Post Local Housing Market Observations Here!
What do you see in your housing market this weekend? Builder incentives? How about a buyback plan? “Developers of Woodland Pond at Manchester are offering new buyers a two-year price protection guarantee. ‘We’re very committed and bullish on southern New Hampshire, and for good reason,’ parnet Robert E. Shapiro said.”
The Herald Tribune in Florida. “August is typically a slow month for real estate, but this is ridiculous. According to statistics compiled by John Lafabregue in Sarasota, just 4.9 percent of listed houses and 3.1 percent of listed condominiums were sold in August by members of the Sarasota Association of Realtors.”
The Pioneer Press in the Twin Cities. “Indecision is not an uncommon problem for prospective buyers looking for property in an area where sellers outnumber qualified purchasers, says Tom Early, president of the National Association of Exclusive Buyer Agents. ‘In a buyers’ market, with more inventory available each week, these women feel overwhelmed and can’t seem to make the right decision,’ says Early.”
“By Early’s estimate, buyers now prevail over sellers in more than 80 percent of U.S. neighborhoods. But he says this situation is only as advantageous to buyers as they make it.”
The Canaberra Times from Australia. “Established house prices could fall by about $100,000 if there were large-scale land releases, the author of a study on housing affordability widely quoted by government ministers has estimated. ‘Canberra is down there in the middle of a desert,’ Alan Moran said. ‘[There is] a lot of land around there and the land is worth around $10,000 a hectare. You get 10 blocks per hectare. It should be about $1000 a block.’”
From WHO TV. “You can find a ‘for sale sign’ on practically every corner here in Des Moines. While sellers cringe at the current trend, buyers are thrilled. They’re watching prices come down, and some developers are evening offering incentives to encourage them to buy.”
The Dallas News. “North Texas home sales continued to cool in August, the third consecutive month of declining residential activity. The pause after years of sales gains has caught the real estate industry’s attention. ‘People who have planned to sell at the top of the market may not get it,’ said (realtor) Sheila Rice.”
“‘Overbuilding in Texas is probably our biggest concern for the moment,’ economist James Gaines said. ‘The main thing we’re hearing and seeing is some slowdown in new home purchases and some buildup in builders’ inventory.”
“‘We don’t have a bubble in Dallas,’ she said. ‘But they are getting a steady diet of it in the media. If they keep hearing it long enough buyers will think that maybe they should wait,’ Ms. Rice said. ‘That could cause a problem if too many of them make a call like that.’”
OT, anybody having a copy of that Credit Suisse report handy?
San Diego home prices fall for 3rd straight month!! Condo prices now $40K lower than August 2005!!
Article at http://www.realestatedecline.com
Interesting, I just went on my regular bike riding route up in the S.F. Bay penninsula, it is in a quite high priced area - San Mateo down to Burlingame up by 280. Pretty much nothing less than a million - many that are substantially more.
There were more open house signs today then I’ve seen since I’ve moved into the area 2 years ago. It really jumped out at me.
The prices also aren’t showing big jumps. It seems to me that those who are long time owners know that this is going to be their last chance for a while to “cash in”.
While we don’t get a huge amount of rain (about 24 inches a year), Canberra is NOT “down there in the middle of a desert”. I live there.
If you go to one of the main lookouts and gaze over the suburbs more than 15 years old you won’t be able to see the houses for the trees.
Alan Moran is the director of an off-the-planet-right economic think tank called (with careful misdirection) the Institute for Public Affairs. His dislike for Canberra (the Australian Federal capital) as the embodiment of big government spills over to his view of Canberra as a place to live.
Maybe OT ,but can someone explain what this means exactly. As Washington Mutual has been one of the banks loaded with bad debt this article sounds like a way to pawn it off to the Euros’? Accounting scam mumbo-jumbo?
http://www.ft.com/cms/s/366e71d8-3ea0-11db-b4de-0000779e2340.html
“…sounds like a way to pawn it off to the Euros”
That would be pretty shrewd indeed. Sell your bubble-based “assets” to bubble believers in Europe, so they can diversify their heading-to-worthless paper. Slick. The Sting on a grand scale.
Couldn’t get past the first paragraph in the FT article without a subscription, but I found a Reuters article on the subject. The first paragraph of the FT article leads me to believe that it’s a warning shot across the bow if the Finance Board. “If you cut the value of our Home Loan Bank stock we’ll pull out and sell in Europe.” The Reuters article was clear as mud - talked about an “implied” guarantee from the issuing bank. If there is an explicit guarantee, or an “implied” guarantee strong enough to make OTS take notice, then they are not getting rid of most of the credit risk, just using the European market to shave a little off their funding cost. If these bonds are sold with no guarantee beyond the collateral that backs them, then they are palming their credit risk off on European buyers. Was the FT article any clearer than Reuters on the subject of what sort of guarantees came with the bonds?
Full version:
CAPITAL MARKETS AND COMMODITIES
US mortgage banks look for Europe funding.
By SASKIA SCHOLTES
552 words
8 September 2006
Financial Times
London Ed1
Page 39
English
(c) 2006 The Financial Times Limited. All rights reserved
US mortgage banks have begun looking to Europe for funding options outside the Federal Home Loan Banking system, in part as a response to proposed changes to how the system is regulated.
The Federal Housing Finance Board, which regulates the 12 home loan banks, issued a proposal in March that would cut dividend payouts until the home loan banks increased their retained earnings. Facing lower dividend payments, customer banks are expected to sell their stock in the home loan banks, in turn reducing their capital.
A House Financial Services sub-committee held a hearing to discuss the proposal yesterday, at which concerns were repeatedly expressed that the plan had the potential to drive members from the FHLB system to seek funding elsewhere. All 12 banks and their customer banks oppose the scheme and have filed more than 1,000 letters against it.
Louis Hagen, chairman of the European Covered Bond Council, said that the current regulatory debate surrounding government-sponsored enterprises (GSEs) such as the FHLB system had encouraged several mortgage lenders to reconsider their funding options.
“The discussion about the GSEs has led to concerns that (they) may not be a permanently cheap source of funding,” said Mr Hagen.
Washington Mutual, the system’s biggest single customer with Dollars 55bn of advances at the end of the second quarter, launched its funding diversification programme this week with a European roadshow for a covered bond transaction worth more than Euros 1bn.
Washington Mutual has already cut its stake in the Federal Home Loan Bank of San Francisco from 38 per cent to 25 per cent of outstanding stock.
The bank’s European transaction is part of a planned Euros 20bn covered bond funding programme and will be the first time that aUS institution has tapped Europe’s Euros 1,600bn market for covered bonds, which are backed by mortgages or public sector loans and guaranteed by the issuing bank.
Executives at Washington Mutual said that the covered bond market offered two advantages to institutions with large mortgage books: investor diversification and low-cost funding.
Todd Niemy, analyst at rating agency Standard & Poor’s, said that an added advantage of covered bonds was that they allowed the pool of mortgages backing the bonds to stay on the balance sheet. “This gives the company the flexibility it needs as a retail bank in dealing with its customers, including being able to change the terms of the mortgages, which it would not be able to do if the mortgage was pledged to FHLB or sold through a securitisation,” said Mr Niemy.
As a result, if Washington Mutual’s issue is successful, other US banks are widely expected to follow suit.
However, Richard Bernstein, chief investment strategist at Merrill Lynch, said Washington Mutual’s European covered bond programme may not be the path to cheaper funding for the bank, given the weakness of the dollar versus the euro.
“If the dollar falls, which apparently is increasingly the desire of policymakers, then such non-dollar debt could get more expensive for a US dollar-based business,” he said.
That consideration may constrain US issuers’ use of the European covered bond market unless a dollar-denominated covered bond market is born.
