Bits Bucket And Craigslist Finds For August 22, 2006
Please post off-topic ideas, links and Craigslist finds here!
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Surprise of the day -
Toll Brothers posts lower net income, cuts guidance
For some the surprise of the day will be if the share price gets hammered into the ground because of that news.
Tol is up today, which means that its earnings and projections are not as bad as Wall Street feared. However, TOL today made a substantial cut in their annual earnings projections only three weeks after their previous cut.
Now people who think that TOL is doing ok should consider how many more times they will cut guidance this year and if their projections for next year have any credibility at all.
The whole HB sector went down strongly in early August when TOL last warned. Today most HB stocks seem to be up a little, but owners might have second thoughts considering that July homes sales will be announced on Wednesday and Thursday. The data for various markets that have been trickling into posts on this site look weak. What would happen if TOL, instead of projecting that sales and prices would more or less level out from here, projected instead that sales would continue to decline at the rate that we are observing.
A very good friend of my family is a building contractor.
Before he moved from the East Coast to Montana, he did quite a bit of handyman work for my parents. During one of his visits to the house, he amused my mother with stories about his time as a Toll Brothers employee.
According to our friend, Toll’s workmanship leaves a lot to be desired. In fact, he made up a new slogan for them, which my mother is quite fond of repeating as she drives by one of the many Toll McMansions in her area:
“Guaranteed for five years. Then they fall apart.”
“Tol is up today, which means that its earnings and projections are not as bad as Wall Street feared.”
Yeah, right, all the bad news is priced in, no matter how much bad news there is to be priced. I personally suspect another dynamic is at work, which was well-described by John Maynard Keynes:
“It is not a case of choosing those [faces] which, to the best of one’s judgment, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practise the fourth, fifth and higher degrees.” (Keynes, General Theory of Employment Interest and Money, 1936).
Keynes believed that similar behavior was at work within the stock market. This would have people pricing shares not based on what they thought their fundamental value was, but rather based on what they think everyone else thinks their value was, or what everybody else would predict the average assessment of value was.
http://en.wikipedia.org/wiki/Keynesian_beauty_contest
Toll’s face is looking pretty ugly these days, IMO…
I haven’t looked at the charts, but I would be less concerned with the increase in share price given outlook and more concerned with average daily volume during these periods of stock price consolidation. You can always tell the market makers are pulling a head fake on us when consolidation takes place under lessening daily volume… then they pull the rug out from under you.
The overbought/oversold indicators like RSI and Stochastics can help as well to determine why a particular piece of news has little/opposite effect.
Bottom line (if you partake of the technical analysis camp) is that you need to look at a number of indicators to understand the behavior of a particular stock and even then it is a bit of a crap shoot (heck, even purist TA believers are only looking for a small percentage increase in accuracy of predictions on price over time to give traders an edge)
The sidebar on p. C1 of today’s WSJ is entitled “A Toll for Housing” (by Justin Lahart). I quote a bit here:
“Rising home inventories and shaky sales have put pressure on housing prices. Tomorrow’s report on existing-home sales from the NAR and Thurday’s report on new-home sales from the Commerce Department may show that in July home prices had their first decline from year-ago-levels since 1995. In June they were up 0.9% and 2.3%, respectively.
If prices are falling, that could increase the ranks of housing market fence-sitters, people who are holding off on buying with hopes of getting better deals.
The lingering concern on Wall Street is that this snowballs. Price decline could challenge the beliefs of homeowners who see their houses as a store for retirement savings and force them to cut back spending.
“The message of the housing boom was that housing prices are always going to go up so you don’t have to rely on conventional ways of saving,” says Lehman Brothers economist Ethan Harris. “Now that view has to be changing.”
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Justin, you rock! Now ‘fess up — what is your blog handle? Or are you just a lurker here?
A short video I put together last night about the west Houston real estate scene:
http://louminatti.blogspot.com/2006/08/west-houston-real-estate-tour.html
I wish people in other parts of the country would do videos like this. Not that my video is good, but it’s very easy to do and other videos would make for interesting discussion here. (I’d like to see a local Phoenix resident put one together!)
