Home Sales ‘Slip, Slump, Sink And Slide’
An update from the Boston Globe. “Home sales across the state fell nearly 11 percent in the second quarter as the real estate market slowed, with Cape Cod, central Massachusetts, and the Northeast and Southeast corners of the state experiencing the sharpest declines. The price of single-family homes also dropped. The drop was largest in central Massachusetts, where prices were down 3.3 percent.”
“Condominium sales also slowed in the quarter: Sales fell 8 percent in Greater Boston and 34 percent on Cape Cod. ‘We’re going through a correction’ on Cape Cod, said Thomas Dillon, a Hyannis agent. ‘We went through five years of insane growth.’”
“Barnstable County experienced the single largest increase in foreclosure filings in Massachusetts, 78 percent. ‘A lot of people who bought in ‘04 or ‘05 bought doing 100 percent financing with interest-only loans,’ Dillon said. ‘I think a lot of them didn’t understand what they were doing, your payment was $999 and all of a sudden it’s $2,999.’”
The Standard Times. “A glut of single-family houses for sale is causing a ‘correction’ in the once hot SouthCoast real estate market, dropping prices from record highs and producing patient buyers. ‘For Sale’ signs are sprouting in front lawns of both condominiums and single-family houses in record numbers.”
“‘This spring, the number of single-family properties for sale across the state reached a new all-time high,’ the Realtor group reported. ‘Over the past year, the inventory of detached homes and condos on the market rose steadily by 27 percent, from a monthly average of 49,931 listings in the second quarter of 2005 to 63,433 in the same quarter this year.’”
“Prices are dipping for house rentals, both seasonal and yearly leases, Jocelyn daLuz, a Realtor in Mattapoisett said. ‘We are seeing houses that rented for $1,700 a month a year ago now renting for $1,500 a month,’ Mrs. daLuz said.”
The Boston Herald. “‘We’ve seen a lot of shyness on the market,’ said Jay McHugh, broker in Brookline. Whereas house-hunters attending open houses previously would follow up for a second showing or an offer, they’re now sitting tight.”
“‘It’s almost like they’re afraid to make a decision in fear of learning that their seller was prepared to drop (the price) if they had not made an offer,’ McHugh said.”
The Telegraph. “Pompea Halliday is helping her brother sell his three-bedroom ranch on Wallace Avenue in Auburn. ‘We have had at least 12 people come and look at the house,’ she said. ‘No one is interested enough to make a bid yet, but I didn’t expect that so soon. If it has the right price, it will sell. If it doesn’t, it won’t,’ she said. ‘I look at this as a normal market rather than a declining market. It was excessive, to say the least, in the past.’”
From News Day. “The downturn is coming. Long Island’s housing market is heading for annual price declines, probably in the next few months, experts said. The market is ‘going to turn down, but it’s not going to be dramatic,’ said Emmett Laffey, chief executive of Century 21, with 16 offices regionwide.”
“In the first half of this year, residential inventory on Long Island doubled that of a year earlier, Laffey said. ‘When you have double the inventory, prices will soften,’ he added.”
“Experts said this market has not begun to mimic the downturn of the late 1980s and early 1990s, when prices plummeted. The difference? ‘There’s no panic,’ said Linda Bonarelli, a broker in Huntington. ‘And there’s no reason to panic.’”
“The market between $600,000 and $1.2 million is ‘just flooded with homes,’ allowing for potential price declines, Laffey added. And that leaves buyers in control. Said Martin Cantor, economist for a Garden City advocacy group: ‘I think sellers shouldn’t panic..but buyers are holding the ace in the hole.’”
From Business Week. “The housing market turned in one of its worst performances in years. ‘There’s a lot more merchandise and tremendous amounts of price reductions,’ says Phyllis Haber, a realtor on New York’s Long Island. ‘It’s crazy. It’s like someone waved a wand and everything changed.’”
Several readers sent in this link:
‘The state has shut two licensed mortgage brokers in Lawrence and fined one of them $200,000 after regulators documented several cases of brokers inflating the incomes of borrowers on mortgage applications, sometimes doubling or tripling the sums, to help home buyers qualify for loans.’
‘One of the loan applications said he earned $5,805 a month, when the family’s gross income was really no more than $3,000 in any month. The application also said he had $10,000 in the bank. He actually had only about $2,500.’
This suggests another reason the middle class is priced out — at least the members thereof who are not willing to fraudulently overstate their incomes.
Well put.
The era of the McMansion is over.
http://www.time.com/time/magazine/article/0,9171,1226156,00.html
Loads of truely FB’s with their white elephants out there.
I agree that by and large the McMansion era is over. With rising energy prices, property taxes, etc. people will want more responsibly sized, efficient homes. There will always be the avaricious super-wealthy with a pension for those behemoths, but I expect a trend towards smaller, more functional homes in the not too distant future. It is hard to imagine why anyone would ever “need” more than say 2500 square feet. That, to me, is still a very large house. I plan on building my own home in the next few years and will keep it under 1500 square feet with a strong emphasis on functionality.
I’d get agoraphobia in one of those absurd Toll Bros. monstrosities. I lived in a 900 sf house for five years, and it was great—low maintenance, low heating/cooling costs, easy to clean etc. If it’s well designed, it’s possible to fit quite a bit in a space that size, especially with vertical storage systems, efficient use of shelf space, etc.
It all depends on perspective. Try sticking four teenagers and two toddlers in a 1800 sq ft box. It equals hell. After living in tiny houses and huge houses I’ll take the huge ones any day. As a side note if built properlly, 4000+ sqft in Phx in July only costs about $200/mo to cool.
That sounds like something I’d expect in Lawrence.
it all bubbles up to the surface when the appreciation train stops. just twelve short months ago, these hapless borrowers would have refi’d to their brother in law or sold. today they have nowhere to go. this is going to get ugly. three quarter of the apps we see in boston are unrefinancable (is that a new word?)
stated incomes are the norm here in CA.
“unrefinancable (is that a new word?)”
unrefinanceable = 2007 word of the year.
We’re already building a pile of files on the corner of our desks that carry the stamp of unrefinanceable.
2005 = Re-Fied
2006 = Re-Fried
UFRs? -
Alright, lets see more of that please.
“The price of single-family homes also dropped. The drop was largest in central Massachusetts, where prices were down 3.3 percent.”
BeaConst –
Thought the MIT genius crowd said, “MA prices always go up.” Any thoughts on whether this reported price decline is due to false reporting?
–>Experts said this market has not begun to mimic the downturn of the late 1980s and early 1990s, when prices plummeted. The difference? ‘There’s no panic,’ said Linda Bonarelli, a broker in Huntington. ‘And there’s no reason to panic.’