IF the FT reporter is right, then these things are being sold with guarantees, so they aren’t really getting rid of the credit risk. But I’m not sure that the reporter is that clued in. Securitizing the loan interrupts the lenders ability to recast the loan terms, but pleding the loan to a Home Loan Bank generally doesn’t (technically it does but there are easy ways around it). And keeping the loan on the balance sheet has a major downside relative to securitizing it. The lender doesn’t get to hold less capital against the loans by moving them off balance sheet. Which the reporter doesn’t note.
hello from germany,
germany is the “home of the pfandbrief” or covered bonds. the regulation is the toughest out there. the backing of these bonds must be proven and there is a duty to pump up the reserves if something goes wrong.
the key is that wm is not able to load the loans off their balance sheet.
i´m not sure how big the appetite for this kind of things will be. but this resolves not the problem from wm regarding the risky loans.
http://www.immobilienblasen.blogspot.com/
Buy now or forever be priced out. They’re not making any more land. It’s different here. Does that cover it?
Yeah, this “no bubble” thing really gets me. Everyone seems to take the normal stats for housing appreciation and compare them to the stats for the last five years. If prices in their area haven’t appreciated as much as CA/FL etc., then “there’s no bubble here.”
But what about cases where the prices shouldn’t have risen at all during this time period based on wages, layoffs, etc.? It’s as though all these people are riding on the Titanic, looking out their portholes, and saying, “Ohhh…look at that little piece of ice floating out there.”
Crash!
” If prices in their area haven’t appreciated as much as CA/FL etc., then “there’s no bubble here.”
Peggy, that the attitude that prevails in the Chicago area. I try to tell people that we should feel fortunate that RE hasn’t appreciated here as much as it has in San Diego, for example, that means we don’t have as far down to go to correct. But we still have to correct.
You forget, “There’s never been a better time to buy than right now.”
“That could cause a problem if too many of them make a call like that”. What kind of “problem” might that be?
In the markets that were late to the bubblemania, the insanity continues:
$1 million 2k sq ft condo-tel condos in Columbia, SC:
http://www.thestate.com/mld/thestate/15477323.htm
That is a hoot and a half. This guy is flogging the idea that these units will be hot sellers because of football games. Lemme see, how many wekends might that be? Twelve a year? Nah, no way. What are the odds that football season will be extended to year-round in Columbia? Hahaha.
I’ve seen condotels sell successfully for about $75,000 in Daytona Beach. Selling them for mega-bucks in Columbia, SC? IMO, the city council should be impeached if they give this guy a penny of their tax money and they should be unelected if they don’t try to squash the building permit.
Average 2BR Apartment rent $600/mo.
Priceline average for a hotel room on a weekend at the Marriott: $55
Posted rack rate: $149
Good luck covering the mortgage on any of those units!
I dunno, I’ve lived (in my poorer days) near football stadiums. Even though it was convenient (for me, not for my visiting friends) when I went to the games, it’s certainly not the residence of choice for anyone who wants to drive to the grocery or video store on an autumn weekend. And as for resale, what will weed out buyers faster than a back yard with a pool and high dive? How about a back yard (or balcony) with a stadium.
Now sure, these can be viewed as rental a.k.a. (bad) investment properties, where you rent out on those pricey weekend to blokes who love football, but remember those college days? No, better yet, remember those soon-after-college days, when you still had the team spirit and not a lot of money but just enough?
Yes, indeed, you and seven of your friends would chip in on an expensive weekend rental and then have a big music and beer party! Even though most people never intend to trash the place, as a landlord/investor, that’s almsot the last type of short-term tenants I would want: a bunch of football-weekenders! Just say no.
Locally, here in Tehachapi, CA, there were total of 487 homes that went into escrow over the past 12 months. Currently, we have 475 active listings. There are massive withdrawals and expirations.
In Santa Clara County, the supply-demand in the worst in years. Based on the most recent sales that went Pending Sale, the demand is less than half of what it was in August 2004 and number of listings are the highest that I have recorded in the past three years and are 2.5 times what they were in August 2004. Hence, supply-demand is worse by a factor of more than 5 compared to August 2004.
The median listing price for SFHs is down 75K in the past five months and has been declining steadily. I predict a drop of $60-75K from June (price peak at $819.5K) to August.
Jas Jain
OT, but love your work Jas. Always look forward to your posts at safehaven. Nice to see you here. Keep’em coming!
Ditto.
jas - same here as well - from financialsense.com. you’re a must read. tx!
dd
High end houses are gathering dust and I’m not seeing any price reductions which I find so strange. And yet as new homes are still coming on, I swear the houses are being priced ever higher. I am completely perplexed about that. Because of the consistent sales in the mid and lower homes the past few months, I’d have to say people must be thinking, “It’s different here” instead of “I gotta get out before the storm”.
Anecdotally, I heard thru the grapevine of a couple selling their lakefront home being advised by their realtor to reduce the price. It was the couple’s thinking that they would hold.
This comment is regarding my own town, not the whole region. Seems the burbs are not exactly reacting in unison as some are experiencing more inventory bloat than others.
And where are you?
Sorry, outside Syracuse, NY.
Carrie Ann-
I find it very hard to believe that Syracuse, NY does not have price reductions. That makes NO sense!
I believe you are in the unfortunate position of not having Zip Realty in NY State? I know Manhattan does not.
If you don’t have Zip, it can be very hard to reliably track price reductions- unless your town is so tiny that it’s easy to “memorize” everything that’s on the market?!
Well, take heart, I guess we can be pretty certain that, even if Syracuse has no price reductions at present, it will not continue to rise in value as the rest of the US tanks.
High end houses are gathering dust and I’m not seeing any price reductions which I find so strange. And yet as new homes are still coming on,
Casino owners love this too. Win and your on top of the world but keep playing and you will lose it all. Just sit back and watch the odds win.
Anecdotal, but here in ATL, I have driven by the same 3 houses for sale for almost two years now. They are all next door to each other; weeds are taking over the lawns. Asking price $1.8 to $2.0 million, I have seen no price reductions on them and like you said, they are just gathering dust. One did go to auction, but it’s back on the market. I guess the bidders didn’t hit the reserve price. How long can the buiders hold out. I do know that on house prices in this range, some builders have built in 2 years in the budget for the homes to sell. These homes have been completed for 2 years though, and still NADA. We’ll see what happens. I’m thinkin’ another auction but this one won’t be by choice.
Has anybody noticed a significant pick up in “architectural renderings” of houses, townhomes, and condos listed in their local mls?
I am monitoring the Pensacola, Florida area and I swear there has been a significant increase in renderings and computer graphic listings on my mls today (numerous) vs. four months ago (none).
My take on this is that “ground zero” investors have withdrawn from the market.
“Has anybody noticed a significant pick up in ‘architectural renderings’ of houses, townhomes, and condos listed in their local mls?”
I’ve not noticed it where I live, as there is little new construction, but I see a LOT of it, at an increasing rate, in the areas in which I plan to buy when the time is right. I thought it was just builders getting their in-the-ground construction into the listings a little earlier than usual; I think you’ve added a very likely motivation for doing so.
Yeah, I’m seeing more and more ‘modelled’ houses….but then again, even #rappy 3D models must be better than the awful truth..
..I give, m’lud, the following:
http://tinyurl.com/zmndf
29 DOM, and they still haven’t got a photo of anything more than a half-finished frame. You have to ask ‘why are you trying to sell it before you’ve even built it?’
But ..”finished by October 2006!” (yeah, riiiight), for a cool 1.6 million asking price. A 4,000 sq ft house on a 6,000 ft lot, and 100 yards south of the I-101 to boot.
I don’t think even a makeover by the talented people over at Pixar can make this one look better…
Funny you mention this, I noticed a couple of places in the glossy real estate ads today who’s image were shown using cheapo oil paintings (i.e. like those crapola paintings you see sold in front of Costco). They weren’t even nice places, just typical frumpy 50s tract homes. (this is in Santa Barbara, CA)
Last winter in Seattle there was a rise in artist renderings on the MLS.
My favorite though is a new development this summer: an increase of what can only be described as “rushed” listings of new construction:
Photos of barely begun (2×4’s and particle board, if that) places with construction materials scattered about and honey buckets/porta potties in the foreground!
For upwards of 600K!
