Post Local Housing Market Observations Here!
What do you see in your housing market this weekend? Prices reduced? Poorly attended open houses? Here are a few observations from the topics thread. “St. Louis is all but dead, there is going to be a fairly strong pullback of prices in that market, IMO.”
“People must be getting desperate in Tampa. This morning on my way to work, I saw a van wth the following written in shoe polish on the back window: ‘Spring Hill corner lot, need to sell!! Call’ If that’s not desperation, I don’t know what is.”
“In Newton, MA where idiots are still paying 1m for 1950’s ranches and colonials. Gosh! The endless supply of GF is simply mind boggling. When will this madness end?”
“For the zip codes I follow (SD, north county), inventory has basically plateaued in July. It’s actually been going down the past few days. Not sure if it’s permanent, though, as inventory usually climbs through late September/October. I AM seeing more of the following in listing comments: ‘desperate to sell’..’priced below comps (or appraised value)’..’foreclosure imminent’..’bank/lender owned’..’will take any offer’..’owner NEEDS to sell!’”
“Definitely seeing people selling for less than 2004 prices (and some still selling for more). Remember, SD prices have basically not moved much since mid-2004 because we reached the ‘affordability ceiling’ even with exotic loans.”
From Canada. “Area real estate prices softened slightly in July, according to new statistics from the Real Estate Board of Greater Vancouver. The sale price of a benchmark single detached house in Greater Vancouver dropped $5,000 from last month to around $644,000. Total residential sales were down 25 per cent in Greater Vancouver, to 2,732 units for the month.”
From Colorado. “The number of homes for sale in the Colorado Springs area last month soared to an 18-year high as sales slowed for the third time in four months. ‘The housing market is clearly softening. There is no question it is really becoming a buyer’s market,’ said broker/owner Joe Clement. ‘We’ve got a whole bunch of homes that are not getting sold; they just aren’t getting offers.’”
“The local housing market is slowing in response to higher mortgage rates, said economist Fred Crowley. ‘I don’t know that the housing bubble is bursting, but there certainly is a leak,’ Crowley said.”
From New Hampshire. “Paul Griffin, of the New Hampshire Realtors Association, said the real estate market is slowing down a little bit. There were 163 new houses listed in one day last week on a statewide data base, said broker Jason Duval. ‘New construction has taken a bath on this and the worst sales are being reported for condos because there are so many on the market,’ Duval said.”
“Tracy Dowling found a house on Baboosic Lake Road. It has plenty of room and a big back yard, and best of all, the price had been reduced $40,000 to $289,900. With time on their side and the market turning their way; and Tracy Dowling was using the momentum to her advantage. ‘I most definitely am,’ she said.”
A buyers agent writes a column in the local paper. This is from yesterdays piece, commenting about a Cornville, AZ development:
‘At Verde Santa Fe, where last year people camped overnight for a shot at buying in, we now see 58 active listings, 5 pending and only 29 sold since January.’
The developer probably has 100 new homes for sale, finished or nearly so, with more coming.
Verde Santa Fe gets hyped to me every month by that Sedona Realtor via his newsletter which I believe I forwarded to you once. That is one UGLY development. No thanks.
I’m not sure I could live in a place called “Cornville”.
LOL Cornville has a great story about how it got it’s name. When they applied for a post office (to make it an official town) the people thought the name on the paperwork was Cornville, but it was supposed to be Cohenville (spelling? lol). Don’t ask me why I know that!
Hey, that’s exactly right! I think they were too lazy to ask for a correction.
After the coming housing market crash, whole sections of the Bay Area, San Diego, Miami, Tampa, Manhattan, Washington DC, etc., will become known as “Cornholeville.”
Saw that coming from someone.
It was a slow, fat pitch…I couldn’t resist!
I need TP for my bunghole!
I went to this open house in the North Flushing area today of a house that’s been on the market for about 6 months. The original asking price was $900,000.
I did some research on the house and found out that the flipper bought the house in November 2005 for $550,000. That’s $550,000 about 9 months ago.
The flipper supposedly remodeled the house but in my opinion the work was really poor and the house would have to be gutted and totally redone. The flipper is now listing the house for 799,999.
This flipper has some set of balls expecting to make a $250,000 profit on a house that they have owned for less then a year, in horrible shape.
The good thing is that the house has been on the market for more then 6 months and the flipper has an adjustable rate mortgage, so hopefully they will get there balls handed to them when they cant sell and the ARM adjusts.
Can’t wait for this housing market bubble to really burst and hard working people can once again afford a house without going on food stamps.
this is a tell it all for Cape Coral/fort Myers Florida area
http://www.news-press.com/apps/pbcs.dll/article?AID=/20060806/CAPEWATER/608060405/1075
http://www.news-press.com/apps/pbcs.dll/article?AID=/20060719/BUSINESS/60719001/1076
Person has $450K to buy 1900sqft home here in Phoenix for $450K. Same home for rent next door for $1200/mo. Property taxes = $3000, HOA=$100/mo
Let’s do the math for rent: 450K in a FDIC insured callable on 7-28-2008 at par and semi-annually thereafter with a 15year CD = 6.5% = $29,250/year
Rent=1200×12=$14,400
Profit after renting = $29,250-14,400 = ++$14,850/year profit in your bank account. After 5 years you would have a GAIN OF
$74,250!!!
Let’s do the math now for buying: $450K to purchase it so automatically you are down $29,250/year of the money not working for you earning 6.5% interest
Loss from buying/year=$29,250+(HOA:$100×12)+(Taxes:$3000)-(rent:1200×12)=$19,050/year LOSS!!! After 5 years that would be a LOSS of $95,250.
That means that the equity in your home would have to RISE each and every year $19,050 or about 5% just to keep up with the renter.
What do you think guys??? Would property values continue RISING 5% a year from here on out?????
CONCLUSION: Anyone who is buying real estate right now at these wacko bubble prices is… OUT OF THEIR PHAKING MIND!!!!
Please don’t complicate this with math. We Americans don’t do math.
Sheeesh!
Your analysis reminds me of when I studied finance back in college and how we were expected to anwer questions this way when doing case analysis. You’re always trying to find the best possible outcome for ROI with the least amount of risk. It appears many in the U.S. didn’t study even basic finance in college.
I would go further and suggest that many in the U.S. didn’t even go to college. Am I right?
Just to show you how far out of what this is…
girl at work bought a new house and instead of selling, she is renting her old house. The price she could get is 170K and the rent is $1300.
Yes.
as a reminder it was N.A.R., C.A.R., LAY, Lereah and Watson who more often than not told everyone who would listen prices only go up. Bank rates were going lower approaching 2004, people lost money in stock market in 2002 and housing was only safe way to invest your money even if you had no money. Prices predictions were going up this year and next.
They were all wrong big time.
What I see in east central Florida surprises me — a decrease in real-estate company signs and an increase in FSBO signs, at least along the roads I follow. To me, that’s not logical. When sales slow, you want more and/or better advertising. And with increasing inventories, agents have plenty of their own to show the occasional buyer. I may be proven wrong by the time this is over, but I’d have though that in a crash the cheap-it real estate offices and the FSBOs sell relatively fewer units than the professional offices. The corollary is that cheapos and FSBOs seemed to flourish as the market ws going wild.
That’s always a sign of a problem. In bad times, smart companies see a greater need for exposure and increase (or maintain) marketing/advertising budgets. Stupid companies see it as low hanging fruit: an easy way to cut costs.
Now what does that say about the FSBO seller?
Backstage, I couldn’t disagree more. With all of the ways to research and get your property marketed, the MLS realtor system has seen its’ best days.
Why would I give 6% of my purchase price away to list my home. I think if you’re buying, it’s a different story. A good realtor can make a difference, but sellers are wising up. They can generate traffic to their property without paying the ransom. Any thoughts on this?
Actually I think part of it is that sellers are walking such a tightrope, that they’re converting to FSBOs to “save” a commission….6% can be a LOT to someone with two mortgages and no cash.
Another possibility - some agents are starting to refuse to list homes unless they are priced competitively, leaving the seller with little choice but to do it himself (because he thinks ” That #*&#%** agent is crazy if he thinks I’m going to give my place away!!”).
Polestar…you’re right….at least the better agents refuse the listing, and hopefully, that can bring about a mind change in the sellers. But most agents are listing whores. They’ll take an overpriced listing, throw it on MLS and cross their fingers.
Kudos to the agents who actually do what they’ll supposed to do…sell their client’s property at a price that this current market indicates. IMHO, it’s at least 15% below all comps.
they are not really doing their clients a favor.
Listings cost the broker money for advertising/overhead.
When you have 20 over-priced turkeys that won’t sell, you are just spending money you can’t afford to waste.
The other downside, is that you loose the ability to reel in potential buyers, because you don’t show them any value in your listings.. You loose the confidence of both buyer and seller. Better to get the listing off the books.
