Hello Glutville!
A pair of reports on the fading condo boom. “David Black, a broker in Cherry Creek, recently searched the listings for a client seeking a condominium. The buyer wanted a one-bedroom unit, costing less than $150,000, in the Southeast Denver area. Black typed these criteria into his computer. ‘Six hundred came up right away,’ Black said. ‘To me, that was surprising.’”
“Welcome to Colorful Condo-rado. ‘Colorado’s inventory of unsold condos is at an all-time high,’ said Gary Bauer, an independent real-estate analyst.”
“Even amid the slump, new condos are cropping up like weeds, in fields, in urban parking lots, in former airports and military bases, and along new tollways and light-rail lines. With all these shiny, new residences, used condos are about as appealing as used condoms.”
“‘I just can’t get any showings,’ said Carol Richardson, referring to a property in south Denver. ‘Someone tried to show it last week, and they canceled before they saw it.’ For months now, nobody even wants to look at it, said Richardson, who has sold real estate since 1983.”
“Prominent Denver Realtor Ed Jalowski said he hasn’t seen a condo market like this since the savings-and-loan crisis devastated Colorado in the late 1980s. He said many condo sellers he sees owe more on their units than they are worth due to slipping values and aggressive financing.”
The St Paul Pioneer Press. “Facing oversupply, Twin Cities condo developers are halting projects, converting to rentals or delaying construction. When the developers of the new CityWalk project in Woodbury decided in February to rent the condominiums instead of sell them, manager Sally Henkel thought the move was premature.”
“But now that condo sales appear to be slowing around the Twin Cities, she is relieved that the 208 units are rentals. ‘I’m so glad they did it because (the condo market has) gotten worse,’ said Henkel.”
“Hello, Glutville. ‘Temporarily, supply has exceeded demand,’ said Mary Bujold, (who) compiles real estate data and feasibility studies. The problem is too many condos, she said. The number of condo units under development in the 13-county metro area is estimated at 10,000. That’s almost double the annual average of 5,000 to 6,000 units for the last five years, said economist Gleb Nechayev.”
“Condo developers across the metro area are halting proposed projects, converting some units into rentals or delaying construction until most of the units have sold in advance. Conversions of apartment buildings into condos also are slowing dramatically. In May, $334 million was spent on such conversions nationwide, down from an all-time high of $4 billion last September, according to Torto Wheaton Research.”
“‘My forecast is that we’ll see a lot of developers decide not to do condominiums anymore and that you’ll see the number of condo projects dwindle,’ said Jim Seabold, an agent who represents several St. Paul projects. Seabold, an agent for 19 years, doesn’t expect a condo crash like the one the Twin Cities experienced in the 1980s.”
“Real estate observers say the anticipated growth in buyers for the flood of condos, from young people buying their first homes to empty-nesters trying to downsize, just isn’t enough. And investors, who never played a big part in the boom here, have all but disappeared because the easy money is gone.”
“Now developers and sellers are looking to baby boomers who are thinking about moving into condos a few years down the line. What they’re finding is boomers who are having trouble selling their single-family homes or are holding off for lower prices, causing headaches for builders.”
“‘Some of the buyers want to adopt a wait-and-see attitude, but you can’t wait and see when you have to get the building up,’ said Bujold.”
‘Seabold, an agent for 19 years, doesn’t expect a condo crash like the one the Twin Cities experienced in the 1980s.’
‘Jalowski said he hasn’t seen a condo market like this since the savings-and-loan crisis devastated Colorado in the late 1980s. He said many condo sellers he sees owe more on their units than they are worth due to slipping values and aggressive financing.’
Denying that cycles still exist while they look right at one.
Totally agree. There are a glut of condos everywhere!!!! The agents are trying with all their might to soften the blow, but eventually it will crash - much harder than they imagine.
The RE’s know the crash has started and, unless they’re complete morons, know it’s coming down HARDER than in the 80’s. They’re just looking for a few more idiots with ‘A bucket full of cash and a box full of stupid”. I just love that quote
it’s cycles, stupid! up. and down.
Just heard Crabtree talk about Bakersfield. Price down 2%, 3900+ listings. Great, SD and Bak both down. Go for it buyers, Bak only 97F today at the airport. Wait til Indian summer. Remember Dove season starts on September 1, get your liscense.
Where was he speaking at? I am waiting for his July numbers???
Was this 2% YOY? Pismobear? are you there? You know I live and die by the #’s for Bakersfield and Crabtree is the offical counter for our town! Hello!!?!? LOL
Smelling a little blood in the water, are we?