I don’t believe much of anything these media-favored ‘experts’ have to say about what happened when. Shiller’s book “Irrational Exuberance” brings to light the fact that it is very hard to tell when you are experiencing a crash in progress. In fact, the media was clueless that a depression was on for a long time after the Great Crash of 1929.
I suspect that the last housing market bust of the late 1980s and early 1990s was no different, as suggested by the concurrent media spin in a series of LA Times articles (previously posted here) which documented the downturn.
If you’re outside the industry loop, panic is admittedly not that perceptable, yet. But you should see it from where I’m sitting. No panic? Tell that to one of our small time builders here, who financed 20mil on a local development. He’s already poured the money into subdividing the original property, building a fancy gated community, and has gone 7 houses out on spec in the 650K-900k range. He has yet to get a serious offer on one of them, and they’ve been sitting there since early Spring. One of our LO’s saw this guy at a local bar over the weekend, in the corner all alone, staring off into nowhere with a numb look on his face. This isn’t an isolated case here. There are many similar examples that I won’t waste time recounting.
Yeah, from someone on the inside, the panic is perceptable. The ones who have the bad poker faces look like they need to be committed to a psych ward.
I bought Schiller’s book in paperback (2nd edition) while I was in the States after seeing him referenced repeatedly by yourself and others. Look forward to reading it this weekend and finding out what all the hub bub is about.
Should be “Shiller” not Schiller.
Should be “Shiller” not Schiller.
‘There’s no panic,’ …’And there’s no reason to panic.’
ask her again in a few months:
‘Now is the best time to sell, before prices fall even further! Get out while you can!’
Umm, I’ve seen panic. The only reason I’m not in a panic is my capital is liquid and ,god forbid I’m asked to bail everyone out, I think I could do fine as an ex-pat.
Maz , same here. I’m thinking New Zealand.
No Panic …BUT
‘A lot of people who bought in ‘04 or ‘05 bought doing 100 percent financing with interest-only loans,’ Dillon said. ‘I think a lot of them didn’t understand what they were doing, your payment was $999 and all of a sudden it’s $2,999.’”
Maybe they can give these folks the extra $2000.00 per mth.
I’ve seen panic, too. I saw a townhouse last Sunday. The flipper was trying to sell it herself. She followed us around apologizing for her fixtures and offering to upgrade right and left; she made clear that the price was very negotiable; and she literally begged for an offer. Next day–having just come on the market that week–she dropped the price $50,000.
Holy dropping prices, Batman!
** SHILL ALERT **
this is much faster w total participation
the 90’s was slow and 1/2 the country was already discounted out
midwest & oil patch were ouda there by 1988
must be just bad math!?
“The downturn is coming. Long Island’s housing market is heading for annual price declines, probably in the next few months, experts said. The market is ‘going to turn down, but it’s not going to be dramatic,’ said Emmett Laffey, chief executive of Century 21, with 16 offices regionwide.”
He is right — the Long Island housing crash will be like a slow-motion version of a stock market crash, and hence far less dramatic. It will only appear dramatic in retrospect, not while it occurs.
maybe not quite as fast as the stock market crash, but once the ball starts rolling…
prices will come down 40% or more - they already have dropped in houses I’ve been watching, upwards of 10%. LI is due for a major correction.
They have already dropped in Boulder, CO by 12%. Many houses pulled off the market and are attempting to rent them out. Denver is worse!
Boulder is interesting, because of the pathetic attempts of the realtors there. The normal blather of “it’s different here” is being applied to smaller and smaller areas.
First it was “Colorado never had bubbly run-up in prices, so prices won’t go down.”
Second: “Boulder never had bubbly run-up in prices, so prices won’t go down.”
Where we are now: “Martin acres never had bubbly run-up in prices, so prices won’t go down.”
The only thing left is to identify specific houses that didn’t have bubbly run-ups in price.
The whole situation is made more amusing by watching the different realtors talk about how their particular favorite neighborhood is going to be OK, but some other neighborhood (being pumped by another realtor) is already on the ropes.
Sadly, they’re all shooting themselves in the foot. If they would just shoot straight and help the fall to happen quickly, their overall commissions would be larger.
Same thing in Seattle. Used to be the whole city was “different”. Now we’re down to a few select neighborhoods.
I think it’s kind of funny.
Same thing in Seattle. Used to be the whole city was “different”. Now we’re down to a only few select neighborhoods that remain “different”.
Last week one realtor even came right out and said he didn’t think the whole city would crash, just a few select homes (!!!).
They’re begining to grapple with reality. I think it’s kind of funny.
Get Stucco you said, “It will only appear dramatic in retrospect, not while it occurs.”
It may just appear dramatic during the long, slow reversion to the mean to those who have zero equity who are watching their adjustable rate loan payments that they can’t afford go up while they are forced to knock their selling price lower and lower chasing the falling market because they are losing money every month on the house they could not afford in the first place.
“It was a dark and stormy night…”
Stage 3-
The market is ‘going to turn down, but it’s not going to be dramatic,’ said Emmett Laffey, chief executive of Century 21, with 16 offices regionwide.”
____________________________________________
Stage 4 -
Ok the market has tanked and you are upside down. Now is a good time to buy
Stage 5-
Brother can you spare a dime!??!
I wonder what Emmett was saying 6-9 months ago? Whatever it was, I’m sure it was completely wrong. Just like now.
Holy Schnike! Are we already at stage 3? That was fast.
In regards to stage 5…I wonder if we’ll see the same loveable rag-tag hobos that rode the rails and became folk song legends during the last depression or perhaps something a little more “juiced up” for the new millinium?
What stage is denial? It seems to be disappearing.
The difference? ‘There’s no panic,’ said Linda Bonarelli, a broker in Huntington. ‘And there’s no reason to panic.’”
All I can think of is the scene at the end of ‘Animal House’ , where a young Kevin Bacon , screaming “all is well , remain calm” , is trampled by the mob.
And I am thinking about Alexander Haig after Ronald Reagan was shot, “I am in control here…”
That’s exactly what I thought, too.
But what he is really saying is “Please don’t panic, for the love of God, DON”T PANIC!!”
http://anon688.googlepages.com/alliswell.wav
http://www.tigersweat.com/images/anim15.jpg
Can you really trust somebody named “Bonarelli” to give you real estate advice? Beavis and Butthead would love that one.
Great scene, great movie. Thanks for the links Robert. I am reminded of something I read here a couple of weeks ago, apparently an adage of the stock market - don’t panic; but if you do panic, panic first.
on msnbc this am a shill from nantucket saying “it’s not f_ckedyet”
cooling like from a hemroid pad
There was an FB from Nantucket
about the market, he said “it’s not f_ckedyet”
The option ARM adjusted
His bank account busted
Should have read the Ben Jones Bits Bucket.
