The Market Has Shifted And Sellers Know It
The Pioneer press reports from the Twin Cities. “The housing market’s slowdown is gnawing at prices, resulting last month in the first drop in the Twin Cities’ median selling price in recent memory. ‘There’s no urgency with the buyers right now,’ said Justin Fox, a Realtor in Cottage Grove. ‘It’s like you’ll be working with one that’s really hot to buy and all of a sudden they disappear for a couple of weeks and you can’t get ahold of them.’”
“The sharp slump in sales that took hold in summer continued last month, with sales in the 13-county metro area dropping 24 percent from September 2005. Pending sales, an indicator of future sales, also have plummeted. To get houses sold, sellers are offering extravagant incentives like sports cars or even auctioning off their homes to the highest bidder.”
“That’s what John Massey is doing this weekend to sell his Minneapolis house. ‘There’s just been no movement on it at all, so we’re trying some radical stuff to at least get people to look at it,’ said Massey, who moved with his wife last year to a house near Madison, Wis.”
“Massey has slashed $100,000 off the asking price of his four-bedroom house since listing it for sale a year ago for $839,000. Homes in that price range now typically take a year to sell. Bids will start at $349,500 for Massey’s 4,200-square-foot house.”
“‘We’re at the point that it’s impossible to carry both house payments and keep any standard of living,’ said Massey, who planned to live in the Minneapolis house before business and family issues forced a move.”
“Many sellers simply aren’t sure what to do. Leslie Larson had the kitchen and bathroom remodeled before listing her Macalester-Groveland three-bedroom in February. But she just took the house off the market after listing it for sale for seven months and reducing the price $40,000, to $289,500.”
“Larson is frustrated by comments from agents who have toured the house and offered glib advice such as placing colorful hand towels in the kitchen. ‘No one can explain why this house hasn’t sold,’ she said. Larson has no doubt that the housing market has changed. ‘If we had sold this house two years ago without putting in a new kitchen and a new bathroom, we’d have made $50,000 or $60,000 more,’ she said.”
The Star Tribune. “For the first time in 14 months, the number of new listings added to the Twin Cities residential real estate market dipped in September. For the past several months, inventory levels have been rising at a double-digit pace, driving the number of homes for sale to record levels.”
“From January through September, there were nearly 90,000 new listings in the metro area, 11.3 percent more than the same period last year and more than 13,000 more listings than the five-year average.”
“What’s driving the decline in new listings? ‘I think people are tired,’ said Todd Shipman, president of the Minneapolis Area Association of Realtors. ‘In some sense, yes, the numbers are going to level out, but we have a long road ahead of us. They [sellers] know we’re in a buyer’s market, and maybe they had less success getting what they wanted; the market has shifted, and they know it,’ he said.”
The Chicago Sun Times. “It’s strange how a developer who landed in Chicago just a couple of months ago trailing clouds of public relations glory now has an acute case of shyness. Garrett Kelleher, the Irish developer who in July took financial control of the proposed 124-story building for 400 N. Lake Shore, doesn’t answer questions about the flashy project these days. Nor does his Chicago attorney, Thomas Murphy, who has acted as his spokesman.”
“Murphy refers calls to a public relations agent (a spokeswoman for a spokesman?) whose main function is to say that neither man has anything to say, and that Kelleher never liked talking to reporters anyway.”
“Such a feeling is common, of course, but it usually abates in developers when they want to spread the word that they have condos to sell. The silence can’t bode well for this project, which could turn out as one big financial miscalculation.”
“Groundbreaking had been promised by early 2007. But financially, the Calatrava contraption looks as rickety as something out of an old Erector Set.”
The Journal Sentinel from Wisconsin. “One clear sign of metro Milwaukee’s new-home sales slump: developers are raining down on the parade. ‘We used to have to beg people to host (the annual) Parade of Homes,’ said Matt Moroney, executive director of Metropolitan Builders Association. ‘Now, we’re turning people away. Developers need the show as a marketing opportunity.’”
“For the year to date, MTD data show, Milwaukee metro permits are running 24% behind last year. This September was the market’s worst-performing September in at least seven years, according to Menasha-based MTD, which tracks one- and two-family home permits in most of the metro area. ‘I’m hoping we’ve bottomed out,’ Moroney said.”
