Bits Bucket And Craigslist Finds For September 25, 2006
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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A new video I just put together about a toasted Houston RE flipper:
http://louminatti.blogspot.com/2006/09/real-estate-flipper.html
Lou,
the best part was that roadkill painted over…shows how much the flippers care about the houses they buy. so, is this one headed for foreclosure? i think with the exposure on the internet somebody may actually snatch it before it gets any worse, but i will pass this one for now, though
It’s the fire-engine red exterior paint that kills me.
I like the swimming pool’s close proximity with the home. Built to code, right?
You know Michael Moore will be all over this eventually. Your clip is like a one minute version of what his movie will look like. Good work.
That’s a typical suburban Houston (or Dallas or Austin or San Antonio) shit shack. You can’t give those away in a downturn. But those California geniuses knew better than us Texas rubes, ya know?
Thanks for the Start of the week, early morning laugh Lou…
That was great!!!
So let us figure this out: Since August, 2005
The median home price dropped 1.7%
The inventory of homes for sale grew by 38% from 2.8 to 3.8 million
Annual sales dropped from 7 million to 6.3 million homes
The supply of homes increased from 5 months to 7.5 months
And David Lereah said
“The price correction is a welcome development, the price drop has stopped the bleeding, sales have hit bottom, sellers are finally getting it, I am confident the housing sector is picking up, if that’s so, we’ll have achieved a soft landing.”
How does this man look at himself in the mirror? I believe he needs all our prayers.
I want more!!!!!
Lou you are the greatest! Good Stuff love the Doors softly in the background!
Lou-
Nice work. Love the soundtrack.
Lou — nice work. Passed it on to friends.
great site with a lot of pain
http://flippersintrouble.blogspot.com/
Wow , these are some scary numbers when you cinsider that the FB probably put nothing down and had zero equity right from the start.
Sold on 2006-05-03 for $2,000,000
Asking Price: $1,380,000
Sold on 2006-03-27 for $515,000
Asking Price: $270,000
Sold on 2005-03-31 for $625,000
Asking Price: $439,000
Sold on 2004-11-15 for $625,000
Asking Price: $494,950
The almost 50% pricecuts this early in the game are very heartening.
It’s a good indication that prices COULD POSSIBLY get back in line with salaries and the old common sense standards for buying a house.
posted “great site with a lot of pain”
Meet the future.
let us hope that the decline in the mbs market will last
Voodoo debt and the coming recession
In the marketplace, there are indices known as ABX.HE. They are a synthetic version of assets backed by U.S. home loans. They are subdivided into “tranches,” or sections, that are grouped by their relative risk. Two weeks ago, a friend alerted me to the rather large trade that went through in a particular tranche of one of these indices. (It happened to be the BBB- tranche, which is the riskiest.) When the trade took place, it knocked the bid price a bit lower. It has continued to drift and now is off about 1.5%.
rest
http://tinyurl.com/kjq8e
Can one buy puts in this?
i want to make sure that everybody reads the cover story from the economist about “the dark side of debt/shadows of debt”
this shows really why the markets havn´t yer respondet to the coming recession. a must read!. thanks stucco for the discovery
http://immobilienblasen.blogspot.com/2006/09/shadows-of-debt-economist.html
jmf,
Thank you for your post (and to Getstucco for his contribution). This is a very important aspect of the credit/housing bubble. I do not think institutions have adequately protected themselves from the potential fallout.
VERY GOOD READ!
roubini on new york housing
What about Wall Street bonuses? There are rumors that they’ll be sizable again, and brokers say bankers, traders, and hedge funders like to use their bonuses to buy real estate.
Wall Street will not rescue the housing market in New York for two reasons: First, there is a limited number of investment bankers and Wall Streeters. They already own homes, and their demand is constant—if they sell a property and buy another one, the net demand is unchanged. Second, Wall Street has been doing well, in part, because we have been living in a bubble, and it is bursting. We’re going to have a national recession in early 2007, and Wall Street profits and bonuses will sharply drop, limiting the wealth of these Wall Street bankers and traders. Also, hedge funds are doing lousy this year; returns for many hedge funds are below safe Treasury bills.
rest of the good story from grim
http://njrereport.com/index.php/2006/09/25/roubini-on-housing/
Great q and a - I think NY mag has been one of the few publications to nail this -they had their bubble story months before the times news and post - odd that a magazine is ahead of the dailies on this..
