the stock market crashed at the turn of the century.
5) Verification of income sources
Your first born child
6) A downpayment (10% good, 20% better)
7) Your right arm
The radio ads here say, “Bankrupcy no problem”
“It used to be painful to get a loan now the radio ads say ‘getting a loan should be as easy as ordering a pizza’….I kid you not.”
That ad has been in heavy rotation in the SF Bay Area, on the largest all-news radio station here, for months and months now.
At one time, in the middle of the mania, I’m sure some flippers spent _more time_ thinking about their pizza order.
I saw this same phenomenon back in 1995 in Mission Viejo, CA (Orange County) when I bought my home for $ 221 k. The neighbors were shocked to see that my house sold for almost $ 164 k lower than what they purchased for just one 1.5 years earlier. I don’t think there were hard feelings though since the people we purchased from were underwater by $ 14 k and were estatic to sell at all (hard to believe that there was once a time in the OC when houses didn’t sell).
I remember it, and I’m anxiously awaiting it’s return. I was too young to buy back then (still in college), but I’m ready now. I just need to see prices drop around 40-50%, so that they start to make sense again.
Hi Waiting,
From the highs in S. Cal in 1988 to the lows in 1997, we saw an average decline of 28%.
In many areas, it needs to be more than 28% this time to correct back to some level of normalcy.
Bought a REO in 1994 in Capo Beach. The neighbors were actually angry with me for getting a good deal.
My guess is that greed is a carcinogen that attacks the brain cells controlling all of the higher brain functions, i.e., reasoning (I can afford a million dollar mortgage making 42k a year), calculating (see reasoning), memory (evidence of any contrary view/past downturn doesn’t exist), vision (everything has a reddish tint, and field of view significantly narrows), and speech (nonsensical verbage which is often difficult to understand due to misplaced foot that causes non-afflicted persons to question sanity and/or IQ). If left unchecked, can lead to greedphoma which has no known cure but can be treated in federal court.
wow this is starting to get fun.
I was just starting to think to myself:
“The ball is really rolling downhill now!”
‘You could get a better deal,’ said Higa.”
In six years, Higa will finally become an honest man.
Ah yes, the new construction in Seattle is a sight to behold.
Glad to see that at least for one person - Natalie Paige -there is a limit to what they will pay to live in a cylinder box.
>>cylinder box
Is that a trick?
Good catch Holgs… I’m an artist and *should* definitely know the difference between a cylinder and a box.
Gee..if these awful neighbors didn’t lower their price my place would still be worth what I paid for it!
yikes…do these people have NO idea of how markets work?
Obliviously not.
Folks have no idea why real estate prices go up (or down). It’s an imaginary, magical occurrence. My landlord sez, “Prices can’t go down below County assessments.”
“Dominion Homes Inc., which sells homes and offers mortgage financing services, said revenue from home sales dropped 46.2 percent in the second quarter, compared with the same period last year.”
‘The slight change in revenue from home sales at Dominion Homes Inc. indicates the market is beginning to level out,’
And if sales in the third and fourth quarters also drop 46.2 percent, that would signal a plateau.
When it hurts someone else it is just the “market” but when it hurts you suddenly its all personal. I bet these people were patting themselves ont he back when they bought their house at just how smart they were. Of course as I have been sitting out this bubble I can sit back and watch it explode. But it is easy to forget the tendancy of people to look for someone to “blame.” First it will be the neighbors, then the realtors, then the appraisers, then the banks. Of course, the sophisticated ones will be demanding lower interest rates….inflation be damned. The RE bubble was an effort to mask the poping of the Internet bubble. What do we do to mask this one?
It is a recession if your neighbor gets laid off.
It is a depression if you get laid off.
This is the biggest bubble in the history of the world. There ain’t going to be no hiding it, or masking it. When the tide goes out and the breeze comes in everybody is going to get to smell what the rock’s been cookin’. If you catch my drift, that is.
I agree.
Nuclear war with North Korea!
The North Koreans are just accomplished extortionists. China is complicit and knew exactly what was going on. China could squash N. Korea like a bug, if they had a mind to, and they probably never will. Useful apparatchiks and a buffer zone. I just hope that, for the first time I can remember, someone other than the U.S. taxpayer pays the extortion money.
Whoever has the deepest pockets pays the ransom. And whoever has nukes gets to extort it, if they choose to do so.
Actually I just read a story that the Chinese have stopped transporting food aid to North Korea because the Koreans were keeping the trains, claiming they were part of the aid package.
Real reason; their own rolling stock has reached the point where it simply won’t run, and they have NO way to buy or build more. So they steal it, simple really.
Anybody else struck by the SNL skit or Mad magazine-ish nature of this week’s Economist cover photo?
“The Rocket Man”
(Kim Jong Il atop a fiery plume heading vertically up the page)
There’s been weirder/more difficult/crazier times globally before in my lifetime, but the “here and now” is starting to get a ranking - in my book, anyway.