(To recycle a comment applied to me about 6 months ago when I was discussing hypotheticals; about midwest condos I suddenly recall :D).
Where are you going?
damn, all those cancelled projects = out of work carpenters, plumbers, electricians, laborers; construction materials and appliances that won’t be purchased; not to mention the realtors and back office people whose services will not be required… and how many of those people have arms or other ‘exotic’ financing for their homes. once this picks up — and the i’ve been amazed at how quickly this seems to be developing — the ripple from this is gonna be a tidal wave across the country.
i happen to live in one of the hot, trendy neighborhoods in brooklyn that has seen an influx of young hipster families in the past couple of years (the kind with the $1000 baby strollers), moving in as the older generation of italian families sell off and move out. a house on my block previously rental apts was remodeled and converted to 3 condos during the winter. it’s currently advertised with corcoran ranging from $825k, $1.25m and $1.65m.; a lovely neighborhood; very easy commute into manhattan (the subway is 1/2 block away); a strip of trendy restaurants/boutiques a couple of blocks away; and a park across the street. open houses have been advertised every weekend for the past several weeks. i’ve only seen 3 couples come take a look. there’s absolutely no traffic to the place.
Thank you Linda. You are SO RIGHT about canceled projects = NO DA_M WORK!!!
Do any of these economoronist / forcasters even grasp the smallest thread between the hollow real estate growth and the employment it created? In So CA you see a contractor giant wheeled pickup truck every 30 seconds (with a boat hitch of course).
out of work carpenters, plumbers, electricians, laborers; construction materials and appliances that won’t be purchased; not to mention the realtors and back office people whose services will not be required… and how many of those people have arms or other ‘exotic’ financing for their homes. once this picks up — and the i’ve been amazed at how quickly this seems to be developing — the ripple from this is gonna be a tidal wave across the country.
I would like to know what the pay is for the trades from state to state, I know in florida 12.00-14.00 an hour for carpenters that would set a base for the home price,
In California the workers are paid in pesos.
Union Commercial construction in Seattle Pays $25-40 per hour depending on the trade, plus health insurance and pension.
i was listening to call-in radio show that offers religious/spiritual counseling. guy said he was depressed ’cause his business was slow. what business is he in? wholesale tiles.
i believe the nyc market has already pulled back 20% from the peak, unheralded by deceptive median price (the pasties and g-string of the bubble). and that’s just the froth off the top of the brew. there’ll be another 20% — minimum — before it’s all over, in 2010 or so…. and then it’s a long, long way back to the trendline: how about 2020???
Everybody please come to Manhattan and I will show you what “Glutville” really looks like. My wife and I were walking around the Upper West Side today. My mouth just dropped. We live downtown where I thought the pace of building was ridiculous. There are luxury condos going up everywhere. If you see the word “luxury” then you better not hope to get in under $800,000. I thought it was bad here. Slow down! The Upper West Side almost made me cry. The building is frantic. It is awful. They are putting up towers of Babyl condos all over the place.
We walked past Clinton West and the number of condo projects was staggering. Have you heard of “Clinton West”? Oh yeah, probably not. It used to be known as “Hell’s Kitchen”. Welcome to Clinton West where you can give Barbara Corcoran and the Corcoran Group $1 milllion to live in a loft two blocks from the Port Authority Bus Station. Ever walked in that neighborhood? Would you ever let your wife walk in that neighborhood after dark? I wouldn’t.
It is outrageous here. The crash is going to make 9/11 look small. I don’t mean to downplay 9/11. The manmade disaster will hurt our economy and psyche even more than 9/11. God help us all and deliver us from these greedy bastards.
I was in Manhattan a week ago and learned that CBGB, the club that the Ramones and many other legendary bands played, is closing… one of the guys there said that someone is building condos in its place.
CBGB is being forced out by a homeless shelter. That is no joke. It is not condos, surprisingly. They are looking for another location but I don’t think they have found it. They belong in the East Village. The East Village is not being taken over by condos. It is being taken over by NYU. The Village is fighting to keep NYU from overtaking everything but I think they will lose.
Ahhh, CBGB’s.
I remember seeing Blondie there in, wow, it must have been 1978 or so. Lots of history, but if it’s still like it was was in the ’70s, it’s just a long, narrow room with brick walls. I remember thinking at the time they needed more and better space. I hope they find it.