“He said builders have been reducing their inventory of speculatively built homes, which don’t have contracted buyers. Metro Milwaukee is sharing the nation’s housing market slide, following five years of boom conditions that produced what economist Michael Carliner called ‘unrealistic expectations’ among customers and contractors.”
“‘They may be over-reacting now that their expectations have been tarnished,’ said Carliner, the National Association of Home Builders’ vice president for economics. He predicted national housing sales will be down about 20% this year and shrink further in 2007.”
‘Over 400 single family foreclosure homes in Illinois, Indiana, Ohio, and Pennsylvania will be auctioned for several of the country’s national lenders from October 23rd-November 1st at multiple locations. Homes are valued from $5,000 to more than $450,000 and will likely sell well below their market value in a competitive bidding environment. In large ‘caravan’ auctions such as these, sellers accept almost every offer in order to recover costs of defaulted loans.’
- Quote from the former Iraqi Information Minister
“”Yes, the american troops have advanced further. This will only make it easier for us to defeat them”
“Their casualties and bodies are many.”
This could easily describe present sellers and flippers.
Home prices slide for third straight month
Median sales price for September was $626,000; sales activity remains slow.
By JEFF COLLINS
The Orange County Register
The median price of an Orange County home fell for a third straight month in September, when the midpoint of all sales was $626,000, DataQuick Information Systems reported today.
That’s still up $16,000, or 2.6 percent, from the median price a year ago, said DataQuick, which tracks real estate prices and sales nationwide.
But it’s down $20,000 from the peak price of $646,000 in June.
“The big question is whether Orange County at some point … will go negative on an annualized basis,” said Patrick Veling, president of Real Data Strategies Inc., a Brea research firm. “The jury’s still out.”
DataQuick also reported that 2,664 homes sold last month, which was 34.6 percent below the number of homes sold in September 2005. It was the 10th month in a row that sales were down from last year’s levels, DataQuick figures show.
CONTACT US: 714-796-7734 or jcollins@ocregister.com
“The median price of an Orange County home fell for a third straight month in September, when the midpoint of all sales was $626,000, DataQuick Information Systems reported today.”
Is Gary “In the bag” Watts’ OC price increase forecast for 2006 still on target?
From the OCR blog: “But September also marks the third straight month of declines. September is usually weak for pricing, with the median declining on average 0.2 percent from August since 1988. This year, the one-month drop was 1.1 percent. In DataQuick’s 19 years tracking the home market, home prices have only declined three consecutive months on three other occasions — 1990, 1992 and 1996.”
Hmmm, what was happening to OC RE from 1990-1996? Looks like it’s going down again.
Auctions may well accelerate the slowdown into a crash.
You may be right, or it may be that auctions keep the sales figures above Zero and thereby support the notion that this market is orderly. My worst fear for a friend who is FB, is that the auction will be postponed so long that even a (rental-related) reasonable price will be unattainable.
The auction price is generally below the trolling price (what you get by listing your home and waiting for the buyer with the best offer). So if lots of homes sold by auction get reflected in the comps, prices will go down more quickly than if everyone is wondering what the price is because nothing on the MLS is selling.
OT:
Is anyone offended by the references to us as “Ben Joneseean Bubbleheads” - obvious reference to Jim Jones?
He just provides the forum and content for discussion which is why I think this group has been worthy of daily participation. No slavish devotion to a charismatic leader like some of the others with the attendant ego problems.
I think there are other bloggers who are jealous of the level of traffic Ben receives.
Yeah. I wonder how many hits this site gets per day? I am sure it is way up from a year ago.
I noticed a sharp increase in posts per given period of time in just the past couple of months.
I do get bored with Keith’s comments about “Ben’s boring blog.”
Not a bit offended. Time will tell who is right. If we are wrong (and that is a very big if with the way things are playing out) then they have every right to rub our noses in it. If we are right, well we won’t have to rub their noses in it since the lenders, IRS, family members, and friends who watch them lose their homes (flips) will have done it for us.
In the short run, we have out beliefs and they have their’s and we won’t change their minds nor they ours. (Although I keep begging RE bulls to give me NUMBERS that support their beliefs. And if the right ones came up - i.e. salaries doubles, I would change my mind. But they never come up with anything that satisfies my left brain.)
From below: “Ben Jones Bobble Head to come out.” When and where do I get one??!!!!