This is not a problem in a highly inflationary environment, as we saw the past few years. Even if you overpriced 10%, the market would catch up before the listing expired. You were then considered a genius for you foresight into the changing market.
Not so anymore.
Catherine
There is a house in my neighborhood that is listed at 289K. It is only 1200 sq ft and backs to Cactus (a four lane road with 45 mile an hour traffic). I figure it is over priced at least 100K, yet a RE agent took the listing. I can’t believe that a credible agent would take a listing like this. There is no way it will apprase even close to the amount.
There’s a LOT of real estate agents out there.
Cape Coral/Fort Myers Florida area - lot of FSBO signs,Price Reduced signs, for rent signs, and the must sell hand written owner will finance signs. I think the 6% real-estate fees are too much off the top for the flippers to pay.There not going to give it away you know. (till the bank forcloses on it !)
“(till the bank forcloses on it !)”
(and gives it away for them.)
I’m seeing alot more FSBO on Long Island N.Y., also.
I considered moving to NY to take a job in Manhattan, but I think living in Boston and staying underemployed is cheaper. NY is so expensive that unless you make at least $100K you’ll be broke all the time with little to no savings. I’m considering moving to India since that’s were all my work is going. They will do for $10/hr what I will do for at least $50/hr. Plus I still have to pay my own health insurance, medicare, social security, save for retirement, think about my kids college(which I think is becoming pointless because a college degree has steadily been losing value and guarantees debt not a rewarding career).
Welcome to Republican America….privatise the profit socialize the cost…how does it feel to be fungible?
I disagree, as I’m searching for a house, I use the internet and contact the realtor directly. I hope to save another 3% by not using a buyers agent. I am in the $650-$850K price range. That’s a lot of money for someone to unlock a house for me. As I look in neighborhoods, I contact the FSBO, as they are pricing lower than with the realtors. Problem for me is that the builders are offering so many incentives, the resales(mls and fsbo) are way over priced. I’m not in a position to purchase until prices in Florida drop at least 30%. With builder incentives, they are almost there.
Reduced Prices in Modesto and Merced California. As I drove along Scenic Ave. in Modesto, three homes, with PMZ signs, had “price reduced” signs — across the street from eash other. In Merced, I went to look at model homes: $50,000 off and $25,000 in upgrades.
I must have missed class that day….Is GF greater fools?
Or maybe getting F**ked
or “greedy fool.”
Good Fortune? Oh, the irony.
I need some help on this one. BAPPIEs are Bay Area People. DINKs are Double Income No Kids. DINTs are Double Income Tenants. PRIKs are Retired People spending their Kids Inheritance. Is this correct? Especially the PRIKs. Aren’t these real estate sales people? hehehehehehehe
My landlord bought the 1-bedroom condo I was living in (while I was living in it) about two years ago for $305K. My rent is $995/mo. He financed it with 10% down and an 80/10 first/second. The first is interest-only and the payment at the time he purchased it was almost exactly to my rent payment. He hired a property management company to handle it, even though I’m a super low-mantenance tenant. I figure he’s got a negative cash flow of about $600 a month if you assume his payments haven’t adjusted (which they probably have).
Now, he’s putting it on the market… I flat-out refused to go through the intrusive ordeal of realtors and open houses and unannounced visits at odd hours by realtors and their clients. So, I have to move.
The question is: will he make money? God, I hope not. He has to sell for about $325K just to get his down payment back, and probably more like $335K-$340K to recoup his negative cash flow for the past two years.
Will it happen? I don’t know. The real estate market here (Silicon Valley) is still stronger than a lot of other bubble markets and we still have y/y increases. However, inventory is up about 70% y/y and we’re entering the slow season.
Stay tuned in two months for the result…. I hope the dumbass loses his shirt.
He needs less than that to break even. 1st is $244k. 2nd is ~$29k. Closing @7% of sales will be $22k. He’s been running -$400/mo after taxes for 2 years or current value about $10k. Down is $30k. Add it up $306k.
You’re using a different math system than I am.
244 + 29 + 22 + 10 + 30 = 335.
He’s been losing more than $400K a month once you factor in the property manager’s fees, the property taxes, the second mortgage, and the HOA fees. I this my $600/mo estimate of his negative cash flow is underestimating it…it’s probably more like $700 or $800 a month.
Thanks, stpid math error.
Peterson house advertised on eBay (As in Scott and Laci Peterson).
The Real Estate agent who bought the house has not been able to flip it.
The owner of Scott and Laci Peterson’s former Modesto home is trying to sell it on eBay.
“Maybe there’s a curiosity buyer out there,” Gerry Roberts said. “At this point, I don’t really care.”
He listed the three-bedroom, two-bath cottage-bungalow Friday at $449,000, or $30,000 lower than what Roberts first sought since putting it on the conventional market July 10.
Got an ebay link to the house?
You better hurry! The bidding has already started.
http://tinyurl.com/gjxo2
“Bidding?” His Buy-it-now price is the same as his opening bid (reserve price). That’s no auction.
Who are the right people? The insane, murderous kind?
This listing needs a lot of work including separating marketing hype and the full disclosure.
My question exactly!
And who in their right mind would one to live and raise a fimily in a house tagged as as a home of murderer?
So if I bid $463,491.02, then can I beat the buy-it-now guy who bids $449,000.00 and “buys it now”?
Buy it now buys it. as soon as bidding starts ther is no buy it now anymore. I think thats how it works.
That is how it works, any bidding ends the Buy It Now, and Buy It Now, obviously ends any bidding. So, this is not an auction. (Why bid $449K when you could buy it immediately for $449K). This demonstrates the Realtor is an idiot.
Also keep in mind that Buy It Now is generally used with LOW priced things like $1.
And on top of all that, e-bay will take 1.5% of the sale so he’s giving them $7K. He he…
Read about House on Ebay.
Didn’t that R.E. agent get into a heap of trouble and lose his job? Maybe he thinks Ebay will rescue him via the notoriety he hoped to achieve in flipping it. F F F Fooooooll.
Zillow prices it at 399 and he paid 390 7/2005
He produced a blood stained knife and got some TV coverage. The article state that’s why he lost his job.
He produced a blood stained knife and got some TV coverage. That’s why he lost his job, according to The Modesti Bee article. With a RE deal like this one, he probally would of lost his job anyways.
He produced a blood stained knife and got some TV coverage. That’s why he lost his job, according to The Modesto Bee article. With a RE deal like this one, he probally would of lost his job anyways.
I think he bought that place for $279K. Nice house, but sot of morbid.
I showed my husband the pictures of this house ( he is conservative and used to Michigan prices anyway ), and his comment was, ” Holy Sh-t ! What an ugly house ! Maybe I’d buy it if I was a wealthy devil-worshipper ! ” This is a nasty piece of you-know-what house that the murders of two innocent people happened in. Why help someone trying to make money from the tragedy of the loss of two innocent lives ? Drown in debt, sensation-monger. I hope the present owner bites the whole thing. Bad, bad karma there.
I forgot the link to my previous link on the Scott and Laci Peterson House.
http://www.modbee.com/local/story/12549780p-13261143c.html
Report from Santa Barbara:
In the past 2 weeks, 4 of my coworkers have sent out emails announcing that they are selling their homes (mostly condos and townhomes).
The noteworthy information is that their asking prices are all about 200K below the Zillow estimates. Zillow shows these were all bought in 2003 and 2004. The asking prices seem to be almost exactly 10% per year over their purchase prices. I guess they feel they are asking for *ahem* modest returns compared what have supposedly been 20%+ gains YOY here, but 500K+ for condos is still beyond ridiculous…
Zillow is a joke — advertises last year’s prices. Don’t believe the figures, as you could do better averaging whatever recent comps you can find and subtracting the recent median trend…
Sorry - meant to say “last year’s prices + 10%”…
Really? We find Zillow to run a bit on the low side of comps. Zip realty runs high- really the most accurate is MLS comps.
My sample size is small, but checking on the prices of homes around where I live resulted in outlandish overvaluations — maybe this is where sellers are getting the idea to price at levels where their homes don’t ever sell!
Look at the comps page and do your own math, for I find that Zillow is both low and high. Doesn’t take being a rocket scientist to comp your house out.
Do a “reply all” e-mail back to them, with the link to this site and an explanation that you’re waiting to buy until after the carnage has played out in the next 12 months or so.
By all means. Publicly taunting your co-workers is a great career move.
You could take a dump in the break room afterwards.
LOL, nice!
KB Offers Incentive Advice in Sacrament0:
The $60,000 question—why are other builders just giving money away? Because they have to…
Homebuying today is a maze of “special” offers that might not be so special. So, to make sure you get REAL value in your new home, KB Home offers some simple dos and don’ts:
DON’T let cash incentives drive your decision.
