Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
Please post off topic ideas, links and Craigslist finds here!
On a technical note, this blog had a mandatory changeover to a dedicated server. As always, any donations to help with on-going costs is appreciated. There will be an abbreviated number of posts today.
A big thanks to David Paterni, who orchestrated the move. You can find his design firms link in the sidebar.
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
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View the HBB Photo Gallery *updated 4/13/2008
Wow… About time this blog came back up.
This was actually the first productive day that I have had in a long time!
Nice to have you back Ben!
DITTO.
Whew! I thought we had lost you.
I’ll bet that the ‘housing bubble’ world was spinning out of control while your blog was down.
Ben, so glad you’re back!!! This blog truly has no substitute out there.
Welcome back, Ben. We missed you!
welcome back…
We missed you Ben!
David
Bubble Meter Blog
Time for me to donate to Bens IT Fund… Sorry to the Katrina folks …
I did
I’ve had withdrawl all day!!!
Tell me about it!!!!!
Good to see you back up and running again!
Yaaaayy!!!!!
Yaaaayy!!!!! My prayers have been answered.
I thought it was my system damm it…
time for us all to donate…..I just did, particularly out of relief to see the blog back up - withdrawal was sheer misery!
Just did a small donation as well. I am definitely hooked.
Times getting tough these days with talk of an upcoming recession, and business volume and spending activity seems to have slowed down in sept, at least out here in South LA area. At least we can all dig down and cough up a little bit of dough somewhere to keep up this vital RE blog. Thanks Ben.
Was at Urth Cafe this morning for breakfast … and it was kind of dead. That NEVER happens. I commented to one of the girls behind the counter, and she said its been like that the past few weeks.
…hmmm.
thank you ben.
Tx, needed my fix…
Agreed. I had to actually focus on work for an entire day….brutal. Coincidentally dataquick released numbers for the San Francisco bay area today. August volumes down vs. July, median price down 2.7%. C’mon BIG WHAMMY!!
http://www.dqnews.com/RRBay0906.shtm
I can relate to the part about focusing on work .
Yeah. I usually read while eating. Tough missing lunch.
Donation to IT fund is on the way.
It is amazing, how less interesting watching paint dry is without this blog.
I had to actually pay attention and listen to all the mindless phone calls I get while working. I couldn’t surf this blog while saying, “yea…..yup……umm…..na….ya sure…..ok…..bye”
Man, I didn’t realize how tough it was to go without Ben’s blog. I’m clearly addicted. And, I’ll keep donating so that I don’t have to go through withdrawals.
Hey, yo, Benny da’ Bubble, you been a hidin’ in the old country or sumtin’…
I was thinking that because this blog caused the housing bubble to begin to deflate, thereby slowing cement sales and dumpster pickups, that the Ministry Of Business had you wacked.
Pen — funny — there4 were times yesterday when i wondered the same thing.
Whoa — so THAT was what it would be like without Ben. It was AWFUL. And how quickly my wife began hating me! She thought the loan of the remote wasn’t revocable.
I quit smoking cigarettes in 1978 and it was ALMOST that bad yesterday and today. Glad you are back on-line, Ben.
LOL! Amazing how much productivity gets sucked up by this blog, isn’t it?
am i the only paranoid here? i figured for sure that ben’s blog had been whacked by the realtpeople.
i guess not. i see there are many paranoids here.
Just ’cause you’re paranoid don’t mean they ain’t out to getcha!!!
New category of paranoidism: the optimistic paranoid. He thinks the glass is half full - of poison.
LOL — Manhattanite — I admire your quick wit.
I’ve got to admit that for a very brief moment, I thought the SDCIA or the NAR was successful in sabotaging the blog……hey now days you never know!
Ben, I thought I heard David Learah and the NAR toasting the end of their nightmare. Sorry, boys this is Nightmare on Housing Bubble, Part 2.
Bigger and Badder then ever.
It was Raines and Gary Watt. LAY and Carol Lloyd were pole dancing hoping the blog would end.
Ben-
Looks like we were all “jonesing” for a fix.
Now I know what it’s like to be a crackhead.
Greater Reno area showing prices down 10% YOY. Lots of denial, squirming going on. As I have said before, Reno may be the BIGGEST bubble area in the nation.
no, my bubble is bigger…
This would make an interesting topic.
We all submit one MLS number from Realtor.com, to see which of us can find the most overpriced POS.
Here it is…Costa Mesa, CA #S451248. Original price $950K, currently priced at $850K.
Do you know anything about the Fernley area? I hear it died.
Fernley is down 6% YOY for August. They are toast. Hardly anything moving.