Hey we on this board aren’t the ones drinking any Kool-Aid!
Name calling is common in those without a compelling case.
Like they say in Hollywood “Any publicity is good publicity, as long as they spell your name correctly”
C&C,
Where has that been posted or said?
I am with TXChick on this one. Ben is providing a forum for discussion and exploration of issues, the antidote to the Koolaid salesman of the NAR, CAR, and every Ma and Pa Realty firm across the country with an obvious conflict of interest. It is amazing how hard it is to get word from RE experts without a dog in the fight.
However, I would encourage all to cross reference posts on this blog. Personally, I am amazed how accurate the predictions from the bubbleheads are turning out to be. My wife is no bubblehead, but she reads the mainstream media much more than I, and virtually everything discussed here matches with what she finds on other forums.
Here is one:
__________________________________________
At 9:38 AM, surfer-x said…
CrispyEcoli,
As a hardcore Ben Jonesian Bubbleboy, you forfeit the right to insist on civility much less being taken seriously
I’m just waiting for the Ben Jones Bobble Head to come out.
It’s going on the mantle.
“Ben Jones Bobble Head to come out.” Right next to the St Joseph statue
Consider the source. Patrick.net’s surfer-x is a douchebag. Why would anyone care what he has to say?
I’ve never witnessed so much anger and hate in one individual’s blogging as this guy. I’d love to know what prompted it. Obviously the guy is a big loser in the game of life, but it would be interesting to know the origin of the hate nonetheless (unless of course it is just that he realizes what a loser he is and can’t stand other’s success because he pales in comparison).
Patrick’s folks take themselves and their posts waaaaaaaaaay to seriously. Its as if they think they are read word for word into the minutes of congress.
I like patrick.net’s blog and occasionally read there. It’s centered on the Bay Area though, and I get more out of this blog. This blog allows also nested replies.
Also, this blog does a MUCH better job of staying on topic.
Actually, Patrick is pretty cool. The blog that keeps calling Ben ‘boring’ is Housing Panic.
At least Patrick doesn’t get threadjacked by racist xenophobes that can’t spell. It can get a bit wordy, but everyone seems to enjoy talking about just about everything without too much rancour or flaming.
Housing Panic, on the other hand…its the only blog where I read Keith’s post but rarely bother to read the comments. Keith gives as good as he gets and allows anonymous posters, which seems to exacerbate the problem of nutjobs spewing all sorts of hateful crap without the danger of ‘outing’. Still, he’s prolific (4 or 5 posts a day), if a little radical at times.
I have no idea why he has it in for Ben. The two blogs are like chalk and cheese. I reckon one Housing Panic is enough…
Well I suppose they are entitled to their opinions, and so am I.
Screw those unhinged, hate-mongering swine!!!! And I agree about Patrick.net. Patrick seems cool, but unfortunately he gets a lot of self-absorbed whiners on his blog. Perhaps it is a Bay Area thing….
Keep it up Ben & Crispy! I love this visiting blog, and I have a special interest in Bakersfield because my brother lives there and may consider buying a house one day soon.
wow, that is funny coming from him.
The Ecoli part is actually pretty funny - I am considering changing my screen name. LOL
I’m not even sure what his point is- from the few posts of his I’ve read, isn’t he about the biggest bubblehead around?
I propose a rumble- Ben Jones’ crew vs. Patrick’s. I’ve seen photos of the regulars over there (which could explain some of the hostility). I’m confident we could take them. And we can clone HARM and he can fight himself.
LMFAO!!
> And we can clone HARM and he can fight himself
What about DiNOR and Cote?
Cote can be a cheerleader and DinOR has to pick, us or the dark side.
And we can clone HARM and he can fight himself
Huh??
Having broken bread with the infamous Mr. X (and btw, he’s 73% more civil in person), I can tell you one of the following is true:
1. He did NOT make that disparaging “bubbleboy” comment @crispy&cole / some troll hijacked his screen name, or…
2. He was being deliberately ironic / playing Devil’s advocate. I’ve done the same on occasion just for kicks & giggles.
“Huh??”
I was joking about a rumble between this blog and Patrick’s, you post on both blogs, never mind. I’m sorry, I should have started the post with “sarcasm on” and ended with “sarcasm off”. What was I thinking!?
Ok, got it now –my bad. I was too dense to get the joke.