(‘The state has shut two licensed mortgage brokers in Lawrence and fined one of them $200,000 after regulators documented several cases of brokers inflating the incomes of borrowers on mortgage applications, sometimes doubling or tripling the sums, to help home buyers qualify for loans.’)
The headline for this article should have been “Horse Out of Barn; Door Closing.”
I have long said that Mass has one of the nations most delicate balancing acts. The economy here has never recovered from the Technological and telecommunications wasteland that enveloped it in 2001. High paying tech jobs where replaced with journal jobs that pay 10 to 15% of these tech jobs, yet house prices kept on rising.
The amount of construction related jobs is just staggering, without counting the big hole in Boston. What are all these “trades” people going to do once the music stops, and people figure out that in fact there is enough housing for everybody? Maybe not all Mc Mansions or stately victorians, but a lot of adequate ranches and capes?
What are all these unemployed, and generally unemployable in another industry, are going to do? If you had a company, would you hire a former Mortage Broker (some exceptions like nnvmtg, and socal)? How about a RE Broker?
Remember that RE brokers are the last rung before permanent unemployment. These are the people laid off from the tech world that could never get back in, due to a lack of jobs, or where still using SNA!.
Pinch-a,
Agreed. With a couple of other points:
1. The Big Dig is over too. That was a flood of cash for the greater boston area that has left a lot of construction people in the area. What will they do now that the housing situation has turned.
2. Massachusetts has a declining population. When we talk about supply and demand, that fact should remain prominent. It’s the opposite of “they’re not making any more land”.
3. Tax-achusetts is an expensive place. Retirees seem to be streaming out of here to New Hampshire, Maine, etc, etc.
Massachusetts has pretty low state taxes. The real factor behind the declining population is high real estate prices. In fact, the first boom in Mass, in the 80s, was fueled in part by the fact that housing started off relatively cheap, though it later moved into mini-bubble territory. Mass. needs prices to drop to get its economy moving again.
Retirees seem to be streaming out of here to New Hampshire, Maine, etc, etc
Well they sure ain’t gonna find any bargins in ME.
The early bird MA equity locusts have driven the prices of everything right thru the roof.
Native seller’s are totally infected with greed.
You’re truely f*cked if your locally employed and need a house.
So the place is turning into a geriatric ward, cause all the young kids are bailin’ cause the job base pays a third of what they can earn elsewhere.
ME is also ranked the highest taxing state in the country relative to income based on the combination of property taxes, income taxes, and sale tax.
Current gov has been borrowing to pay bills. Hidden fee’s like auto excise taxes goin’ thru the roof.
There’s no public transport, so you’re totally at the mercy of gaz prices.
Brutal winters too.
These immigrants will do 3 years and say-WTF am I doin’ here!
I moved from the Boston area to Raleigh/Durham NC 4 years ago, and concur that state taxes aren’t that high there. The income and sales taxes are both at 5%, while they are ~7% in NC. However, my real estate taxes, for houses purchased at the exact same price, are 30% lower here, and the house is WAY nicer.
“The Big Dig is over too.”
Except for the parts that have to be done over.
Actually, when I was there in late June, it looked like there was still quite a bit of work going on near the TD Banknorth arena.
holeee crap — imagine going from $999 to $2999 monthly increase. and this when you’re already stretched to come up with the $999….
Thats a joke to design a loan that would have that kind of a increase in payment in that short of time . If they qualified the borrower on the $999 payments they deserve foreclosures .What a mess .
I would tend to disagree with you… I think the economy in/around Boston is fairly well diversified. Finance, Legal, Hi-tech, Biotec/Pharma, Higher-Ed, etc. We are more diversified than the late 80’s/early 90’s and while the bust in 2001 hurt, Cambridge is still a haven for startups and early ventures.
That’s not to say we don’t have issues, like a net decrease in population because of the high cost of living tied primarily to high taxes and real estate. But the grass is always greener as they say and it isn’t until people move to Florida and realize that while New England winters are harsh, it sucks worse to have to rebuild every couple of years from Hurricanes
If you where able to keep your job in the 2000 to 2002 period, then you are probably doing all right. If not, then you are blind to the multitude of people that have gone into RE as an avenue of last resort, because they have sent 1000 resumes and no one ever called back.
From personal experience, I am lucky to have a job that pays the bills, but I am earning around 2/3 of what I earned in 2000. My cousing who graduated from wentworth in EE has been unable to find a job in his field (radio Antennas) since 2001, and has been working with my uncle in his surveying business making 1/2 of what he made.
No, MA is in deep trouble, as those who once held decent jobs have seen them vanish into thin air. Since we are on the topic of new companies, how many new IPO’s coming from MA have made the news in the last 5 years? What new and exciting companies are out there? How many new Bay Networks, Nortel, Cisco, Cabletron Systems, etc, have sprung up (yes I cheated Nortel, and Cisco are in other geographic places, but they had a large presence here in MA)? How many companies disappeared? If Mass is in such a good state of affairs, why is the middle class leaving in droves? Not only retired grannys to florida, but people with education and experience moving their families to places like South Carolina, Tennesee, or even NH?
Your departing middle class is being replaced with an arriving underclass of ignorant hispanics, and a lot of eastern Europeans. Think about that, and you will realize that we are in a far worse situation that you can imagine.
I realize that maybe Cambridge with MIT and Harvard is going to have some exciting start ups, but they are increasingly becoming isolated by the same sociological factors that are driving competent people out. Pretty soon, they will have to start up somewhere else where their employees can afford health insurance, a decent retirement, and a decent house.
I agree with much of what you say concerning the middle class leaving because of the high costs of living. I have considered moving my family somewhere we could easily afford a nice sfh without it impacting our lifestyle/savings and North Carolina is still high on my list, but both my family and my wife’s is here in MA.
The middle class is being squeezed everywhere, they just feel it here more because of the high cost of living. By moving to a lower cost area, all you do is delay the inevitable, not fix the root cause (short-sited politicians who are generally disconnected with their constituents and in the pockets of special interests). People’s lifestyle choices need to change as well. Everyone is not entitled to drive a BMW and a Hummer, have a 5BR 4Bath house with the latest fads in furnishings and the best electronics, and buy a new wardrobe every season.
I consider our family upper middle class given our combined income (low six figures) and the fact that we don’t have to go without, but I still don’t drive a BMW (try a VW) and I don’t have a huge mortgage (well, I do, but it is payed for by my tenants) and I am more worried about saving for our future and my children’s education than having all the latest toys…
BTW, I did lose my IT job in 2003, hence the forced sale of my condo (turned out to be a great time to sell). We moved in with my parents until I was back on my feet and now have a good job in IT again, as well as much well earned wisdom…
The fault does not lie with the politicians, as we know that they are working for themselves, but with us the lemming who keep on voting for them.