SM - that “intimate” atmosphere is what made CBGB so special - it would never be the same as a bigger, cleaner venue - I played there a couple times in the 80’s with a band I was in - there is nothing quite like a mosh-pit in that tiny little front stage area, what with no air to breathe and the band sweating on everyone in the front row - ahhhh…. the good old days
“According to MTV News, as of July 7th, owner Hilly Kristal plans to move the venue, including the stage and bar, to downtown Las Vegas sometime in the Spring of 2008.”
http://en.wikipedia.org/wiki/CBGB#The_future
That neighborhood is vastly improved. I lived there 30 years ago — I would run to my apt. from the subway. Now it’s overrun by tourists. Whether there is enough demand for luxury condos is another question.
There are million dollar condo towers all over the lower Bowery near Houston Street now (South of CBGB’s). THE BOWERY! It is a friggin joke to anyone old enough to remember that this was (and still is partially, due to the giant city shelter on E. 3rd street) “flophouse row” and among the greatest concentration of homeless bag people on the planet.
the word’s out: don’t try to catch a falling knife!
A quote by anonymous at http://www.curbed.com:
“Has anyone EVER lost money in ANY neighborhood within the borders of New York City? I feel pretty secure in my purchase, even if the building won’t win any design awards… “
Linda,
I am with ya! Sweated to close the sale of my Brooklyn co-op for a nice profit a month ago. Am breathing the sweet air of no debt right now. Am walking through the boros seeing single family knockdowns of nice 80 year old Victorian/Edwardian homes everywhere I look, for replacement with Home Depot block and brick square box condos. All built out to the lot lines. All with the tiny rooms (800 Sq. Ft. 2 bedrooms & 2 baths Hahahahahahahahaha!!!!!! Those are NOT rooms!) This is on top of the dozens of huge condo towers going up throughout Manhattan… There are so many shovels in the ground at the same time right now, that the fallout will take years to unravel.
I already know that some fairly major projects here in Brooklyn have no pre-sales and no one is going to the open houses. Don’t know what the developers were thinking when they decided that $600 sq. ft. was the going price for shoebox way out in Bensonhurst or Sunset Park.
omg, there are 3 or 4 really big condo developments under construction right now on atlantic ave between court and hoyt streets — one is a ‘luxury’ development, across the street from the friggin brooklyn house of detention. for those not familiar, a lovely, soviet-style multi-story, barbed wired window abode. that area is just a couple of blocks from downtown brooklyn and atlantic ave is a major thoroughfare — the noise from the traffic alone would drive me nuts. otoh, it is just a couple of blocks from sahadi’s…
Looooove Sahadis!
Wait ’til Ratner builds thousands of condos over the Atlantic rail yards- I wonder if he doesn’t scale that whole thing back on his own, considering the market?
I will back up his observation. I saw it in Queens three weeks ago. It looks terrible. If you walk through these neighborhoods bring a box of Kleenex. You may weep!
I lived in NYC and later the suburbs as a kid. I am sorry to hear about all the great old buildings going under the wrecking ball. It is happening all over and where there is open land, the buildings that are going up are equally as ugly down here in Florida as what you are seeing in New York. Linda, I think you nailed it when you said “soviet style”. That’s what I think of every time I see these places going up. Development after development of drab houses, all the same, right on top of each other. Doesn’t matter what price range, maybe the more expensive ones have a false facade or something to make the buyers think they are “lugjury”. But to me, they are just building the gulags of the future.
Palmetto,
Nothing is uglier than what they are doing here. At least in Fla. they make prettier stucco boxes that are designed as stucco boxes - what they are doing here looks like downtown Beirut, with stucco just slathered willy-nilly over whatever shape house the speculator can get their hands on. Looks very odd to see a stucco’d Victorian with all the dormers and bump-outs covered in tan sand!
tan sand….funny.
Buddhaman - I thought you were going to buy in Florida, north of Tampa. You were worried about your daughter picking up the local dialect, but other than that, it sounded like a done deal.
I am, but am still at my job in NYC while I am looking online. The wife is in Fla. dooing the footwork on what we find.
http://www.propertyshark.com now has coop selling prices for for NYC
I looked at the forest hills/rego park and they aren’t bad. of course things didn’t balloon here like williamsburgh or park slope
“With all these shiny, new residences, used condos are about as appealing as used condoms.”
RFLMAO! I nominate this statement for the annual 2006 Bubble Awards. (Category - Best Observation Reflecting Reality)
That was a great line!
My favorite!!
“Now developers and sellers are looking to baby boomers who are thinking about moving into condos a few years down the line. What they’re finding is boomers who are having trouble selling their single-family homes or are holding off for lower prices, causing headaches for builders.”