“‘We’re at the point that it’s impossible to carry both house payments and keep any standard of living,’ said Massey, who planned to live in the Minneapolis house before business and family issues forced a move.”
I thought the realtors solved this issue months ago: just rent it out, baby. Wait for the market to recover in 10 or 20 days.
Eh, My opinion the renting it out thing only works if you don’t drink the kool-aid and buy the house on the moving end too. Because the realtor tells you thats what you should do.
My wife and I are relocating for work (what timing huh), it makes a LOT more sense financially to rent and rent out. The bad move is buying and renting out. I see (online) enough rental listings where you can tell they want to cover all their costs in rent. Probably not going to happen for a lot of homes. We’re very close, but we found good renters, which is well worth $150-200/mo. Also, it’s a little insane (at this time in the market) to expect your renter to pick up your principal payment (interest/taxes/insurance at most).
It’s much easier to cover just another rent payment. And a lot less risk…$400-500K house or $15,000 lease.
“Also, it’s a little insane (at this time in the market) to expect your renter to pick up your principal payment (interest/taxes/insurance at most).”
That’s not my understanding.
What is not your understanding? That it isn’t insane to expect rent to cover PITI? Unless one bought several years ago I would expect that the price appreciation over the past few years would but the mortgage on a newly purchased home WAY above market rental rate. Perhaps this isn’t what you meant to imply though.
Jesus, do I need to type “Sarcasm off” after I write “wait for the market to recover in 10 or 20 DAYS”!?
Well even I would have picked up on that comment. but “apparently” is the short answer, at least in my regard. sorry.
Rents will be a dime a dozen as the McMansion crowd seek to convert those massive family room’s over the 3-car garage into apartment’s in order to get the income to meet their rising ARM house payments.
However you will be asked to sign an identiy waiver allowing them to call you “Cousin Ed” in order for them to circumvent
zoning ordinances pertaining to multi-family use.
WTF!!!! It’s a great deal.
You’ll have all the amenities of a big buck SF neighborhood for a quarter the cost of buying in. Just be sure to have them include use of the pool in your lease.
Greed still rules. I zillowed this house and it was bought in 2002 for $175,000 and he listed it for $839,000. Now he is auctioning it with a minimum price of $349,500 - DOUBLE - what he paid for it four years ago. Oh yeah, he’s sacrificing this POS!
I agree. We have yet to see the real pain.
He is Heloc’d for probably 200k plus.
Thanks for looking that up. I suspected as much.
Looks like he might be taking a bath after all. I found the ad for the auction http://tinyurl.com/ylsekc House built in 2005.
Larson is frustrated by comments from agents who have toured the house and offered glib advice such as placing colorful hand towels in the kitchen. ‘No one can explain why this house hasn’t sold, -
Leslie, darling - we can explain why it hasn’t sold. It has nothing to do with colorful towels or BS spewed out by some real-whores. It is still, unfortunately for you, priced too high. Drop it further and maybe it will sell. You state that you understand the market has changed. Roll with it, and get out with as much as you can.
No, you’re wrong. She’s just not putting out ENOUGH colorful towels. Put out another one every day until it sells. I’m telling you! It’s the towels!
I’ve said it before and I’ll say it again, it needs a damn koi pond. Then it will sell.
CUPCAKES!
Vulture, it looks like you beat me to it.
No, no, no. She has to bake cupcakes. Then everyone will know how special her house is. Oh, and burying a statue might help, too.
hmmm…maybe remove the squirrel-feeding requirement?
A really good friend who is not without common sense reports that her LA daughter bought a house in the 400’s, listed it for 880 a while back, has dropped to 790, has open houses every weekend, got her house featured in some MSM thing, has had it “staged”, and my friend says, “If this house doesn’t sell, I don’t know what will.” I haven’t got the heart to tell her: what will sell is a $400,000 house.
Amazing how the obvious escapes so many…
“No one can explain why this house hasn’t sold,’ she said. ”
Nearly every story we see has some seller’s comment similar to this in it. Here’s a clue for all the sellers: “price”.
Aw, c’mon, axe, everyone KNOWS it’s the color of the kitchen hand towels! Put some neon green ones out on the counter, and watch the house SELL!
Somebody yesterday mentioned a Koi Pond will do the trick.
Dude, it’s Feng Shui. That’s the really problem the houses energy isn’t oriented right.