DON’T settle for a home that’s not built just for you.
DO visit KB Home to see what everyday value is.
To see how KB Home value stacks up against the competition, visit us today.
http://www.kbhome.com/Promo~PromoID~1411.aspx
I’ve been to some KB homes and I think their workmanship is terrible. They need to give the house away.
I’ve been to some KB homes and I think their workmanship is terrible. They need to give the house away.
“DON’T let cash incentives drive your decision.”
Translation: “We can’t afford to lop off thousand$ to make a sale like other builders.”
If I was in the market for a new house, which I’m not, I’d be happy to take all of the cash any builder could possibly throw at me. New spec builds are new spec builds, & I would be looking for the best deal on the cookie-cutter I could find.
Q:What’s the point in having a nice house if your neighbors give you a barking dog 24/7 ?
A: None, of course, which is why it’s better to rent.
I recommend hosing down the dog.
I already know and believe the numbers and what they mean to housing and all related industry. It’s like preaching to the choir for me. But I do love learning and thinking about the deeper, more sophisticated financial analysis here in the comments (thank you txchick, GetStucco, Robert Cote, and so many others!)
So, what I find really interesting, at this point, are the varied psychological reactions to what’s happening. To wit:
1. My friend told me she pulled up to this local realtor guy (driving a Hummer, of course) at a stop light, and glanced over at him. He was weeping. So she looked up his listings on MLS, (she had a good hunch, since this guy is well known for being a complete asshole about how much money he has “made” in RE) and sure enough, one of his “investment” properties was back on the market. Several have been on the market for months, and no pendings. She also heard he was getting a divorce.
2. I DON’T talk RE with anybody anymore, because MOST of my family/friends are at some level of distress about the fine mess they got themselves into. People do NOT appreciate the truth at this point. My days of warning folks are over.
3. There’s a undercurrent of stress and barely controlled hysteria that I’m picking up on an almost daily basis….if I listen long enough (eavesdrop) to conversations, the subject always comes up…property not selling, HELOC woes, credit card debt, etc.
What happens when people REALLY realize they’ve pissed away their kid’s tuition, their retirement, and they have no recourse or savings or backup plan?
Is this country even remotely prepared for the kind of financial distress our grandparents faced in the Great Depression? Will crime soar? I’d be most interested to read how you see people reacting and how you believe our society will cope.
Maybe gun sales will increase as the FB and FRE agents commit suicide? Better go long on Smith and Wesson.
How about used guns: “Only fired once.”
Your sick. I love it.
or the great cemetary plot bubble may be created.
Catherine-
Terribly, I think, and you are right about the stress level in people these days, it is palpable. We have lost the meaning of what it is to live. Over the last 20+ years the path to our goal of a better life has changed. It has morphed into something cynical, harsh, and warped. Yes, people still say they want a better life for themselves and their families but the way many try to get it is often through whatever is quick and easy. These people want it NOW. Before if you didn’t have the money for something when you were growing up, you did without it, and you were ok.
Now people must have the latest toy or other materialistic good and they need to show it off to others to prove how successful they are (I laugh at the big SUVs people drive on the road, which NEVER end up doing real utility work but often end up in the ditch during a snow storm - idiots).
In many ways materialism IS the value system many Americans aspire to, whether they realize it or not, they got sucked up in the advertisers telling them if they buy some product they will be so much happier (just like people got sucked up into believing the Marlboro Man was handsome and always got the girl - forget about the cancer, emphysema and oxygen tank 20 years later).
It is like some people have never grown mentally and emotionally beyond the 2 yr old’s need for immediate gratification. I’m amazed at how many possessions people have in their early 20;s. Why do people need these things judge others by what they have? And of course when you get bored with something you just throw it away. It is no wonder people in other parts of the world think we are spoiled brats, and no wonder people are so emotionally fragile.
This coming downturn is going to wreak such havoc in people’s lives that the turmoil will result in a big increase in diagnoses of anxiety, depression, suicide, and for sure an increase in crime. So many people don’t really interact much with their neigbors or friends anymore or have an intelligent conversation that is longer than the contracted code of a text message. And who writes letters anymore, where you sit down and take the time to really communicate with someone? Come on, are people really going to pull out old emails from a shoe box 20 years from now, reread them and smile?
These types of things are the stuff that help keep you grounded and make you feel more connected. If people never had that before, then when the material stuff is gone, they will be completely lost
Polestar …..Boy I sure agree with what you say . I am really concerned with how people are going to react to the lost of
material status if we go into a depression .
Well said, Polestar.
Agreed. I used to think some part of being materialistic was related to age, but I no longer think so. The psychology appears to be deeper. Thankful I wasn’t as a child or as an adult, but I have coworkers in their 50s who just blow cash all the time - on crap they clearly don’t need, or even use. I’m talking married, double-income households who say they can’t max out contributions to the retirement plan while making $250-300k/yr. Their retirement savings accounts show it as well.
Engineers seem to be more conservative? I don’t know but I have worked in Engineering for so long I forget how the rest of the world lives? Maybe young Asian Engineers tend to drive fancy cars but older white guys often drive old clunkers while making 100K plus. And own many rental properties to boot
My engineer husband was not conservative until I took over the finances. And I was in the “hot shot, all about image” marketing/advertising industry. He only drives the company car now but he drools regularly over some of the new American retro designs. I quote a few blog messages a night to keep him in line.
“Engineers seem to be more conservative? I don’t know but I have worked in Engineering for so long I forget how the rest of the world lives? Maybe young Asian Engineers tend to drive fancy cars but older white guys often drive old clunkers while making 100K plus. And own many rental properties to boot ”
Yep! Besides myself, I know a bunch of engineering consultants who own only one car, and it’s always modest, like a Toyota Tercel or an old Honda Accord. These guys don’t look rich. But they have been making $150,000 annually for quite a few years. One guy I work with made $250,000 last year and is set to make over $300,000 this year. Who said you cannot get rich by being an engineer? We don’t own our own businesses, but we go where there is money. As a result, we can afford to value invest. One friend bought 160 acres in Iowa a few years ago when no one wanted land. Now his land (with lots of good timber on it) is worth 4 times. He has a house nearly constructed in Jamaica and real estate in Florida that he owned with his brother for years. His rentals are doing well, providing additional income streams that are paying off those Florida units. He bought all his real estate (except Jamaica) before this bubble. The undershoot may clobber him, but that will be temporarily.
Yes, I work with Asian engineers too. And yes, most of them like their fancy Lexus cars. You are right on the money. One asian colleage of mine (born in Hong Kong) rents a room from a friend and has a high performance Japanese car and another Japanese car. He loves cars and says that you cannot take it with you. You should enjoy your money while your young, because when you are obese and in your 50s you won’t look good in one of those cars. His words!
My rich conservative engineer friends are down to earth types with few concerns because they live well below their means.
Widely anticipated catastrophes seldom pan out. I am maintaining faith in the Fed to sustain their effort to keep us collectively flummoxed in order to prevent any protracted financial meltdowns.
The hotshot real estate program Sat AM in Los Angeles had an investor call who got a 100% loan on an housein Sacremento last year, losing $600 a month rent, but the tennant wants to buy the house at her cost, but the tennant has a 500 fica score. I have listened to these guys for a couple of years, and they always had an answer.
Not this time, they pretty much told the investor she was screwed, unless she could get the tennants fica score up. Panic is here
“3. There’s a undercurrent of stress and barely controlled hysteria that I’m picking up on an almost daily basis….if I listen long enough (eavesdrop) to conversations, the subject always comes up…property not selling, HELOC woes, credit card debt, etc.
What happens when people REALLY realize they’ve pissed away their kid’s tuition, their retirement, and they have no recourse or savings or backup plan?
Is this country even remotely prepared for the kind of financial distress our grandparents faced in the Great Depression? Will crime soar? I’d be most interested to read how you see people reacting and how you believe our society will cope.”
I’m afraid that many of our worst fears will be realized in the not too distant future. It’s hard not to feel sorry for someone when you see them crying, after all, they are humans just like you and me. I think people will need to rely on their better inner strengths to get through this. What good advice did Frank of Everybody Loves Raymond have to give, something like; stop crying in your pity pot Nancy and suck it up. Good advice. The best quote from a brokerage firm was, “We don’t make money, we earn it.” We have to get back to being proud of earning money, not proud of producing it from thin air.
