Post Local Housing Market Observations Here!
What do you see in your housing market this weekend? Prices reduced, Incentives? Here’s one from San Diego. “The slowing real estate resale market has hit homes in the Murrieta-Temecula area especially hard because of the plethora of new developments in south Riverside County. Prices are plummeting, and unsold inventory is mounting.”
“Angel McCormick held her ‘For Sale’ sign while wearing the bright yellow duck outfit for nearly 11 hours over four days on various well-traveled streets near her home. It brought her lots of smiles and waves, one unappreciated hand gesture..and a few low-ball offers, however, her house remains on the market. ‘We don’t want to make money on this home. We just want to pay the house off and make the move out of state for my husband’s job,’ she says.”
From New Mexico. “Santa Fe home sales dropped sharply in the third quarter of this year, falling more than 30 percent. Robbie Dobbyns, who is past president of the Association of Realtors, said there was ‘a little bit of a lull in the third quarter. Dobbyns also said Santa Fe sales have been slowed by the fact that buyers from elsewhere are unwilling to pay Santa Fe prices after they experienced big declines in their own markets.”
From Las Vegas. “Homeowner Denny Segler is what most would call a motivated seller. His house has been on the market for two months, leading this real estate agent to up the ante in order to get it sold. ‘I’m offering a new car in the driveway if somebody wants to buy this house. Rather than spend the money and give it to another agent, I’d just as soon give it to the people buying the house,’ Segler said.”
“Segler realizes that the current glut of homes for sale in the Las Vegas valley, means buyers can be more demanding than in years past. ‘As soon as I get someone that’s interested in this house, I’m willing to negotiate with them,’ he said.”
In Colorado. “If you pay the asking price of $2.45 million for the home John Fritzel recently built at 470 Steele St. in Cherry Creek North, he’ll throw in either a new $73,000 CLS 550 Mercedes-Benz or a $68,000 GL 450 Mercedes SUV. ‘Things are tough, and everyone knows that,’ Fritzel said.”
From Michigan. “Just how sluggish is business for many home builders? ‘We’ll build a doghouse right now if you want one,’ said Duane Marlink of Hudsonville-based Marlink Builders Inc. ‘It’s quite slow out there.’”
From Australia. “Debt-stricken families with new homes, cars and plasma televisions in Sydney’s sprawling housing estates are relying on charity handouts to buy food. Welfare agencies report a worrying increase in the number of middle-income families with big mortgages seeking help to pay grocery, electricity and gas bills.”
“Dubbed the ‘pay-later poor’ by St Vincent de Paul, they live in homes boasting cable television and the latest electrical goods and use credit cards to meet basic living costs. Many of the families live in so-called McMansions. ‘I call them the pay-nothing-now poor - couples who have wanted everything now,’ said St Vincent de Paul Society CEO John Picot.”
From Florida. “The number of homes in some stage of foreclosure in Palm Beach County and the Treasure Coast soared last month compared with a year ago. ‘People are not sitting and hoping for a sale,’” consultant Mark Wiser said. ‘They are dropping the price, doing open houses midweek, whatever it takes to get out before foreclosure.’”
“Exotic mortgages allowed local buyers to afford homes in one of the hottest real estate markets in the country. However, those loans are beginning to reset with monthly payments that are out of reach for many, making foreclosure an unwelcome choice in a market where homes aren’t selling. At the same time, home values are stagnant or even dropping.”
“Spectrum Home Furnishings and its Spectrum’s Office at Home stores throughout Southwest Florida are closing their doors. ‘You could say it’s almost a perfect storm of events,’ said John Munzenrieder, who founded the business 23 years ago. ‘Basically, it was the housing bubble, new home and condo sales down 50 to 60 percent, our sales were down almost an equal amount, along with hurricanes that drove people off and increased insurance costs for us and our clients.’”
Here are other housing related industry items:
‘Only three days after announcing the elimination of a shift at the Prescott Potlatch lumber facility, the Potlatch Forest Products Corporation has announced the immediate closing of the Warren lumber mill. ‘While other plants in the southern U.S. are looking at indefinite layoffs, we are pleased that the two main shifts of Potlatch are continuing to operate, and that the mill continues to buy logs from this area,’ Godwin said. ‘We are looking forward to the housing market to improve nationally and the plan to return to full capacity.’
“A cooling housing market and the furniture industry’s struggle to connect with consumers may cast a shadow over next week’s High Point market, according to a new monthly analysis. The industry has been waiting nearly six years for the release of pent-up demand for home furnishings connected to the housing boom. Furniture officials have lamented the ‘mortgage poor’ strategy of homeowners who buy as large a residence as they can afford, only to lack money to buy furnishings.