Good job Lou! I wish I was a little more tech saavy and could do that to my neighborhood on Long Island. For as easy as you make it sound ,I’m sure i would muck it up. BTW, how much are the 80s houses goin for? Quite frankly the newer houses sound like a steal.
danni
Anyone can do this. Most digital cameras have movie capabilities, and XP comes with a simple movie editing tool. It’s literally drag and drop.
I’d like TxChic to create one. I bet it would be pretty good. She’s the queen of entertaining snarkiness.
I have a camera full of pictures of the housing bubble in Dallas, complete with the architectural love children of almost every vernacular. Some of them are truly hideous and cannot be viewed after ingesting a large meal. The ones I particularly like are the ones showing a gigantic 6000 square foot Tuscador (shotgun marriage of Tudor and Tuscany, complete with cylindrical tower and witch’s hat (neither of which has any reference whatsoever to the land of Southfork) sandwiched in between two 1940s era small ranches. Then we have the gigantic mongrel mansions being built on scraped lots on Belmont Avenue just west of Whole Foods where the poplulation is largely Hispanic and blue collar. I’ve just got to get off my lazy butt and download them.
They have to be some of the ugliest places to live I have ever seen.
Though the prices are beyond my comprehension- 85 , 120? Jeez , that’s a few years worth of RE taxes to many of the FB ’s in my area.
The cheap ones are indeed ugly. They are being snapped up by immigrant families. Provided they have traditional loans they should be OK, but if they are buying them with ARMs I just don’t know what will happen to them down the road. We’ll see what happens in January when they get their $2500-$3000 property tax bill. That could be a killer. (Are the current wacky RE loans still requiring an escrow account for taxes and insurance for people who don’t have more than 20% equity?)
I hope to God that these lenders are not letting people be responsible for their own tax bills - at least not unless you have a 20% down paymnet (though I guess 20% equity will be claimed by every FB trying to get rif of his PMI and pay his own taxes in order to minimize the monthly nut , regardless of the reality that they still actually have to pay the tax , and now in a lump sum– out of sight (for a year anyway) .. out of mind). I do find it hard to believe that houses can still be had for such prices though. The area in which I live , I kid you not , people pay that much in tax over the course of several years. Frankly I can’t wait to get the hell out of here. Have many friends who’ve left /leaving the area already. Heading to the carolins etc. I may just take it a step further one of these days though and become an expat. Am scared of the ramifications of this country’s debt addiction , both public and private.
The rest of the world’s economy depends on the US. You aren’t safe anywhere else either. That’s life.
You made the assumption that I am talking about Earth.
I think, but am not positive, that if someone does an 80-20, they can avoid escrow. Those with more expertise please correct me if I am wrong. This means, if I am correct, 100% LTV can avoid escrows. Again, I may be wrong here.
Lou, considered buying in the Sugar Land / Katy area awhile ago.
Not as an investment, but to live. Can’t believe the amount of construction (both highway and homes) happening in that area.
Looked at some fabulous homes, but the job market ultimately made the decision not to move.
Cinco Ranch (mentioned on your link), had some nice homes. Was considering a place in a gated community there, overlooking the golf course.
Only $350K!
Be careful about buying in Dallas. We bought a nice 4/3 in Far North Dallas in 1983, and sold it in 1985 after it had been on the market for nine months. By doing FSBO, we lost less than 2% including the settlement costs. In 2004, I was looking on realtor.com for houses in that old ZIP code, and lo and behold, there was our old house (Dallas realtors show the address on realtor.com). The ASKING price was LESS than our SELLING price NINETEEN YEARS EARLIER. It wasn’t an anomaly; other houses in the neighborhood were similarly priced. How far down did prices drop in Dallas, and when did that happen?
That was outstanding Lou….I am also a bike rider (minus the spandex) and I may try to do this….Picture speaks louder than words “Big Time”…Nice job….
This is fascinating. I’m going to try to do something similar for my little town in the Ozarks. Everything from McMansions to former chicken-house shacks are for sale. I wonder if there is a way to pop easily pop these videos onto Google Earth?