Yes, we need to earn income and stop inflating a false economy! GDP over the last five years has been propped up by the housing boom. Take that away and we probably had zero growth, maybe even hidden recessions. Is it a fair statement to say that perhaps the housing boom hid our past recessions? Maybe now our true weaknesses will be exposed and then what do we do? Ask China and India for our jobs back? Or maybe China can lend us more money. What do we produce anymore in this country besides debt and broken promises of a better future? With the cost of living at an all time high we are positioning ourselves as a nation for failure because of the lack of competitive prices (wages). Sure drop everyones pay down and we’ll create more jobs and opportunities, but how do we do that with the cost of surviving is as high as it is? We live in the what I think is the richest country in the world, but our kids graduate high school with zero skills and are expected to be out of the house on their own before they’re even old enough to drink. We have more than a bubble issue, we have a cultural issue. We as Americans need to start to find value in more simpler things, go back to the basics and stop competing for things that hold little value. Before I had credit cards I saved money and always had money in my wallet. Once I started to use credit cards I never saved money because I needed it to pay my credit card bills and I spent more than before because my little plastic card was magical and gets me of what I want without considering if the stuff really has value. I’m starting to change my habits, but it will take a nation to really have an impact.
What city is this in?
I work in the mental health field, and business has really picked up since January. It has been an unusually busy year. Summer months are usually quiet in my field, and it has only been getting crazier. I’ve stopped asking my coworkers “Geez, what have they been putting in the water lately” at the end of a really busy day, because that joke is getting really old.
Yeah, I would say there has been an increase in general stress levels since January or February and it just seems to be getting worse.
I couldn’t believe my ears when I heard an ad run on WMAL here in D.C. It was for lake-front lots on Lake Anna (~1 hour south of D.C. with no traffic). The man was exclaiming “lots are only 200K this year, and last year they were 400K !! (It’s a great time to buy!)” I thought builders, etc. would be quieter about announcing huge reductions, but now I see that’s not the case.
A Ryan development in Warrenton has a huge banner out front in big red letters “last lots from $449,000!” (last year they were selling in the upper 500’s.) Most people are already moved in (other than the empty specuvestor houses) and must not be so happy to see that banner when returning home from a hot ride from work!
We also have many townhomes for sale in our area, and now Ryan is starting a new set of them from 295K, an unheard-of-price. The lowest-priced resale garage townhome (as of yesterday, when the 295K listing was added) is something like 315K and they go up from there. (reductions are imminent on all of them now, I am sure).
Also, in Fauquier County, Richmond American has added many lower-end houses to their former McMansion development; Toll Brothers might get started building soon, but their selection of models has been cut drastically from their original advertisements.
We have the Lake Anna one up here in Baltimore as well…I change the channel immediately.
Lake Anna adds were running in Richmond this week too. Looks like they are casting a wide net for the last greater fool they can find.
I’ve looked at hundreds of properties this past week in Phoenix. Some people get that the market is correcting from it’s overinflated state and are motivated to get out of bad siutations, or maybe just need to move and are pricing lower. Some people still do not get that nobdoy cares if you house shows like a model in this market when there are a thousand homes just like it- or that reducing the price $2-10k is enough to bring buyers! I’m gearing up to scoop up houses!
Two houses in the Awatukie area of Phoenix have SOLD signs under the Realitor sign. Other realitor for sale signs are gone. Maybe pulled from market? Last month there were many signs everywhere. I need to go check it out.
Where are the sold home prices in the newspaper? they always ran them, and now I don’t see it. This is San Gabriel Valley Tribune.
In the local free rag in north county San Diego theyve been reporting a single house sold - the same house for over 2.5 months. Reading that paper is like being in the movie groundhog day.
here in the NE corner of Mesa AZ we have Las Sendas, nationally acclaimed master-planned planned community of the year (3x’s in 10)having a fire sale! 15% off base price of all homes, 50% off ALL lot premiums and 25% off all upgrades. New range mid 3’s to low 4’s….lets’s just say they’ve been given a hair cut in price!
Ha ha ha. I was following a 3br in Aliso Viejo, ca. On the market since dec 2005. After two price drops and the photos now have no furniture(ie tenants out since march)…it is now for rent. Hmmm 180+ DOM…8 months. Bwah ha ha.
Johnny - keep an eye on it for me…. please
Is it the one on Channel Islands Street?
Sacramento California real estate is down 10-15% and dropping. Record number of listings, 6-9 months inventory, and pending sales are dropping. Home builders are UNDERCUTTING the individual resellers to dump inventory and keep volume from tubing. Prices in July 2006 are dropping below prices 18 months ago. Lots of people stuck with 100% loans who are 10-20% OVER FINANCED.
Here is the interesting part: The publicly quoted stats do not yet reflect the turn. We have a “1% drop” in the median. Why not 10%? All the very best product is the only stuff selling, at slightly discounted prices. Wait until the less desirable stuff MUST sell, at highly discounted prices. The median stats are a laggin indicator.
I have been looking to buy for nearly a year. It did not feel right. I just signed a 1-year lease + 1-year option. $740,000 house (2900 sf) purchased by San Francisco flipper who is stuck with TWO of them. PITI (90% loan) is $59,850/year. Rent is $23,400. They pay $36,450/yr to subsidize my life. If the property drops 30% (conservatively, as the PMI insurers say there is a 59% chance of a 53% drop in value), they will lose another $222,000 in value over the next 3 years. This is a $300,000 mistake for them and they own TWO of these homes.
The pain is barely starting. I know from personal experience. I learned in 1990, when my home dropped 28% in value by 1994, and I had to do a CASH IN refi, to get a lower rate. There is one for you: REPEAT…CASH IN REFI. That’s not quite so much fun. Sold the BMW and bought a Chevy Caprice Station Wagon. Talk about Chick magnet………….NOT.
John in Rocklin, the lease you signed is as good as toilet paper when the owner stops paying his mortage, and the bank owns the property. Banks don’t rent REO’s. This investor knows how much he is going into the hole. How do you know the rent you are paying him is not going into his pocket, and he is Not paying his loan. Happened a lot in 1991 recession.
David Cee, Good point. I just found out he owns FOUR of them in that subdivions. Four losses of $300,000 each is $1,200,000. He also has other rentals. Maybe I should run a credit check and get a financial statement from the landlord. What a topsy turvey world this is going to become as the market corrects. Reminds me of the “Autobiography of William Zechendorf”. In fact, I should probably re-read that to get a refresher on market crashes. History repeats….well, you know…..
Never heard of that book, but it sounds like a great read. I looked it up on Amazon.com. My favorite line from the first review:
“Real estate operator’s in this day and age can learn lots of lesions from this book…”
I’ll bet.
Holy moly, talk about overvaluation:
“5 used & new available from $269.99″
http://tinyurl.com/n2hh2
No doubt this SF flipper will end up toast, and the SF property(s) he/she/it owns will have to be sold at a discount, disproving the bay area housing heads assertion that that area is different.
Another sign of the times: Today I saw a sign for a combination open house slash garage sale…
That was in the West Hollywood hills, by the way.
This is even better - house in Santiago Canyon (last rural area in Orange County). Custom home on 2 acres - 2,000 square feet and built in 2003 (which is big since most of those houses are cabins from the 30’s). Has been on the market since Dec. 2005 and dropped since from $875,000 to 599,000 and still not selling! All the other little 1000 square foot cabins in the area immediately dropped up to $80,000 and are still not selling. We almost bought a place there in May for $500,000 before we started reading this blog - boy did we dodge a major bullet! Would have lost $100,000 just walking into the place in July.
that’s a great area. My wife & I were back there a week ago and looking at some of the props. Still too high, but would like it when time to buy. Only thing that keeps me scared s***less is the thought of wildfires back there (silverado/mojeska canyons).
I grew up in Trabuco Canyon and went through one fire. They were able to keep it contained so no losses. I don’t worry about the fire so much since there are 4 fire stations out there and you can get really cheap insurance through the state (not fair to taxpayers, but available). Be very careful of landslide, flooding, and rockslide in those areas though. We looked at one house on a creek that was gorgeous, completely redone, and found out it had completely flooded one year prior! (he was selling it for $599,00 so he wouldn’t lose money on the rehab!). Since you can’t get landslide insurance, look for houses along Santiago Canyon Road or in Trabuco - much more stable land. Although as my dad says - if all those houses have been there since the 1930’s, how unstable can the land be? I don’t know about that, but I guess he has a point when the house is built on rock and earth and not some manufactured slope thats been mass graded.
Yup. There’s a grim reminder of the slide danger as you go thru Silverado. The general market still sits damaged from the boulder that came down about 18 months ago. Killed the owner’s teenager.
My dad bought his FL house at a yardsale. How about that. Hurricane damage last year, the house was for sale too.
Small disclaimer, this data is extracted from multiple MLS systems, it may not be exactly accurate (can’t be any more accurate than the source it pulls from) but it should be generally correct.
Bakersfield CA - Market Summary
Single Family Homes, May 30, 2006
Market Count: 5,688
Median Asking Price: $325,050.00
Average Asking Price: $375,976.00
Single Family Homes, August 8, 2006
Market Count: 5,969
Median Asking Price: $309,995.00
Average Asking Price: $358,887.00
Prices are now down 5% for both average and mean asking prices. Inventory is up 5% from the end of May. Interestingly inventory for homes peaked at the end of June at 6141 and has dropped since then.