They can’t sell their homes because they are charging too much for those who came after to afford them. They can’t sell for less and buy a condo because the condos are overpriced. The condos are overpriced because the land they developer built on is overpriced.
If only this bubble had never occurred.
I have seen a lot of condos for sale in North Boulder, Colorado and most of them look pretty trashed out on the outside. They were built in the 1980’s on strips of land that essentially became condo gettos. There are junk cars parked in the parking lot and a lot are “For Sale by Owner”. I believe that this is the case either because the realtors are refusing to list them at the price the owner needs or because realtors could not sell them.
I don’t know who would buy them at their outrageous prices. I would not even want to rent them. The Boulder rental market is very week so good luck in renting them out to pay the mortgage and other expenses.
if you’re interested, curbed is a good site to track the nyc housing market. excellent snark included…. be sure to check out the property swap as suggested by a cape town resident wanting to move to nyc:
http://www.curbed.com/archives/2006/08/10/extreme_house_swap_cape_town_edition.php
http://www.curbed.com/index.php?page=2
Cool apartment. The first one.
TxChick — cool, yes, but that is one dangerous city to be out and about in, especially after dark — think: business district New York after dark. It is, IMO, not a place where you would want to live unless you have daily business downtown. Across the “mountain” to the west, on the coast, are very nice houses and condos and farther down either coast, to the north and particularly to the west, are spectacular homes at incredible prices with unbelievable views. The catch: here today, maybe gone tomorrow. South Africa is a fantastically wonderful place to visit, but the old-timers there would not be moving money to the West as fast as possible if it were a wonderful place to stay forever.
If ever you travel there, I have the guaranteed-absolute-best list of top restaurants in the region and have dined at them all. The very best is the only Relais Gourmand restaurant in Africa, Bosman’s in the Grande Roche Hotel in Paarl, about 45 minutes out of central Cape Town. The only choices are between something like a twelve-course and a fifteen-course meal and the wine list runs to 300 pages as I recall (Melody — this is for YOU). Kicker is that you cannot access most of those wines without selecting 24 hours in advance, since they are stored in a cave away from the property. Luxurious decadence at its utterly affordable best. Only in Bangkok have I gotten an overall value compared to that at the Grande Roche and the gotta-do-it days spent in the surrounding wine district. If you haven’t done it and are not on chemo, go.
Ok, so post the list already! I am not saying I will get there this week/month/year but SA is one of my destinations of choice for a nice long vacation. I just checked the exchange rate, at 6.77350 to 1 it doesn’t seem like nearly the good deal it was at 11 to one two years ago.
Barnaby — it is still a deal — those folks know where their exchange-based currency is buttered.
My list, and I challenge it to be bettered (all are in the Wine District, except as noted):
1. Bosman’s (at the Grande Roche, Paarl)
2. “Guinea Fowl” restaurant at Saxenburg Estate; not for the food, but for the Saxenburg Private Reserve Shiraz that you cannot get unless you were born there or eat in the reastaurant. The Saxenburg Private Reserve Cabernet Sauvignon is a very decent second-place.
3. Le Quartier Francais, Franschoek. Small, very charming, excellent food, wonderful service. Tip the pianist a relative pittance and she will play for you past midnight.
4. L’Auberge du Paysan — wonderful French cooking, great ambiance, fantastic wines, oo-la-la. Limited seating. Use a GPS or, better, hire a driver.
5. 96 Winery Road — my favorite after the Grande Roche — a bit raucous, wonderful wine — once I lost my reserved table to the honcho from Opus One, who was coming to negotiate something with the Forresters, who own the place (I believe it was the vineyard that he was interested in). My proudest loss, so to speak.
6. Constantia Uitsig (in the hills above Cape Town). Wonderful food, wonderful view, wonderful drive to and from.
7. Clos Cabriere — in Franschoek, as is Le Quartier Francais — a restaurant in a cave, at the far end of town — each course is a small, delicious appetizer, so one orders eight or ten or twelve different things over the evening. The owner, Achim von Arnim, will, if enough patrons are present, appear and perform the “sauvage” — he slices the top off a champagne bottle with his sabre. Good entertainment. It is the only vineyard-restaurant in South Africa that offers every one of its wines by the glass.
Need more?
Constantia Uitsig : Agreed. Was there in April. Food and wine (their own) was excellent. I have a case of their juice waiting for me at home.
Also - agree about the safety of Cape Town, or the whole of SA for that matter. The place seems to be a ticking time bomb. Once Mandela dies, the place could go the way of Zimbabwe.