Postes this in the Bucket yesterday just before the dive, replying to a post that described what is noted:
So Amaranth’s clients include Morgan Stanley and Morgan Stanley is one of the handful of large players who dominate the natural gas futures market. And how is that *supposed* to play out?
Is this a level playing field for the rest of the Amaranth investors? Hopefully yes, but I’d love to know why. I see, ironically, that one of the groups to get screwed in this loss is the San Diego Pension Fund (presumably the taxpayer-funded public employee one).
I read yesterday that Bill Hunter (the Amaranth fund manager) made between $75-100M last year. I doubt he’ll be eating Tender Vittles anytime soon. Now his investors . . . that’s another story.
The shares of that fund (I read) are 10c bid x 30-40c ask in the secondary market.
The San Diego County retirement fund is a big player w/ Amaranth. There go your taxes boys and girls. Amaranth has as of 4:30 cst unwinded its positions
2 1/2% of assets of San Diego County retirement fund essentially wiped out. Gonna be rough on those promised 6-figure pensions.
Paul — as I read it, San Diego has 2.5% of its pension find invested in Amaranth. If Amaranth loses 1/3 of its value, the SDCERA loses 0.83% of its pension fund value. My question would be: what is the total exposure of SDCERA, as a % of assets, to ALL hedge funds combined? Good question for any intrepid blogger who makes it to the next city commission meeting. If you really want to get their knickers in a twist, send your question, in advance, to the finance director, asking him/her to have the data for the meeting that you will address. Ditto, of course, for every other taxpayer-funded financial entity in the country.
“4th Floor. Housewares. Going down.”
Not 2 1/2%, perhaps, but I do think it’s probably a good bit worse than the .83%. Amaranth’s 35% initial reported loss was actually down approx. 55% from its high (the 35% was net of a 20% gain) but reading between the lines it doesn’t look like investors will get out so easily since Amaranth had to dump its entire energy protfolio at vulture prices.
Oops… maybe hedge funds and pension funds don’t mix?
http://tinyurl.com/z5l29
Ya think?
Remember the good old days when hedge funds were for shooters? Now they’re all fighting each other for 8% returns and paying themselves more than ever. Unbelieveable.
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i thought this was a brilliant post:
-
5.
most of miller’s content was published a month ago in barron’s. the market for the last couple of years has been near-Ponzi-scheme like. Low bar & creative financing product fueled a total bullshit tactic by the real estate industry (conjuring the perception of artificial scarcity) and agents/brokers insisted their clints overbid left & right, etc.
i call it “the fleecing of the buyers”. if you bought in the last couple of years there’s a very good chance you overpaid based on “contrived” and “persuaded” demand, as opposed to the historical market….the market sans the “fuel” to heat up this bullshit. Example? The price you HAD to pay was probably rigged up due to a would-be buyer who also wanted the property, had no business trying to buy it,could not afford it, however thanks to 0 down & i/o and ARMs, could muster financing for up to $800K or $1M or so. Very good chance of them ultimately ending in foreclosure but that does not matter…..that person increased the price you paid, bottom line.
NYC is not immune to what’s hitting the rest of the country. The tactics and tricks our regional market has employed are not working like they used to,hence all inventory, extended days on the market,and price chopping.
Did you see the NYT yesterday? The article about the real estate industry complaining and literally blaming the media for the slowdown? Ha! A voice reports truth and immediately the real estate industry discredits that voice.
Never disclose fact & truth, the real estate motto. I’m trying to sell my multi units in California and am taking a hammering right now. I’ve been interesting in buying in NYC,and will in time…however pulled back from even considering it when I saw the bullshit at work.
The bullshit is I saw I was competing against buyers marginally, thinly qualified…but thanks to the low bar Zero down products, were fueling demand. I pulled back and decided to not be exploited by the manipulation.
Clearing of the market of the marginally qualified will be a good thing, once banks tighten up. I look forward to the days when sellers realize the market is made up of qualified buyers…..and not a large sector of marginally qualified, happy to just be there and have a chance to overpay.
Sellers “Testing The Market” = Is there a bigger fool who managed to get a Zero down i/o ARM whiz bang loan and buy over their head?
Can we cut the bullshit and tell it like it is?
By anon at September 18, 2006 12:30 PM
http://www.curbed.com/archives/2006/09/18/downmarket_here_come_the_brits.php
Speaking of bad housing news, feast your eyes on the latest from the Phoenix area. Take your pick!
http://www.azcentral.com/
Ben,
Thanks again for keeping up this blog. Add my donation to the pile!
Folks, let’s all do everything we can to keep this blog up. Think about how much we spend on ONE meal out vs. how many hours, days, months and years spent on this blog.