Bend, OR - Market Summary
Single Family Homes, May 30, 2006
Market Count: 1,656
Median Asking Price: $449,900.00
Average Asking Price: $434,900.00
Single Family Homes, August 8, 2006
Market Count: 2,615
Median Asking Price: $429,000.00
Average Asking Price: $415,900.00
Inventory up 58% from the end of May, while asking prices are down 5%. What is interesting is that the median asking price is actually up 7% from the mid July market sampling. In addition, the mid July sampling (July 14th) nearly 1,000 fewer homes in the MLS. One can assume there is some listing “re-tread” going on.
Boise, ID - Market Summary
Single Family Homes, May 30, 2006
Market Count: 4,119
Median Asking Price: $269,950.00
Average Asking Price: $347,209.00
Single Family Homes, August 8, 2006
Market Count: 5,453
Median Asking Price: $269,000.00
Average Asking Price: $344,171.00
The unlikely bubble market of Boise finally succumbs to gridlock and starts to pile on the inventory. The number of single family homes for sale is up 32% since May 30th while the prices asked are flat.
Phoenix, AZ - Market Summary
Single Family Homes, May 30, 2006
Market Count: 32,395
Median Asking Price: $341,990.00
Average Asking Price: $489,853.00
Single Family Homes, August 8, 2006
Market Count: 35,825
Median Asking Price: $335,000.00
Average Asking Price: $470,188.00
Unlike some of the markets being tracked, Phoenix seems to be continuing the upward trajectory of inventory, while the prices are starting to accelerate downward. Inventory up 11%, median asking price is down 2%, average asking price down 4%. The Phoenix market still cannot cope with amount of properties being injected into the MLS.
Reno, NV - Market Summary
Single Family Homes, May 30, 2006
Market Count: 4,110
Median Asking Price: $419,900.00
Average Asking Price: $633,740.00
Single Family Homes, August 8, 2006
Market Count: 4,530
Median Asking Price: $414,900.00
Average Asking Price: $624,109.00
We have several folks on this Blog from the Reno area, and that market is continuing to add properties to the MLS. Inventory up 10% from May 30th while the average and mean asking prices are down slightly.
Sacramento, CA - Market Summary
Single Family Homes, May 30, 2006
Market Count: 14,762
Median Asking Price: $458,000.00
Average Asking Price: $569,740.00
Single Family Homes, August 8, 2006
Market Count: 17,499
Median Asking Price: $448,950.00
Average Asking Price: $565,997.00
Sacramento is leading the way in adding inventory up 19%, now over 17,000 single family homes in the MLS. Asking prices are down slightly since May 30th.
San Diego, CA - Market Summary
Single Family Homes, May 30, 2006
Market Count: 11,964
Median Asking Price: $640,000.00
Average Asking Price: $923,530.00
Single Family Homes, August 8, 2006
Market Count: 13,618
Median Asking Price: $634,600.00
Average Asking Price: $905,691.00
San Diego follows the trend, with inventory up 14% since the end of May, while average and median asking prices are down slightly. One thing is for sure, the trajectory has stalled.
Interestingly, the Sacramento Realtors haven’t published detailed home sales since May. I think certain neighborhood comps are falling faster than the regional ones, and they don’t want the buyers to know.
BTW: I’m adding the new Flippers In Trouble listings as we speak:
flippersintrouble.blogspot.com
Max
max, great stuff. thanx
This is one of the cooler new bits of data that I have seen in the last few months. If I had more time I would try to do the same for San Diego North County. Good stuff!
Sigalarm — thanks for collecting those statistics. And Max for the Sac site.
Good work. Thx
I think Bakersfield inventory is on the rise again within the last few days.
This CL listing explains what I am seeing all over the Sacramento area
“Yet Another Yard Sale - Another Family Bailing Out Of California!”
http://sacramento.craigslist.org/gms/190286955.html
Got a postcard from Brady Sullivan. Selling condos (apartments really) for $804 per month. Includes principal, interest, taxes and condo fees. You need a 10% down payment and they’ll work on qualifying you for a 30 yr loan at 6.875%. These are garden-style and are built as a more or less squarish structure with three stories. They’re not hard to find in MA and NH. I don’t particularly care for them but they do look a lot closer to affordable housing than anything else that I’ve seen.
So the condo is priced at about $130K, right?
The postcard said that the condos are priced from $80K to $120K. Remember that taxes and fees are included. I don’t know if these places are brand new or converted apartments. Only so much info you can get on a postcard. I don’t think that I’d pay $80K for one of them based on the pictures.
Here in Southern NH I’m getting bombarded with Brady Sullivan ads to buy one of their condos for $80K. I also keep getting desperate hand-signed mail from a guy in Manchester who promises to buy me a steak dinner if he can’t find me my dream home. And then this other guy keeps sending me mail promising to “end the nightmare of renting and making your landlord rich”. Everytime I go to my freaking mailbox I have a few ads to buy homes. The wheels have really fallen off the wagon this time.
I’m signed up for the apartments and rentals for NH at craigslist. It gets spammed regularly with “why rent when you can buy?” ads and lots and lots of rentals available in the state. Especially Manchester and some places in the boonies.
Brady Sullivan is indeed persistent.
Maybe you should take up that guy on the steak dinner. You just have to indicate that price is an important factor in your “dreams”.
I guess you’re getting hit with both dreams and nightmares.
As far as junk mail goes, I toss a lot of the bulk stuff as it usually comes all bundled together.
They are not new. All of the Brady-Sullivan condos currently for sale in New Hampshire are conversions, including Oakbridge and Crosswoods Path. They were full rental communities that Brady-Sullivan bought out and evicted all the longtime residents from.
Since you asked, here’s a short video I put together about Houston real estate wackiness.
Thank you, Lou. That was funny.
Are you by any chance keeping track of the Houston RE market? I ask because I too live in Houston and wanted to know if anyone else is observing the local semi-bubble market.
Lou, good job. I wanted more
Awesome. Needed that. Thanks.
A local realtor in the San Luis Obispo ‘market conditions’ section of Realty Times actually reported that prices had been “overinflated” for the past couple of years and that there are now “price declines” (which she reassuringly called “stabalization” or “normalization” of the market, and she also assured her readers that “houses are still selling” and “people are still buying”; she neglects to mention that sales are down about 40% compared to a year ago . . . .).
This is the first report of this market that has suggested that prices were too high and that price declines are occurring. During the past couple of months, the market condition reports have mentioned “market slowing” and “normalizing”, with predictions along the lines of “single digit increases of 8%, which is still a great return on an investment”.
visting family in Colorado and went to look at homes in Bloomfield with the wife. Toll Brothers had the best stuff. No crowds, no pressure to buy.
Toll Brothers still wants $50,000 lot premiums for some locations. They want around $150 a square foot. Some of the smaller builders in the area want anywhere from $80 to $120 a square foot including the basement square footage. My in-laws home in Brooklyn NYC is around $300 per square foot as a base to measure by. In the Fort Collins area in Colorado it’s not hard to find something nice for $100 a square foot or so.
Generally what I notice in Colorado and NYC is that there are pockets of a lot of homes for sale and a lot of places with few or no places for sale. In bloomfield where I saw toll brothers, there was a subdivision with $800,000 and up homes and a lot of them were for sale. At least 20%. Where my family lives in loveland there are only a few resales in the immediate area.
I have attended a conference in Bloomfield (at Omni Interlocken)every year since 2001 except this year. I used to go a back way from the airport over through Westminster, etc. What I noticed was all of the new construction closer to the airport (I believe it was on 104th Ave). Start prices in the high 200’s with “up to $40K in builder incentives”. Even three years ago that market was in a funk. I have friends in the REO business in the Denver area and all three carry at least 100 listings all of the time. And two of the bigger outsourcers are in the Denver area, so they market REO’s in house. I gotta believe that the number of REO’s in the immediate Denver market can only increase in the next year or two.
san francisco- this place just went on the market
http://www.3295clay2.com/
$780k for a 1 bedroom street level + $400 hoa
WTF! - I live down the street and pay $2000/month for a 2 bedroom with a view.
It’s San Francisco and has parking. I have had hotels in SF charge me $80/night for parking alone. Let’s see: that was 10 years ago, and I haven’t stayed in SF since then - wonder why.
No, wait: I remember why!! San Francisco is a blight on an otherwise beautiful landscape. Last couple of times I was in wine country, I took 80 through Oakland to avoid even driving through that sewer. And when you choose driving through Oakland as an alternative, that really says something.
Okay, since I’ve badmouthed a number of other California cities on this blog, I’m going to let this one go. But $80 for keeping your car at the hotel I agree is exhorbitant.