The last lines in the Roubini interview:
“So the ride is over?”
“Not only is it over, it’s going to be a nasty fall.”
jmf, I always enjoy and learn from your postings. Thx
Hey! Didn’t someone say Zillow was overvalued?? How much do you think?
Liz,
I have seen zillow overvalued by up to 25% on some places. Zillow uses old info, prior sale prices. They don’t have the ability to look at asking prices and they don’t tend to extrapolate trends from their data to try and get a more up to date prediction of value. So in a falling market zillow estimates will be overvalued and in a rapidly rising market zillow estimates will likely be undervalued. Just my $0.02 feel free to give me some change back.
Thanks for the info and I thought so. I looked up our house (rental - Woodhaven Court, 20165) and noticed first of all the drop in value just since we moved in mid august and second, a house of friends of ours that sold in August still doesn’t show up. Furthermore, I agree about the asking price - house on Hampshire Station was also finally rented because they couldn’t sell after a year on the market.
FWIW, a house next door to a family member’s, one of the more gee-whiz houses in the neighborhood, is worth 35-50% more but Zillow valued at just 1% more. It appeared to me that Zillow was using a presumed value per sq. foot regardless of variations in the quality of design, construction, lot, trees, etc. That might be logical for a computer program, but wouldn’t be much help to me in sorting out a sales price.
A family friend recently put his house on the market in my parents’ neighborhood, priced in the mid-600s. I checked zillow to see what it says: $1.3 million. Quite a gap no matter how one tries to explain it.
I’d like to see examples of mortgage fraud which readers have either experienced or observed. I’ve seen at least a half-dozen creative tricks and I’m interested in learning of other variations.
Kia , I could tell you about a bunch of stuff but I would be afraid that some amoral person would attempt to pull it off.
I think all of the scams have been tried by now. Think of it as a “true crime” show. We’re not encouraging crime, we’re talking about how it can be caught and prevented.
It really is “true crime “. It especially comes out when people start to get desperate . True , everything has been tried before but I question if the hen house is being guarded from the fox .
FISHER: FED WATCHING HOUSING SO IT DOESN’T INFECT
FISHER SAYS ‘SERIOUS CORRECTION TAKING PLACE’ IN HOUSING
FISHER; CONSUMERS WILL GET SHOT IN ARM FROM LOWER GAS PRICES
FISHER: BEST GUAGES OF INFLATION ‘ARE NOT NOT COMFORTING’ FISHER SAYS ECONOMY, OUTSIDE HOUSING, IS HEALTHY AND ROBUST FED’S FISHER SAYS MORE WORRIED ABOUT INFLATION THAN SLOWDOWN
This is great news, jmf — it means the Fed is not fixating on Bernanke’s deflationary bugaboo, and is not likely to accidently respike the inflation punchbowl as a consequence.
in theory yes …….
to me this is just more propaganda and spinning.
the bondmarket pushed the yield after this news to the lowest of the day.
You might note that Lacker (Richmond Fed?) was the only one voting dissent the previous time against a rate freeze, him wanting to increase rates for stave off inflation, but being outvoted by the rest.
Fisher from the Dallas Fed is not even on the (rotating) voting board! So he can cajole and try to convince others, but he doesn’t have a direct effect on it this year. He does get a vote in 2008.
The rest of them are following Ben Bernanke, from the sounds of it. So I dunno about the “great news”.
first sign of RE trouble in the Netherlands:
Out of the blue, there is a story in our local newspaper from the ‘big’ RE brokers who complain about a flood of other ‘unlicensed’ RE agents that cause inventory to increase because properties ‘are not priced properly’. Strange, we never see stories like that in the papers; at the same time the brokers assure that the RE market is very healthy, the problem is just that these new agents are disturbing the listings because their asking prices are sometimes ‘too high’. The funny thing is, the agents that are complaining now are exactly the ones who have been using outrageous asking prices for many years (one of them has a habit of listing expensive flipper properties for 2x the price of 1-2 years ago). Maybe they are worried about a continuing decline in sales volume, and competition from new agents that charge less than half of their rates?