As an example, I have formed part of the RTM for my small town. The way that the firefighters contract passes, is that all the firefighters run for the RTM, and form a voting block. When the contract vote with nice perks comes up, they overwhelmingly vote for it. Same for the Police, the teachers, and town employees. It is so out of hand, that the budget for a 2000 student school is 32 MILLION dollars per year! That is around 16K per student per year!. That is half of what Harvard costs, and it is only for HS.
This problem is repeated across the state. The entitlement that some people feel is enormous. I know of cities that will start cutting kindergarden teachers to save some office workers in city hall. Politicians will always cut the most visible positions to save their political appointees. Start with School, continue with safety, and finally cut gardeners, and low paid maintenance workers before getting rid of his campaign manager, or his image manager.
I agree with you 100% in terms of local politics and the self-serving interests being pursued, but I am more concerned with the jokers in Washington who run the show… imagine the workers in the engine room of the Titanic jockeying over who has to shovel coal and who gets to stand around and watch the gauges. Meanwhile on the bridge… where is the captain and what is the lookout doing? That is how I view local politics compared to Washington.
I also agree with you that the people are also to blame. Fully half this country voted for GWB twice and also saw fit to vote in a Republican majority to Congress… what happened to Seperation of Powers? What happened to the responsibility of Congress to keep the Executive branch in check?
Bottom line is that we as Americans need a reality check. All is not well with the republic and we as a people need to get past our own greed, self-interest, and arrogance before anything will change.
I apologize for the OT rant, but I get so worked up about this I can’t help it.
Hear! Hear!
Throw your TV through someone’s SUV
LOL, I would do just that only what would I have to keep my mind numb while the world around me falls apart?
Throw your TV through someone’s SUV
Drive a Hummer to Burlington VT, and leave it unattended….You might just find a Sony in the drivers seat which found it’s way there thru your front windshield.
Them Phish-heads ain’t as pacifistic as you might think.
Man they hate big SUV’s in Linguisland.
Throw your TV through someone’s SUV
Drive a Hummer to Burlington VT, and leave it unattended….You might just find a Sony in the drivers seat which found it’s way there thru your front windshield.
Them Phish-heads ain’t as pacifistic as you might think.
Man they hate big SUV’s in Linguisland.
Harvard is only $8k per year? I don’t believe it.
Whoops, read it wrong. Your’e saying Harvard is $32k, ok.
“I consider our family upper middle class given our combined income (low six figures)”
An adjusted gross income of $57,343 or more puts you in the top 25%. An AGI of $130,080 puts you in the top 5%. $295,495 puts you in the top 1%. Actually, those are 2003 numbers, they’ve gone up, but low six figures still gets you into the top 5%.
I believe a six-figure family income puts you in the top 5%.
I disagree with this. I’m working at a mid-size semiconductor in Silicon Valley. I have three open requisistions and I can’t fill them. I just made an offer to a senior candidate for $150K+options and he went to another company instead.
Most of the people that were laid off in 2000 and 2001 and couldn’t find a job are just riffraff. They were marginally qualified and should have been digging ditches instead of writing code.
I would strongly disagree with this. In 2000 and 2001 most of the major companies where laying people off in droves. IT was not unusual to see 20 or 30K reductions at Nortel, or some other “new” economy company. Those people hit the ground hard as they competed for the same jobs with other 20K of people with similar skills. (if you ever so having fun with Dick and Jane, you will get the picture). Some of them just got tired of looking for something that they had been doing and decided to give something else a try. RE was booming, and it sucked in a lot of otherwise bored smart people. The engineering manager at my former company is an example. He had over 20 years of experience in high tech management, project management, and is now a RE agent. I know because I ran into him.
I found a job, but it is not doing the same thing as I did before, and that has hurt, even though I have kept current. I have had at least 20-30 interviews in the last 2 years, but still no offers.
There is a large pool of people that thought that the tech world would improve in a couple of years, but that has not happened.
You might not get those two positions filled if your competition is offering 150K plus benefits in a place that has cheaper housing, and a cheaper cost of living, or if the other company is willing to offer more money. If I where given a choice between living in Silly Valley with 1M + houses or somewhere like the Resarch triangle in North Carolina with nice houses for 250-300K for the same salary, I would take the North Carolina job…
I’d like to chime in and agree with you Greenlander. I live in SD and 02 was really rough for me. Alot of people in the IT industry prior to that got in during the madness when anyone who could spell IT could earn alot of money. For the most part they got flushed out. Even so having a CS degree and contacts didn’t spare me from a 6 month unemployment stretch.
Greenlander,
Your req problems might be caused by the ramifications of the bubble. People get locked into their homes with huge loans and can’t move to new jobs in other cities. This hurts the flexibility of the economy.
The Boston Globe had an article about 3 years ago concerning Boston Biotech companies that could not afford to have talented people to come to Boston and work there.
The main issue was cost of housing. A talented individual in the fly-over nation could not sell their home and buy in Boston. These people had a high standard living in a nice home but could only afford a condo Boston. The companies could only pay so much to make up the difference.
I agree with you Greenlander. I work in IT in the Seattle area. We can’t find enough qualified people. I just bailed from my corporate job to work on contract. In 2003 I was on contract and was offered an employee position. I took it because I wanted to stay local. But, after three years, I was tired of sitting next to contractors making twice what I do but doing the same work. Its all about keeping your skills current and marketing yourself. Seems to work for many of the people I work with.
There is a whole bunch of people here in MA that would love to move out. Problem is that the jobs that are available pay 30K in MA and require a PH.d!. Yes there are a whole bunch of jobs, but the pay is dismal, and the requirements look like some letter soup. i.e, go to monster and look in MA for Cisco. There are 20 pages. Look into them. They are garbage jobs, or headhunters. Very few real jobs, and when there is one of those, there are literally 300 resumes replying. Pay is commensurate with the amount of replies!… and lets face it, IT is not a hard job. It is demanding, and you need to keep your skill set up, but it is also fun. Where else do you get to play with new and exciting technologies every so often? Of course then there are the calls about how to get rid of the ***** in excell!
Something doesn’t sound right with your post. Your cousin has an EE degree (BS, MS or PhD?) with and emphasis in radio antennas (RF antennas) and hasn’t been able to find a job since 2001? My company and every other company I’m even casually aware of has been begging, and I mean begging, anyone with a EE degree that has even heard of RF to come work for them. Does he live in nowhere’sville MA and refuses to move? Was his GPS a 1.2 or something? Does he have multiple felony convictions? Voted for Gore? There’s more to this story than we are being told.