Good catch. Yeah that’s looking a little 60’s-ish surreal.
http://www.economist.com/images/20060708/20060708issuecovUS400.jpg
>But it is easy to forget the tendancy of people
>to look for someone to “blame.”
The RE Financial Complex will blame the Fed and the media for this one. Expect to see it in the history books.
This guy was telling all his friends six months ago, the bubble couldn’t happen here, we are different!
Each time he lowers his price, I see my potential profits next year getting squashed. Doesn’t he realize he’s hurting the comps for all of his neighbors by doing this? I want to say something to him and tell him he should stop putting his interests ahead of his neighbors. What can I do to stop him?
Neighbourhood house selling for higher prices.
“My house has gone up in value. Yippeee! All that money for me just for free! Without me doing anything! I am smart.”
Neighbourhood house goes up in price.
“My house also goes down? How come? That neighbour is ruining me. I did not do anything to lose money.Waaaaaaaah, MOMMY.”
Moron.
“Perhaps last year’s prices were just illusory after all.”
‘It is all a dream–a grotesque and foolish dream. Nothing exists but you. And you are but a thought–a vagrant thought, a useless thought, a homeless thought, wandering forlorn among the empty eternities!’
-Mark Twain-
Wow — ‘ol Mark must’ve had some bad hooch that evening.
Mark Twain - nobody ever identified every single human fault more clearly and more eloquently than he.
I think he wrote those lines in the wake of one of the first housing bubbles in the USA (written in 1898, and the bust started around 1890, at least in CA; but maybe all markets were local back then…).
Last year’s prices will be far from illusory to the FB’s that bought last year with option-ARM’s.
North Korea? Why are they a problem all of a sudden? Who used missiles three years ago to FLATTEN Baghdad?
Baghdad wasn’t flattened. And North Korea has been a problem all along. Seems Bill Xlinton’s sunshine policy was a failure, after all. What a surprise…NOT. I see you’ve drunk the Demonrat kool-aid and it is too late for you.
I hear the republicans have some tasty coolaid too.
mmmmm…coolaid!
Right. Anyone who objects to the killing of hundreds of thousands of innocent civilians must be a kool-aid drinking democrat.
When you go about your day, you notice a growing discomfort. It is getting gradually stonger as the days, weeks, and months pass. You are becoming more and more frustrated with the world. Your convictions in your beliefs are getting ever stonger, while the world is getting more irritating. Every day you see more and more proof of your beliefs, and people who dissagree with you have become as enraging as ever.
Your shadow is growing. And it is coming for you.
Just kidding, man. I love you.
They’ve been a problem a long time. Their problem factor actually just dropped substantially, but now they might behave like a cornered dog (the chips to play at the big boy table have been a nuclear weapon and delivery system) since 1945. NKorea grabbed the dice at the global craps table and threw boxcars.
Now the world is preparing for victory, but moving slower than normal as while they can’t hurt the US but could still really ruin Japan’s or South Korea’s day. More importantly China isn’t interested in anything that causes regime change there as they don’t want millions of Koreans streaming across the border when it happens.
The lesson of Iraq is that if you want the US to leave you alone, you have to be able to fight back, hard. The North Koreans have had the capacity to flatten Seoul for decades now. They’re just upping the ante a bit.
Shouldn’t you be posting on dailykos.com?
gotta confess…read in late 2004 that Warren Buffet sold his Newport Beach home cause he thought i was overvalued. I told myself..why is that guy so rich…seems to me that he could still have made more money if he held on.
Now I know why he is rich and I am a working class joe…cause he can “predict” the market and understands human nature. in anycase, I think the top of the market was probably spring 2005.
Yes, Spring 2005 — top of the market. A clone of the the house I sold in Oct 2005 sold for $150K more in May 2005. That was the peak, at least in Silicon Valley from my experience. I actually “knew” that was the time to sell but I had to delay because of medical issues. My realtor warned me the market would turn after Labor Day 2005 — it did but I was still able to sell immediately with the house on the market in September with 2 good offers. I have no idea what’s happening now.
I lived thru the previous downturn (was it in 1989 or 1990?) and never forgot how quickly the market could go from red hot to ice cold.
Except in seattle, haha.
“read in late 2004 that Warren Buffet sold his Newport Beach home cause he thought i was overvalued. I told myself..why is that guy so rich…seems to me that he could still have made more money if he held on.”
It depends what he did with the proceeds. There are investments other than residential real estate.
No one can predict the “top”. The overvalued real estate market was propped up by irrational exuberance. How can a rational being determine exactly when irrational people will begin to act rationally? With hindsight it appears the top was sometime in 2005. It just as easily could have been 2003 or 2008.
He believes that it is better to sell too soon than too late.