South Africa has been hyping real estate based on its hosting of the World Cup 2010. I have an inside source at FIFA that tells me SA is so far behind in the preparation and stadium building that FIFA is making back up plans and may pull the plug on SA.
I was there in the late 1990s and if I recall correctly, South Africa at that time had the WORST auto accident rate in the world. Here’s some info:
http://www.simbaproject.org/en/simba_regions/south_africa/
Aha, looks like things have improved…it’s only the 5th worst in the world in terms of traffic safety.
——————————————————-
http://www.gig.org/Features/gig_GD_Letter_9.php
Letter from Grahamstown:
‘Road Rage’ in South Africa : The Problem, Psychological Factors and Possible Solutions
Saturday August 28, 2004
Grahamstown, South Africa — The Republic of South Africa may - at the moment - be considered to be one of the world’s most preferred destinations when it comes to international tourism. In fact, it was recently reported to be among the top five nations - but with more than 500,000 traffic accidents annually at a cost of nearly 10,000 lives, and thousands of injuries, its road safety record leaves much to be desired. Moreover, it is reported to have the fifth-worst traffic accident rate in the world. This sobering fact is hardly conducive to the promotion of South Africa as a safe tourist destination. In a country where 85 percent of the accidents are estimated to be caused by aggressive driving and reckless disregard for the safety of other road users, we examine the extent to which the sensationalised phenomenon of so-called “road rage” contributes to the tragic record of traffic fatalities in South Africa .
I’ve heard they may take the 2010 World Cup away from you guys, any truth to that?
Also from the real estate observers (whom ever they may be):
“And investors, who never played a big part in the boom here, have all but disappeared because the easy money is gone.”
I don’t know how to tell you R/E observers this so I’ll come right out and say it. That little box that says “owner occupied” was incorrectly marked.
I’m shocked too.
Heaven Forbid ! When I have mentioned this in the past, I was advised what a serious violation of law that would be …..
My son is in the process of moving from an old mid-town Sacramento building/apartment that he has been renting from ….. apparently a three-owner ‘flipper’ group, who now want to sell. He was told that someone was coming by to appraise the property, and to put all his “stuff” away, and not have any personal mail laying out, which would clue someone in that ….. you get the idea ……
And the reason for him not telling them to stuff it is…???
“Welcome to Colorful Condo-rado. ‘Colorado’s inventory of unsold condos is at an all-time high,’ said Gary Bauer, an independent real-estate analyst.”
From Con Diego to Condo-rado, a big, hearty Hello!
Condo-rados for everyone.
Ranks up there with Condotino (Cupertino). Colorado is going to get a lot worse before it gets better. I predict at least one California induced dead-cat bounce before it’s over. But if things are already at this point and interest rates don’t come tumbling back down… to quote Ben Jones, YIKES!
Does anyone have any observations or information regarding the LODO Denver condo market? I have a friend who pre-purchased a condo in this area - “Glass House” building. The building is due for completion at the end of the year. The units reportedly sold out quickly.
I was concerned about her so I did an Internet search a few months ago… but found no references to a bubble in the downtown Denver condo market (obviously plenty of bubble issues in the suburbs, forclosures, etc.).
I live in Southern California so I am well aware of what it looks like here… actually I live in LA and travel to SD on business. I have found that it is cheaper to rent a brand new “hip” furnished condo in downtown SD vs. renting a hotel room. When you walk through the condo buildings it feels like you are the only one there, so quiet, no people in the halls and lobby… bizarro land! The last time I stayed in SD, I counted 15 condo buildings being constructed - that I could see by looking out of a SINGLE window!
I don’t have any specific information for you regarding the downtown Denver loft market. I do know that there are a lot of projects being built and a lot of projects in the planning stages. My past understanding was that the lofts were being sold but most likely to “investors” who were intending to flip them. This would be similar to what had occurred over the past couple of years elsewhere (e.g. Miami). Most of the units being built are high-end and regular Denverites cannot really afford them. It is going to go down hard at some point although there may still be air right now. I have talked to some people about these places and they just raise their hands when it comes to who is actually purchasing them or what kind of people are planning to live there.
“Most of the units being built are high-end and regular Denverites cannot really afford them. It is going to go down hard at some point although there may still be air right now. I have talked to some people about these places and they just raise their hands when it comes to who is actually purchasing them or what kind of people are planning to live there. ”
This is going on in every city. I am constantly asking friends and family if they know who may be buying or who can afford these luxury condo’s and nobody seems to know. I have a sneaking suspicion these braindead builders don’t either! What ever happened to market research/analysis??