He worked in the outskirts of the 128 corridor in MA. He just got tired of looking for a job after a while, and decided to go work with my uncle, as he is part owner. If you want to send me your e-mail, I can talk to him and have him send his resume. He is unable to relocate though, and that is why he might not have found a job around here. AS far as what degree he has, I am not sure, and there is no way on hell that he voted for Gore!
I happen to agree with your point about cost of living making MA unattractive to employers. The cost of living has done the same thing to CA. Everyone in AZ is well aware of where the Californians are fleeing too. We have made this point over and over and over to corporate that it is too expensive to live in CA. If you bought in ‘85 then things are great. But hiring new engineers is a nightmare. The kids straight out of school like the beach and all, but as soon as they find a girl (or guy) and want to settle down (vitually everyone does at some point) they leave. It is difficult explaining to the new wife that even though you make 100k/yr you can only afford a 2 bd/1ba condo in Victorville, that you have a 2 hr commute each way to work, that sound carries better at night so those gunshots are really not that close and that the kids all need to learn Spanish because the public schools stopped teaching classes in English 3 years ago. Within months of that conversation they leave. A work force consisting of new college graduates and veterans with 20+ yrs experience is not the road to long term prosperity.
Something else to note:
Massachusetts: gross area = 8257 sq.miles. Net area 7838 sq. miles. (assume the difference is land covered by the Atlantic ocean)
Maricopa County: gross area = 9226 sq. miles. Net area the same minus the half of the county covered by swimming pools.
The AZ county that Phoenix sits in is larger than all of Massachusetts even including the part that is under the Atlantic. The ridoculouslly priced crowded NE states will slowly leak jobs, population and political representation to the larger western states until it evens out.
That is most likely one of the best explanations as to why it is almost impossible to start a company in either MA or CA. I am hanging on by the skin of my teeth here, and I am considering moving. I believe that the people getting hired into IT jobs here in MA are either recent grads, that are alone, renting a single room in southie, or very experienced people that bought houses when it was cheap to do so, circa 1985.
For people like me, who have around 10 years of work experience doing IT in both High tech, and international, there is nowhere to run…
Go West young man!
I have been thinking about it… Family ties around here are nice, but the future is not too bright… Wife enjoys MA though, and loves to go visit Boston. We despise city life, but like to go walk there once in a while!
A couple of things… first, the equity locusts moving in droves are an aberration. The reason they are moving is because it is the only way they can lock in their new-found wealth, by selling and moving to locations which are cheaper to live/buy. However, there are reasons these places are cheaper to live than say Boston, New York, and San Francisco. Historically, if housing tracks close to inflation then these outsized gains that have created so much wealth will disappear going forward.
Second, if real estate values track below the mean to make up for the bubble, then companies should have no problem finding employees who previously wouldn’t consider jobs in the area because of the cost of housing. In fact, I think as the economy unwinds, finding employees anywhere will be quite simple as unemployment should increase. That’s if companies are even hiring and qualifications not withstanding.
That is exactly what I am terrified about. As the housing bubble unravels, formerly bubbly places like MA will have a problem attracting both employees (who wants to live in a place where buying your home is the finacial equivalent of taking out a shotgun and pointing it at your head!) and companies that not pay enough to cover the rising costs of living in a place such as this leving them without employees. The increase in prices will come from restaurants, food chains, and supermarkets that will have to pay more to attract employees as they will be unable to afford anything else. Right now it is impossible to hire someone under $10 and hour, and if you offer less, you will not see a single applicant. I recently saw a Mc Donalds offering 50K a year for an assistant Manager. There go the $1 Mc D’s!. After a while companies will just tire of losing money by having to overpay for basic employees, and will look towards cheaper locales.
This is step 2 of the nightmare, and barring a miracle new technology, or another Dot.Com bubble, I see no way out of it, as when companies move, they take their best employees and lay off the rest. The rest, that some consider riff-raff, were useful, productive members of society, that will no longer have a way of doing anything productive any more. The Nightmare begins when these people try to get another job that pays the same. If they are young they will be able to adapt, and do something else. If they are middle aged baby boomers, they are SOL.
I believe that MA is in stage 2. Stage 1 has been happening since the dot con days.
The value of RE is the single biggest expense for most employees. If you reduce that expense, employees can get paid less, and still have a sound standard of living.
Unless MA tanks real fast, we are in for a long, protracted period where we will just stagnate, as we have since 2000.
Should say ‘GPA a 1.2 or something. Is his name Mohammed and he spends half the year in Syria helping out the ‘local causes’? What gives. A turtle could could have got a job in RF during the last five years so long as it could pronounce RF.
Ya got it all covered, “pinch”…
Old money, political patronage and welfare are the driving forces in MA.
‘There’s no panic,’ said Linda Bonarelli, a broker in Huntington. ‘And there’s no reason to panic.’
ha
haha
hahahahahahahahahahahahaha.
Wally:
You need to setup those laughs.
Everyone remember the movie Cape Fear.
Now cue the laugh of Robert DeNiro laughing vigorously in the back of the church.
That is the kind of laugh that is deserving here.
or Tom Hanks in the “Money Pit”
I think a lot of them didn’t understand what they were doing, your payment was $999 and all of a sudden it’s $2,999.’”
This is enough to kill anybody
Simmssays… Bye Bye Boring Laundry
http://www.americaninventorspot.com/
Sorry… that last was in response to Pinch-a-penny. I’m not saying it is different here at all, but a couple of things to keep in mind about eastern MA is that it is densely populated compared to other areas and has quite a bit of older infrastructure from hundreds of years of development. Building restrictions/high cost of development have generally kept it difficult and expensive to “overdevelop” here compared to Florida and Las Vegas. Lastly, the concentration of higher ed here is a huge draw for business. All work in our favor as far as this housing decline is concerned.
There will be economic pain and there will be housing price declines, but I think the future here is bright once we get past this correction and work out all the excesses from the system.
It is expensive to develop, but it is being overdeveloped right now. Maybe not in the sense where there are thousands of acres of land being subdivided and tens of thousands of houses are being built, but if you have a declining population, coupled with an aging population, coupled with a large immigration into the lower echelons of society, then any new development is overdevelopment.
I have a lot of family that works in surveying. This has been the busyest season that they have had since 1935 when the company was founded by my grandfather. Everything they get is for Form A subdivision plans. Even Troll brothers has a development in our small town. There is a plethora of condos, and old mills are being converted into small applianced condos.
Old Apartment buildings are being bought out and turned into Condos. We have even reverted some of these back to apartments after a year of trying to sell them. Now they are trying to rent, and there are no takers.
Finally, the house next to me consists of 2 apartments. It has been vacant since late february, and they are asking around 1200 for them. As the owner is my stepfather, I have told him to lower the rent to attract a stable renter. He has failed to do so, and is hanging on to the price. At my off the cuffs math, I can tell that he has lost around 12K in income, and he still has to maintain the property, pay taxes (around 5K), heating, electric, etc. He owns the place outright so he is not bleeding too badly, but that just shows that he can cut rents to 400-500 a month to cover his costs, and attract some renters from other places.