I think someone once asked him how he made all of his money. He replied that he always sold too early.
He’s goes by the golden investment rule “Always leave something on the table for the next guy”.
He sold one of his 3 Laguna Beach homes.
He still owns 2.
Some flipper traded on the notoriety and made some more $ on it.
gotta a question for the knowledgeable folks here…what happens in a Bankruptcy…what is the worst case scenario…
I am in my late 20s and have never been Bankrupt and the last time I paid a credit card bill late was 10 years ago. So, needless to say..I know I never find out what a BK is like.
My reason for asking this question…is that people I know don’t seem to think much about it or aren’t even much scared about it. Is there something that I am missing?
It’s fluid. Right now very little to nothing. I’ve seen mortgage ads for unseasoned lending, meaning you could have walked from the bankruptcy court and gotten a new mortgage at a rate very close to what prime borrowers pay.
In a poor credit cycle, it means no borrowing for 5-7-10 years and you pay very, very high rates on secured loans when you are finally able to borrow again.
This one is my favorite on the WaPost article:
Bristow, Va.: Townhouses in my neighborhood are listing at $340,000 and not selling, one year ago they were listing at $390,000 and selling fast. Inventory is high, buyers are no where. How much further can it go down? At some point won’t speculators move in and start buying low, and thus prop up these prices? Or is this a bottomless fall?
Kirstin Downey: The market feels different than it did in recent years, but homes are still selling. But let’s be frank about the prices: $340,000 is still a heck of a lot of money for most people. Just six years ago, homes in prime subdivisions in close-in suburbs went for that amount of money.
“a bottomless fall?”
LOL! I love it!!
“At some point won’t speculators move in and start buying?”
Uh, the speculators are trying to get OUT now, not in. And since they are almost financially exhausted from buying so high, the last thing speculators will be able to afford when prices drop further is another mortgage. So yes, this is a bottomless fall. Fun huh? Kinda like a roller coaster ride at the park - only instead of riding comfortably in the cars you are laying across the track. Look out!
hell, just 5 years ago, townhouses in prime close-in suburbs were going for around $200k.
Hell, I didn’t even know were Bristow was, so I had to google it. It is far beyond Manassas. About the the only thing going for it is that it looks like it might by on a VRE line.
I bought my townhouse in Bristow in 1998 for $130k. (BTW, I was worried I paid too much for a townhouse in the middle of nowhere!) That gives you an idea of where we are at and how far it can fall. I sold in 2003 - waaay too early I suppose but I was happy with the equity I walked away with.
Full disclosue: In 1998 there were no grocery stores in the area. It’s really grown since then so so price gains should be expected. On the other hand, the traffic is horrible!
Yep. And six years from now I’m guessing more than a few of those “prime subdivisions” will be blighted Suburbistans.
Dominion Homes reporting sh!tty results at 5:00 p.m. on a Friday in July? Stay classy Dominion.
ha! or… “go f yourself, Dominion”.
In a final note of irony mad at my neighbor in Ashburn, VA complained bitterly that he had paid property taxes for two years based on a million dollar tax assessment of his house that ended up selling for 439k. Later he was heard to remark: “Who do I see about getting a tax rebate?”.
Yes. They will all be lining up soon, won’t they?
testing
No skin color required for,” Their goes the neighborhood”.
Who will be the first real estate agent, to go down in history, in a news paper article to say, Inventory! Inventory! Inventory!
We have seen a paradigm shift from, Location! Location Location!
Wow Easthawaii, so word’s travelled across the Pacific about the miraculous Seattle market that just won’t die?
Somebody posted an old Seattle newspaper article from the 1990 bust on the Seattle blog. I guess the bust happened super fast . The article started out with a line like “Seattleites must be suffering whiplash from watching this market change…” Pretty funny
Well *that* posted in the totally wrong place. oh well…
What’s with the mass psychology that you must hold investments until you can pay the least amount of taxes? Paying taxes at least means you’re making money.
This guy sounds like the same people who held internet stocks during the bust, but refused to sell after the pop for at least a year so they could pay capital gain taxes instead of income taxes. Too bad their internet stock fell from $180 to $3 in the interim. You don’t have to pay taxes at all when you have a LOSS.
If this guy is fortunate enough to be above water, he should sell and pay taxes on whatever profits he’s lucky to get. The greedy urge to avoid taxes is going to be his downfall.
I noticed a while ago we stopped getting “We buy houses for cash!!” on the door and in the mail. They have been replaced by a flood of refinancing offers. Lately they have been from off the wall companies offering ARM’s with rates that if you read the fine print are finacial death. I noticed that they are also in Spanish. I think the sharks are starting to smell blood.
This is in No. VA. I also did soe research on the dev. next door. Out of 17 purchases in the last 2 years my guess is 13 are already upside down. At least one is already down close to 200k.
stcamp