Weekend Topics, Photos And Appraisers
Please post weekend topic suggestions here. Also, note the new photo submission email address in the profile area. This is for your housing bubble related pic you would like put up in the photo gallery, which is about to launch. This gallery will be updated weekly and will not accept shots which include identifying features like addresses, faces or car license numbers, for example. Also, please keep resolution to 1600 x 1200 pixels or less.
This blog is working on an appraisers testimonial. If you are an appraiser who has something to say about fraud or inflation of values, send an email to:
thehousingbubble@gmail.com
You must be willing to identify yourself professionally to the blog, but all names will remain anonymous.
Ben,
The photo gallery is a great idea. You may inspire me to hunt down a photo shot ReMAX balloon at sundown, just after it has landed and started to deflate
And then there is the roadside ad I just saw yesterday, “Employment Opportunity / Sign Twirlers / $10/hour”
You can scan a physical photo and email it. Be sure and include a short caption describing the shot.
How about a “confessions” board? Though I am not very religous the idea of confession seems kind of cool. I’m sure there are some people on the site that have a personal story about real estate that somebody might learn from.
I’d like to see pictures of the most outrageous property for sale. I mentioned two the other day that were hilarious. I’ve since gone by to look at these dumps and they were the size of my living room selling for 1.3mm & 1.4mm.
Why not a “Put your money where your mouth is” predictions:
Explain your prediction for your local area (EG, SF Bay Area, down 30% in real losses (loss + inflation decay)), why, and what you are going to do about it.
Hi Ben,
Is everyone aware that they changed the new fannie mae forms to place more liability with appraisers shifting away from lenders. It ’s old tatic of blaming rouge individuals instead of the system. as a long time appraiser in the SF/BAy area I am wooried about how this will shake out.I am interested in what other appriasers think out the changes in the forms.
Fannie Mae has changed the forms to place more resonsibility(blame) with the appraiser if the feal goes sour. Comments?
Let’s discuss the latest report showing median incomes declined:
“Income growth was held back in from 2001 to 2004, largely because of a 6.2 percent fall in median wages, the largest source of family income, the report said.”
While there is a difference between the median and the average, I think this shreds any arguments that housing prices have gone up due to the fundamentals of rising incomes. Lax credit standards and the willingness to levarage based on creative finanancing, are the clear reasons why housing prices have seen their steep rise. There seem to be few other contributing factors.
http://tinyurl.com/oxyqd
I second the outrageous property listings. For example, this Boston-area POS:
http://www.realtor.com/FindHome/HomeListing.asp?snum=115&locallnk=yes&frm=bymap&mnbed=0&mnbath=0&mnprice=200000&mxprice=99999999&js=off&pgnum=12&fid=so&stype=&mnsqft=&mls=xmls&areaid=84227&poe=realtor&ct=Watertown&st=MA&sbint=&vtsort=&sorttype=&typ=1&typ=2&typ=4&x=57&y=8&sid=06300426DDCEC&snumxlid=1055835242&lnksrc=00001
Wow! That vinyl siding really holds up, doesn’t it? A hundred year old house, looks like new.
And I thought NY was bad. That’s terrible.
I would like to discuss just how much we hate the NAR and their website - it just makes me mad everytime I click on it and have to look at Blanche Evans (for some reason I have this image of her listening to a speech given by Lereah with adoration in her eyes - bizarre, I know). But maybe I’m just being overly sensitive:)
Others have speculated on this blog about where the next bubble will happen as money flows out of RE. In yesterday’s WSJ, an article pointed out that trades by individual investors at discount brokerages rose 30% to 40% in January over December, and money flowing into stock mutual funds last month was at a near record level. Charles Schwab reported $4.5 Billion in inflows, the highest amount since February 2000.
So the question is, are we headed for another stock bubble? Heaven forbid, are in-duh-viduals using HELOC money to buy stocks?
Although the problem of sellers’ denial is likely to prolong the agony, it does provide an opportunity to get around some of the difficulties in interpreting median price data. For example, when we see median prices decline, we don’t know whether it’s because sellers have dropped their prices or buyers are seeking smaller/cheaper units (e.g., condo conversions vs. McMansions). But if sellers are refusing to lower their asking prices, we can instead follow the “% of asking price” metric and more clearly determine whether median price changes reflect the type of residence or adjustments in asking price.