It is going to get real ugly real soon, and yes, it will get much better after a while. It is that intermission that I am terrified of.
I guess I am being optimistic, but given all that the Boston area has to offer (beaches in the summer/skiing in the winter, great Universities, diversified ecomony), if a real estate correction is happening everywhere and the primary reason the young and the middle class are leaving the area is the high cost of real estate, doesn’t it stand to reason that the population movements out should slow/stop?
My expectation is that if real estate is depreciating then many will delay the purchase of a home and continue to rent, especially if lending standards tighten and interest rates climb, both making it more difficult to buy even in a falling market. If the young/middle class are not going to buy now, then they might as well live in places that have all the benefits listed above as well as high incomes relative to the US median (and a decent nightlife).
Again, I may be making some simplified/wrong assumptions here, but that is my take on the things. Real estate going down may be the best thing for MA as you mentioned.
The declining population issue is overstated. We have a big churn of locals and families moving out, gays, young college graduates, and immigrants moving in. If a family of five moves out to North Carolina and a gay couple or two recent B.U. grads takes up their apartment, well that’s a net loss of 3 to the state, but no change in occupancy and probably a rise in median income. You can’t compare us to the dying areas like West Virginia and Ohio where people die/move out and no one moves in.
People are forming smaller households and taking up more space. That’s why we can have a declining population and still high demand for housing. Massachusetts doesn’t look or feel like the Rust Belt.
By the way, don’t take my comment about “high demand for housing” as mindless optimist talk. Prices are still way too high to be sustained. All I’m saying is that we aren’t about to have blocks of abandoned housing going for $10k like you find in the Rust Belt–there are plenty of people waiting to move in at the right price.
You bring up a good point in that there are many smaller households currently being formed but I think you may be forming the wrong conclusion from this. This is really false demand just as speculator “demand” created the supposed need for multiple houses in some industry watchers’ minds. In reality, people don’t NEED to take up more space at all, and in fact when this economy spirals downward and the inevitable recession cuts many jobs, we should see a reversal of this effect where more people move in together (kids with parents, multiple families in one house, etc.) Those expecting large increases in rents will be sadly disappointed as even more inventory and vacancies flood the market.
Except for gays, those are low income people. Very few graduates have money for discretionary spending, and immigrants take whatever jobs they can get in order to eat. They are not thinking about getting a Mc house for 1M. These are replacing families that had a 50-60K income.
Most recent grads barely make in the lower 30’s!.
The other issue is that taxes have indirectly gone way up. As most of the commonwealth works on year to year property appraisals, this year your property tax is going to eat a large hole in your pocket. The houses around me, and mine have valuations in the mid to high 300’s, and at 1.2/00 it comes up to around to 5K a year in taxes. That is more than what I pay in state income taxes a year!
There is a plethora of condos, and old mills are being converted into small applianced condos.
Sure like to know what the f*ck the road systems are gonna do with all these new residents?
128 is a fookin’ nightmare.
Boston to gridlock in 5 years, despite the outmigration of middle class, ’cause the carpet cleaners gotta commute a bazillion miles since they can’t afford B-town and the immediate suburbs.
When I sold my home on the North Shore of LI NY in Q4 of 2003, I was both relieved to be free of the albatross home and amazed at the price the buyer paid for it - astounding. As a physician, I was earning double six figures; yet, money was always tight and we really didn’t vacation much or go out much - we were a family of five with small children and we had to keep it simple. Sure, it was a very nice 5 BD 3.5 bath 5,000 sq ft. house on 1/2 acre after we spent 200K expanding and upgrading it so my ailing mother-in-law could move in and be cared for. I worked to pay the mortgage (which really wasn’t that large), and ever increasing taxes and insurances, not to mention sundry home maintainence, for which you definitely pay a premium living on LI.
After living in that house since 1990, and after 13 years of constant budgetary struggle, I concluded that one could simply not get ahead on LI NY with the exception of the rich, and small business owners (many of my neighbors) who frankly lived by hidiing cash and avoiding paying income taxes, something that was not an option for an employed physician. I felt that I worked to pay the highest property taxes, electric rates, insurances, and daily expenses around. And every year, there were double digit increases in taxes, utilities and fees. Teachers would claim to be underpaid whilst driving BMWs (I kid you not). Suffolk cops are the highest paid in the USA (good for them). On LI, one works to support an overexpensive bureaucrat-laden entitlement-minded socialistic society where the rich and dishonest prosper and the honest working folk struggle and pay the bulk of taxes to support “the village.” The wives loved it, as did mine. I resented it - deeply. So, I voted with my feet - sold the overpriced home with the evergrowing expenses, and got out of LI. It was the best move I ever made - even my wife now admits it. My new house is nicer, on far more property, in a cleaner safer and lower cost area. My new neighbors are more concerned with raising healthy children and helping eachother than having the most expensive car or fancy jeans for their kids.
If LI NY RE is to survive, there must be a lot of high income buyers out there who can afford the exorbidant cost-of-living and still save for the future - you’re talking $300K income per annum, believe it. Frankly, I don’t think there are enough folks in that income bracket to support LI bloated overpriced RE market. I believe it is overbought big time and must revert to the mean, to the tune of 40% price drops. The present home prices are insanely unsustainable.
Just one man’s opinion.
Nice post. Reminds me of my nagging, constant wonder — how can there be so many rich people in this country? Logic says there are not so many as there appear to be, but I can’t fathom how they can keep paying for all multiple houses, big $ boats and blingmobiles.
According to this USA Today article, there were 2.7 million net worth millionaires in the U.S. in 2005.
Research of net worth millionaires suggests few of those 2.7 million have prime Long Island homes or Humvees. The high spending set are more likely to be trust fund parasites or doomed borrowers.
Great post…as a Arizona native, I appreciate the opportunity for understanding the NY/East Coast situation, although we have a lot of the same issues…I see the same in upscale communities like Sedona and Scottsdale, where there are so many second homes…I can’t believe there are that many people who can actually afford them.
mamboni,
Well worth the read. Encountered a very similar circumstance over a like time frame (but on the opposite coast). Did we sell “early”? Probably. I really don’t care. Aside from the huge bubble factors there were other more personal impacts.
Seems as the years went by everyone still wanted to have a huge Xmas tree (but nobody wanted to help put it up). Everyone got all nostalgic for Xmas lights but was no where to be found when that chilly Saturday came around. Oh and yard work? Forget it.