“Liberty Lake cabinetmaker Huntwood Industries laid off at least 120 workers this week, cutting costs in the wake of a slowdown in the U.S. wood products industry. Officials from the privately held company contacted Washington state officials this week, asking for assistance in giving laid-off workers information for finding new jobs or filing unemployment claims. Contractions in the national housing market and slowdowns in customer orders for new cabinets forced company owners to start the layoffs this week.’
Had a quick talk with an acquaintance from the D.C. area. Last we spoke was in late 04 - early 05. he was working for an apartment / REIT type company and they were selling what that had.
Now he is working for a similar but different company and tells me that they are heavy buying failed condo projects. According to him they are not getting much of a discount but he assurred me that they would be cash flow positive. Their outlook is for things to turn around in next 2 years.
I’m not sure what could be selling at anywhere near the prices I’ve seen and still be CFP, nor do I see such a quick recovery, but I thought the info was interesting.
FWIW. My wife spotted a “RENT REDUCED” ad. I’m in a jersey shore vacation town and year around rentals are hard to come by. This is the first I’ve ever seen somebody advertise a reduced asking rent.
- From Australia. “Debt-stricken families with new homes, cars and plasma televisions in Sydney’s sprawling housing estates are relying on charity handouts to buy food.
Can’t they use the Plasma TV to watch cooking shows on how to stretch the dollar?
in the Netherlands foodbanks are popular lately as well and a significant chunk of the customers are the same types as those in Oz. They could sell their home (or many other expensive gadgets) but instead they decide to make ends meet by getting free food supplies. To me it looks like just another trick to make society pay for their over-the-top lifestyle (in Netherlands, foodbanks are paid for by local government/business). If people drive a few km with their car to pick up free food they could use some counceling on spending habits.
Why don’t they just sell the televisions and new cars to buy food?
I guess they feel that owning a plasma TV or shiny car is more important than eating good quality food. Or maybe most of these plasma TV’s and cars are purchased on (bad) credit so that it is difficult to trade them for cash?
If grocers would allow them to buy food on credit, they would keep on going indefinately.
Good idea tulkinghorn. They could then get a food mortgage and pay off this year’s food over 30 years.
OT, but this is why I don’t believe in socialized health care. People will pay for plasma TVs and cars before health insurance. If they don’t care enough to finance their own healthcare, why should I?
Total B.S. When they don’t pay their healthcare we all end up paying the bill. And they show up in the emergency room, long after preventive care was doable.
It costs all of us a lot more this way.
And let’s not forget almost all of those counntries with socialized health care live longer than we do.
Sorry for the facts.
Everyone knows that governments have huge problems administering programs of any kind. And yet we’re told that a socialized healthcare system is going to be more effective and cheaper than a free market approach. Let’s just say that I’m extremely skeptical.
Our healthcare system isn’t anything close to a free market. We have Medicare, Medicaid, and a myriad of state and local socialized healthcare programs.
Joe Momma,
You’re proceeding on the false premise that first-class medical care is some kind of constitutionally guaranteed right. IMHO people should only be entitled to the level health care for which they’re willing to pay and/or insure themselves. No money, no insurance, no care. You’d be amazed at how many people would suddenly see the light (either by purchasing insurance or meeting their maker).
Sure, it sounds heartless until you consider my original argument: If they don’t care about their health, why should I?
TJ said: Sure, it sounds heartless until you consider my original argument: If they don’t care about their health, why should I?
I am not a big proponent of socialized heath care, but society’s overall health affects us all. When someone gets ill with something contagious that could have easily been prevented, it becomes everybody’s problem!
500K. In Temecula. Unbelieveable. When we moved to SD in 1987, the law firm that recruited us (and was trying to recruit at UT law school) couldn’t keep the Texans they recruited because housing costs were so ludicrous. In those days, 300-500K in OB, Pac Beach, parts of LaJolla, etc. You could buy one of those nasty shacks in North Park for about 250-300K. Rancho California was kind of a joke but some people were starting to buy houses and schelp in from there because you could get stuff under 200K, but it was nuts and only a few people did it. 500K out there just blows my mind. There was a whole class of people from Austin who came to San Diego that year to work for that firm and two years later, all of them were gone.
How humiliating to have to resort to nonsense like that Temecula seller.
A cousin of mine has a couple places in hellmecula. Talk about a nightmare of a commute. Those houses are worth 250k maybe.I was born in San diego and it sure has turned into the epicenter of this bubble.
“We don’t want to make money on this home. We just want to pay the house off and make the move out of state for my husband’s job,” she says.
I bet they wanted to make money on this home when they gleefully signed on the dotted line, cash registers glowing in their eyes.
1987 was a pretty bubblicious time. You couldn’t get me to pay 250-300k for one of those tiny NP POS’.