I spoke to a Mortgage person in Carolina Beach NC and he said 75% of Carolina Beach was for sale. I personally walked 1 mile and found 30 houses/duplexes for sale.
they will file a 8k to the sec later in the day.
hopefully tehy will disclose the cashflow.
the amasing thing is that they lowered the guidance in the 9th. august.
here is a quick summary
http://immobilienblasen.blogspot.com/2006/08/mal-wieder-toll-tol.html
Interesting CNBC is doing a section mentioning HARD LANDING.
Simmssays…What You Need to Be Cool in College
http://www.americaninventorspot.com/school_supplies
I caught on the news that a molatov (?sp) cocktail was thrown through a window of a Century 21 building in Jamaica Plain, MA , setting it and other buildings on fire. I just caught the end of it and don’t know if they already have a suspicion as to who and why, but somehow I wouldn’t be surprised to see more of these types of stories as we go forward and FB’s realize how hosed they are and try to exact revenge.
I am sure that most everyone saw the entire row of rowhouses in Baltimore that were vacant and burned.
I thought that there was a critical undersupply of housing?
Someone posted yesterday: today on NPR, Talk of the Nation, about the housing market.
repost as this didn’t go through:
I caught on the news that a molatov (?sp) cocktail was thrown through a window of a Century 21 building in Jamaica Plain, MA , setting it and other buildings on fire. I just caught the end of it and don’t know if they already have a suspicion as to who and why, but somehow I wouldn’t be surprised to see more of these types of stories as we go forward and FB’s realize how hosed they are and try to exact revenge.
The whipped husband was mad at Suzanne because he lost his house that he couldn’t afford
Funny you mention that….when my house was on the market, a couple struggling w/financing for a home listed at $70,000 more than ours (for same size house 1 street over) had targeted our house for a back-up if the financing didn’t go thru. As most reg readers know we’ve poured a lot of money into what I’d called the infrastructure…roof, cedar, paint, floors, all new appliances (nothing too crazy), new furnace, hot water heater, water system, etc. but the home they stretched for was only a year old and was a more exciting design.
Long story short, the couple found someone to finance their dream home and now, what is it? 7 mos later…their home is back on the market…btw they’re asking $10k more for it.
Another sign of the times on the news this am. On the other side of Syracuse where the incomes are a bit lower, auto break-ins are up 18% over last year.
An interesting article on how revenue from folks who see through ebay is down. While the article says the people with complaints point to the CEO, I think its a far greater sign of consumer exhaustion. When the house ATM runs out of money, you can’t bid up prices on vintage belly button lint like the good old days.
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URL:http://tinyurl.com/fdms5
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(AP) - Despite a recent swoon in eBay Inc.’s share price, Wall Street seems willing to give Chief Executive Meg Whitman the benefit of the doubt. EBay’s merchants beg to differ.
Some of those who sell merchandise through the Internet auctioneer’s Web site recently have called for drastic action and management change at the San Jose, Calif., company. They are particularly upset at the deterioration in the company’s flagship auction site, where they say they are seeing fewer transactions and declining sale prices.
“EBay’s core (auction) performance is suffering tremendously,” says Steve Grossberg, a longtime videogame seller on eBay. He says he now lists an item four times on average in order to sell it, up from two listings two years ago. Adds Andy Mowery, an eBay seller of home and garden gear: “It is time for new leadership at eBay.”
sorry. sell through ebay - At this point I will now wake up before I post.
I think “see through e-bay” works better. Scam shipping on small items, phantom bidding, unequal bidding access, tiered fees, subtle redirects, multiple storefronts… caveat emptor.
The only redeeming thing about e-bay is the ability to locate hard to find items. Even so, beware.
MSM has already picked up on it. WSJ says starbucks will be taking in soon with $3 gas and lack of housing ATM.
I’ve been absolutely stealing stuff off Ebay. New Patagonia gear for 95% off retail. A new Garmin HRM for more than half off. I have a big watch list and every day things are being listed on it.
Who’s your source for the outdoors gear on eBay?
Thanks!
Stephanie Ellison
My best seller is called The Gear Revival.
Does anyone have an opinion as to the cause of “fewer transactions and declining sale prices”? Is it something that eBay has done? (I have never used it.)