What else do they expect when even a hard working couple with good education can no longer afford a ’starter home’? The only people that are still in the market are the ‘disadvantaged’ that can pile subsidy on subsidy, some who get help from their parents (multi-generation mortgage etc.) and those that where already in the game years ago. They are running out of idiots at the bottom of the pyramid …
At the same time it’s telling that more and more local RE agents are listing foreign ‘investment properties’ in their advertisements; that’s probably where the money is now.
Finally, some good news from the Dutchmen!
Is it as impossible as in Belgium to get figures on sales volume?
In Belgium you have to wait at least until next summer to have information of last summer!
as far as I know it is impossible here to get independent sales volume data; together with some other interesting statistics (like time on the market) they were removed from public view a few years ago. One can only check the total number of properties for sale on websites etc, together with relistings that gives some idea about sales volume. There is an independent authority that registers all sales data (’Kadaster’) but they are lagging a few months and most of the info is not publicly available.
nhz –
You have brought up yet another reason why it is different here in the USA. We have outfits like DataQuick which give us fairly current information to chew on, such as yesterday’s data release showing a 20% YOY drop in resale SFR prices in Rancho Santa Fe (Aug 05 - Aug 06), an area which has the highest per capita income households in the USA.
yes, agree - we desperately need reliable and timely RE sales data here. Even the Economist uses the heavily manipulated NVM (Dutch NAR) numbers for the Netherlands
Just like with the lack of local ’speculators’ I think issues like these stimulate excess (in the sense that it is not quickly corrected) in the Netherlands relative to the US.
On the other side, the market here changes much slower than in the US anyway, so the 1-2 months time lag for ‘Kadaster’ sales prices is acceptable. When the downslide starts here it will last many years, so a few months is nothing
that is quite a time lag……
But I thought prices never fall? Wow 90K off a 300k home.
http://shopping.news-journalonline.com/ROP/ads.aspx?advid=405282
oops link
Wow — can you imagine being one of the people who bought one of their homes there in the past year or two? Or the used-home seller a block away who now has a much higher listing price than the brand-new counterpart? Must be sort of like walking outside and seeing your Ferrari in flames.
U.S. AUG. HOME MEDIAN PRICE OFF 1.7%, 1ST DROP IN 11 YEARS
HOUSING SALES HAVE HIT BOTTOM, REALTORS’ LEREAH SAYS (hahahahahahhahaha…….)
http://immobilienblasen.blogspot.com/2006/08/bagdad-bob-lebt.html
U.S. AUG. HOME INVENTORIES RISE TO 7.5-MONTH SUPPLY
U.S. AUG. HOME MEDIAN PRICE OFF 1.7%, 1ST DROP IN 11 YEARS
U.S. AUG. EXISTING-HOME SALES FALL 0.5% TO 6.30 MILLION PACE
U.S. Aug. existing home median price falls 1.7%
Median sales prices of existing homes fell from year-ago levels in August for the first time in 11 years and just the sixth time in the past 30 years, the National Association of Realtors said Monday. Sales of existing homes fell 0.5% in August to a seasonally adjusted annual rate of 6.30 million, the industry group said. Sales are down 12.6% in the past year. The median price of an existing home fell 1.7% year-over-year to $225,000. It’s the first time since April 1995 that median prices have fallen on a year-over-year basis. The price correction is a welcome development, said David Lereah, chief economists for the realtors group. “The price drop has stopped the bleeding,” Lereah said. “Sales have hit bottom,” he said. “Sellers are finally getting it
Great picture! But where is the gunmen protection team?
I think the most amazing thing about this was that when the figures were announced on CNBC, followed by the inevitable David Liar caveat about this being an “expected slowdown” and a “bottom”, Mark Haines said something along the lines of the “Yes, but that’s the NAR, and they have a vested interest in keeping housing prices high.”
I almost fell out of my chair, and I hadn’t even had my coffee yet. The MSM is really coming around.
“Median sales prices of existing homes fell from year-ago levels in August for the first time in 11 years and just the sixth time in the past 30 years, the National Association of Realtors said Monday.”