P’cola Popper: We were there last month, and there were many signs on every corner. Also heard they were shutting down the Naval stn. so 1000+ jobs were going to be leaving ,and they were relatively high paying engineering support. Any observations locally on that? ….anyway, the cranes were up and running all down the beach…Racing to the stop sign”
I have not heard anything new about Pensacola NAS lately however there was some news that came out about a month and a half ago that one of the tactical wings based in the Ft. Walton Beach/Destin area was to be relocated to California which would cause some major problems over there.
Pensacola voters recently approved a major tax payer funded/backed project for the downtown area that includes the construction of a baseball field, maritime museum, and a park on the Trillium property which is located along the bay between downtown and Joe Patti’s. Looks like a lot of downtown townhome/condo construction has been initiated over the past year in anticipation of approval or at least “rebirth” of the downtown area. Suckers.
The beach is completely screwed up. Construction from one end to the other to repair the damage done by Ivan. Ft. Pickens Road is still blown out after the entrance gates. Going east the road to Navarre is still out. The beach needs a minimum of two more years to get back to its pre Ivan quality.
Property taxes are now being assessed on P’cola Beach which is a major issue. Insurance has gone through the roof. P’cola beach owners are getting double and triple helpings of Augur In’s finest.
Standard Pacific offered last phase and models today in Highland Ca (Inland Empire) sold them withou incentives or reduction.
Hi Gary. You aren’t Carnes, are ya? That would be a crack up.
Inland Empire was the last to rise and it might hold out a little longer than some other areas because it has had real growth in population. But don’t fret. It has just as many speculators as the rest of the counties leveraged up to the eyeballs with option arm loans about to reset. We’ll see in the coming two years when $2 trillion reset how many IE residents can legitimately afford to amortize their $500k McMansions.
But haven’t you heard about the “board deals ” . That’s when the builder puts different prices/incentives on a chalk board in the sales office that might not be the same as their advertising .
They ain’t SOLD until the builder actually has cash in his checking out. Other builders are reporting 50% cancellations, and these cancellations are happening right up to the day of closing. What this builder has is signed contracts with a deposit that opens the Escrow. Who knows where the prices will be in 60 days, but if the builder didn’t get a huge deoposit, expect a ton of cancellations.
Here’s some data for Ashland, Oregon. I’ve been keeping track of the local market here since last summer. Current inventory stands at 453 units, which is quite staggering when you consider the sales numbers.
(453/24 = 18.9 months inventory!)
Month # Houses sold AVG Ask AVG Sell AVG $/SF
July 2005 39 $488,949 $477,049 $260
Aug 2005 40 $470,455 $460,057 $263
Sep 2005 34 $504,371 $484,262 $266
Oct 2005 36 $449,383 $442,688 $293
Nov 2005 24 $489,025 $480,643 $261
Dec 2005 26 $460,576 $446,384 $265
Jan 2006 14 $543,082 $542,973 $279
Feb 2006 13 $588,585 $580,176 $311
Mar 2006 21 $484,433 $475,615 $245
Apr 2006 22 $485,445 $475,132 $257
May 2006 28 $535,729 $519,054 $257
Jun 2006 39 $572,594 $557,257 $272
July 2006 30 $490,993 $476,918 $256
Aug 2006 24 $561,925 $541,448 $288
Sorry for the crappy formatting of that table!
I guess the pertinent information is that sales volume YOY is down 40% compared to last August. Inventory keeps building and building.
In the price segment I’m keeping track of (below $450,000, 3BDR) there have been lots of price reductions, although most are still in the 10% range, and those houses are just sitting there. Several have been on the market for a year now.
I also see a trend increase for the Ask/Sell spread in those numbers; so if you’re correct about asking price reductions as well then there’s a fair bit of equity evaporating as we watch.
Of all the 3BDR houses below $450,000 listed since January in Ashland, 40% have had at least one price reduction, and 17% have had multiple reductions. One house is on it’s 5th price reduction!
In N. VA I’ve noticed that lots of “For Sale” signs are changing to “For Rent” signs. And they’re not moving, either. In most cases, the flipper-turned-landlords are asking for ridiculous rents - they are probably trying to cover their carrying costs. I will be interesting to see how long they can hold out.
That is happening here in my part of central Florida. I’ll bet it is happening in a majority of areas (other than tiny, tiny towns), but the reporting about it is lagging.
That’s intersting Chip, because here in Palm Beach, I am seeing the opposite.
I think rents are insanely low compared to home price. 2K will put you into a 600K home. And the higher you go, the more out of control the multipliers go. 5K a month will get you into a million and a half. 10K a month, and your in a Palm Beach style mansion (I would guess 3-5 million).
Anyway, I am not seeing rents rise, but acutally fall in most areas. Seems there is a real glut of “higher end” rentals on the market. Anything over 1500-2000 a month is “untouchable” for the typical employee down here (40-50K/yr income).
exactly! no one is going to take out a loan to pay rent, right? So no way those incomes support the house values either. This is so basic that it is just silly - I still cant believe how strong the denial is - as a trained economist I could not for the life of me convince people who are supposedly astute in finance (they worked in the RE industry as well) for years that these prices are not sustainable. But if you said bubble years ago, you practically got fired. So oh well, I quit instead.
Michael — re-read your post — rents for places that actually get rented here have fallen noticeably over the past six months. I didn’t word my post well enough — the flippers turn from for-sale to for-rent and ask an outrageous rent. There are already lots of for-rents already going begging. So these newest flippers-come-landlords will have to rot on the vine for a while before they realize therent they will receive is far les than what they hoped.
I’m seeing some of that too, or more dual-signs on the same lawn..”For Rent” “For Sale”.
I’m also seeing ads for open-houses at places in the for-rent section of the classifieds, which I’d never seen before either!
Here in MI.
“…seeing ads for open-houses at places in the for-rent section.”
That sounds like a smart idea to me. Some number of renters who are month-to-month or coming up for renewal probably want to avoid the pressure of calling a listing office to see a rental unit. If they can just drop by, they probably will. Never heard of this being done before, for rentals, but I think it is a good move.
George:
I’ve noticed that as well. I’m in Vienna.
In Glastonbury Connecticut there are for sales signs on almost every street. Prices are still predominately high for it seems as if Sellers are convinced they can sell at last year’s prices if they just wait. The majority of the listings are reducing their prices but only by $10K or so which hardly makes a difference. A crappy 1,200 square foot cape that needs work is not going to get $375K and hello? It’s not going to get $355 either. Keep trying. I’ll let you know when you start getting warm.
Waiting in CT,
I am looking in Glastonbury as well — properties still seem to be moving. I have been focusing on Great Pond/South Glastonbury area. Trying to avoid certain builders homes as I have heard of one builder who has been saddled with a suspect practices reputation. Not looking at new constrction but something built in the late 90’s. If you don’t mind me asking, where are you focusing your efforts. Email me at theguru1350@hotmail.com if you want to share any “war” stories.
Hello from the Northwoods of Wisconsin. Last week, my township finished and mailed the new assesments for property taxes. The last re-assessment was done in 1999…so, you can gues the results of this one. Property values…lake frontage went up 100%. Acordingly, assessments went up the same. The reception of the new value for taxes on their lake frontage, has them up in arms. Typical was a pre assessment of 340k, now 730k, Which of course means the property taxes will about double, even with equalization. There are some that are actually going to hire lawyers to appear before the town board to get their assessment down. These are the same upitty people from Chicago, the drive high end suvs and wont give the average person the time of day. So, if you can afford a 500k lake home, how come the taxes for same would upset you? My answer to all of these non locals is : DEAL WITH IT!
We were just up your way three weeks ago for our annual visit. We had a lovely time, and I saw the northern lights for the first time! It only took me 37 years. You are right about property values being crazy. All of the little cottages have been torn down and replaced by behemoths. I would love to own a home there, but it is just not in the financial cards.
But Terry, I hope you don’t think all Chicagoans are uppity. My extended family has been visiting the Northwoods for nearly 60 years. My grandparents lived there for 20 years in the 60s and 70s. Some of the best times of my live have been there. We do not drive fast boats, jet skis or snowmobiles. We mostly canoe, hike and fish. But we also spend a lot of money when we visit. Without people like my family, the Northwoods would not have an economy.