Not only is it one of the best educational resources out there, we get to meet an awful lot of really nice people here!
Welcome back Ben:
Here’s a story for ya…….
Countrywide may cut jobs by 10%
Countrywide blames housing sales slowdown
http://venturacountystar.com/vcs/county_news/article/0,1375,VCS_226_5007144,00.html
Not surprised; expect more; everything housing related
countrywide has changed its loan statements. It used to say on the pay option (neg am) 1) payment $2096.38 2) payment $2786.32 3) Payment $3721 etc now it starts with the 15 year amort 1st. Big difference and different color etc. I guess Angelo wasn’t happy with his personal survey with the idiots last week. LOL
Or, maybe he is afraid of a congressional probe.
I would pay to Mozillo probed.
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i thought this was a brilliant post:
-
5. most of miller’s content was published a month ago in barron’s. the market for the last couple of years has been near-Ponzi-scheme like. Low bar & creative financing product fueled a total bullsh!t tactic by the real estate industry (conjuring the perception of artificial scarcity) and agents/brokers insisted their clients overbid left & right, etc.
i call it “the fleecing of the buyers”. if you bought in the last couple of years there’s a very good chance you overpaid based on “contrived” and “persuaded” demand, as opposed to the historical market….the market sans the “fuel” to heat up this bullsh!t. Example? The price you HAD to pay was probably rigged up due to a would-be buyer who also wanted the property, had no business trying to buy it,could not afford it, however thanks to 0 down & i/o and ARMs, could muster financing for up to $800K or $1M or so. Very good chance of them ultimately ending in foreclosure but that does not matter…..that person increased the price you paid, bottom line.
NYC is not immune to what’s hitting the rest of the country. The tactics and tricks our regional market has employed are not working like they used to,hence all inventory, extended days on the market,and price chopping.
Did you see the NYT yesterday? The article about the real estate industry complaining and literally blaming the media for the slowdown? Ha! A voice reports truth and immediately the real estate industry discredits that voice.
Never disclose fact & truth, the real estate motto. I’m trying to sell my multi units in California and am taking a hammering right now. I’ve been interesting in buying in NYC,and will in time…however pulled back from even considering it when I saw the bullsh!t at work.
The bullsh!t is I saw I was competing against buyers marginally, thinly qualified…but thanks to the low bar Zero down products, were fueling demand. I pulled back and decided to not be exploited by the manipulation.
Clearing of the market of the marginally qualified will be a good thing, once banks tighten up. I look forward to the days when sellers realize the market is made up of qualified buyers…..and not a large sector of marginally qualified, happy to just be there and have a chance to overpay.
Sellers “Testing The Market” = Is there a bigger fool who managed to get a Zero down i/o ARM whiz bang loan and buy over their head?
Can we cut the bullsh!t and tell it like it is?
By anon at September 18, 2006 12:30 PM
http://www.curbed.com/archives/2006/09/18/downmarket_here_come_the_brits.php
i’m convinced the nyc market is absolutely contrived, with brokers and agents refusing to even transmit true lowball offers. for example, right now the firm bottom for studios on the uws in the nytimes is about $220K. we’ll see about that. but it will be very, very sticky on the way down for nyc co-ops/condos. 3-5 years minimum to the bottom. the whole country’s crash has to ring like a bell in new yawkers’ ears before the manhattan market will capitulate. until then, it’ll be more and more developers offerings at 10% off “BIG savings!.” but it will easily be 3 times that to the bottom. around 2012 or so…. of course, $200/bl oil could place a nice non-commuter premium on living down nyc. that could help to support manhattan prices a bit over the worst bubble areas.
i hear you. NYC remains pretty firm.
$200 oil?
Oil prices are going down, not up. Gasoline prices are going down, not up. Haven’t you noticed?
i think you are being lulled by the temporarily low gas/oil prices. the longterm trend is up. and one ‘crisis’ and it could up very far and very fast.
A friend’s mother is putting her UWS co-op on the market in conjunction with the unit right below her; they will be marketing them together as a “renovate and turn into a duplex” deal. The numbers they’re talking about asking are pretty staggering; it’s a very good building in a prime location (although not overlooking the park).
The co-op requires 50% cash so anyone who can actually afford that amount of $ is probably not being affected by this market. We’ll see how it plays out. She does not need to sell so if things don’t work out as planned she won’t be hurting.
Ben — congrats on getting back up and running. It was a tragedy to have the blog down on Fed announcement day.