“Sales have hit bottom,” he said. “Sellers are finally getting it.”
Realtors (TM) are finally getting it. Last year, they were still saying that the national-level median US home price has always gone up ever since the 1930s. Now, suddenly, we hear directly from the NAR that the median has fallen five previous times in the past thirty years. Somebody really ought to sue this organization for disseminating false information.
:-)!
GS
I had the same reaction as you - the NAR has half the people in this country running around say that RE prices have never gone down.
I guess its kind of like those 150 year eclipse events that seem to happen every five years or so.
My guess is the never gone down figure is yearly vs. the August monthly figure?
Lereah said “Sales have hit bottom ,” ……..
The nerve of that creep saying that sales have hit bottom . This man is harming people with his attempt to call the bottom .Why doesn’t a reporter question him on the grounds for his bottom calling predictions?
Not only are the Realtors/Nar/Lereah trying to control inventory ,they are trying to confine the needed correction ,so they can get back to their greatest sale pitch again of ,”Buy now ,the prices only go up “. Without the main sales pitch of the urgency of buying now many buyers have no need to buy now and won’t need to because the fear/greed is gone .The NAR can’t say buy now because of limited supply of homes either .
Sellers are going to see that the NAR/Realtors have proclaimed the bottom and be even more sticky on their downward price adjustments .
i really think like someone on this blog said that they are not reporters, economist, analysts etc.
they are clueless actors.
DL should say something like .
We are hoping that the sales price decreases level out by the end of the year and remain stable into 2007 so new buyers can rest assured that they are not buying a declining asset .We have record inventory with lower sales which might prolong the correction in prices before the market becomes stable .
No instead he said , “Sales have hit bottom”.
Wizard –
I guess DL is hoping we don’t all go back to last year’s prediction, when real estate was going to keep booming until kingdom come? Otherwise, we might get suspicious that he is just blowing more gas out of his arse when he says prices are going to bottom out in 2007.
Northern Virginia - This weekend I talked with a friend who is a mortgage lender here in northern Virginia (in-house, not a broker). He said that he is seeing tons of people in financial trouble related to their home loans. He said each day he deals with someone who desperately needs a ’solution’ to unmeetable mortgage payments. Lots of people with ARM’s adjusting that they can’t afford, etc., etc. He says the number of defaults and foreclosures is increasing rapidly and that the problem is getting worse by the week. It was interesting to hear from someone on the front lines about just how much financial trouble people are in.
This only reaffirmed my belief that a very significant correction in home prices is coming for northern Virginia. Prices have already corrected by up to 10%, and I expect we’ve got another 40% left to go. It only takes a small percentage of homeowners defaulting and going into foreclosure to cause a significant downward adjustment to home prices.
On a final note, I went to a few open houses in Arlington yesterday. They were all deserted.
thanks.
and big gov and MIC are still hiring
Imagine if a real GOP/LP got in
I see Hoovervilles.
Pottervilles!
Gee, how can that be? Home prices are highly illiquid. They’re sticky on the way down. The feds will inflate us out of any dollar equity loss.
Did I miss any of the usual retorts?
I’ve been very much on the fence about how long depreciation can go (in real terms if not nominal, if I don’t have those two reversed). Just lately though it occurs to me that for any truly impressive mania I can think of in human history, the bubble never really just “let out air” like a wounded teatherball.
Creative workouts aside, housing is only as illiquid up as far as the courthouse steps.
Your reasoning is flawed. Reality is not a retort. If you go look at the downturn following the last two big real estate bubbles in the US property went down at only a few percent per year. By the time the reductions added up enough of the correction came from inflation that sellers could claim they were only losing a small amount. For each of the short term distressed buyers there were several buyers of considerable resources who were willing to throw everything away for years just to avoid foreclosure. This second group make up the throngs that come to the table with properties to spare when the markets hit bottom. This boom is much bigger and developers are taking it down very hard, so predictions are all guesswork, but the last two corrections did amount to long, slow leaks in peak areas.
“For each of the short term distressed buyers there were several buyers of considerable resources who were willing to throw everything away for years just to avoid foreclosure.”