I think for much of 2005 in San Diego, sellers were getting ~97-98% of their asking price; now it’s closer to 94%.
cap ex to replace refi cash ?
we know refi is dying, heads keep spinning about cap ex by businesses
see any ? and how can we compare tech spending to 1999 ?
I still think my “what is the most fitting form of punishment for David Lereah?” topic would be interesting.
you wanna see what $419,000 gets you in Bayonne, NJ?
looky here: http://tinyurl.com/khcd2
you think it looks bad in a photo? I walk by this crumbling pile of shit twice a day. it’s an insult to the eyes. it needs about 100,000 worth of reno.
Bayonne is full of old shitboxes like this. there’s lots of nice houses too, but the city’s housing stock is close to 100 years old and there’s no more land as we’re on a peninsula (not counting the toxic industrial area to the south-east, and who wants to live next to an oil refinery anyway). mitigating factors: cheaper than Hoboken/Jersey City, 30 minutes to lower Manhattan or 33rd/6th.
I realized tonight that it’s had a for-sale sign in front since I moved here last June.
Thanks for the picture of that NJ $hitbox. I couldn’t help but make a comment to the realtor that it was ugly and overpriced. How about all of us flooding the realt whore with such comments. I am sure it will make his day.
This whole house of cards in CA is going to end badly for a lot of folks. No sympathy for flippers and stupid investors. Some sympathy for the uneducated who were encouraged to buy something that the realtor/mort broker, etc knew they couldn’t afford. Some people belong in hell for what they have done to some people
I wouldn’t be too rough on the agent. he looks like nice old dude, like he’s been in the business for decades. i’m sure he’s probably thinking the same “WTF?” when he writes ads like that than I think reading it (or seeing the bile-green dump in question).
I am sure the realtor is a nice dude - but that is one UGLY house, so it is my choice for outrageous.
The server crashed and burned.
Has the Greenspan put morphed into the Bernanke put? It looks like the DJIA is propped up at a strike price of 11K.
http://tinyurl.com/br84c
Marketwatch.com article (12noon Fri):
“Dow sheds the red
Blue-chip index cracks positive territory in late trading as Saudi terrorist threat recedes.”
Phew! I am glad that terrorist threat was so short-lived! Now that it has ended, we can get back to work again this afternoon, bidding up the prices of stocks and houses.
Here are listings for single family homes from Realtor.com in Portland, ME. It’s based on Portland (3 zips), Falmouth, Cumberland and North Yarmouth.
9/6/05 352
9/19/05 394
9/29/05 400
11/3/05 425
12/5/05 406
1/3/06 407
2/2/06 395
2/11/06 352
2/18/06 348
2/24/06 345
Inventory has been slowly decreasing all month and was 14% higher on February 2nd. It’s still early in the season.
It seems as though a week doesn’t go by without hearing about someone who has just moved in somewhere from Boston or NY. And more and more frequently we hear about people from California. They see Maine as a value now but should their markets’ prices correct and if Maine keeps inching up or even holding steady, at some point we’ll correct. I’d guess.
As southern Maine becomes overrun by this out of state money, native Mainers from this area are moving north where you can still by land for $500 an acre in say 100 acre lots. The big scary variable is the timberland. The stae is 90% forested, the most in the nation. The timber companies never put up no trespassing signs. But now they are controlled by Wall Street and cheap foreign wood and labor prices are leading to land sales. In the next few years, if nothing is done, huge lots could be sold off to private individuals who want retreats from megalopolis. These folks may likely put up no trespassing signs and inexorably alter the frontier spirit. John Malone, the cable magnate recently bought 53,000 acres which he has not posted. But we can’t count on others to be like Malone. Anyway, that’s neither here nor there with respect to housing prices.
I’d like to see what others are doing/saying to convince family/friends that the real estate freak show is over! I’ve pissed off any number of people by trying to help, and I’d like to read about other’s efforts and how it worked out.
It was a little tricky in my case because my wife and I moved away from San Diego a little while ago, and we kept our house in SD in case things didn’t work out in our new town. This meant that when we decided to put the house on the market, my in-laws assumed it meant we weren’t coming back to SD. When I tried to explain that this was our best opportunity to buy into a better neighborhood in SD (sell high now, buy low in a better neighborhood later on), it was met with the “you’ll never be able to buy back in” argument. I found it helpful, however, to walk my mother-in-law through the numbers (how much a $400-500K mortgage payment is, how much you’d really have to earn to support that, etc.) and to point out that the high numbers of speculators and tightening credit requirements are really threatening to bring everything to a devastating end. So, now we’re in escrow (please cross your fingers for me and pray that we successfully close), and my mother-in-law still sometimes frets about our decision, but as my wife put it, “Mom, this has no effect on your finances. You have no reason to worry.”