In about three years, I want to retire and maybe buy some of that lake frontage property. However, I will pass on buying if values stay high. I would certainly buy if values dropped 50%. Any chance of that? Those buyers from Chicago could also get tax relief with a drop in prices.
Hmm. talked to an old time customer of mine today and he told he his just listed house is under contract.
House on a lake. I’ll get the ask /sell price but he didn’t say anything about taking less.
I went to an “Open Condo” today and asked the Realtor(R) blatantly what the owners’ cost basis was. I then asked if they’d be willing to take 1999 prices. She laughed and then I ate some of her food and we had a conversation that laid out my arguments. She said the same bogus crap that real estate never goes down in the long run, and I quoted Keynes “we’re all dead in the long run.” As I left I said we’ll see who’s right in the coming couple years when another $2T in ARMs adjust upwards. She said to give her a call if I knew anyone that might want the $809k condo.
By the way, after she first told me the price she asked if I thought it was too high. I said absolutely!
San Jose, “For Sale” signs everywhere in highest density I’ve seen since I’ve been here. My Sister fired her agent this past week, he was used to doing no work or promation to make a sale so no buyers for her place after six weeks when other places are selling taht have an agressive agent. He also had the gaul to send them an e-mail saying that he wasn’t going to show them any more listings they were interested in since their place hadn’t sold and it was “a waste of his time”. How many shiftless spoiled lazy agents are going to survive this downturn ?
” when other places are selling taht have an agressive agent” NO, the other houses sold because they were priced to sell..Tell your sister it’s her listing is overpriced. Oh, I forgot, she has designer wallpaper and upgraded the shower head. Definitely worth $10,000 more than the others.
Sorry, you’re wrong. Her place was priced $40K less than comparable townhouse models in her development that are selling with more active agents. If the agent doesn”t aggresively persue leads and get feedback from potential buyers things aren’t going to sell. Just having an open house isn’t going to cut it. She just interviewed another agent today who thinks she can get the listing price given advertising and working the leads.
From my experience in selling in Silicon Valley, buyers do their homework. They know what they want, the location, the schools, everything. They find the houses on the internet. The agent can help with making the house presentable and closing the deal. But marketing the house is a waste of time. If it is priced right and shows well there will be offers.
LOL. Hysterical post.
As of this morning, there were 3,557 SFHs For Sale in Santa Clara County on MLS (usually, 2/3rds are San Jose listings). Add to that For Sale by Owner and I would guess that there are some 3,000 SFHs and more than 1,000 condos For Sale in San Jose alone.
Jas Jain
This is the last week that I’ll be posting from here in Savannah, GA. Really, nothing has changed about the market since I last reported, but because I believe that I’m the only blogger from this area I’ll give a final summary:
IMO housing activity peaked in Savannah in 2005. For a couple of years, prices were driven by out-of-state buyers, especially people from the NY/NJ metro area as well as some Florida “bounce backs,” who suddenly “discovered” Savannah.
This activity seems to have ended. The concensus around here is that most people from out of state are once again choosing to purchase in Charleston, SC rather than in Savannah. A neighbor who is a native Savannahian tells me that except for the past few years, in her lifetime “outsiders” have typically chosen Charleston over Savannah, so it appears that that change in buying patterns is really just a return to normal.
I don’t see prices rising rapidly right now, and I do see a lot of houses just sitting on the market. This is especially true in the historic district and in the higher priced suburban neighborhoods.
I’ve recently seen some Sold signs on less expensive homes (all in neighborhoods that typically sell for less than $150K). I also don’t see as many homes in those neighborhoods “sitting”, so my sense it that the lower end of housing here is holding up fine.
Also, I’m told by a friend who is trying to sell her house and move to Pooler (outside Savannah) that builders there have started offering incentives such as discounts on lots and interior upgrades. She is talking about a new house in the low $200s with upgrades that normally cost extra. The model is one of the lowest priced houses in a very large development with prices that go much higher than that. There are also a lot of other large developments in the same area. She says she got a postcard offering an upgraded home for $189K, and she seems to think it was a very good deal. But she also has not had anyone come to see her home here in Savannah for a couple of weeks now, so she’s not optimistic about selling. And no, she’s not the type to buy two homes. She says she will wait to sell before she purchases her new home.
Finally, there are a lot of listings on the Golden Isles right now, but again I’m told by locals that that’s not unusual for this time of year. Some sellers like to use their beach home one last summer before listing it for sale after Labor Day.
OK. That’s it for me from this area. Soon will no longer be a Georgian.
where are you going?
Las Vegas. Talk about culture shock. LOL
And before somebody who hasn’t read my other posts jumps on me, please let me add that we are moving there because my husband was laid off and could not find a job here. The job market in Georgia is being driven by the construction boom. Housing, banking, and other related industries are doing well. Other areas of employment are very slow and have been since the supposed dot.com bust hit many sectors of our economy, not to mention our state budget.
Peggy,
I like the clarity of your posts. Best of things in Vegas for you and yours…would like to see your point of view on the employment situation there…curious about that. Hope your up and posting soon.
Thanks,
Timothy
Thank you for sending good thoughts my way. I sincerely appreciate it!
After I get past the move, I’ll check back in. I will try to remember to report on the LV job market. If I don’t, just nudge me.
26′ UHaul Savannah - Las Vegas: $1035
26′ UHaul Las Vegas - Savannah: $2691
At least you got that going for you!
Amid the increasing price reductions of co-ops in outer boros, I’m seeing many more half-finished buildings for sale in NYC on propertyshark and craigslist. One brick box I posted about cracked me up - a tiny one in Bedstuy for 3/4 of a mil.
North County San Diego:
Existing home market - homes are sitting for months, with the occasional sale. Often, there are comparable models for sale with large differences in price, and the more expensive one will sell (better agent or most clueless buyer or higher commissions to buyer’s agent???). People are listing very high (as if the 20% annual increases are still going on), even though sales prices have been rather flat since 2004.
The lower-end homes which seemed to hold up better through 2005 have started to decline as well. There’s been a shift toward more expensive homes selling while the garbage homes in bad areas sit (price compression — often the price difference is $50K or so).
New homes - selling VERY SLOWLY with quite a few incentives and actual price reductions from 2005 prices.
Land/lots - seeing developers trying to get out of their projects mid-stream.
Annecdote: Went to look at a house which is listed for $800K after being reduced by about $70K. Tons of deferred maintenance (structural and cosmetic). When the agent asked what I thought, I said it was very overpriced. She asked what I thought it was worth and I said, “$600K, IF someone is even willing to tackle the project.” She just laughed in agreement. This house would have sold for around $775K at peak.
A couple SD anecdotes. At a restaurant last night, a woman was talking about saving money to buy a house here. Said she was waiting a year to see what prices do, no rush now that prices are coming down. Out surfing this morning, a guy was telling another to lower his price, because buyers are afraid and people don’t want to buy at the top of a waterfall. Everyone is scared now. Nice to see the change in mentality.
One more thing I forgot, the surfer who was recommending to the other to lower his price to get it to sell, said everyone is waiting to buy things at the bottom. That bottom is a long way down, and lots of people will catch falling knives as this takes a lot of jobs with it, in turn lowering prices more, causing more job losses, etc. It’s never easy buying at the bottom.
I’ve been a lurker on this blog for almost a year now. I am a Vegas native and I won’t go into what has happened here because you all know. I’m graduating from dental school in April and my wife and I considering a move to the Denver area next summer to associate in a practice. We just visited Denver this last weekend and looked at houses mainly on the south side of town, Littleton, Highlands Ranch. Home buiders were offering big incentives and I even had a sales woman at a Shea homes office admit that the market is really slow but then in the same breath she said “But you never know, when you move here next year it might be on fire again.” I assume she was wanting me to buy a house now so that I don’s “miss out” on the market. I was impressed with the homes in Denver though compared to LV. It seems like you get much more for your money plus large basements, which do not exist in vegas. We were looking at a 3100 sqft home with a 1500 sqft unfinished basement starting at 355,000. Shea’s incentives were similart to Vegas’ : 3.99% financing, etc. I’d like to hear from the wise posters on this blog that are familiar with the Denver market. How big is the bubble there? Is next summer too soon to consider purchasing? Any thoughts or insight would be appreciated.