From what I hear Lodo sells to out of staters (a lot of Californians and NYers) and the very well off people here tired of the suburbs, with no, or grown, kids, who want some cultural life nearby. But I have to wonder just how many of those people there are? (more than I think apparently). The new area of development is near the Colorado Convention Center along 14th St. where numerous 20-30 story condo buildings have been announced.
But, like the Denver Post ariticle states, the market for resale condos is dead, with thousands of units (about 8500 listed) just sitting there. People will pay $400+/sq ft for new units in downtown/LoDo, but the resale market can’t get half that. And in the suburbs its a true disaster…it’s easy to find condos at $100/sq ft or less.
..way too much supply, and more’s being built. I was here in the 80s for the complete melt down then, I sure hope we’re not going to see a repeat.
I sold my house 2 years ago and have been renting, waiting for this to unfold. Lately people haven’t been giving me the weird looks when I explain why I decided to rent like they used to.
The thing is, these condos, compared to the cost of renting, are way WAY overpriced. About 2x to 3x more to buy than to rent something comparable on a monthly payment basis. That has to equalize in some way.
just got back from a weekend in summit county. very few for sale signs, all properties under $2M going like hot cakes. have to wonder when the californicators with money will dry up, doesn’t look like anytime soon, imho
Hi Boulderbo.
The trouble with Summit County is, that even if a property is for sale, it is unlikely that you will actually SEE a sign in front. Usually, you have to look at the windows of the condos, but even then it is not sure-fire. The pain in the a$$ that my wife and I went through there was that you HAD to hook up with a RE agent to find out what the hell was going on. But, I have noticed that there are fewer properties on line, and the ones that are left on there haven’t moved an inch since the beginning of the year. I have seen plenty of things that say “reduced” and even some that say “reduced again”. I have a feeling that those that own property there are cinching up their butts, and trying to hold out until things get better (which will NOT be soon). Sadly, people in Summit, Eagle, and Park counties make CRAP for $, and even a 500 sf dump in Dillon Valley is over $200 sf, even at a reduced price. So, the locals will get crushed, as usual. I think that since this is a resort area, that most likely it will take longer for that “oh crap” feeling to set in.
Well, I took all of the following photos from one street corner in LoDo, if that helps.
http://www.flickr.com/photos/thedragonweaver/159018278/in/set-72157594153673433/
http://www.flickr.com/photos/thedragonweaver/159018277/in/set-72157594153673433/
http://www.flickr.com/photos/thedragonweaver/159018276/in/set-72157594153673433/
http://www.flickr.com/photos/thedragonweaver/159018275/in/set-72157594153673433/
More anecdotal eveidence that pple have gotten well in over their heads. and their optimism is/was the rope they will soon swing from.
My wife just told me about ANOTHER couple in our circle of friends who are carrying two homes and their associated costs. There have been no offers on the house they hoped to sell. It has been months since a showing. This is in Boulder.
This is four couples in our modest circle of friends who are struggling under similar circumstances . This bust must be really, really huge. How many more will confess to my sympathetic wife?
In our small circle, we know of 3 families in this boat (was 4, but one of the purchase deals fell through, and still trying to sell house #1). None of them are wealthy enough to afford this, and none are interested in holding onto the first for “investment income”. These are also the people who cannot afford the market price of their current house to fall, even 5%.
i just came back from visiting family in Loveland. Colorado RE is like buying a car. No one wants last year’s model. Unlike the northeast, there is so much land in Northern Colorado that if you buy a home there you better be prepared to live there for at least 15 years by my guess. Only Boulder has the no building policy. Wife and I went to see the Toll Brothers homes in Broomfield last weekend. Why overpay for Boulder when you can buy something down the road?
At current trends I think it will be like the northeast in 20 years or so, but until then don’t plan on selling the home you buy unless you have water rights or something similar.
ben, if you write a book, remember to name a lot of these smug real estate shills.
I hate to say it but the tone of my posts tonight is sadness. This out of control building has ruined so many areas. The article from the Pioneer Press is very sad. It mentions Apple Valley and Woodbury. These were too wonderful, not so urban towns about 25 years ago. People trying to escape the Twin Cities began moving out there. They have both become terrible shrines to sprawl and overbuilding. They are truly Suburban Hell.
I am glad they cancelled the project in Hastings. Hastings was known as a sleepy town with lots of farms and a quaint downtown. They have been developing the sh#t out of it in the past 20 years. Its soul is being trampled. The first nail in its coffin was the casino that went in nearby. Ever since then they have been the victim of the Real Estate gold rush.