Currently debt service is way up per home owner household. Even individuals with equity are looking at selling as the only way out of the debt service which outpaces income. Our individual homes appreciated way beyond what we could afford to buy and Mew put so many people in the same position as those that bought at the peak with Arms. The “equity” factor is causing the market to be sticky. I have a feeling when prices drop to where there is no longer equity to protect for this class of seller things will get less sticky.
Russell — nice summary.
memphis - I never said the remaining 40% would come quickly, just that it would come. I believe the correction will take at least another 3 to 5 years to play out. It’s going to be a long, slow, painfull grind to the bottom.
no, homeprices are not always sticky - it depends very much on the circumstances and what will happen this time is anyones guess because this bubble is without precedent.
My country had a -40% houseprice crash around 1980 within just 1.5 years, after a 100% runup in prices over about 5 years (the crash erased all the prior gains, if you take the 8% rates into account). Suddenly, without any clear cause the bottom fell out of the market and buyers simply disappeared. Prices can go down a lot in such a situation. But I’m afraid the bursting of the current bubble will take many years because politicians and banksters will do anything they can to fight the necessary correction.
nhz –
It is also worth considering that this time really is different, as it is the first global housing market bubble / bust cycle to play out in the internet era. The free flow of information and the general awareness of the staggering proportions of the bubble are likely to make the landing much harder and pervasive than in past busts where information was relatively more constrained.
Here is some news that should encourage homebuilder stocks go up today, as bad news about the housing market is always bullish for the contrarian value investors who invest in those stocks.
————————————————————————————————
ECONOMIC REPORT
Existing-home prices fall for 1st time in 11 years
Sales drop 0.5% in August to lowest pace since January 2005
By Rex Nutting, MarketWatch
Last Update: 10:26 AM ET Sep 25, 2006
WASHINGTON (MarketWatch) — Median sales prices of existing homes fell from year-ago levels in August for the first time in 11 years and just the sixth time in the past 38 years, the National Association of Realtors said Monday.
Sales of existing homes fell 0.5% in August to a seasonally adjusted annual rate of 6.30 million, the industry group said.
Sales have fallen five months in a row and in nine of the past 12 months. Sales are down 12.6% in the past year. It’s the lowest sales pace since January 2004.
The median price of an existing home fell 1.7% year-over-year to $225,000. It’s the first time since April 1995 that median prices have fallen on a year-over-year basis. It’s the second largest decline in the 38-year history of the realtors’ survey, exceeded only by a 2.1% drop in November 1990.
http://tinyurl.com/zjgke
I saw something pretty disturbing last week. I walked into a property manangement company and they had a sign up about how you can use your credit card with them (but they will tack on an additional 5% transaction fee). So apparently folks no longer have to have cash to pay the rent or deposit. Can you imagine the quality of renters that invites?
“Can you imagine the quality of renters that invites?”
The “leaving Las Vegas” types, perhaps. Very glad I’m not a landlord.
The ONLY thing that has kept rents in line with incomes is the lack of credit for paying.
One could hope that renters will refuse to go for this ploy. Otherwise, it will be used to force rents up and float the housing market to boot.
Since we already know that most Americans could give a hoot about how much debt they accrue, I don’t have much faith in renters not going for this “deal” right now.
A severe credit crunch from above will be the only way to save the situation.
Where in WA. are you, WArenter?
I’m in Bellingham.
I still cannot imagine that the use of credit will drive rent prices up (but ya never know). Individual LL probably won’t be taking cc, and the mgmt. companies will still have to compete with them. But I do think this is an interesting development.
WArenter-
Did you see the Flipper list that somebody linked the other day?
It showed the top 147 flipper markets in the US. Bellingham was on that list. It was in the top 30 markets where flippers have lost money. 33% of B’ham flippers are under water.
They’re going to have a heck of a time selling here, as our inventory has doubled in one year.
And for a while there (the past few months), rents were going down.
This looks like a very attractive option to get those rents stabilized at a higher level and could go a long way towards keeping some of those flippers “barely under” for a bit longer.
I wouldn’t count on this not catching on, at least as a temporary fix.
Warn everyone you know to not go for this crap and spread the word. A LOT of the rentals here are owned by managment companies. If they succeed in raising rents, individual LL’s will follow suit.