I was actually wondering if we’re seeing a whiff of deflation.
eBay is actually very seasonal. The best selling season is November to October, more because people stay at home more in the winter than because of the holidays. But I agree that eBay is getting a little long in the tooth and dowdy, like so many of the tract houses and condos in the Sunshine State. Also agree that deflation is much more likely than inflation over next 12-18 months as money creation dries up.
eBay will be the pawn shop of the 80’s as people sell off all of the gadgets and doodaws acquired over the past 5 years for food money.
I wish I was smart enough to say that but now that you point it out it seems obvious.
These eBay sellers have the same trouble RE sellers do - they don’t want to lower their prices to a market-clearing price. The easy money is over.
Look for eBay volume to pick up as folks start selling off their “stuff” to try and save their financial butts.
I have noticed that. Have followed several items that I eventually bought through 3-5 listings. No problem, I have all the time in the world to wait.
A couple of times I bid low for this, the auction expired, and magically, I got them through “second chance” offers which tells me the winning bids were shams. This has happened 8-9 times.
I have sold a lot of items on Ebay, I have not listed anything in 6 months - The reason Ebays fees are no longer reasonable. I live an hour from the nearest city and Ebay was great for selling outgrown items. Now I list on Craigslist with the similar results and no expenses.
(I caught on the news that a molotov (sp fixed) cocktail was thrown through a window of a Century 21 building in Jamaica Plain, MA)
Seems to be a local custom. I tried searching for it and ended up with all kids of incidents in the area, but not this one.
I guess everyone will react to real estate losses according to local custom. In NYC, they’ll sue.
http://www.thebostonchannel.com/news/9709925/detail.html
Past arsons that police believe are connected were not housing related.
yahoo! finance now has a special edition up:
“Real Estate: What Now?”
“Condos boom in N. Idaho”- the bubble tries to live on!
“The popularity of condominiums in northern Idaho has been increasing in the last year, and so have their prices — approaching $2 million for a luxury condo.”
“After a hard day grading potatoes on a harvesting crew, there’s nothing like ambling across a luxurious slate floor, dumping your mud-encrusted overalls in a pile, and stepping in to a jetted marble bath tub with views overlooking Boise’s historic Ida Lee district.”
— Brought to you by the Idaho Luxury Condo Builders Assn.
Funny….
After a hard day grading potatoes on a harvesting crew…”
Wrong part of the state. In Northern Idaho, a logger or lumbermill worker would be enjoying his luxury condo.
I forgot to post the link: http://www.idahostatesman.com/apps/pbcs.dll/article?AID=/20060822/NEWS02/608220378/1029
Check this out.
http://biz.yahoo.com/special/pf082206_article3.html
DL reporting that nearly everyone is waiting to get a better price.
Update on my co-worker’s home buying situation. I had posted before about how she was going to “lowball” a FSBO listing at $340K for $320K (despite me suggesting she go even lower and work up from there). Her bid was accepted. Inspection’s this morning. Sale is contingent on her selling her house by the end of August.
Her house is “zillowed” at ~$270K. I know, I know - zillow isn’t exact, but still. She’d like to be mortgage-free and owes a bit on a home equity loan only (no mortgage on her current house). Wants to sell for about $350K to make it all happen.
I have to say, if she gets $350K for her house I’m giving up all hope that things will ever improve around here. I’m not the type of person to wish bad things for other people and I hate to even sort of wish for her house not to sell, but on the other hand I want so badly to be right about the market demise.
Was there negotiating, or was her first offer accepted?
First offer accepted. As I’ve read on this blog before - that means she offered too much!
The market demise is not in question, the only issue is timing. It’s like those of us who “know” another 1987 is out there in the stock market. It just hasn’t happened yet, but the cheap volatility has made it reasonable to keep trying to catch the move.
As I’ve heard it explained, 1987 happened because James Baker (then Treasury Secretary) threatened trade war with Germany and Japan. What makes you expect a repeat?
Hedge funds and derivatives.
Hopefully the contingency will force a rethinking. Once she gets to be on the seller side of the transaction, the gears might start turning.
I’m clueless regarding contigencies (hell, I’m clueless about most of a RE transaction - if and when I ever buy, I’m going to be posting to ya’ll for help). Anyway, it seems almost insane to me that someone can make buying a house contigent on selling theirs. Kind of screws the other seller, doesn’t it? I understand contigencies based on inspections and the like, but based on selling your own home by the end of one month? Doesn’t seem fair.