No, She does have the saint john buried in the frontyard..that is why it hasn’t sold!
No, it needs granite countertops to sell!
C’mon, everyone knows you need an address where all the numbers add up to 11 (or is it 12).
Just add new stainless appliannces to hang those nice towels on. Then it will sell for sure!
No, No, No, you are all so 2005 which was a greedy sellers market you need to be 2006 in a desperate sellers market
You need granite appliances, and stainless steel countertops
You need to bury a Koi Pond upside down in your backyard and put a statue of St John above it right side up
You need to misalign your energy so that your out of wac Feng Shui will attract buyers looking for deals.
You need to remove your house numbers and replace it with letters which also has the advantage of confusing your mailman so he can’t deliver mortgage bills.
And you need white hand towels which signifies to the buyer that you surrender.
I read that granite countertops and stainless steel appliances are no longer in style. When I sold my old house people kept telling us that our light-colored oak cabinets were dated (dark was “in” apparently). I would love to see the look on an FB’s face when a prospective buyer told them the upgrades they paid through the nose for were now “dated”.
I’ve done that, but I believe it. Black counter tops and restaurant stoves and stainless are not my thing.
I think he needs to bury that statue of the saint in his yard. I wonder if he did that because it’s supposed to work miracles, heh heh.
Wonder what will happen to the people who CAN’T lower the price next year when they realize it’s no better in the spring? They’ll be crying in some pretty hand towels.
Instead of burying a statute upside down, he needs to dig a hole and stick his head in it with his ass sticking out and stay there for several hours. My guess is that he would quickly have an epiphany on what measures he needs to take to sell his house.
Actually, I think the problem is that he already *IS* in this position.
Who’s the f-ing patron saint of future home buyers?? Can I carry a minature on my keyring to counteract the mojo of the St. Greed Statue?
Why would the buried St. Joe statue gig work? I thought greed, gluttony and sloth were all deadly sins. Note to floppers: Forget the statue, drop your price, sell that Hummer and get a job!
because somewhere in time somebody got drunk and buried poor St. Joe upside down in their front yard.
Then when that homeowner dropped their asking price on their house by 183%, the house miraculously sold!
So of course St. Joe got the credit.
(this is a true story; every Catholic knows this.)
Nearly every story we see has some seller’s comment similar to this in it. Here’s a clue for all the sellers: “price”.
But that would require them to “give it away”.
Rainman18,
We are WAY overdue for a visit from BTC.
Was thinking the same thing just today. Bring on BTC, Rainman!
“…Justin Fox, a Realtor in Cottage Grove. ‘It’s like you’ll be working with one that’s really hot to buy and all of a sudden they disappear for a couple of weeks and you can’t get ahold of them.’”
It is good to read stories like this. I truly believe there are still a lot of uneducated prospective buyers out there who are not up to speed on the bubble yet. They probably believe prices are still going up. Once nationwide price declines are reported by the MSM, the momentum will really pick up, and sales will slow to a trickle.
Now we know why they call him Justin “blue balls” Fox around the Twin Cities.
You owe me a keyboard. LOL
‘If we had sold this house two years ago without putting in a new kitchen and a new bathroom, we’d have made $50,000 or $60,000 more,’ she said.”
‘No one can explain why this house hasn’t sold,’
That is very UNFAIR. I mean really it is.
Think about it. They even put granite countertop.
Under president Greenspan’s constitutional ammendment, did not the rights of the sellers to claim higher price…..
Do the prices a home sells for at an auction get put into the real estate databases and used for comps ?
Auction as a marketing tool still shows up as a arms length transaction… The seller is not a bank or lender. Therefore a good comp.. In Boston a developer just had a auction and sold units within the condo complex for 30% lower than people who bought @ preconstruction.. One day haircut of roughly $80,000.
I can just hear them saying to me “you cant use those sales as it was an auction” Yea right… They were market. The auction was a tool to generate interest.
HA-
$80k-live by the sword, die by the sword.
Obviously you won’t get the call to go back to that complex to do the re-fi appraisals of those who bought before the auction.
Bring on the rubber stamp crew!!!
> The seller is not a bank or lender. Therefore a good comp.
Is a house from a bank or lender not on the market? The bank also wants a good price for it, as high as they can get. Do you know why they don’t count as market prices?