I haven’t seen much of the Twin Cities in 6 or 7 years. I’m sure I would be very sad to see what out of control development has done. Last year I couldn’t believe the number of townhomes being built in places like St. Paul, Eagan, Inver Grove Heights and South St. Paul. Anybody living there have anything to add?
Where is Clouseau? He usually has some good intel on MSP.
I live north of Denver, in Wyoming. The little 35 acre housing tracts have absolutely ruined the whole area. Funny, but it wasn’t too many years ago that most natives would have considered most of those areas to be uninhabitable. So many outsiders come in and build their little house out on the praire without knowing how harsh the climate is and how hard travel is in the winter. Many can’t take it and move on, but the damage is already done.
I, too, am saddened by the countless small quaint towns in our country which have been ruined by this building boom. But the reality is that each has it’s own city/county government to blame. They are the ones who permitted it, literally. By not requiring the builders to adhere to strict standards and not placing growth moratoriums, their towns lie in ruin in the name of the almighty dollar. Shame on them. Hold them accountable by voting them out of office.
Amen,
I am a farmer in western colorado fighting a proposed LMUC golf course/housing community next to my farm. The local city is in it together with a Denver developer and I feel very outnumbered indeed…
Auger: here I am! Can’t be “on” 24/7!
NYCCityBoy:
If you haven’t been to MSP in a while you’ll be pretty shocked. The growth has been explosive. You seem to be more from the St Paul side which hasn’t been hit quite so hard, but it is out of control nonetheless.
Imagine this:
Hordes of 10-15 story condo towers in Downtown St. Paul, especially aruond where the Farmer’s market is. They are mainly in the $400k-600k range for 1000 sq ft.
There is a line of 5 story mega-condo towers all along the Mississipi river (along Shepherd’s road) from Downtown St. Paul all the way to the Airport. If you know where Buca is, and the Off Site Airport Parking lot, you know the area. (rediculous, huh?) It is mainly nearer downtown, by the big factories on the river, in the flood plain. Smart move I know.
The old strip joint by the Taco bell on 7th/Hwy 5… gone. Luxury condos now.
As for Apple Valley, Inver Grove Heights:
It is all “mcmansionland” over there. Most stuff is cheaply constructed suburban sprawl. All the “nature” that was there is now gone. Replaced by strip malls and suburban tracts.
South St Paul escaped FOR A WHILE, but now if you drive along Robert street:
1) congestion
2) condos condos condos
3) major strip malls. (walmart, target, best buy, you name it).
Mpls has seen the worst of this, but St Paul too.
The St. Paul areas that REALLY are seeing the growth are the East suburbs like Woodbury and Oakdale and all that, all the way out to Hudson Wisconsin. Crazy.
But now the developers have their eyes on West and South SP… beware.
it is not going to turn out well…
Clouseau.
The market is cold and the only people telling anyone otherwise are realtors scared to death that they might again have to work for a living.
National debt, interest rates and rising oil prices will correct the market.
If a market can increase 20% a year it can also decrease by that amount. Take a look at housing values over the last 50 years.
In a Yahoo article today, “Developers offer condo sales incentives,” about San Diego:
full article at http://tinyurl.com/qgvdd
“One complex that bills itself as a resort-style community just north of downtown San Diego is advertising $35,000 discounts on units already tricked out with state-of-the-art, stainless steel appliances. Developer Maisel Presley is selling condos online by dropping the price by $1,000 a day until a unit sells.”
Now THAT is the way to sell condos and houses! Good for him. $1,000 a day off until somebody buys. It’s the perfect example of a Dutch auction, IMO. To me, this guy is the perfect “Holy Crap I’ve Got To Deal With Reality” marketer poster child.
“is selling condos online by dropping the price by $1,000 a day until a unit sells.” = VERY DESPERATE
I said it on piggington and I’ll say it again here. Dropping the price 1k a day is a good efficient market theory practice, not a gimmick. You find out what someone will pay quite quickly.
I won’t raise an eyebrow or check my pocketbook until the 365th day.
it’s called finding the clearing price. i just don’t get why peole think the seller determines the price all by his lonesone with no input whatsoever from the buyer.
I hope these RE shills smoke a turd in hell!
Isn’t Minn like Fla where 10k people per minute are moving there for all its beauty, and all the mosquitos you can hose down with a flame-thrower!