Might not seem fair, but it’s such a large expenditure that the practice is commonplace. When you see stories about somebody carrying 2 mortgages, often it is a situation that they would have used a contingency in the past. Instead they threw caution to the wind and just couldn’t live without their new house so didn’t bother with the contingency.
It also says that those of us renting-by-choice are becoming hot commodities, because when we buy, it will be without any contingencies.
> I understand contigencies based on inspections and the like, but based on selling your own home by the end of one month? Doesn’t seem fair.
Contingencies are simply part of the offer like the offered price. No one forces the seller to accept an offer with contingencies. The seller could wait for a offer without them, but that offer would probably have a lower price written on it.
“Sale is contingent on her selling her house by the end of August.”
Now that’s an interesting contingency. My neighbor is selling a house for 800K. I offer 750K, with the contency that I won’t buy it unless I can sell it by this time next month for 900K. Is that it?
Basically, my example would be a potential 150K (minus fees) profit for me with no risk.
I can’t see a seller accepting such a contigency… I cannot see how it is ever beneficial to the seller regardless of how desperate they may be, unless possibly if I can move houses faster than thier agent can.
If this is true, your friend is taking advantage of fomenting panic selling that is just waiting to begin.
Whoops, nevermind, disregard… I had misread your post. Sry… need that delete/edit button.
Chinks in the Armor?
http://www.xanga.com/home.aspx?user=russwinter&nextdate=8%2f22%2f2006+23%3a59%3a59.999
here is something very good from grim about stated income
http://nnjbubble.blogspot.com/2006/08/liar-loans.html
I’ve been noticing more and more homes for sale listed on craigslist under the “apartments for rent” category. Sometimes they even list it by the estimated monthly mortgage payment instead of the asking price. There is no mistake, these are homes for sale (and not for rent) but being listed under the for rent category. Anyone else seeing this?
maybe postet bevor. from peter shiff.
The Bond Market Has it Wrong
Perhaps Abraham Lincoln would never have devised his famous adage about fooling all the people all the time if he had a chance to observe the current bond market’s complete obedience to Fed propaganda. In an exercise in mass hypnosis that would have made Orson Wells jealous, the Fed has managed to convinced bond investors that inflation no longer matters. This is like convincing major league managers that batting average no longer matters. It was a long process, but for now at least, the Fed should celebrate their communications victory, at least until the actual carnage becomes too heavy to ignore.
In an article earlier this week in the Wall Street Journal, as in many other recent media reports, a professional bond investor says that his is no longer focusing very intently on CPI reports. After all, says the bond trader, the Fed has said that growth is the thing to watch now and that any current signs of rising inflation are backward looking. As a result, at a time when even the most watered down data reveal that inflation is running at its fastest pace since the early 1980’s, Treasury yields have remained significantly below the current 5.25% Fed funds rate. How could this have happened? How could professional bond investors speed through these stop signs at 75 mph? It happened step by step.
The first step was convincing the markets that hedonic adjustments were okay. Next came the legitimization of substitution bias. Then the Fed convinced everybody to ignore monthly increases in food and energy. When that wasn’t enough, it got everybody to ignore yearly increases in food and energy. Finally, when even all these tricks were not enough to conceal the growth of inflation, the Fed finally played its trump card by telling the markets that inflation is the poor step-child of its much more import parent, GDP growth.
This week, when the government reported better then expected PPI and CPI data, the bond market went ballistic, as traders took the government’s bait hook, line and sinker. Equities went along for the ride, and a good time was had by all. Lost in the shuffle was the renewed weakness in dollar, which has lost about 2% of its value relative to other currencies over the past month. The Fed pause has given currency traders the “all clear” to sell the dollar. Combine that with a poor technical outlook and I look for the dollar to meet with some intense selling pressure in the coming months.