I (as I’m sure you) could go on, but the truth is our “dream home” was a dream for my wife and daughters (and a nightmare for me). I can’t recall how many times I rolled up the driveway locking up the brakes, bolting from my car, jumping out of my suit and into jeans and an old sweatshirt to take on that day’s chores to “stay on schedule”. You’d need something critical for a project and while they bolted out the door to shop on Saturday I would ask “could you guys get me some masking tape while you’re out”? OH SURE! No problem. Six hours later they arrive with a trunkload of stuff (but no masking tape). As your children grow up, it gets worse, not better. BUT they do have their “images” and standing in the community to think of so for years downsizing was out of the question.
Well after my nervous breakdown (kidding) they finally realized how unfair they had been. It didn’t come a moment too soon. Now that I can actually BE A PART of their lives they find themselves wondering why they had been so damn insistent.
DinOR,
While we may have sold a bit early, I did manage to get about 20% over the zillow price at the time, $800K. I was very happy with that as it allowed us to easily afford the new house and lock in a small mortgage at 5.5% fixed 30 yr. Besides, the area I moved to has seen impressive home price appreciation between 2003 and now and I believe will weather the coming real estate slump well.
As for the family domestic situation you describe, we share some similarities. Truth be told: I was happy to see the wife and kids out and about having fun, even if shopping was incorporated, as I preferred to stay home on the weekends and putt around the house. What I did object to was working 60+ hours per week just to pay the bills, save very little, constantly feel financially restricted, while feeding the ever growing government/schools/status quo beast’s taxes, fees and insurances. Long Island is for suckers, fools, overpaid civil servants, the rich and tax evaders, in my opinion. By the way, when I left my property taxes were $8K (Sept 2003). Today, those taxes are $14K!!!
Anecdote (true story): after carrying a home owner’s policy for 10 years and never having filed a claim, in 2000 a 10 dollar water hose burst in my basement, flooding it. The cleanup up cost about $1400 for which we filed a claim. A year later my home owner’s company (Allstate) dropped me!!!! So, they collected about $20K in premiums and after a miniscule payout decided to cut and run. To add insult to injury, as my home was only a couple of blocks from the water (long island sound), despite being 80 feet above sea level, no standard home owner’s insurance would pick me up. Ultimately, my contractor had to pull strings to get me into an assigned risk pooled insurance at substantially higher premium. You might recall this was a couple of years after the Noreaster that devastated LI in the late 1990s - my home withstood it fine wth no damage. As far as I am concerned, insurance companies, especially home owners insurances, are scumbags and they can all go fornicate themselves. They are great at collecting premiums, and masters at avoiding paying legitimate claims. They have absolutely no customer loyalty, none. You may be in good hands with Allstate, but those hands are probably up your ass!
I agree with everything you say about LI. My husband and I grew up there and now live near Boston (also overpriced). The rental market in suburban Boston is way better than LI. I’m moving from an apartment into a cheaper single family rental in two weeks and I really couldn’t be happier. I’m not sure if either of these areas are worth investing significant amounts of time or money in.
Lawrence area probably has the highest % of new immigrant population in MA. Weren’t the bubbleheads saying not too long ago that constant flow of new immigrants is going to keep the bubble inflated for ever? Of ocurse, inflating incomes also helps.
(I think the economy in/around Boston is fairly well diversified. Finance, Legal, Hi-tech, Biotec/Pharma, Higher-Ed, etc…That’s not to say we don’t have issues, like a net decrease in population because of the high cost of living tied primarily to high taxes and real estate.)
You’re right. All the sectors you just mentioned are picking up as the housing bubble pops, and I don’t think that’s an accident. High housing prices are choking the state (taxes aren’t really high there anymore, relative to income). The area was losing the young despite all those colleges.
Construction and retail may be hurt, but other sectors helped, by a price collapse. Heck, even construction might be helped, as the soaring cost of development sites is choking it off in bubble markets.
The bubble is not good for the economy.
While the market for condos and sfh get’s all the press, what is the consensus opinion regarding multi-family units? I sold my condo in 2003 and decided that paying $350,000 for a fixer/upper was the height of stupidity.
Of course I also thought renting was out of the question (between the high costs of rent, the fact that you don’t build equity, and I have two large dogs) and my wife really wanted to have our own place, we decided to buy a 4 unit multi and live in one of the units.
Question on my mind now is how is the market going to treat multifamily prices given the state of the sfh/condo market? Anyone have any experience during the last housing decline in this regards? Not that I need to sell, but I would like to buy a single family within the next 3-4 years…
ot
“jade homes shut down operations”
http://immobilienblasen.blogspot.com/2006/08/jade-homes-shut-down-operations.html
You might want to re-post that when the next Florida post is up. It will interest all the Sarasota-Tampa folks.
hello
problem is sometimes that i don´t know whre the names are locatet (because i´m from germany). but i will put the link in the next florida post.
from germany
http://www.immobilienblasen.blogspot.com/
“Home Sales ‘Slip, Slump, Sink And Slide’”
Reminds me of the 50s/60s tune, “Splish, Splash.” Probably easy enough to re-work the lyrics.
Just posted it in the Bits Bucket.
“The housing market turned in one of its worst performances in years. ‘There’s a lot more merchandise and tremendous amounts of price reductions,’ says Phyllis Haber, a realtor on New York’s Long Island. ‘It’s crazy. It’s like someone waved a wand and everything changed.’”
No … I think that McManshion financed with an Option ARM and double HELOC finally turned into a pumpkin.
..Coming up on CNBC, ‘Why renting makes more sense than buying in 25 years…”
Whew…there’s a real indicator of a major correction!!!!!!!!!
The shite is gonna hit the fan.
Northeastener,
By multi-family, do you mean a townhouse in a complex?
I view townhouses as being commoditized the same way high-rise condos are, due to their similarity. Most sellers can’t get any more for their unit than the lowest price that got paid in their complex, or in similar complexes. A seller has to compete against far too many equivalent properties to do well. There’s no downside protection from being in sought-after neighborhoods, because complexes almost never are. In fact, the opposite seems true; complexes seem to be far out, or close to visible negatives (like an industrial plant or railroad tracks) that put a cap on desirability and appreciation potential.
Also, townhouses seem to be subject to condo-style overbuilding, which may be a reason why condos lead downturns.
No, I was referring to true multi-family apartment buildings, not townhouses. I own a “Three decker” house with a total of 4 apartments, One each on the first and third levels and two apartments on the second level. The last thing I would want to own right now would be a condo/townhouse for all the reasons you mentioned in your post. Overdevelopment and no differentiation will kill those properties during this correction.