Remember, at this juncture, most individual LL’s who’ve purchased property in the past few years here are not cash flow positive. There is great incentive for this to take off.
You make some good points re: the use of credit cards to pay rent. It definitely bothered me. I guess this is the equivalent of pay option arms.
I missed the flipper link. I would be interested in seeing that. When we were looking to buy, I was puzzled by the number of vacant houses we saw, till I started reading this blog. There was an article in the B-ham Herald -Jan or Feb 2005- that mentioned the number of new housing units in the area along the increase in population. If you divide the population increase by 2.5 or 3 (ave # of people per household), the new units outpaced household formation by about 2 to 1, but of course they didn’t mention that in the article. Sorry, I cannot remember exactly when the article was run. Lots of speculation going on all over the county. One realtor told me she worked almost exclusively with out of the area buyers - including those from other countries. I called about one rental that was owned by a Canadian, she wasn’t too happy about her investment because of the potential for decline in the dollar.
Oops, the B’ham Herald article was from Jan/Feb 2006 not 05.
WArenter-
That flipper article was at http://www.homesmartreports.com. It was a couple days ago and I don’t have the full link but hopefully you can get there.
A lot of WA- even Pasco!- is on the “best of the flippers” list.
But Bellingham takes the prize with 33% losing out. Anacourtes/Mt Vernon is in 2nd place with 20% going down the tubes.
Up until a few months ago the Herald was a pretty decent source for local RE info. So refreshing. Then they suddenly changed their tack. Now it’s about as useful as reading the Seattle Times for Seattle RE info. What a disapointment.
spd -
Thank you for the link!
Whew…
Talk about excessive HOA fees:
http://sandiego.craigslist.org/rfs/211530512.html
(guess it includes valet parking…that explains it)
ha ha…and the unRealtor can’t even spell her own name right.
$265,000 a month? My limit on HOA fees is $200,000 a month. Any thing over that is just too much.
Well sure, you can have that upper limit for a 1 Bd condo. But if you want a 2 Bd SFR, you should really be ready to stretch beyond $200,000/mon. After all, you will get it all back thru appreication when you sell….!!!!
LOL. I wonder how long that will stay uncorrected? I’m often amazed and frustrated at the gross grammar errors and misspellings I see in RE listings. For the first day or two, sure, it’s not too awful to see these, as the seller might have been in a big hurry to get that sucker up on the screen. But by the third day, if the agent doesn’t figure out and correct the error, I think that is appallingly sloppy service. How difficult can it be to create the text in a word processor first, then paste it into the listing field(s)?
Here’s a creative idea for a stuck homeowner.
Find a renter willing to unquestioningly stay put for 15 years. Promise to sell the house in 15 years and split the equity with him. Have him give you $50K up front to live there and pay rent with no claim to the house or his money and make him forefeit that 50K deposit if he moves.
From Craigslist SD
$216000 Market rent for 15 years, then split proceeds
Date: 2006-09-25, 8:39AM PDT
Do you want to live in Oceanside by College and 78?
Check out the market rent for these 3-bedrooms on the other Craig’s page and you will see they rent for 1200-1500. Let’s take the 1200 figure here.
Pay this each month for 15 years (ie $216k) and then sell the unit to split equity 50-50, or you can continue living here.
(Unit huh… Crappy Condo Alert! Crappy Condo Alert!)
How is this different from actual long-term renting?
(Gee… I don’t know. Only $50K in your pocket if I want to move?)
Move in requires first month together with a $50k security deposit. This is returned in full when the house sells in 15 years but forsaken if move out occurs prior to the full duration.
Pathetic.
A 15-year lease wth a $50k move-out-early penalty? Harsh. Does the landlord at least cover the HOA/Condo fees and the property tax and maintenance as well? (I wonder ifthe even thought about those things.) Wow, how could someone with $50k, even to waste, fall for that?
Er, unless they had the proverbial box of stupid!
So maybe the seller DOES have a chance after all.
Then again, if you have $50k in you pocket… er, bucket, and a box of stupid as well, then you’ll find a thousand other people falling all over themselves to let you *buy* their POS condo unit outright. The competition for your bucket+box would be quite intense.