Since the value of the dollar is the single biggest determinate of prices, it is amazing that Wall Street can celebrate a victory over inflation based solely on one month’s data despite the poor monthly performance of the dollar itself. If the dollar continues to lose value, it’s only a matter of time before sellers demand more of them in exchange for their wares. If they fail to raise their prices, the net effect is that they suffer a price reduction. So while Wall Street looks to the bond market as evidence that inflation is well contained, the smart money looks at the forex markets to realize just how much worse inflation is likely to get. Remember, bond yields do not reflect what future inflation actually will be, only what bond investor think it will be. Action in the currency markets will reveal just how wrong these bets are likely to be.
http://www.immobilienblasen.blogspot.com/
OT: God, I’m an idiot . . . for a second I thought postet bevor was Latin for something (you know, like “caveat lector”?)
from germany,
my english is not very good. i try my best
http://www.immobilienblasen.blogspot.com/
Deutch fur mich ist auch schwer…vielen Dank fur eine Gelegenheit es zu lesen. Es wird wohl 20 Jahren …
Conundrum
Went to a wedding in LA this past weekend. Couple of interesting titbits:
The groom lives in Bakersfield, CA, where he bought a house last year. However, he and his bride will move to Houston, TX after the wedding. Hence they have to sell the Bakersfield home. They looked slightly concerned with the recent onslaught of inventory.
A young couple with kid living in Fairfax, VA, was also present. The couple complained about the cost of housing. As the name “Fairfax, VA” obviously ring a bell, I replied, in very neutral tone, ‘Don’t worry, it’ll all revert back to the norm eventually.” They looked at me in disgust: “We sure hope not. We just bought a 3000 sq ft townhome last year. So far, we’re ok though.”
Both of the above are classic bubble bagholders. Late 20s, bought 6-8x income (my guess), and clueless. Also shows you the myth behind “demand on the sidelines”. As we’ve concluded over and over, everyone that could buy has bought.
Lastly then, homes are now really starting to sit.
Example of a mansion sitting : http://tinyurl.com/n3p4s
Price Reduced: 06/21/06 — $905,000 to $889,950
Price Reduced: 08/09/06 — $889,950 to $854,000
DOM: 77
An older home, sitting:
http://tinyurl.com/pg5t8
Price Reduced: 07/04/06 — $560,000 to $539,950
Price Reduced: 08/03/06 — $539,950 to $525,000
Price Reduced: 08/15/06 — $525,000 to $519,950
DOM: 55
The 10-year is only 25 b.p. below the 30-day. 100 b.p. or more is common during recessions. The bond market is not acting irrationally; it is simply signalling a slowdown. There is no “one-month victory over inflation” - the victory over inflation has been going on for 25 years and will not be lost easily. The best model for the U.S. economy today is Japan 1990, not U.S. 1973.
I wish you were right, the only reason inflation appears under control is that THE STANDARDS USED TO MEASURE INFLATION ARE NO LONGER THE SAME AS USED IN THE REAGAN/BUSH ERA! Unfortunately inflation has won.
Which reminds me of the joke when the president was talking about the war on drugs and was asked if it was over another reporter answered “yes, drugs win”.
Completely, totally and utterly OT: I’m posting this here because it made me laugh for about 10 minutes and I thought you all might also be in need of a little midday amusement:
http://thesuperficial.com/2006/08/hulk_hogan_and_his_neon_banana.html
That’s…erm….quite a banana….{cough}
Hey, that’s one of ny favorite websites!
Apologies if this is a duplicate…
Went to a wedding in LA this past weekend. Couple of interesting titbits:
The groom lives in Bakersfield, CA, where he bought a house last year. However, he and his bride will move to Houston, TX after the wedding. Hence they have to sell the Bakersfield home. They looked slightly concerned with the recent onslaught of inventory.
A young couple with kid living in Fairfax, VA, was also present. The couple complained about the cost of housing. As the name “Fairfax, VA” obviously ring a bell, I replied, in very neutral tone, ‘Don’t worry, it’ll all revert back to the norm eventually.” They looked at me in disgust: “We sure hope not. We just bought a 3000 sq ft townhome last year. So far, we’re ok though.”
Both of the above are classic bubble bagholders. Late 20s, bought 6-8x income (my guess), and clueless. Also shows you the myth behind “demand on the sidelines”. As we’ve concluded over and over, everyone that could buy has bought.
Lastly then, homes are now really starting to sit.