When you look at the historical records of major real estate corrections, they always take several years, at least, to bottom. But you are usually 90% of the way to bottom in about 3 years. So figure on buying in the summer or (better) fall of 2008.
I think it’s always best to rent for some time when you move to a new city. It takes time to really get to know the place, to get to be a “local”. Only then will you know where you really want to live, and what the neighborhoods are like. Don’t commit to an illiquid investment of hundreds of thousands based on a few weekends research.
Excellent advice!!! Rent first. Only after living in a new place for awhile will you really know where and what you want to buy. I moved to a small town and when I first looked it all seemed about the same. Now after living here 10 months (renting) I know that there is only one street I want to buy on, two blocks long, and only on the north side of the street :-). I am waiting patiently for someone to decide to sell.
i agree with the others:
1) rent a while, so that you know where you really want to live. You may find that it initially all seems the same, but you might decide after a while that one area “fits” your life more, one area may have a better commute, one area may have more amenities for you. It takes time to know a city.
2) you don’t want to trap yourself into an illiquid investment until you KNOW that your new partnership is right for you. I know this well (I’m a Doc, I have lots of friends who are dentists/oral facial surgeons). Although most dentists pick wisely right away, a fair number of people realize that they don’t really like their practice and move on. You don’t want to be stuck in a house when your job isn’t SECURE.
3) it has been my experience that doctors tend to OVERESTIMATE how “rich” they will be. They think they need to live the “doctor” lifestyle. I’m not sure what you will make, but you’ll be surprised at how little it feels like. (I’m not complaining, I remember years of living at 13,000/yr….) I’d see what your salary “feels” like for a while before committing.
As an example, one of my very good friends from Residency bought a $450k home right away, it was his dream home. Well then he realized how little $150k/year actually is (and he has 5 kids and stay at home mother). They are now constantly stressed… his choices are horrible. Try to sell the house (wife hates him for the thought), or take a bunch of extra shifts and work OT for the cash (wife hates him for that too). No college for the kids. (he didn’t realize how expensive upkeep is on a home like that: it’s in a rural area, so “cheap” for what it is)
A second example: my partner at work. My partner made $335k last year. Her husband (an orothodontist) also makes in the 200k/yr range. So they’re rich, right? Well, let me tell you… she comes to work bitter every day. she constantly complains about how stressed she is about money. she works 4 extra shifts a month “to make ends meet”. Friday she freaked out on me because one of her patients was put on my schedule (so she didn’t get the revenue from seeing him) . How can this be? I exaggerate? no way. She simply lives high on the hog. (Mercedes, huge home in the hills, paying for all 3 kids’ tuitions as well as living expenses at UW Madison, parents in old home, etc). She is an extreme example… but valid.
Last example: me. I make a very good salary. Double income (doctor, wife is travel consultant) so we make great money. Our mortgage is less than yours will be (if you buy). we drive late model used cars. we contribute fully to 401k etc (not eligible for Roth). I support my mother in addition. And I CANNOT imagine wasting any more money on a mortgage. Houses are EXPENSIVE. I’m the other extreme: by doing this I will be able to retire by 45. Listen to that: it’s the sound of FREEDOM. I don’t know if you want kids or not, but let me tell you: I would MUCH rather have time to be with my loved ones than to live in a pretentious house. I can’t wait until the day when I don’t HAVE to go to work (love my job, but would love it more if it were 100% voluntary).
Forget all that crap you see about PITI payments. It will run you WAY more than you can possibly expect. I’m serious.
*Figure out your PITI payment. there’s your monthly nut. remember that taxes will keep raising and raising and raising. Oh, and insurance too.
*Then take 1.5% of the purchase price of the home: that will be your ANNUAL repair bill. (so like $4500/yr)- yes EVEN if it’s a new home
*Then add in all the stuff you’ll have to buy: furniture, lawnmower, landscaping stuff, tools.
Going back to your question about the Denver market: it’s been dead forever. some of my good friends trained at Denver kid’s hospital. They live there now. they’ve seen trivial appreciation in 5 or 6 years. but they love Denver. (correct me anyone: I think Denver has had less appreciation than any other major market in the country in the last 6 years…) But that’s good for you, because you can buy a home as a HOME, not investment.
hope that helped
clouseau
In Stanley and Danko’s book “The Millionaire Next Door,” the authors described it similar to what you describe here: Many high paid doctors and lawyers feel as though they have to have expensive homes, cars, and clothes to portray an image of success. Lawyers think clients seeing them with wealth means more court cases won, I guess. It turns out many are high income and low net worth, as you point out.
Actually, I always looked at it the other way. If you were living too large, the clients would think you were overcharging.
I basically operated under the same set of principles you are talking about and was retired at 37.
wow! That was a very insightful response. Thank you. I agree with everything that you said. We will most likely rent at least for the first year when I graduate. I am a pretty simple person and so is my wife. We just want a place we can call home and raise our future kids in. We drive Honda’s and probably will for years. I would never buy a house that runs my life. The reality is that we will have to rent for a while so that I can start paying off the huge student loans from dental school. But at 2.75 % for 30 yrs I think that we will be OK. My wife is an RN but she will not work after we have a child. Eventually I want to own a solo practice.
My goals:
solo private practice
pay off student loans
savings
modest home
cars paid off
retirement
money for hobbies…. skiiing, camping, hiking, 4-wheeling.
Never own a BMW, Cadillac, Mercedes, Land Rover, etc.
In regards to your comment about lawyers and doctors that try to dress the part: my Dad is a BK lawyer and now trustee in LV and he has been exremely successful… but he has never “looked” the part. He wears cowboy boots and a bolo tie still, drives an F-150 and wears a flourescent lime green shirt on the weekends that my Mom hates. I am grateful that I wasnt raised to covet money or to care about appearances. That all being said I do want to be successful at my career and I want to live a good life.
Thanks again for your comments!
I choose not to have a lifestyle. That way, I don’t put any pressure on myself to maintain a certain standard. I also find that, having zero debt is more fun than having a ton of debt.
Im in a similar boat as you. In an anesthesiologist and my wife is a rheumatologist, combined we make near 500k. I try and save 40% of out monthly income and invest it. I figure to have 3-4 mill in the bank and retire. My puts in the housing/lending industry have done so well this year that Ive bumped my retirement age from 45 to 40
your puts made money, but your house value increased or didn’t go down in value. that makes sense. barriers to entry for doctors who then retire at age 40. buddy of mine didn’t get into med school b/c they were admitting women in those years. all these daddy i want to be a doctor rich kids. doctors have the most powerful lobby in washington. i don’t want be put under from a doctor whose just looking at me as his floor mat to early retirement. shmuck.
Good advice HIC.
Interesting that your partner and her husband make >$500k/yr household income. No doubt in the 99+%ile for the US and it seems like they are still running on the treadmill. It sounds as even if their income were $1M/yr, their lifestyle would expand to meet the income.
You, txchick, Bill, Slew, unlvdental, and no doubt many others seem to have the right idea.
I appear to fall in that live well within your means camp also. The nearest my parents can tell, I appear to have been born with minimal material desires/wants. I’ve made up for that with an incessant desire for learning that borders on addiction. Not all of it academic either - since I forced myself to invest in RE several years ago and had several rental properties. Hopefully, I learned some things for future use. Out earlier this year, so I am taking a few courses at 50 while I sit this out on the sidelines. Took the MBTI as part of vocational testing back in my mid-30s when I wanted to change careers. Counselor said I was an extreme case based on my responses, so the description was pretty accurate. Had to laugh, took it again at 50, same results.
From Santa Barbara, CA.:
More for sale signs than I’ve seen in the 8 years I’ve been here. Not a lot of traffic, many places don’t even seem to have open houses (?). BTW, school started last week around here.
Driving around, I found there are at least 5 places with asking prices of around a million dollars within a few blocks of me. Many have been sitting for 9 months. I hate to give these ding-bats traffic, but here are 3 of the places:
$1.1M
$1M
$1.1M
The pictures make them look better than they really are. Just old 60s tract homes with weeds in the sidewalks, etc. Neighborhood is NOT that great, hairy-backed fat guys washing Honda Civics, etc. As a reference, the neighborhood elementary school is 2/3 immigrant hispanic, 30% are in ESL.