It is considered more of a distressed sale. The bank wants to unload for roughly the amount owed. Its gonna be bad around MA, but the first round of auctions are buy backs as no one wants to buy the property
Shouldn’t the buy backs for the amount owed be the upper limit for the current value of the house? Using this as a “one-sided” comp would do the market more justice and reveal the actual depreciation.
Now that it’s October, and the frost is starting to show, it will further freeze the already near-dead market here. (we’re like 30 degrees under our average today… we should be low 60’s, instead it’s 30 and flurries… ACK!)
I never understood why buying a house should slow down in February in San Diego (it’s 60 and sunny there in Feb), but you bet that people aren’t househunting in Minneapolis in February.
we will have one dead winter in terms of sales.
Inventory MIGHT drop here… only because most people realize it’s hopeless to sell a house in Mpls from November until March.
That said, it depends on how many FB’s are out there with adjusting toxic loans…
Has that Mary Tyler Moore house sold? Talk about an owner drinking the koolaid.
I don’t think so, but not sure.
Lots of Realtor TM shenanigans going on round here. Like selling the house, then leaving the “sold” sign up forever to make it seem like things are selling. I’ve also noticed houses having “for sale” signs, then not, then again. I’ve seen a couple of “sold” signs and then the house back on the market (sale fell through? or shenanigan?)
In my neighborhood many of the people seem to be just giving up on selling, and hunkering down for the winter. Still a lot of For Sale signs, but nowhere near where it was back in July/Aug/Sept.
All the while they continue to build those condo towers…
Ok, I have been reading and following the “bubble” info and blogs for over a year now, this is my first reply/post etc. I am 30 I make over 90K a year, I live in the Courthouse, Arlington, VA area and I rent. I would like to own my own place because well I’m getting tired of renting, and am one of those folks on the “sideline” right now. I make a good salary, I have a decent amount of money towards a home (about 15 K cash) however I am still COMPLETELY out priced in this area, who are these people that can afford 525K 2BR condos? My GF who is a lawyer and makes over 150K a year can afford 500K barely, she looks in the 350-425 range and that is a stretch. Can someone help me understand what it is that I am doing wrong? I just looked at listings in Arlington and nothing is changing, its all the same, WHO CAN AFFORD THESE PLACES??? It is so frustrating, I read all the news about “the great correction”, or “prices will slide 20-30 no maybe 40%” etc., yet there are STILL all these condos, and townhomes for sale at and above 500K in this area. I know the gov’t pay scale and NO WAY can a GS own a 500K condo on one salary, yet I overheard this girl say how she got “such a deal on a 2br condo in Ballston for 535K” and this was just about 2 weeks ago. WTF???? I’m rambling, I’m frustrated, and I’m not seeing the change that is coming.
I want to buy, but the sad fact is I can’t because even at my salary level (not even counting my bonus) I cannot afford a home. That is the simple economics of this.
Any ideas, comments, suggestions, I am all ears!
Rent. People can’t afford these places. Wait until the market comes down and then buy using standard advice on what you can afford. Run the numbers here: http://cgi.money.cnn.com/tools/houseafford/houseafford.html. Bet you’ll find you can afford a lot less than $525k. It may seem conservative, but that’s because in a normal world you are supposed to pay a mortgage and save for retirement without running up credit card debt and helocking your house. Truth is, almost no one plays it conservative and, in a falling market, they’ll regret it.
In about two to three years, you’ll be able to get into something. This correction will occur until people like you and me decide to buy because it actually makes financial sense. Right now you’d just be rescuing some idiot who wants something for nothing. Life is long. Be patient.
I should add that I’m over 35, have a wife and kid, and also make a decent living (more than $90k, but in a pricier place). Every time I think of chaining myself to a house, I think of all of the options that would be foreclosed down the line (or at least for a decade or so). Also, if you wait, and your future house drops $100k before you buy it, that is a HUGE deal. Not because of the difference in monthly payments, but because it effectively means that for the rest of your life you will be floating an equity gift (once prices start to climb again) when you buy up/sideways/down instead of dragging around a loss that will always leave you playing from behind.