Granted, this was only to provide the rationale for our decision to sell our own place. I wasn’t about to try to convince my in-laws that they should be selling (my parents-in-law have a beach rental free and clear (no need to sell anyway, I guess), and my sister-in-law owns part of a rental duplex that they bought within the last couple of years, I think). That, I must concede, is a much more hazardous undertaking.
A particular condo for rent in Dublin would have made a great photo but the composition of the picture changed….the balcony that faces a busy street used to have not 1, not 2 but THREE For Rent signs! Honest! Now there is only 1 sign….I think the HOA got to them and had them take the extra signs down. Would have been a GREAT picture for the gallery.
BayQT~
Also…noticing a little more desperation on the part of the Bay Area RE agents. Listening to the radio, on the way to work this morning, an agent had a *spot* where she described 2 Open Houses this weekend….one in Livermore for **only** $619,000, and a **steal** in Danville for $1,049,000.
The Danville house (only one for this amt in Realtor.com):
http://tinyurl.com/zaa5l
BayQT~
There is nothing in Danville to support $1M homes.
I say the same about Dublin…but there are several sellers of homes with $1+million price tags, including one for $2,349,950. Sheesh! They CAN’T be serious.
BayQT~
Now compare the Danville house to this:
http://tinyurl.com/hnglj
Now compare the Danville listing to this one:
A tad overpriced in my opinion.
Frak. Screwed up the formatting. Sorry. The overpriced comment was for the Danville listing, not the McKinney one (though in way, that one is also overpriced).
I hate those kind of homes… a waste of brick.
Would like to hear people’s thoughts about the Va. Beach market. Definitely overvalued but retirees keep moving here and the military presence is a factor. Any thoughts on the timing for a Beach Bubble Bursting? Thanks.
How many rich military families are moving in?
Not many, can the average military salary support a median home using 30yr fixed mortgage?
I am losing the faith in the Fed; it looks like Ben Bernanke is doing just what he said he would do — continue AG’s policies, including the famous put. Could anyone offer useful suggestions for a low-risk diversification into foreign currencies? (I am not interested in gold or oil, just currency risk diversification.)
Schiff has a scary report:
“The Collapsing Dollar: The Powerful Case for Investing in Foreign Equities” (WARNING: PDF FILE)
http://www.europac.net/report/scripts/report3.pdf
I am not convinced that foreign equities are a good bet if the dollar collapses — too much of a tsunami to be long risk. But the Chinese have the right idea with diversifying away from the dollar, IMO.
If foreign values devalue due to the US Dollar devaluing, will it be a zero sum?
I have so much invested in Canada, they should let me be a citizen.
Brillant Idea on Photo Gallery. I can start to upload pix on recent home developments growing in San Francisco and rest of Bay Area every month.
Oh I forgot the Realtors will make you think that …
They dont make any more land/homes in San Francisco Bay Area.
Only a blind fool will beleive that.
How about examples of Realtor desperation? I just got a letter in the mail from a local realtor and I just couldn’t get over it. I’m in Sarasota/Bradenton and basically said a short window has opened for buyers due to the exploding inventory but will end soon with all the spring buyers that will rush in. It was 1 & 1/2 pages long explaining how we’ll “miss out” (said local median price will be $500k+ in 5 years) and a story of how she just helped someone buy a house for $19k off the asking price. She went on to say they now have an instant $19k in equity!! To top it off, the grammar was awful and the thing looks like it was done on a typewriter…..
I actually want to email her but it may be a waste of time….
That’s it!! I know what to put my money… short-term crack futures! because these Realtors(tm) have got to smoking all they got.
Willingness to decieve others seems to rise as one’s economic future is threatened.
Melody, what is it with the brick? I have a friend at work, retiring, and just bought a house in Justin TX. Also put the down payment on one for his kids. House looks just the same, but single story. Everybody in his family packed it up and moved to Texas. We thought it was hot in So Cal. Is Justin bad? Never heard of it. BTW, he paid 120,000.