Boggles the mind why anyone would even consider buying these things, especially since rents are less than $2500/month.
Report from the exurbs of Northern Virginia. Today I drove through a few new high-priced/bad area developments in Dumfries (30 miles south of DC and an hour plus commute each way). Dumfries is a very low income town, lots of section 8 housing, no jobs, no decent retail, etc.
After passing the local Dollar Tree store and Bottom Dollar groceries, I passed some low-income housing and some trailers (er, mobile estates) before arriving at Stonewall Manor, a community of vinyl big-box McMansions ’starting from the mid-$500’s.’ The cul-de-sac with the three model homes was picturesque - the two other houses were both being resold and had ‘price reduced’ signs (I’m sure the builders are thrilled about that, karma is a bitch). On another cul-de-sac, 6 of the 10 homes were for sale (no, I’m not kidding). There was not one single spot in the neighborhood where I couldn’t see a for sale sign. Many of the homes for sale appeared vacant (unkept yards, no window treatments).
Next, I went to a new development offering townhouses from the $340’s. Again, directly across from the model was a perfect tic-tac-toe: three TH’s in a row, all for sale. Same story as the first neighborhood, with for sale signs in every direction.
Not only are there tons of homes for sale in Dumfries, there are mega-tons of homes being built. I seriously don’t know if half of these homes will be occupied anytime in the next 10 years! It was homes and more homes under construction as far as the eye could see.
This trip reconfirmed and reinforced my belief that this downturn is going to be uglier than anything most people can imagine. I wish I had my camera. These homes will end up selling for half of today’s prices or less by the time this is all through.
wow, that was a great description!
thanks for posting it…
I agree with you on both the 50% price reductions and the non-occupancy conclusions. I went for a longish bike ride today in the area between St. Augustine and Daytona and it’s just amazing how much is going on and how much is for sale, and this is an area that used to be just a sleepy backwater of rural coastal Florida.
Everywhere you go in Fla. the entrances to new condos are plastered with For Sale and For Rent signs. Meanwhile there is still just as much or more new construction going on than ever before. It’s just a stunning situation, like there’s no way for anybody to stop the madness because nobody wants to lose face by blinking first.
I’ve got to believe there are going to pockets all over the country that are going to be kind of like East New Orleans - a few people venturing in but huge swaths of unoccupied units, no maintenance, and just a slow descent into degradation, filth, and crime. A lot of this junk will be fully depreciated to near zero in 30 years.
Oh, those homes will be occupied. After foreclosure, the folks that live in the trailer community you passed on the way in will be able to move up to one of those townhomes!
LOL! McMansions for everyone! Imagine the current owners’ displeasure when the trailer park neighbors start moving in post-bubble and putting their cars on blocks in the front yards.
Yep, I rent in Woodbridge and am patiently waiting for sanity to prevail. Saw a 3 br 1 ba on .25 acre listed for $364K. Some folks are just the last to get the word.
I spoke to a santa rosa ca broker i know and like last night,he told me it is already worse than 1991,he has a number of listings he priced $20k under the most recent comp,and no offers,he also said a 600k home last years will bring 500k tops.a 10 unit development of townhomes and live-work spaces in sebastopol has been completed and on the market since april 1st,no sales.the largw condo project in petaluma’s theatre district by the river has not had a full crew working on it for at least 2 months,just a few men keeping the thieves out.i work in sana rosa and drove to oakland last week,took the time to drive by condo projects in both places,either work is at a standstill,or they are busting butt to finish and sell at any price.oakland was frightening,mayor moonbeam bet the city on these upscale developments in horrific locations,and the city lost.i hope he marries alberto gonzales,who also deserves to catch the clap from his dog.
Oakland is scary.
I fly to Oakland and have to take BART around the Bay Area quite a bit.
When I hear these permabulls talk about how high incomes are in the Bay Area, I feel the need to strangle ‘em.
Spend some time in Oakland!
Uhhhh…having been to Oakland when my daughter was at Berkeley, why would anyone want to spend time in Oakland? Maybe I missed something?
There are a lot of nice neighborhoods and fun things to do in Oakland.
There are a lot of terrible neighborhoods and dangerous things in Oakland.
“Developers of Woodland Pond at Manchester are offering new buyers a two-year price protection guarantee. ‘We’re very committed and bullish on southern New Hampshire, and for good reason,’ parnet Robert E. Shapiro said.”
The article goes on to present the bullish case for Southern NH in that lots of folks from MA are fleeing up here.
Well, Manchester is 20 to 30 minutes north of
MA so I don’t know that it’s all that desirable for commuters to MA. The other problem is that Manchester is an old mill city with an economy to match. The cities and towns south of
Manchester are far more desireable for commuters and generally have better schools. Though Nashua (a city on the border) has had a lot of problems this year with its schools.
$400K for Manchester is nuts in my opinion.
One other thing that hit the state this past week. The courts ruled the state funding system is unconstitutional. The state gives local communities about $3,700 per pupil with a little more than a third coming from a statewide property tax and the rest coming from other taxes. The local communities have to make up the rest of the real cost of education. My estimate of the cost of a quality education is about $8K. That would mean that state property taxes would have to triple to make up for that amount. Or we’d have to have income and/or sales taxes. The current Governor won’t do an income or sales tax and no one has evre gotten the corner office that didn’t say that they would veto income or sales taxes. Of course there’s an election this fall so we should have some fireworks.
The thing that would get us out of this problem would be a constitutional ammendment but the
Gov said that he didn’t want to do that.
This has been going on between the Legislature and the Courts for about 13 years.
At any rate, those buying here should be aware that property taxes could rise considerably next year.
Here in San Diego “William The Liquidator” has plastered Mission Valley and Serra Mesa with his http://www.dumpinghomes.com signs.
From the website;
An Absolute No Reserve Live auction will be held
at the property beginning at 2:15, To Liquidate:
4534 Aragon Drive, San Diego, CA 92115
The owners of this property are
being pulled under by
properties in another county.
They are forced to sell their one
good investment property.
This is a great home for an extended
family;
OR
Rent it out; the last tenants paid $3,000
per month;
OR
Live upstairs and rent the downstairs to
graduate students.
Offer 125 times monthly rent.
$375,000 is what the value is.
I wouldn’t want that house. Too big and I don’t like the neighborhood. The only way they are getting $3000 a month is by renting to SDSU students. I wonder what they are getting annually?
I pay 1700 a month in rent in Serra Mesa. Asking prices are running about $500,000 to $550,000 and people are still paying that. I don’t see the house I’m renting going for as little as $212,500 ever. I’d be happy to see $300,000.
I still see a pretty good number of GF out there. The house across the street from my Mom’s went for $325,000. It was a total tear down in City Heights, not one of SD finer hoods. It is a 849 sq ft house with no garage, has horrible noise from 2 freeways, bad plumbing, bath and kitchen are unusable and need to be gutted, it has a terrible layout with a “one butt kitchen”. I’m amazed anyone would pay that kind of money for that place even if you did the work yourself it would still cost around $80k to rehab.
He is also the owner of http://www.dumpingcondos.com A month ago he plastered UTC area with his signs.
If you go to the above site now, he says that the property in Carlsbad was auctioned off at 380,000 last month. Zillow-appraisal shows the property at 537,000-678,000.
Yikes! That thing has zero curb appeal. I hope the interior of that condo isn’t as hideous as the outside.
And here are the comps for that condo. 2/2, 1908 sf:
1. sold 2/05 for $485K
2. sold 4/05 for $500K
3. sold 4/06 for $589.5K (WTF???)
and the condo auction…
4. sold 8/06 for $380K (based on the dumping condos website)
That would be a 36% drop from the highest priced unit and a 22% drop from the lowest comp in the past two years. NICE!
Report from Long Beach, CA.