For GS
This is from a survey from “The street .com”
Check out homebuilding and the number of votes in the down section……………
1 What would best describe your stance heading into the coming week of trading?
Bullish 35.06% 128 votes
Bearish 39.45% 144 votes
Neutral 25.47% 93 votes
2 Which of these sectors do you think is set to move up in the coming week?
Aerospace and Defense 5.2% 19 votes
Airlines 2.19% 8 votes
Automobiles 0.82% 3 votes
Beverages and Food Products 8.21% 30 votes
Biotechnology 3.28% 12 votes
Commercial Banks 1.64% 6 votes
Computers and Peripherals 0.54% 2 votes
Consumer Nondurables 3.01% 11 votes
Energy Equipment & Services 12.05% 44 votes
HMOs and Hospitals 1.36% 5 votes
Homebuilding 1.91% 7 votes
Insurance 1.64% 6 votes
Integrated Oil 13.97% 51 votes
Internet, Software Services 1.64% 6 votes
Investment Bankers and Brokers 2.73% 10 votes
Media 0.54% 2 votes
Multiline Retail 3.01% 11 votes
Pharmaceuticals 7.12% 26 votes
Precious Metals 8.21% 30 votes
Semis, Semi Equipment 8.21% 30 votes
Telecom Equipment 2.19% 8 votes
Tobacco and Alcohol 3.28% 12 votes
Wireless Communications 0.82% 3 votes
Utilities 4.65% 17 votes
3 Which of these sectors do you think is set to move down in the coming week?
Aerospace and Defense 1.09% 4 votes
Airlines 16.71% 61 votes
Automobiles 4.38% 16 votes
Beverages and Food Products 2.19% 8 votes
Biotechnology 1.09% 4 votes
Commercial Banks 2.46% 9 votes
Computers and Peripherals 0.82% 3 votes
Consumer Nondurables 1.91% 7 votes
Energy Equipment & Services 3.01% 11 votes
HMOs and Hospitals 1.64% 6 votes
Homebuilding 23.01% 84 votes
Insurance 1.09% 4 votes
Integrated Oil 10.41% 38 votes
Internet, Software Services 1.64% 6 votes
Investment Bankers and Brokers 1.64% 6 votes
Media 0.27% 1 votes
Multiline Retail 4.65% 17 votes
Pharmaceuticals 0.54% 2 votes
Precious Metals 4.38% 16 votes
Semis, Semi Equipment 6.02% 22 votes
Telecom Equipment 3.56% 13 votes
Tobacco and Alcohol 1.36% 5 votes
Wireless Communications 2.19% 8 votes
Utilities 1.64% 6 votes
This condo business was a rather well-engineered racket. Sell to investors! Why yes, of course! While the developers continue to build and build tons more condos, and majorly undercut the investors!
What a great idea, for the condo developers anyway.
Just wanted to pipe in about how this real estate madness has affected small quaint areas. Arlington, VA used to be a kind of cool, hip place with a few great places to hang out. It was affordable and in a good location. In the span of about 3 years it has become a city filled with numerous high rise condos, restaruant chains and loads of elitists. The schools have been in an upheaval as families are being forced out due to the high cost of living. Most people moving in do not have kids. It is a greed focused “me” kind of culture that is sad to see.
“Most people moving in do not have kids.” You mean apart from all of the Spanish-speaking folks in S. Arlington. I have a friend who worked in the Arlington Co. school district, and since he was a newly-minted teacher, he got to work with all of the juvenile delinquents. Pretty much a cross section of El Salvador.
Even so, I live in the Crystal City area and know exactly what you mean. Prices in Arlington are simply beyond comprehension, but July showed the first YOY decline. It could get interesting around here.
yo ZILLOW ,wake up !- they have a house at 65K over asking price in my hood
Looked at a friend’s recent rowhome/condo purchase the other day. Warped floors and doorways. A kitchen that needed desperate updating. Ugly worn-out carpet over floors that had cracked tile anyway. For this they paid about $175,000, or with mortgage/ PITI costs of about $1400 a month for them. I’m guessing it will cost them a minimum of $30K to do a decent renovation on this place. When I asked them why they bought it, they said “we’re not going to be able to afford the neighborhood soon” and “we can always rent it out.” This was in the Baker neighborhood in Denver. You can rent a somewhat nicer house for about $1200 or so, or even an apartment for a lot less.
So long as there are fools continuing to buy these overpriced places, there will be many overpriced places.
The number of willing fools appears to have dropped substantially, however.
Condos and townhouses are almost always the cheapest, crappiest construction around, and that’s not a new phenomenon. I rented a TH here in the WashDC area a few years back that was built in 1971, but already the top-level floors/walls had sagged so much that the master-bathroom door would no longer close properly (the doorframe had shifted). How’s that for quality?
I’m willing to bet the ache is going to move from their heads to their a$$es.