Couple of random observations from Bellevue, Wa:
1) Just visited the open house down the street. A $500k condo, initially sold within 2 days, but “financing fell through” (per the realtor). Realtor said (quote): “Seattle has really slowed down the past 3-4 weeks. It may be isolated, or could be related to the slowdown in Arizona, California.” I was very surprised by the insight. As for open house traffic, this condo has been open for weekends at a time, and we were the first “true” potential buyers to attend the open house. In related Bellevue news, i see more and more properties sit. Especially $500k and up -> gee wonder why. Three houses in my neighborhood have been on the market for 50+ days. Even 3 months ago, we had nothing on the market. Seattle has a while to go, to be sure, but the process has started.
2) In a classic example of “wealth effect”, my neighbor, who owns 2 investment condos in Seattle, both of which have gone up “$50k at least”, bought a brand new $35k car.
3) A buddy in Dallas, Texas just bought 5 foreclosed homes at 80% LTV (tax value), “cuz it was such a steal.” I warned him extensively, but to no avail.
Thanks for listening.
Thanks for the Bellevue information. My own anecdotal observations are that inventory is building up here, after the selling slowdown this summer. I’m expecting fall/winter to be tough for sellers. Houses on the market now that would have sold in two weeks earlier this year and just sitting now. They are way overpriced IMO, and maybe others are starting to think so as well.
Here’s the newest high end countertop for the people who were doing the granite ones 15 years ago (it’s so 1995)
http://www.purcellmurray.com/product_countertops.html
I suppose they could be very attractive in the right setting, but in a kitchen? Maybe they’re for people who don’t cook. Imagine what these would look like after you pound out a few veal cutlets or smash a few bags of ice on them.
That’s part of the effect. Hammered pewter has a kinda kool look to it.
LOL — more like car-wreck pewter.
pewter countertops — how nauseating! butcher block counters are still the best.
Butcher block is my favorite - natural, easy to replace, easy on your knives (poultry on a separate cutting board). I had heard that quartz was sort of the next-thing-after granite — that it is non-porous and requires no care. Wonder if anyone will try to work with bamboo. And as for cement, I don’t care who think’s it’s great, I would think I’m in a cell block.
Ohmigosh, what will everyone with granite do once they realize they no longer own the latest and greatest? Time to re-HELOC! What were those rates again?
In another sign of covering up bad news during this real estate downturn, the San Jose Mercury News stopped publishing the weekly charts of single family house inventory and % of accepted offers over asking this Saturday.
Last Saturday’s charts before they stopped printing them showed a steep climb in SFR inventory from same time last year (up > 40%) and % accepted over asking declining steadily to 48% (the lowest in 2 years).
Another example of mass media selling out their journalistic souls to their advertisers…
Hmm, I wonder if this is why the View From Silicon Valley site was not updated today. I believe they get their stats from the SJMN.
problem with bay area is not enough permits given out. there’s lot of space and empty office but somehow the officials do not give enough permits for supply to come up as would in a free market. this is how prices are kept artificially high. never let supply match the demand and there will always be greater fools who buy at ridiculous prices. write to county officials to let more housing come up.
That has NOTHING to do with current over-inflated prices, which is due to the credit bubble and before that the dot.coms. When average prices get down below 400k, we can talk about maybe that being a factor.
just did a whirwind tour circling the Sierra Nevada Mts, passing thru some of California’s prime vacation spots. Here is a small sampling of RE Activity from just a few of the hundred or so communities i passed thru:
Western Sierra Foothill areas:
Lots of frenzied RE activity in Oakhurst/Coursegold area just south of Yosemite along rte 41. Cent 21/Ditton Realty is prime player here.
Eastern Sierra/395 corridor/Bishop/owens valley:
Another hot vacation spot is the region along rte 395 from tioga pass all way to Bishop. A Mobil Gas station franchisee/owner turned 10 acres at tioga pass/395 junction(close to Lee Vining) into a green garden oasis/picnic grounds/Market/tourist stopover. And a grand view of Mono Lake as the backdrop. AT 3.85/gal regular he’s making the bucks also.
Bishop and adjacent communities are listing homes/lots/both from $300,000-1,000,000. Not favorably impressed with owning in Bishop-too many impoverished Paiute Indians residing in ragged homes/trailers.
Big Pine, just south of Bishop, is a dead burg. Or depressed.
Lone pine, a tiny vacation town, is seeing equity locust activity- Lone Pine realty’s window display shows three homes sold, including a fixer for $119,000. Another 700 sq ft, 1 bdrm clapboard fixer just off main st lists at 175,000. LP has always been among my favorite eastern Sierra Stopovers for its small, quaint,old town ambience and landmark tourist Motels and family-owned eateries.
Mohave Desert region:
California City is an oddity! much of the “city” is open scrub desert. RE HB’s/speculators here still in denial-i saw a cluster of ten homes being built right on the edge of a barren desert wasteland. This place looks like is is already in meltdown mold.
The entire Eastern Sierra Region will suffer an economic collapse/ RE Meltdown as the Economy Cools, consumer spending dries up, and Gas remains high. Have noticed some evidence of declining tourism as i passed thru-all od Lone pines 1 dozen Motels had vacancies-this in early august weekend,the height of the tourist season. One 32-site campsite near independence
was less than half occupied-this on a summer weekend.
Tourist Walking traffic in both Bishop and LP seemed less busy than in past summers.
I’ve been curious about travel industry in the southwest since we are driving from Colorado Springs to Anaheim in a couple of weeks. Despite not making a reservation before last week, we were able to get a room in the Lodge at the Grand Canyon South Rim. I was rather surprised.
I am convinced that the high Gas prices are putting a hurt on the tourism/travel/lodge industry. I did a 1000 miles on a 4-cly tacoma pickup and spent $140.00 for gas. Thats extremely cheap compared to what a family has to spend for fueling their RV or Large SUV packed with camping gear. And if you add lodge costs it could add up to a Very large sum for a week=long trip traveling throughout the Southwest /california.
As i have said i did notice vacancies available at almost every motel/lodge in Bishop/Lone Pine-IN EARLY AUGUST AT PEAK SUMMER VACATION SEASON. I also noticed light camping volume at Dorst Creek, one of the most popular camping sites in Sequoia N.P. And even Lodgepole, the preeminent campsite in Seq NP, pulled down their camp full sigh during mid-week.
That Mobile station in Lee Vining has a former NYC chef running it. It’s the most bizarre setting for really good food ever.
I’m looking into renting a vacation condo in Mammoth. It’s amusing to go onto the reservation systems and see so much unrented inventory. The buyers probably thought they were getting such a great deal — “you won’t have to pay rent anymore for that one weekend every year you ski, and the rest of the year people pay rent to you!”
Peter M ……. LP is my old hood. A lovely town, very small, lots of gossip, lots of drugs among the kids/adults. I still know many people there. It is a beautiful place to live. I was lucky enough to live in Tha Alabama Hills with a view of Mt.Whitney from my bedroom window. Ahhh those were the days.
Can’t think of a better town to reside in than LP. Always think of it as the gateway town of the Eastern Sierra Nevada Region. The addition of a MacDonalds and Carls Jr. is somewhat depressing: i always liked LP because it never allowed chain stores before. Guess the town needed the revenue.
Still eat at the Mt Whitney Restaurant whenever i pass thru LP, and enjoy those Wild West Movie Star Pictures hanging on the walls.
They have a large Radio Astronomy array near Big Pine. Isn’t that a pretty area. But what about my favorite town Rosemond? What a drive to work in LA everyday……. I worked with a guy who did that many many years ago in the SFV.
The Eastside Sierra Nevada is still my favorite Tourist camping destination. Am fasinated with the geology and the evidence of recent volcanism in the area. Have not really did a thorough drivr-thru of all of the places to visit in the Eastern Sierra valley as i have concentrated on using the eastside as a starting point for hiking.backpacking the lateral trails branching off the 395. The Best most popular lateral entry road is still the rte 168 west out of Bishop going up into the splendid South lake.Sabrina Basin lakes region.
Yeah, the whole 395 corridor is God’s country. It’s crossed my mind to buy a vacation condo or a ranch in that area, but it’s a bit too much for a weekend getaway from the Bay Area.
Did a quick drive thru of California city. Saw owners of what looked like recently brought desert homes having yard sales, with clothes hanging all over their front yard. This was along California city Blvd going straight east off rte 14. Aso saw HB’s plunking down new homes/developments in middle of barren scrub desert flats, of which Cal city has an abundance of.
I foresee that over next several years there will be an abundance of unfinished/unsold/foreclosed desert properties strewn all over the high desert. I am going to scrape about $10,000 and obtain a cheap trailer on a cheap lot for firesale prices maybe in 2008-2009 in one of those post RE bubble-collapsed Mohave desert burgs.