Which reminds me: How is it, during a week when a huge hedge fund blew up and the Thai government was overthrown (remember the 1997 Thai baht crisis?), that the yield curve can manage to stay frozen in time, completely oblivious to the obvious sources of disturbance in the global economy? (Scroll down the page I link in below to see my point — no difference at any maturity from yesterday to today). Rather remarkable, IMO.
http://www.bloomberg.com/markets/rates/index.html
You know why and it was necessary at the time.
-
how them shorts doin’?
U.S. stocks rally on strong earnings; S&P 500 at 5 1/2-year high
By MarketWatch
Last Update: 12:00 PM ET Sep 20, 2006
NEW YORK (MarketWatch) — U.S. stocks rallied Wednesday, with the S&P 500 at a new 5 1/2-year high, after strong results out of Oracle Corp. and Morgan Stanley boosted investor confidence ahead of the upcoming third-quarter earnings season.
No problem. Of course a marginal new high had to be made in the S&P. How foolish of me to think those stops would survive. Of course the Nasdaq isn’t within 100 points of the May highs but it’s all good, isn’t it.
A clear double-top would be very bearish.
GS,
When you consider everything that has happened in the past two years (other hedge funds collapsing, FNM debacle, major hurricanes, tsunamis, earthquakes, terrorism around the world, etc.), all the markets are behaving irrationally, IMHO. How many times have we seen something which would have taken out the markets in the past not even register in the markets. Strange, indeed!
due to unprecedented liquidity. Worldwide.
Some would say that’s because of derivatives and the ability to hedge. The Big Lie.
Absolutely agree with you Txchick. IMO, derivatives will be the undoing of all this…eventually. Still waiting.
Damn, Stucco, you didn’t hit that hanging curve I threw you.
They had to bail out LTCM because Jimbo Cramer was telling everyone to get out of the market! His finest hour! At the very bottom of the down move!
http://www.thestreet.com/_tscs/comment/wrong/32200.html
“Winners of the New World” in early 2000 is my favorite Crammer article.
Now this is interesting
http://www.goodmagazine.com/issue001/Design_Actually_Within_Reach
DTs finally subsiding…after months of saying “I can quit at any time” and “I’m only a social housing bubble blog participant,” the past two days have brought me face to face with reality: I’m hooked.
“My name is Sammy Schadenfreude, and I’m a Housing Bubble Blog addict.” There. I said it.
Ditto, Sammy. Scary in a way, but a lot cheaper than Laphroiag.
Did you hear that they are making Guiness Light???hehehehehehe
Hi, Sammy S. Here’s your 1 day chip. And on Sept 20, 2007 we can all celebrate your HBBA birthday. (Housing Bubble Blog Annonymous).
Serenity Now!
Whe Ben’s blog went down yesterday, the first place I ran was to the personal blogs of regular posters here. There I found consolation that it wan’t an issue with my system/service. That was refreshing, sort of like a buddy system to keep the grapevine updated.
Here we have a panic sale for $480k: http://sandiego.craigslist.org/rfs/209424391.html
And his neighbor trying to sell the SAME thing for $580k! http://sandiego.craigslist.org/rfs/208642632.html?
Yikes!!!!
Looks like No. 2 had No. 1 whacked.
$580/square foot. Go to a, say 5 year old issue of Fine Homebuilding Mag and look at what you could get for half of that.
“Reduced it 30 grand to get it sold.”
There, I’ve done my part. You can’t say I haven’t done my part. I’ve reduced it 30 grand to get it sold. Don’t say I haven’t done every thing I could possibly do. Now it’s time for you to step up to the plate.
First post has disappeared, but the second is still there. Odd that it focuses on the toilet with the milleniums-of-dried-urine tile.
Nah, the tile color is intentional. My question is why anyone would paint their walls the color of Andersenn’s split-pea soup?
Great taste if you add enough salt or bacon and close your eyes!
I am sure Edison loves those 18 foot ceilings. Does anybody else think that features like 18 foot ceilings will become liabilities much like a Hummer?
You don’t need AC in San Diego at the beach.
It depends on the orientation of the house.
Stayed at a $2M plus place about 1/2 of a block from Windansea, they had a lot of west facing windows and it was definitely uncomfortable in September.
Maybe the panic sale for $480k was deleted to be relisted at a lower price?
And the guy who reduced by $30k to $580k - how did he figure it was originally worth $610k to begin with? How much “entitlement” from his original purchase price is he factoring in? 15%? 25%? 35%?
There has been some recent discussion of whether we would see a long slow decline or fast drop. I used to think it would be fast, based on observing the way the re market has ground to a halt in Hawaii. There are few buyers, but those who do buy are paying close to asking prices.