I’d do that deal minus the 50K if I liked the house. Or I’d let him subtract the 50K from the equity split. If I liked the house. I tend to stay in places a long time.
I dunno — do you really think the owner’s idea of the market rent amount is the same as the tenant’s? The latter is far more likely to be the real market rate.
As the tenant, I would lease a very nice place for five years, but not more. However, certain businesses and government agencies will lease for longer periods. If there are foreign consulates in San Diego, those would be a good target for such advertising, as they often like to pin down very long-term leases. The bugaboo is that they could be protected from the penalties in the event they close up shop, and if they choose not to pay, the owner could play heck trying to collect.
August 2006 permits drop 60%
http://bakersfieldbubble.blogspot.com
Luckily for those Motley Fool types who gamble by going long homebuilder stocks, it is well-known that new building permits have no relationship to future profitability of homebuilders.
Ben & Everyone:
My father in law used to do part time home remodeling and still gets the trade magazines. I got a copy of Builder magazine, and they had a huge negative article on current and future conditions… I found the link of the article online. It is a very long, detailed article and breaks down the building and home market into multiple regions, etc… and includes growth drivers…
Uncharted Territory
Starts and sales in many previously hot markets are way down, and the situation probably will get worse before it gets better. Here’s how some local markets are faring.
http://www.builderonline.com/industry-news.asp?sectionID=28&articleID=362135&artnum=1
Source: BUILDER Magazine
Publication date: 2006-09-01
Oh by the way, the site itself is a treasure trove of data to support the trend that we have been seeing….check it out.
Kick @ss article Bubble Butt. Long one too.
“Absolutely, they were selling to investors,” says Bart Johnson, a Realtor with ReMax 100 Riverside, based in Port St. Lucie, adding that he knew one investor who bought 250 from one builder alone”
Okay which of you guys has the hairdresser with the 250 houses in Port St. Lucie?
For those interested in the Seattle market, Seattle cancellation rates, etc. are on the national charts pages 1 and 2.
If you click on the “print this article” link, you get the entire article, instead of having to work through 15 screens.
This one cracks me up…….. check out the price increase/decrease on this north Scottsdale house….
http://tinyurl.com/otlcy
He bought this place for 340k 9-2005. Good luck to this flipper…. not!!!
just noticed that the 10% Treasury is diving below 3% before the elections, if they keep declining this way. Is Helicopter Ben going to refinance all the FB’s at 3% fixed rates before the elections? Wall Street must be drooling over this tremendous opportunity … and they should be able to organise one hell of an echo bubble with these rates.
sorry, that should have read 10Y Treasury …
Bought a 100K CD today at 5.40. You can get approximately that rate for 90 days through 5 years.
nice, we have 2-2.5% deposit rates in Europe and inflation is the same as in the US …
Just had to laugh when I came across this little gem
He’s a fool w/ money who’s good at tennis.
He and his money are heading different ways, how else do you become a senior adviser to a company that has your name on it?
I believe the Sunday’s San Francisco Chronicle had an article about Agassi house in Tiburon and having to reduce the asking price.
Motley Fool picked up on the 24 year old flipper losing his as* website….
and ragged on Countrywide and Citibank for giving him loans:
http://www.fool.com/news/commentary/2006/commentary06092517.htm?source=eptyholnk303100&logvisit=y&npu=y
My favorite thing about this piece is his ragging on Countrywide and Citigroup, along with direct links to the NYSE. It’s been nuts the past several months watching these numbnuts buying stocks for these companies.
Maybe these investors really were unaware of the situation? Sounds impossible I know. But if they were unaware, they won’t be for long once these stories get out.
I think with these stories and the negative year over year decline, the cork has come off the bottle and the genie is out. You know as long as most MSM papers print something close to the truth about the drop in prices that the price drops are only going to get worse now.
Still, I bet the LA Times doesnt put this news on the front page of either the cover or the business section. Most likely page 2 of business with a misleading title.
I’m calling BS on the Casey Serin story. From what I could find, there were a couple of purchases and sales by a Casey Serin (most recent purchase was by a married man by that name). I could not find any purchases under that name in Arizona (assuming some property was purchased there).
I think it’s a hoax. Sure got plenty of attention on the internet, though.