Haven’t been to Rosamond, as i usually pass right by it going from Mohave to Lancaster.
To Peter m regarding California city. I lived in Ridgecrest for 11 years (moved out in 1996) and am aware of the issues you discuss. I don’t recommend anyone to buy any real estate in the Mojave desert - ever, what with today’s meth culture. You are right that prices are very high. But they will fall very low. There are shacks out in the boonies with meth labs dotting the desert. And Charlie Manson’s hideout was in the area in the 1960s. The navy base at China Lake is the biggest employer up north and then you have Edwards AFB to the south.
Thank you for the info-i will rethink my wacky idea of getting a trailer and cheap lot out in the Mohave. The isolated desert boonies do get their share of wacko edge-of-the-law types. I remember back in the 80′ or 90’s Joshua tree.yucca valley was a haven for Hard-core, hell’s angels type bikers, who incidently were the chief Meth Lab operators.
Bet Graham Parsons is bummed
I have to agree with the Oakhurst/Coarsegold assessment. So many people are trying to cash out up there. Recently, I saw enough signs through there and around Bass Lake to make even the non-bubble minded people I was with take note.
Driving up the 99 to Fresno, I saw plenty of RE related billboards but several in Spanish that were almost identical to the ones that you see in SoCal for a group of accident attorneys. (The ones with the guy with the frizzy afro and a huge phone number that spans the ad.) Instead, these were for suicide mortgages. An ad on the radio proclaimed that there is no bubble and that it is a seller’s market. Ooookaaayyy…
I lived in the Oakhurst area as a child. A family friend tipped me on real estate up there in 2001, when land prices were still very low). But in 2004 the land prices shot up very high. Then I assumed it was too late. Oh well. I suspect a lot of these lots and homes were driven up by speculators, as well as boomers from Los Angeles wanting a vacation place or retirement place. That area has very high fire danger some years. In fact, in 1964, Deadwood Mountain had a serious fire that threatened homes. In 2006 there are far more homes in the area, so any forest fire would be very threatening. My father was one of the early developers in Oakhurst. First riding into town there on horseback in 1937. Then in the 1950s and 60s as a developer. He knew all the positives and negatives about rural living. Many people up in that area are senior citizens. Good health care is a long way away. Emergency health care may as well be 3,000 miles away. Also protection of your property is a problem. In a city, the police come over within 30 minutes (which is very long anyway…depends on what part of the city you live and how much money your part of town pays in property taxes). In the country, a senior citizen has to rely on bad eyesight, shakey aim, and a gun. The thing that will kill rural living and drop those values down for good is peak oil in the middle east. When oil goes to $200 per barrel, large cities will be preferred places to live. People will dump vacation homes at 25 cents on the dollar. When the central Valley real estate bubble busts, it will take the western Sierra communities with it and prices will drop sharply. The valley bust is a given. Commuting to silicon valley will get so expensive that renting in San Jose will be a cheaper option than driving 3 hours each way.
Was listening to the local Fresno-based AM talk radio while camping in Sequoia NP and There was a shooting of a Police Officer in fresno by a Hispanic Gang Banger. Apparantly Fresno Has LA-type Gang Activity and presumably a large Impoverished Immigrant population.
Drove toward Fresno going west along the 180 thru the somewhat depressed Agricultural areas east of the city and when I hit clovis ave there it was:several large billboards touting HB’s new housing tract developments. And I also saw some newly sprung Home tracts near Clovis and hwy 180.
Actually skirted the Frenso City limits to get to the 41 hwy so did not get much detailed sightings of this much hyped Central valley RE Bubble city. There was at least some factories and signs of nascent industrial/commercial structures, very similar to what i see in the SCal inland empire areas(riverside/San Bernardino Counties). Only difference is that Fresno/central valley has Agriculture as one pillar of support for their economy, though it does not in any way provide the high-paying jobs sector to sustain their RE Bubble prices.
Stories like that really bother me. That poor police officer. When will we wise up? Latino gangs are scary! Why we let criminals in is beyond me and is a crime to those who are hurt. Makes me sick.
I tried to post this a few hours ago but my sister’s boyfriend was online too and our wireless was overloaded.
Anyhow, while living in Fresno, my mother used to enjoy listening to police scanners. I will tell you this: What the media reports about crime and what the police scanners say are radically different. The crime and gangs in the Central Valley are far more problematic than what the lib media presents. I think partly because if real word gets out, lots of people would not buy property in those areas. That would mean less tax revenue. Here is an example. 2,000-person gang fights. Squads of cops called out on that. You don’t see that in Fresno print. You only hear it on police scanners. That was in the mid-80s. It’s probably far worse now. The Mexican gangs are very strong there.
In LA, my home turf, There is rarely any mention of the huge gang problem from the Politically-correct LA times. I don’t think that any LA times reporter has the Balls to actually go into the really bad, gang-infested parts of LA anyhow. It would be like reporting from Falluja or Beirut.
The notorious MS-13 Salvadorian Gang, which has spread out all over the US, originated in the early 80’s from MacArthur Park just west of downtown LA. LA, besides exporting the RE bubble all over the western states, has also exported Gangsters. Probably fresno has quite a few LA expatriates.
In LA, my home turf, There is rarely any mention of the huge gang problem from the Politically-correct LA times. I don’t think that any LA times reporter has the Balls to actually go into the really bad, gang-infested parts of LA anyhow. It would be like reporting from Falluja or Beirut.
The notorious MS-13 Salvadorian Gang, which has spread out all over the US, originated in the early 80’s from MacArthur Park just west of downtown LA. LA, besides exporting the RE bubble all over the western states, has also exported Gangsters. Probably fresno has quite a few LA expatriates.
I haven’t lived in SoCal for a number of years, but hasn’t the gang problem decreased since the 1980s? As I recall late 80s and early 90s were the height of gang warfare.
If I’m not mistaken, the bloods and crips signed a truce sometime in mid/late 90s and are not fighting each other outright currently.
Instead, as I noticed while watching the news on my last visit, gangbangers are now spending their lots of their energy doing “home invasion” burglaries…. uh…
Whoops! Looks like we still have a problem, Scotty!!!
The sign spinners were missing for the first time in months here in Costa Mesa fpr the Richmond Homes development. And today I got flyer in the mail from Richmond offerring a $5000 incentive. Maybe they are shifting funding since spinners were not working.
Other observations are that sellers continue to list for top dollar and reductions are not that significant. We have a long way to go here.
I am seeing some condo prices come down, but overall I am not seeing
any sign of a break as yet.
Walked into an open house in Sunnyvale, CA to see how things are going (aka deteriorating)…
Prices are still outrageously high. $720K for a 3br 2ba 1600 sq ft on 7000 sq ft lot. This is a 1960s style home in a fairly seedy neighborhood–the mariachi music was booming next door.
The agent seemed pretty desperate. She met me at the door; I was the only person there. The home had been given the HG treatment on the inside. But, the agent was quick to say there was more work to be done (I think the kitchen still needed granite countertops; they were in the bathrooms though).
I did the walk through in under 5 minutes and got out. To be even remotely reasonable, that house needs to drop 20% ($140k). Wonder how long that will take?
$480k + booming mariachi music = Nah, don’t think so.
What a change a year makes. I went to a open house in Moorpark CA were the owner had turned the outdoor jaquzzi into a turtle pond. His master bath tub was stained almost black from… turtles? anyway it sold. I think about 575K it was a duplex. maybe 1500 sq ft?
Of course this was last year. 2005
Observation in D.C. community called Aquia Harbor, which saddles route 95, 20 miles south of Potomac Mills mall and 40 miles south of D.C:
I saw a friend there and there had to be a for-sale sign for every fourth house. It looked like the whole community was for sale.
a fun commute and all electric too boot
Some news from New York’s “Upper West Side”.
So they were turning this apartment complex a block from my house into condos. Tossed all the businesses and all the tenants out.
Fancy signs, but all boarded up while they were doing renovations.
Even though I walk past it daily, I don’t really pay any attention.
However, yesterday they changed the signs. Turns out they’re going to be “rentals”.
Way to go!!! Can anyone say “lost rental income”? (And this is not a marginal neighborhood but prime New York property.)
Where is that? West End Ave in the high 60s? Just a guess.
Funny exchange over on Mish’s site. “Defaming home builders is Un-American!” “If home prices drop, the terrorists win!” “We must continue to flip houses, even at losses, to win the war against terror!”
Ha! Buy an overinflated home if you want to defeat terrorism! Oh good grief!
I think he forgot the tag for all of you out there…
The tag that labeled it as sarcasm…
Here in Fremont California, an easy commute just outside the Silicon Valley (0:20 to 1:15 commutes, depending on where the job is in the valley), I saw something that I can’t recall ever seeing before — Sign Spinners for a condo/townhouse development. Mwahahahaha. If this is happening so close to the jobs in the valley, I guess the multihour commute locations like Tracy and Modesto are going to be flattened.