Sonny - hang in there. I’m in about the same boat, just the other side of the country. The fact is, people can’t afford these places, which is why so many of them have been using toxic loans. These loans let them get into the property, but not really buy them. It’s hard, but you’ve got to be patient. The ARM re-sets have really just started, and the sales prices that you see published (closed sales) are from deals that were signed a couple of months ago. ARM re-sets are really going to start taking their toll in 2007, and this will lead to more foreclosures, which will definitely pull prices down. Sellers are holding out as long as they can, praying that they can get something close to their wishing price. Some will, because some buyers are just too stupid to realize that the market has changed, but most won’t. Watching prices on a daily or weekly basis will drive you insane. Try only checking on them once every month or two, and pay more attention to the trend than to the actual prices. The trend is your friend, and in just the past year prices have gone from going up 20%/year to going down, say 5%/year. Think about what it takes to change that momentum, and realize that the crash will happen but it is going to take a little longer than you would like it to. In the meantime, keep renting and saving. Oh, and you might not want to refer to your girlfriend on this site as a GF, as that acronym is usually referring to a Greater Fool on this site. So, hang in there and be patient. You’re doing the right thing, and it will be rewarded.
Wait.
Even if prices don’t decline like most people here think, I’m sure we can agree that they’re not going to appreciate at a rate that outpaces your pay raises, or returns on the $15,000.
NOVA up to Baltimore, like you, I haven’t seen prices coming down yet, but I haven’t seen anything selling for a long time. Within a half mile of my house, there are 6-7 properties for sale, 4 of them on the market for more than 125 days. Nothing has sold since May. More houses just pile up behind ‘em like cars on the interstate running into the back of a jam.
There’s only one way for prices on places like that to go.
I think you replied late in the thread. You have to be careful on this blog. Wait to long, and we move to the next thread. I am only here because I am catching up after some work.
There is a lot to answer here, but it will get lost in the thread. All I can say is be patient. Smart money is to look at rent/price ratios a year from now.
You’re golden; you haven’t done anything wrong at all. Buy now, however, and you will have totally screwed up. Wait for at least until Winter of ‘07 to buy.
People do it by having profiteered in previous property
inflation cycles, so they’ve pyramided the gains.
However, those who weren’t in the game signed mortgage notes which will be their financial death sentence.
This is what is driven the residual market.
But the bust is here.
So…
Shack up and rent with your GF…That’ll give ya like $240k joint to book some exotic travel, play, and sock away some cash.
You have a myopic view on this housing stuff.
Don’t get your panties all in bunch watchin’ ignorant losers put their heads in a financial guillotine.
Stand above the fray, and give thanks everyday you’re not caught in the tar pit of declining values.
The day will come when you will have your time
15K is not a decent amount of money. its peanuts. Trying working towards a 20% down payment plus extra for unforseen expenses.
Frost? We had SNOW this morning in Chicago. And it stuck! (OK, for only a couple hours; now the sun’s out.) Current temperature 34 degrees. Buy, buy buy!
ROFL!!!!
I have to admit, on average I’m colder in Chicago than Mpls. (wife is travelling consultant, her gig is in Chicago the last year, so I fly out there every month). I think it’s that lake effect stuff combined with the wind tunnel effect from the skyscrapers or something.
Beautiful city though.
Are they going to build the Fordham Spire still? I think that looks AWESOME! (I’ll bet you the Hancock and Sears tower are lobbying to stop it as we speak)
I think that’s the tower referenced in the Sun-Times article above, but I may be wrong.
I’ve been saying from the beginning there’s no way in hell this thing is getting built, not without the builder going bankrupt anyway. For one thing, who’s going to finance it? The builders have still not completely answered this question. Considering how long it currently takes to sell high end properties, I don’t see this project happening. Granted it would be a cool building, but it just makes no economic sense.
Snow here in Detroit too so we probably had your leftovers. flippin 36 degrees this morning. Cant wait for the wife to let me move south!
Does anybody know what the rate of toxic mortgages are in Mpls metro area for 2006. Over the last few years, the % has been quite low actually (8.7%). But I wonder if, and how much it spiked over this year…
http://www.businessweek.com/common_ssi/map_of_misery.htm
it’s the only saving grace for our metro… overall affordability is great, and home prices aren’t too out of wack with purchase prices, EXCLUDING the brand new homes and condos. You’ll pay more to buy then rent, but maybe 10-20% more, not 50-200% more like other places.
The great unknown are these condos. they are EVERYWHERE. I’m sure they’ll pull everything else around them down in value, but by how much? Living in a condo in Mpls winter sounds horrible to me, but it is relatively equivalent housing option to SFH.