Example of a mansion sitting : http://tinyurl.com/n3p4s
Price Reduced: 06/21/06 — $905,000 to $889,950
Price Reduced: 08/09/06 — $889,950 to $854,000
DOM: 77
An older home, sitting:
http://tinyurl.com/pg5t8
Price Reduced: 07/04/06 — $560,000 to $539,950
Price Reduced: 08/03/06 — $539,950 to $525,000
Price Reduced: 08/15/06 — $525,000 to $519,950
DOM: 55
Whoo-hoo! RE auctions for everybody!
Not only has the RE auction fad hit here in Minnesota, they’re auctioning off an ENTIRE DEVELOPMENT - including the golf course! No reserve.
Ritchie Bros. will be holding a large, unreserved real estate auction on behalf of The Jewel in Lake City - a local, master-planned golf community - on September 23…
The current unsold home sites and undeveloped land at the Jewel will be sold in the unreserved auction to take place on September 23, 2006, as well as the Hale Irwin-designed golf course, the clubhouse, and maintenance facility.
Everything will sell to the highest bidders in the unreserved Ritchie Bros. auction, regardless of the price. This huge event, which will be held right at The Jewel in Lake City location - 1900 Clubhouse Drive, Lake City, MN - will feature a live, on-site auction with simultaneous online internet bidding.
As one of the largest Planned United Developments (PUD) in the history of the state of Minnesota, the Jewel auction will offer:
- The Hale Irwin-designed golf course
- More than 100 home sites in several distinct subdivisions ready for construction
- More than 200 acres of undeveloped commercial and residential land
- The clubhouse, restaurant, and maintenance facility
- Single family homes
- Condominiums
Press release at
http://www.marketwire.com/mw/release_html_b1?release_id=148941
I got quite a jolt from this, because this golf course-centered development has been _heavily_ — and I mean HEAVILY — promoted locally for the past 2-3 years on radio, print, and tv. And all along I was wondering who in ghod’s name could afford the insane prices! I guess we’ve learned the answer: almost nobody.
maybe this was just nothing, but last night on “the truth about money w/ Ric Edelman” the answers for the question of the day were not related to the question… they instead said A) home prices are rising, B) home prices are rising, C) home prices are rising, D) homes prices are falling, E) home prices are rising. and D) was highlighted as being the correct answer. they only flashed it for a few seconds before the camera went back on Ric who appeared embarrassed but covered it up quite well by saying, “those weren’t the right answers” and smiling. the original question was related to HELOC rates and taxes.
i wonder if one of his producers was having some fun.
Sorry, about the dual post……Amatuer hour on the blog.
http://www.marketwatch.com/news/story/Story.aspx?guid=%7B9FE7F780%2DDF3B%2D46FA%2DBB3D%2D5104309EEEA5%7D&siteid=
“Tipping point pops bubble, triggers bear”
“Ten warnings the economy, markets have pushed into danger zone”
http://boise.craigslist.org/rfs/197355668.html
Why buy this house when the builder has 26 homes in the same sub for sale- none of which are priced as high as this f’d flipper’s property. Good luck!
Ugh. I hate garages in the front like that.
In freaking Kuna no less. Brandon, PLEASE tell me you don’t have to plunk down 300K to get into that nothing one-horse farm village in the middle of the sage brush these days. Where does this end?
Kuna is “up and coming”; you can get a smaller home for just under 200k, but even then they are overpriced.
The end is near because inventory is through the roof- its as if the market hit a wall in the spring.
Shiller (spelling?) on NPR’s Talk of the Nation right now discussing Housing Bubble. Check you local NPR/public radio station.
What’s going on with home values right now? (At least zillow ones.) Here’s a town I’m interested in buying in:
http://www.zillow.com/local/Pennsylvania/Montgomery/Horsham
All surrounding areas are showing increasing values over the past several weeks after an encouraging dip in the early part of the year. The national overview seems to be the same. Why the value rally?…
Read about Boise’s newest condo project:
http://www.idahostatesman.com/apps/pbcs.dll/article?AID=/20060822/NEWS02/608220356/1029
“With an estimated building cost of $300 a square foot for a condo on a lower floor, a 600-square-foot, one-bedroom condo would sell for $180,000, while 1,200 or 2,400 square feet would cost $360,000 and $720,000, respectively.