Have scanned ziprealty/zillow and did a little driving around parts of LB. It looks, at least for my rather shabby section of the city, that news of a RE bubble pop has not set in. Selling prices for tiny pre WWII-built SFH’s( 2/bd/1bt, 500-900 sq ft, 2500 sq ft lots) selling for $370,000-$450,000, or $500-$900 per square foot.
A tiny 700 sq ft mini-home at 3543 delta, with no garage but with a small additional room in the back lot(not reported on zillow nor probably with the county assessors office), just sold for $410,000 in july 7, 06.
Not a whole lot of for sale activity in the westside/bixby/wriglwy districts, but a lot of renting out of SFH’s.
There is stil a great deal of aggressiive pitching of Loan products on the local TV, radio, and in flyers. Lots of Spanish ads pitching RE products to the Hispanic Market. I see very little evidence, at least in the local Long Beach/local south LA market, of a sudden sharp halt or even a significant decline in RE prices, at least up to early Sept.
The areas which are actually seeing astonishing YOY increases, at least up to the july Data quick figures, are the really crappy areas of LA such as South gate, Compton, huntington park, maywood,la puente, wlimington,lynwood,bell gardens, ect. There has to be a great deal of selling overvalued older SFH’s in rundown innor LA burgs to recent immigrants thru fishy loan products. These areas are 80-90% Hispanic in population, many recent immigrants.
The vast majority of new purchasers out here still have no clue of a possible deline in RE prices, and almost all are using 100 % financing, no doc’s, stated inc. neg amort, Adjustable rate, and all other exotic loan products.
here in Irvine (OC) plenty of open house signs this weekend. At a couple of intersections, there were between 8 & 10 different signs today. Overall listings don’t seem to be changing, and we’re still at about 47% of listings with reduced prices.
Was checking out the listings for the twin condo towers here (Marquee at Park Place). 66 listings out of 228 units. Prices all over the place for what look like comparable units. MANY units on market over 6 months. Gotta love this flipper heaven….$1000/mo HOA.
Does this one sound like he’s in trouble? asking $1.3m (about $11k/mo), but willing to lease for $4600 for a 2/2. Ouch.
http://tinyurl.com/h7uw5
I live in Woodbridge and was driving down Jamboree over the 405 fwy and that new parking structure rises right in fron of those new(Marquee at Park Place. How UGLY!
asuwest2,
There are also a large number of those places for lease. Have a look:
http://www.kagill.com/marquee/lease.htm
Between the for-sale and for-lease, it amounts to about half the total units!
Here’s the newest startling news from Seattle:
Foreclosures appear to be going up pretty rapidly.
I check http://www.ziprealty.com very regularly for numbers of homes on the market, etc. Today I went to http://www.foreclosure.com and checked those same zip codes.
What I found was, if Zip Realty lists 90 homes for sale, the foreclosure site shows 30 homes in that same zip code. It was pretty consistent, @ 1/3 for each zip code.
Unfortunately, I don’t have an account for the foreclosure site so do not have the answer to this question: Are a lot of the foreclosed properties in these neighborhoods also listed on the MLS or is this hidden inventory?
These are really tony neighborhoods . There were million dollar + properties on the foreclosure lists.
I’m thinking we are about to see a new trend in the US: a surge in million/multi million dollar homes in foreclosure.
Or maybe that happened already, during the Depression.
Anyway, I shouldn’t be too surprised about Seattle, national leaders as we are in the risky loan depatment.
But the reality is in marked contrast to the local media cheer team.
Portland, OR update… the condos with the lake view I’ve been watching (new construction) were $265K at the beginning of the summer - now $229K. I’ve watched non-lake-view units sit for months at $219.
I am seeing both more For Sale and For Rent signs. Quite a few Price Reduced stickers, but the reductions remain small. Things are moving very slowly if priced reasonably.
Still quite a bit of townhouse building going on, no doubt from earlier-planned projects, and a bit of multifamily as well.
http://orangecounty.backpage.com/realestate/classifieds/ViewAd?oid=oid%3A306826&name=homes%20for%20sale
Just a small peek at the dwtm LA condo/lofts Market activity.
The very soon to be available library courts lofts is a rather unpretentous-looking smooth block of a building, with smooth white marble walls and a toned-down look. It is at corner of 6ht st and hope. This may be one of the better locations for a dwtn loft ste. The LA central library is 1/2 block north. Sixth st is actually very walkable and has quite a bit of pedestrian traffic. Not as trashed out and seedy as other LA dwtn districts. This site is within short walking distance of every major dwtn landmark commercial office complex, pershing square, 7th st metro station, ect
I am normally very critical about most of the LA dwtn condo siting but this one seems to be sited about right. How this area is at night i do not know: it may have bums and street urchin problems as does most other dwtn LA areas but this rates as the best site for a dwtn loft so far, as far as walkable proximity to The major dwtn LA landmark cultural and commercial sites.
http://www.librarycourtla.com
Here in Wheaton, a suburb of Chicago and county seat of DuPage which is next to Cook County/Chicago, things are slow but not in any form of freefall. A typical 4/2 sfh is 300K-600K with homes from the 50’s and 60’s being torn down to build 800K - 1MM sfh. I would say looking through realtor.com 25%-35% of the homes appear empty (of the ones showing inside pictures). There has been no major subdivision building because this town has been mostly landlocked since the mid 90s. Naperville, in the top 10 best cities to live per Yahoo this year, is the town south of Wheaton and has been on a building binge for the last 2 decades, but not like a Vegas type binge — more controlled. I have seen cracks in the market. 2 weeks ago, I saw a 50s ranch 3/1 come on the market for $139,900 — price not seen for 3+ years around here. As far as I know, it is still for sale. Chicago area did not have a ludicrous price rise in the bubble, but just a crazy one. I would say over the last 7 years, homes have gone up about 50% total on average. Rents definitely reflect a disparity of price to cost of living. Average house 3/2 cost $325K, but rent is around $1600/month.
Actually, I calculated wrong. Prices in the last 7 years have gone up about 100%. My parents bought in ‘87 at 150K. At the price peak last year, the house was realtor guessed around 400K (after 80K of updates and remodels).
Here on the Central California Coast (Santa Maria-Lompoc), there is about a 5% across the board price decline. Not a bursting bubble yet.
However sales are few and far between, neither sellers or buyers are budging. I think 2007 will tell us if it is going to be a hard or soft landing.
I went to an open house here in Phoenix, small 1500 sq ft house built in 1986 on a 7000 sq ft lot. This house has been a rental for an out of state investor who has decided to sell all his rental property. The price was about 285K. Investor bought it for 140K back in 2002. Well It looked like a rental, linolinum floors and dark carpet, backyard had maybe 2 trees and gravel. I would like this house for about 190K but only mentioned it was a little high in price for being so small. Realtor asked me what I though was fair because they reduced it once already. It wasn’t until I left that my wife mentioned it had been for sale since March. Well if next March its still for sale I’ll let Relator know what I think it’s worth with an offer.
However a few other houses are still selling in the area and at high prices, this according to Zillow. The house and the area- 3909 E Tano St, Phoenix, AZ 85044
Cactus, My husband’s nephew (just out of grad school, just married) got a job with Intel in Chandler. He and he wife rented for 6 months, then early 2006 bought a 3 br/1450 sf. home. I don’t remember the city they bought in, but in the greater Phoenix area. He works for Intel. We are very concerned that he might be laid off, or just decide to move and have to sell at a loss down the line. He is originally from the midwest, his wife was from Georgia. She didn’t seem thrilled about moving to AZ, but went along with it.
My sister’s brother in law works for Intel in Chandler as well. She told me that she was told they would be laying off around 10,000 people or so. Her brother in law is also worried about getting laid off. I wish your husband’s nephew the best!
Oh this is great. Some time ago 2 friends (actually 3) and myself rented a 2500 square foot house in Virginia Beach for $1350/month. 2 years ago the landlord wanted to up the rent to $1900-2000/month. He hardly did any maintenance, and when there was something to be fixed he took the cheapest route which always turned into a mess. At the time, it was pretty much unheard of because people don’t want “Frat houses” to spawn up.