Before 2001, I’d never seen a spinner for an apartment here. Now we’ve graduated to spinners for sales.
Google has produced less than a thousand millionaires. Almost no other company has produced more than a dozen in the last half dozen years. Where do people expect buyers of million dollar shacks to materialize from?
Those sign-spinners in Fremont (near Paseo Padre) have been on the job at least six months. I remember seeing them just after the new year when it was not clearcut what the market would do in the spring. Remember the ol’ “spring bounce” hype in February and March?
The interesting part is that this particular complex I am thinking of has had *several* (2+) sign-spinners on *multiple* street corners—and yet they still have units to sell!
hmm. I wonder if dropping the price 20%+ might be more effective… nah! Just double the sign-twirler workforce. That should do it!!
I live in Miami close to Miami Beach and have not yet seen prices go down much (asking prices yes, but we are still above the Oct 2005 peak rates). The property taxes here are around 2.57% of your purchasing price and even though they can not go up more than 3% per year (safe our homes act) it is still very high. A 350K condo will cost you over $8,000 per year! I am very curious to know how property taxes in other cities stack up?? I am renting in a building ( and yes I wish I would have bought in 2003 for under 200K) for close to $1,200 p/m and the developer just put a number of units for rent on the market for $1,320 - $1,500 p/m while the “investors” are trying to rent theirs out for hundreds more ( same view/sf). In Miami we have a great number of expensive condos ($600.000 +) on the market but there is an enormous shortage in work force affordale housing. My point is that with the large property taxes and the insurance increase + maintainance it is very risky to buy anything over $200.000 . The median income here is $32K pp py. There are many illegal workers here who drive down the salaries even more.
Yvonne — in central Florida, you can estimate about 1.85% of the selling price, for property taxes. The rates are right at 2%; the homestead exemption makes the small difference. And I think that is outrageous — your 2.57% is really awful.
OMG — in Montana a condo development is being built (illegally) on a floodplain. It rained. Go take a look at the photo accompanying the article!
Condo units in deep water
Developer Doug Gamble voluntarily stopped construction on the buildings once the floodplain issue was discovered - something he said was inadvertent. Complaints from neighboring residents prompted the Flathead County Planning and Zoning Office to investigate a large plume of muddy water extending out into the lake in front of the development’s sea wall. Planning and zoning office director Jeff Harris said the developer placed clay and sand fill within the Lakeshore Protection Zone, which extends from the lakeshore 20 feet landward. That action was illegal, and the developer removed the fill material after the county issued an emergency order.
http://bigforkeagle.com/articles/2006/08/03/news/news01.txt
“It was totally inadvertant that I was greedy and decided to illegally fill the lake to increase the size of my development in a place where I knew no one would review my actions.
“And I would have got away with it too if it wasn’t for that meddling mother nature!”
Why do they need condos in Montana? It’s not like that state is running out of land.
I overheard people talking at the local swim club…something to the effect of “for sale signs popping up everywhere”. The comment was said in wonderment. The person she was talking to seemed to agree. This in a place that people had considered would be “The Next Santa Barbara”. The psychology is *starting* to change here on the central coast.
Ahhh, memory lane… I swam for the SLO Seahawks.
Just wanted to share a couple of instances of realtor hype. It’s standard stuff for house ads, but it just never struck me the way it does now. These are all 3/2 SFRs in Huntington Beach, most built in the early ’60s.
“Hurry—won’t last!” (At $645k!)
“Wow, $40,000 price reduction!!” (Now $649k. What’s that—6%?)
“Priced below comps for quick sale.” (Really? At $649.9k?)
And my favorite:
“Big price reduction.” (Of $20,000. Yippee.)
Here’s a story about an Orlando couple who paid 175K to have a house built, and the developer took off with the money. Very sad.
http://tinyurl.com/qtdur
From the Orlando Sentinel: developer takes off with 175K of a couple’s money, house never built.
http://tinyurl.com/qtdur
Check out: http://www.proverbs22-3.net
Click on: signposts
Click on: economics
Click on: protect yourself
“Do not finance your home with an interest rate only, or even worse, a variable rate mortgage. This is especially true if you have less than 20% equity in your home! These will be weapons of financial destruction for those who have taken them out when housing does indeed turn down and rates rise. You could quickly find yourself owing more on your mortgage than your home is worth.
Do not speculate in real estate. Buying the NASDAQ stocks in January 2000 was a bad idea. I would say the same about real estate today. Prices have started falling! If you are speculating in real estate, get out now. This is not a “temporary” slow down. It is the beginning of something much longer term. It is possible real estate will continue to rise after a pause of a year or two. But if that is the case, it will be due to massive inflation and the real return on your real estate investment will be minimal.
For the next few years, don’t be looking for great gains in your portfolio. Simply try to protect your assets and maintain your buying power. Don’t be greedy!”
“The local housing market is slowing in response to higher mortgage rates, said economist Fred Crowley. ‘I don’t know that the housing bubble is bursting, but there certainly is a leak,’ Crowley said.”
Higher mortgage rates? Talk about denial. 30 yr. fixed rates advertised today is 5.88 APR 6.05%. What will happen if rates really do head higher?
5 year ARMS are no cheaper thanks to the yield curve. I’m sure that is what he’s referring to.
Still, historically rates are very attractive here.
Do you think this guy has ever considered the prices are just too high? What a tool.
First of the substantial price cuts for in - city (short walk to downtown!) condos:
CONDO CLOSE-OUT!
2bd/2ba corner view units NOW with 2 Parking Spaces!
Orig. $425- NOW $359,900
Just a few weeks back, the Seattle Times ran a huge article (full page) encouraging 20-somethings to go in over their heads to buy condos in Seattle.
Then last week yet another full page condo promotion article claiming that condos- especially studios- appreciated MORE than SFH in the long run.
Looks like it didn’t get the hoped-for results.
“2bd/2ba corner view units NOW with 2 Parking Spaces!”
Those are as funny as the south Bay real estate ads offering $950,000 starters with a peek of ocean view. Hold out your arm straight in front of you and raise your thumb. The area on the horizon blocked out by your thumb would cover that “peek” of ocean view. Those prices are still way ridiculous, and they will be ridiculous still after a 20% cut. Try 60%.
http://realtor.com/FindHome/HomeListing.asp?snum=30&locallnk=yes&frm=bymap&mnbed=0&mnbath=0&mnprice=850000&mxprice=900000&js=off&pgnum=3&fid=so&stype=&mnsqft=&mls=xmls&areaid=115&poe=realtor&ct=Colorado+Springs&st=CO&sbint=&vtsort=&sorttype=&typ=1&x=38&y=9&sid=070F4516357CC&snumxlid=1053592984&lnksrc=00001
This old Victorian is on Wood Avenue, the most prestigious street on Colorado Spring’s much-sought-after Old North Side. It has been on the market since late last year. The original asking price was $969,000. About three months ago it was reduced to $939,000. Now it’s just been reduced again, to $899,000.
These grand old houses come on the market WAY overpriced, and sit for months. This particular one has had several open houses (I went to one — it’s a nice place, in a quiet, tree-lined, beautiful old neighborhood of stately homes) but the price, for this area, is still on the high side. They only seem to sell after significant ($100K or more) reductions.
How is .22 acres nearly half an acre?
For only $1 you can buy a Morrison Home here in Jax, FL
How about this gem?
1121 INDIANA AVE
Venice, CA, 90291
I actually rent a house a few hundred feet away. For almost a million dollars, you can live within two blocks of projects (or subsidized housing if that’s what you prefer to call it) and as an added bonus you can walk down a block to lincoln and rose and really aquire a taste for this up and coming area.
I spend hours reading the good stuff on this blog. This is my first post, but as I drove through the San Fernando Valley today, I was shocked (well, ok, and delighted) at the sight of multiple open house signs on *every single corner*. Woodland Hills, Encino, Studio City, North Hollywood - For Sale signs everywhere. We passed one standard condo complex on Coldwater Canyon that sported no less than seven For Sale signs from different realty co’s. I don’t know that prices have started to drop here in “The Valley,” but the whiff of panic is in the air.
“I don’t know that prices have started to drop here in “The Valley,” but the whiff of panic is in the air. ”
Prices have started to drop. I live in Encino. I usually walk South of Ventura Blvd and several houses have reduced their prices. And yes, sale signs all overthe place, pointing in every possible direction except heavenward!
My wife recently asked a real estate agent friend in Chicago how the local housing market is doing. He said that it had not just slowed down but stopped altogether. My wife then asked him what he was going to do to support him and his new wife, and his answer was classic gallows humor: “Well, I could work at Target or become a porn star.”