“‘We’re at the point that it’s impossible to carry both house payments and keep any standard of living,’ said Massey, ”
—————————————————————————
The paradigm has shifted. Last year it was: 2 house payments are better than one, and 4 are better than 2. Especially if you’re leveraged to the eyeballs. Now we’re finding that leverage cuts both ways.
won’t spread to the rest of the economy”
what sector won’t get hit ?
Health care? If any sector is immune, this would be it. As long as they don’t run out of employers willing to cough up annual double digit insurance premium increases.
‘It’s like you’ll be working with one that’s really hot to buy and all of a sudden they disappear for a couple of weeks and you can’t get ahold of them.’
Prospective buyer to Realtor (TM): “Call me when the market has bottomed out.”
Great read on what’s fed the “Bubble”, and why it’s going to go down real hard. How many people do you know like this?
http://lifestyle.msn.com/MindBodyandSoul/CareerandMoney/ArticleGH.aspx?cp-documentid=994839>1=8681
There is a critical detail missing from the sad tale of Dan and Tammy, which is the severe distortionary effect of the home equity ATM machine in an era of 10%+ annual housing price inflation on family budgets. The negative national savings rate is an artifact of the bubble, and the end of free money is going to hit many US households’ consumption habits as hard as a job loss.
GS-
Pretty much a fairy tale from my perspective…
The minute Danny shut off the credit spigot, Tammy would have gone out on the slink to find the BBD and then given him the heave-ho the instant she found it.
To add to the drama, have Danny loses his job in the midst of it all and then goes to the gun.
Rockin’ in the free world.
Hey, is there any way to find out if a property has been HELOC’d to death? Is mortgage info available anywhere?
You’ve got to figured it’s all public record with the county, in the recorder’s office or something. A realtor can pull up the initial mortgage info and the purchase price pretty easy, so I imagine it’s public record somewhere.
If you don’t know the property owner’s name, you can find it through the tax appraisal district (using address to search)….then take that info to the county records, search Grantee/Grantor records and there you go! At least in Texas that’s the way it’s done. Lots of very interesting info there
I know you can see all the mortgages on the property records sites in most parts of Florida. I check them all the time. Broward in particular is user friendly. You can see just how screwed all these people are.
Query - guy next door builds house in 2005 (mid management job with CPS and…a realtor on the side). I’m curious about loan amount, so I go to Bexar County records, nothing there. Except for HELOC for $75000 filed in August 2005. Move in was July 2005. What’s the deal/trick here? Interestingly, he filed Designation of Homestead to get the HELOC but failed to report to Bexar County AD that a house was built. So property appraised at lot value - no improvements. A liar and a cheat. Back to question - why/how no recorded Deed of Trust? Doesn’t make sense that it was a cash deal with him getting the HELOC so soon.
does anyone know about the real estate market in anchorage?? i’m up here now and see that it is similar to other markets in that there is a glut of homes for sale but prices haven’t dropped significantly. we are renting now and are waiting to see what happens.
Fed says widespread cooling in the housing market
http://www.breitbart.com/news/2006/10/12/D8KN87KG2.html
>“Larson is frustrated by comments from agents who have toured the >house and offered glib advice such as placing colorful hand towels in the >kitchen.”
That sounds like the kind of intelligent analysis that could qualify someone to be an NAR (or press) economist..
Today’s San Diego Union Tribune Headline (literally)
Home sales, prices still falling
San Diego County’s housing market extended its price and sales decline last month, turning in figures not seen for more than a decade that one prominent economist called “rather ominous.”
…
Still, the DataQuick figures showed an 8.1 percent drop in overall housing prices since the peak of $518,000 in November. That came as a surprise to Ed Leamer, director of the UCLA Anderson Forecast.
Leamer, who has been predicting a real estate slowdown for several years, said he had expected prices nationally to gain at a slow rate before leveling out. Slight declines were expected for some communities, including San Diego, but not at the rate the figures show, he said.
“I think this is a rather ominous number,” he said. “The news from San Diego isn’t very good.”
GO BEARS!
Is that the Monsters of the Midway Bears? Wow, it’s going to be a fun year.
The person above has hijacked my screen ID, this is the first time I have posted on a non-patrick.net housing blog. Thanks HARM!