Personally I think I overpaid for the building in 2004, but I paid for location/condition/rents and the fact that it has a huge yard (for the city) which was a plus for my family while we live there. I don’t think this property will make sense to the cash-flow investor as the return wouldn’t be high enough given the cost. My plan is to put some money into it and market it to the owner-occupied crowd if/when I do sell it. An absentee landlord won’t appreciate the water views, corner lot with large private yard, and quiet neighborhood, but someone living there will… a bit of a gamble and definitely not the typical wisdom real estate investors give but…
I’ve never owned an apartment building, so anything I say is guesswork. Rents have been largely flat in most parts of the country and don’t seem to be rising now, so I wouldn’t count on a huge increase in income from it.
In a sense, your building is more akin to commercial RE than residential, since it generates a predictable monthly income that provides an obvious indicator of its real value. Part of the reason, I believe, that residential RE is so prone to bubbles is that it is very difficult to assess its ‘intrinsic’ value. You have to resort to indirect measures like comparables, since an owner-occupied home generates no income. Thus, people are prone to buying homes based on whims and puffery, rather than the hard-headed look at the bottom line that would be more likely in a commercial RE transaction.
What I would do in your situation depends on the amount of income the bldg. generates and your other sources of income. Ideally, I would try to save enough of the rental income to be able to buy a house free and clear in a few years. I can understand not wanting to be an absentee landlord, but having an apt. building that generates a nice stream of income is a pretty cool thing–and I don’t think you’re going to be hurting for potential tenants over the next few years.
I worked for a homebuilder in the early 1990’s. There is some truth to “it’s different this time”. Unfortunately, this time things will end badly for a lot more people. The housing collapse of the early 1990’s in Southern California was the result of an economic shift away from “Cold War” industries - military hardware, etc. So many jobs were lost that it undermined the local economy and many people left the state. Similar conditions existed in other US coastal markets. Middle America and the southern US were relatively unscathed. This time around, I’m guessing we have millions of homeowners with adjustable rates that will be resetting over the next two years. Those who put little money down (again I am assuming a large number of buyers), will not be able to refinance into fixed rates, due to falling prices and a complete change in lender sentiment. Loans will still be out there, but the appraisals will be less than the sales price. Either the seller will have to take less or the deal will die. This will feed on itself. Instead of being limited to US coastal markets, like the early 1990’s, we will see this play out in places like Omaha. I don’t think we will have a crash, just a protracted, painful slide in prices over a period of years. The “my house is my retirement” plan will be thwarted. Using your house as an ATM will be no more. I don’t know how this will be resolved, but it will likely cost the economy and taxpayers a lot of money. Greed powered this bubble and now the game appears to be over. How quickly people forgot the over-inflated stock market of the 1990’s. Will we ever learn?
Anyone think that something doesn’t compute with the last NAR existing home sales report that only salvaged a positive year-over-year number based on a 7.2% increase in the sales price of existing homes in the Northeast? How much you want to bet they will quietly revise that number way down in the report next week?
Great minds think alike :D.
If you check back to http://thehousingbubbleblog.com/?p=1128 , you will find the same thought crossed my mind as soon as I saw the June figures. In fact, the North-East numbers cruelled a prediction I made here last November or so that YOY median would turn negative in June.
Suffice it to say I will be looking at the revised June numbers with considerable interest next week, particularly since the North-East May numbers moved down quite a bit between preliminary and revised.
Northeastener,
To my ear that doesn’t sound good. I suspect that, in a rental building, economics are everything. You would be looking for a buyer that doesn’t feel that way — perhaps a rare bird indeed. To that basic concern one might add that rental rates are coming under competitive pressure. If your tenants turn over during the next couple of years, finding new ones at an acceptable rent level may be challenging.
Also, you bought in 2004 when (perhaps) prices were already elevated in your area. Given that the general real estate market might slip below that point and not return for 10 years — and in view of the fact that purchase price is the primary driver of rental property economics — if you hold it you may not, for a very long time to come, be able to recover what you paid for it.
If you like living there, fine. But if you view this as an investment, keeping it feels like the wrong thing to do. Better to sell now, bubble-sit, then buy another property cheaper.
One other thing. Big lots with a water view are nice for a live-in, but the owner has to pay for those and they don’t produce income. An investment-oriented owner might do better to pick a property where the full purchase price buys a rent-producing asset.
Heck, CNN even mentioned the housing problems this morning while I was driving. I went by the website to read the article a few minutes ago, but I only found this:
“Housing starts came in at an annual pace of 1.795 million, according to a Census Bureau report, down from the 1.84 rate in June, which was revised lower. It is also less than the forecast of 1.81 million of economists surveyed by Briefing.com.”
Note that the “adjusted” figures from June were themselves adjusted downward. I think it is safe to expect further downward revisions next month as well.
“There is no reason to panic.”
- Wasn’t that the first sentence made the night the Titanic went down?
any guesses on housing starts for sept/oct ?
wonder if mr market will like a 10-15% decline
I’m returning to NYC area after 10 years in Ca. I’m interested in find a small house to purchase around Rocky Point/Sound Beach in Suffolk Co. Anyone have opinions on that area?
Ny guy in Ca
Compared to other areas Rocky point/ sound beach look like bargins right now. Inventory is sitting, tons of open houses every weekend. I do some drive-bys of the open houses and rarely see people there. Lots of reduced listings showing up in Newsday. My wifes friend put her house up for sale a couple of months ago for $425,000, current price $359,000, no takers.
Even though the areas you mentioned look more reasonable than other areas, there’s no need to rush into anything, they’ll come down. Long Island is about 40% overvalued. At property taxes are insane, which puts more pressure on values.
I live in Port Jefferson, Sold my house in Huntington April 2005, and will rent for at least two years.
DH and I own in a Nashville (TN) area suburb in a subdivision where building continues (in its last phase, I believe). We purchased in ‘04 and are now considering what we should do. We like our house actually; however, we are becoming turned off by homeowners who have moved out of state and are now renting their homes to illegal aliens, who obviously do not have the same regard for the homes as a homeowner would. In fact, there are several homes owned by out-of-staters. Moreover, the HOA is very ineffective and doesn’t enforce anything. If we have another child, we’d want - and possibly need - more than our current 2000 square feet. We are in a market where people still claim it’s “hot,” but I see price reductions and houses sitting longer the more I investigate. Any recommendations? We did not outlandishly overpay for our home. We have a 30-year fixed rate and have absolutely no issues with making our monthly payments. We have a decent-sized savings cushion and have knocked out many of our debts as well. Wait it out? Sell? Help?!
Try to get on the Board of the HOA??
What a great thread. One of the best. People weighed in from all corners of the country with their own fascinating yet place-specific tales to tell. The only thing I have to add, is that while some people (like the LI NY physician have what I would call very “portable” occupations, some of us (like Silicon Valley techies, or myself, a Madison Avenue ad guy) are sort of stuck. Because while everyone gets sick at times, not everyone needs high end programming or an ad campaign.