In contrast, I’ve been in Houston for nearly a month looking for an apt to rent or small bldg to buy. And the agents here are busy. One broker went over active listings with me frequently commenting, “that one’s overpriced by 100k.” So I said let’s offer 100k less than asking, but he is too busy on bigger deals to even show the properties to me. The agents seem exhausted by the past years’ onslaught of California investors. It seems they only return my calls because I have a Hawaii cell number. Bottom line, I see a much slower than we may like decline in desirable properties, condos excluded. Any other observers here that can tell me more about Houston inside the loop?
I have many friends who all live inside the loop. Mostly west U and bellaire. I believe that houston is still a little behind the more overheated areas so most sellers are not nearly as motivated as they should be. I lived through the real estate bust and it was not purdy. Everyone has the ‘it’s different here” mentality since now the Houston economy is so diverse (not). Since it is tied to energy however, I do think that sector is holding up.
I like the older neighborhoods inside the loop. River Oaks, very pricey. West University better. Bellaire has some nice houses and areas, including the area just outside the loop. Heading down to Braeswood just south of west u has some older homes, but many of those are being torn down. Better prices, but getting closer to undesirable areas. Near memorial park is also nice. As nice as they try to make downtown, I cannot imagine buying a townhouse for that much money near so much residual downtown decay. Montrose/Neartown/Midtown is better for the singles and DINK’s. If public school is at all important I would stick with west u, bellaire, or memorial.
Glad you are back Ben - will be sending a donation in a couple of days (when return to New Mexico). In the meantime, checking out FBers in both So and No Cal.
http://www.youtube.com/watch?v=Ubsd-tWYmZw
As I watched “The Wizard of Oz” with my kids yesterday, I couldn’t help but to think of a parody version with some of our favorite housing bubble characters, starting with the infamous Century 21 “Agents of Change” ad featuring our beloved Suzanne. Here’s how I would cast them:
The Cowardly Lion (the henpecked husband): If I only had courage, I’d stand up to this she-demon wife of mine and the Wicked Witch of the West, Suzanne.
The Scarecrow: (aka the nagging wife who trusts Suzanne and her “research” and wants to buy at the peak of the market): “If I had a brain I’d still be stupid, but at least I’d have a brain.”
The Tin Man: (Whatever mortage broker or banker who has to sit across from the psychotic wife and her buffaloed wimp of a husband when they come in to get financing on a depreciating asset they can’t afford): If I only had a heart, I’d tell this husband to grow a pair, stand up to his she-demon wife, and throw a bucket of water on Suzanne to stop him from making a disastrous financial mistake.
The Wicked Witch of the West: (Who else but Suzanne?): Cackles “I’ll get you, my FBs, and your little dog too!!!”
The flying monkees would be those obnoxious RE harpies that try to fasten onto you at open houses.
Other suggestions?
The FED chair is the would be wizard, the man behind the curtain.
And the good witch of the north, of course, would be Ben Jones in drag!
The twister itself is the housing mania, and we ar the collective Dorothy.
“I have a feeling we’re not in Kansas anymore!”
Tap the ruby slippers three times and say- “There’s noplace like home”.
We’re just about at the end of the movie, where we return to the black and white scenes.
Munchkins (in a very high pitched voice): “We represent, the appraiser guild, the appraiser guild, the appraiser guild…and as a representative of, the appraiser guild…I’d like to welcome you to inflated appraisal land!”
Munchkins: “La-la-la-la-la la-la-la, la-la-la, la-la-la-la-la la-la-la!”
Munchkins: “Ahhhhh! What’s that?!! What’s that?!! Oh my!!!”
The Wicked Suzanne of the West Palm Beach: “Hit those appraisal numbers or I’ll be looking for some NEW appraisers! AHAHAHAHAHAHAHAHAHAHA!”
You gotta warn me when the Suzanne Commercial is linked.
I am having anger management issues, if I see a C21 agent in the next week, I just might have to strangle them.
Great comments. You guys rock!
Welcome back!
You have my gratitude (and ten bucks)….
Welcome back Ben. I am glad you are back online. Is that why they call it Jones-ing?
I need to add my 2 cents too. Oh thank god you are back up. I was getting the shakes. Welcome back.
Whew! Didn’t know I was addicted till they cut off the juice.
Thanks Ben, donation soon to follow.
Yes, Ben, I had no idea how much I enjoy reading this blog. I am glad you are back. Like some of the other posters, I had this brief paranoid thought that NAR and the HBs paid you off to keep you from posting the truth about their collapsing business models.
Blog donation to follow.
I was in Indianapolis last week–north of downtown on Meridian St. are lots of old mansions and new McMansions, about every other one appeared to be for sale or having major construction work done.