Preliminary plans call for 70 condominiums, but the exact number remains a moving target. How many blocks of space each occupant purchases would determine how many units there would be on each floor.
The top floor would consist of two 3,500-square-foot, two-story penthouses carrying price tags of $1.5 million each.”
Watch out San Diego!
$1.5m, eh? in La Jolla, that’ll get you a 1270sq.ft. one-story built in 1941. That’s about $1181 per sq.ft.
http://tinyurl.com/gr5w3
But keep up the good work, Boise.
I’ve got a question for ya’ll - how do homeowners know that the ‘value’ of their home has dropped unless they try to sell, or refinance?
Do people REALLY get appraisals on their home just for the heck of it?
No, but they do get appraisals when they refinance or try to take out a HELOC.
usually they don’t unless they hear from neighbors
today you can use zillow or a lot of counties have online access to property and tax records
This was posted today in the Los Angeles section of Craig’s Real Estate. Does anyone know a good way to find it’s last purchase price?
http://tinyurl.com/pc97u
good article by housing bear/contrarian Fleckenstein:
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/FaceItTheHousingBustIsHere.aspx
From this week’s Barron’s, page 11. The cost and risk of adjustable-rate financing can be devastating. Consider a typical $250,000 three year adjustable-rate mortgage with a 2% rate-hike cap. If the monthly payment is now $1,123, after the first adjustment, the monthly payment is $1,419 . After the second adjustment, the monthly payment is $1,748, a $625 per-month increase. That’s $7,500 more per year just to maintain the same mortgage. If you think high gas prices are biting the consumer, consider the cost of mortgage adjustments.
Some more numbers –
32.6% of new mortgages and home-equity loans in 2005 were interest only, up from 0.6% in 2000.
43% of first-time home-buyers in 2005 put no money down.
15.2% of 2005 buyers owe at least 10% more than their homes are worth.
10% of all home owners with mortgages have no equity in their homes.
$2.7 trillion dollars in loans will adust to higher rates in 2006 and 2007.
DEFAULTS INCREASING …….
More signs of the housing market tailspin accelerating:
SPECULATORS IN SE WALKING AWAY FROM HOUSES THEY BOUGHT
From MORTGAGE SERVICING NEWS WEBSITE:
Southeast Markets Squeezing Speculators?
Rising foreclosure activity in the Southeast indicates that speculators who bought houses when prices had peaked are “simply walking away” from houses they can’t sell at a profit, according to ForeclosureS.com, a Fair Oaks, Calif.-based investment advisory firm. “Over 8,500 properties in Florida went into foreclosure in the month of June alone,” said Alexis McGee, president of ForeclosureS.com. “…. Now, price appreciation has gone flat and even reversed slightly, and this trend is colliding with rising interest rates. People who bought at or near the market peak are being squeezed out of their homes, and speculators find themselves trapped by rising costs and negative cash flows.”
ALSO:
Foreclosures Rising in the West
Meanwhile, ForeclosureS.com has reported that foreclosure activity in several Western markets rose sharply in the second quarter after a first-quarter dip. “Year over year, at the end of the second quarter of 2006, foreclosure activity in California has increased more than 67%,” said Alexis McGee, president of the Fair Oaks, Calif.-based investment advisory firm. She added that defaults were also rising in formerly hot housing markets such as Las Vegas and Phoenix, where she said more than 25% of new-home sales were going to out-of-state investors who had no intention of occupying the homes. “Now those who came late to the party find themselves squeezed by rising interest rates and resulting negative cash flows,” she said.
Chicago Mortgage Defaults Surge
Mortgage defaults in the Chicago metropolitan area surged in the second quarter, rising 60% from the level recorded in the first quarter, according to ForeclosureS.com, a Fair Oaks, Calif.-based investment advisory firm. “As of mid-August, 17,467 homes were in some stage of foreclosure in the Midwestern region that includes Chicago, Gary, Ind., and Kenosha in southern Wisconsin,” said Alexis McGee, president of ForeclosureS.com. Ms. McGee said job losses in the manufacturing sector, growing consumer debt, and rising energy costs are “putting the squeeze” on the middle class in the Midwest.