Now I run across this place on Craigslist:
http://norfolk.craigslist.org/rfs/205223202.html
“GREAT FOR 4 GUYS TO GET TOGETHER OR LARGE FAMILY”
The median household income in this area is $50K. While that is a nice house, it’s no where near the top. It is better than the place we were renting, but $2800/mo is at the very top of the pay around here. Renters can’t pay interest only.
Heh ANIMAL HOUSE!
I had some fun going through the weekly “Residences” section of my local paper here in south FL. On my blog, I analyzed one property, comparing what it would cost to rent vs. buy, per month. You won’t believe how out of whack the figures are, especially when it comes to waterfront or “almost waterfront” property here. Read on if you like …
http://interestrateroundup.blogspot.com/
That’s amazing, and even worse than here in central FL — $985K to buy and $2K to rent. Think they’d take a 10-year non-cancelable lease (if such is possible?)?
“local” note at Newberry Springs [east of Barstow, west of Mojave desert] via LA Times:
An Investors’ Dream or Just a Mirage? Time will tell if those buying dirt-cheap in Newberry Springs really had the smart money.
So it is that Newberry Springs!!!!!!!! I thought there must be another town with that name. I don’t think I’d live there if I was given a house free and clear.
“condo projects in both places,either work is at a standstill,or they are busting butt to finish and sell at any price.oakland was frightening,mayor moonbeam bet the city on these upscale developments in horrific locations,and the city lost.i hope he marries alberto gonzales,who also deserves to catch the clap from his dog.”
I spent 15 yrs living in the East Bay. So many times I was scared to death driving around Oakland. The majority of that city looks like a war zone, and the people that were there were not the types that I wanted to get out and associate with. I think they were waiting for a ’sucker’ to happen by and help ‘enrich’ them.
Newberry Springs the next HOT spot? WTF? What next, luxury hotel complexes in Ludlow? (that is about 60 miles east, has one gas station, and a lot of abandoned buildings on 1-40). Will Needles be after that? (Needles is like hell, but at least there really is a town there).
Observation from San Francisco.
Even though it is little slower, it seems that flipping is still well and alive here in San Francisco. I just noticed that the house just few blocks from my house is on market again. For 750K. I was thinking that it was just re-listed. However, I was surprised when I learned that the house was sold in May (just few months ago) for 660K. Zillow: http://tinyurl.com/pgvbk
And house is a dump… Really…
Maybe madness will continue here for a while…
Any take on this?
Check this one out in Phoenix. A recent flip. http://tinyurl.com/k9pwh
Not a bad looking house, check out the new owner’s price paid and now what hes asking 419K ( went to this open house today).
Hawaii prices finally started a nose dive (”stabilizes” as far as real estate experts are concern). Read it here: http://honoluluadvertiser.gon.gannettonline.com/apps/pbcs.dll/section?Category=HOMES&pub=honoluluadvertiser
Note for SFH: Salt Lake, Nuuanu-Makiki and Pearl City-Aiea usually in a single-digit home sales so it should weigh very little. As usual “real estate experts” stop publishing home sales by region as soon as the numbers “beginning to stabilizes” (they meant crashing).
I live in Las Vegas. My complex started to convert to condos at the beginning of this year. There are 36 buildings in the complex and they have converted 12 buildings so far. Of those 12 buildings I would estimate only 50% are occupied. Some of those fools bought, but most were investors. Asking price for a 1 bedroom is 179,900. 2 bedroom, 229,900 and 3 bedroom 279,900. These are apartments!!!!!!!!!!!!!!!!!!!!!!!!!! Not even built to condo specs. BTW, I’ve lived through 3 recessions. Including the “70’s gas crisis, high interest rate” one. We are now in a recession. It feels like, looks like and smells like a recession. Even here in Vegas which is no different than anyplace else in this country.
Hi. Saw today advertised in the Washington Post, a townhouse on a not bad street of Capitol Hill for $479K. And a two bedroom one bath condo with garage in Logan Circle for $369K. Have not seen prices in range in 2 years.
Update on the Chicago market:
http://www.chicagotribune.com/business/chi-0609100082sep10,1,5965765.story?coll=chi-business-hed
Surprise, surprise - nothing’s selling.
This is my first post, so please bear with me if I screw up my formatting. Here are some helpful tips for all us renters from the San Diego U-T’s “SDHomes Buying Guide” page. A little article called “Myths believed by renters”, by Frank Violi of RE/MAX By The Sea in Carlsbad (sorry, no link to the article that I could find), contains these pearls of wisdom:
“Want to buy a home, but think you can’t afford it? Homeownership is not as difficult to achieve, as some renters might believe.”
“According to a (NAR) survey, most home-buying obstacles renters feel are insurmountable actually can be overcome.”
“In addition, saving for a down payment may not take as long as many people think. Attractive mortgage financing is available that may require down payments of 5 percent or less.”
“Many apartment renters are taking advantage of low-interest rates and saying good-bye to their landlord, ready to enjoy the benefits of homeownership and climb the equity ladder at an affordable price.”
The rest of the article talks about things like the wonders of condo conversions as entry-level homes, and the astounding benefits for the community in the form of increased property taxes.
Isn’t that great? Now that all our worries about homeownership have been allayed, let’s all go out and buy a house or two, shall we? Hey, where are we going, and what am I doing in this handbasket?
Madness continues in Tampa/Clearwater.
I toured the Clearwater Beach area today. Brokers offices are accumulating more “listings”. The prices are insane.
What’s really amazing is they are not timid in their asking prices, and really don’t have a clue about what the selling price should be.
They only know Real estate only goes up.
Most asking prices: 700-800 sf, in beach condos.
But 400-600 or more in plain old residential houses that are not on the beach and not on the water. Five years ago, those houses were sellling for $75-100 sf. It’s totally ridiculous.
One listing was a “handyman special” for $99/sf…. a 2000 sf model.
So, 200k for a house that needs a rehab.
Waterfront 3 houses from me…for sale for 3 months. NOW for rent.
The All day/ all night OPEN House in Town ‘n Country is still for sale.
It has been OTM for about 5 months now.
Lots of inventory, lots for sale………….and the Building continues.
Next week I will go looking for “WHOPPOS” (Way the Heck Over-Priced Pieces of S##t) in St. Pete Beach/ Treasure Island.
Say it like a Bostonian or New Yawka….and it sounds like the Big Burger.
Cheers.
Did anyone see my post from Clearwater Beach?
Costa Mesa, OC - lots of signs despite what Gary, 15% is in the bag, Watts advised. Not a lot of movement on prices - yet. The run up has been pretty massive here so I anticipate prices to be exceptionally sticky. Denial is a river in Egypt especially to all of my neighbors who are paper millionaires. Local developments, Bungalows on Bay St. and Half Moon Bay still flying flags and twirling signs. There was a second builder’s homes right up against Shea’s Halfmoon Bay and it looks like these three homes have sold in the 1.? Million range. FB, gotta pity em. Richmond, the Bungalows developer, also has a tight new micro-development of say 15 or 20 in a 4 acre parcel on Harbor. I have not been there so I can’t say much other than no yards. If there is one other thing beside price that chaps my arse about new homes here in OC is this zero lot line crap. I won’t buy one of those. Ever. Where do the children play? Realtors are now coming out of the woodwork. One called me recently whom I spoke with 3 years back and the Zip realtor for my searches emails and calls too. Getting hungry I suspect.
Funny, the realtor we were working with in 2004 just e-mailed me the other day as well.
In Boston, at the peak of the market in mid 2005, SALES in my area, West Roxbury, were between 50 and 100% over assesment values.
Sale prices have declined to about 20% above assessment more recently and now more and more listings are actually BELOW assessed values.
That translates into about a 33% decline from the peak. And, unfortunately for sellers, the houses are still not affordable. They’ll probably decline another 20%.
One thing I thing will precipitate the speed of this decline will be the accesibilty of information on prices. Before the internet (and sites like this) people really had no clue on what was happening. Perhaps easier access to the price information ON THE INCREASE precipitated the bubble psychology (unlike other periods of slower increase). Of course, add in the easy, low, credit and its hard to see how this situation wouldn’t evolve into a bubble.