And 500k for Temecula is just crazy. The first trac homes in Temecula went for 100-150k. I don’t know how people can stand living there. The traffic is worse than LA.
I have some friends who bought in Temecula in the mid 90’s for under 100k. I think it was in the 80-90 k range. It wasn’t the nicest development down there, but they were cheap.
OOPS I take that back. Right after I posted that I realized they bought in Lake Elsinore. Sorry
“OOPS I take that back. Right after I posted that I realized they bought in Lake Elsinore. Sorry”
That’s okay, you’re forgiven. Lake elsinore only a 30 min drive north of Murrieta/Temecula. My late uncle had a doublewide in LE on an acre lot he purchased back in the 70,s, when LE was just a small isolated rural hamlet. Corona was still a small rural town/village back then, and the drive along the 15 was a real pastoral country drive.
LE IMHO is going thru a rather haphazard process of growth, with old trailers and horse ranchettes being literally torn out to make way for cookie-cutter home tracts and shopping centers. There are still some rough patches around LE. Temecula, believe it or not, is the garden spot for the entire SW riverside region. Don’t know what % of Temecula homeowners commute to San Diego vs Los angeles/OC but either way the commute would be a drag. Going thru the riverside fwy(91)bottleneck has to be commute hell unless you an afford to pay for the OC tollroad/fasttrack.
“How humiliating to have to resort to nonsense like that Temecula seller.”
You make it sound like she had to do that. She chose that plan of action.
“Angel McCormick held her ‘For Sale’ sign while wearing the bright yellow duck outfit
She should have hired the San Diego chicken. I love that guy.
Just drove through Murrieta/Temecula, last night, to see my Dad. I did a short stint at the Calvary Chapel Bible College in Murrieta after High School and I delivered pizzas at night. I had no idea how much they had built out there in the past few years. Housing shortage indeed.
As a side note: we went to the Southern California Fair last night in Perris. Perris is an especially worthless area of the IE, but they were building quite a bit there too.
I can’t help but wonder if these boom towns will be deserted when people realize that they are not “priced out” of places where they actually want to live.
They stopped serving ‘Cupcakes’ in the Inland Empire.
Now they serve ‘Sour Dough Toast.’
posted “They stopped serving ‘Cupcakes’ in the Inland Empire.
Now they serve ‘Sour Dough Toast.’
Soon free tubesteak…. for all.
Angel McCormick held her ‘For Sale’ sign while wearing the bright yellow duck outfit…
Maybe she should try a squirrel outfit instead…
…while holding a tray of cupcakes.
If it walks like a duck and quacks like a duck, it must be…
A DESPERATE SELLER!
And this bozo:
Robbie Dobbyns, a real estate agent with Sotheby’s International Realty who is past president of the Association of Realtors, said there was “a little bit of a lull in the third quarter,” perhaps caused by high gasoline prices, the war in Iraq and other problems that are worrying people.
“I have a funny feeling the fourth quarter is going to be strong,” he said.
I think “that funny feeling” is the bad burrito you had last night, clownboy!
That bozo also tried to find any reason for slow real estate except the real reason: “Prices are too high.”
The industry has been waiting nearly six years for the release of pent-up demand for home furnishings connected to the housing boom. Furniture officials have lamented the ‘mortgage poor’ strategy of homeowners who buy as large a residence as they can afford, only to lack money to buy furnishings. Oh yea, that screams how much margin people have…
Neil
What a bozo.Everyone wants to blame gas prices for the end of the world, give me a break. If you are driving a fuel efficient car than you are fine. I remember my first old chevy truck got 10 miles/ gallon. Now I have a little chevy colorado that gets about 25/ gallon so I’m doing just fine. I must say that gas here in arizone at quiktrip was 2.05 yesterday. So how in the hell do we go from 3 bucks to 2 bucks in 6 weeks? I think someone has exxon mobil by the balls right now. Maybe it’s foley and his page buddies?
What’s REALLY funny is the fact that the model T got about 25mpg. All this technological progress seems to have flowed around fuel efficiency.
The effect of gas price fluctuation makes up what infinitesimal fraction of the amount of dough FBs are about to lose on their homes over the next six years?
The average FB out there might be saving 5$ a day, or $35 a week, $1820 a year.
If the average house is a $225K pos and it loses 10% in the next year, the homeower will lose $22,500 that year, $433 a week, or $61 every single day.
Here in Bubblezone LA county the drop in gas prices has had little effect in level of consumer activity. Go to gas stations at least twice a day and do not see hoards of commuters crowding at the pump. Seen gas as low as 2.33/gal at arco.
This obviously apparant SCal RE housing price decline has effected consumer spending activity and mood despite the rosey BS put out by the MSM. Gas could drop to below $2.00 a gal and dow go to 13,000 and it would not make a difference in the neg balance sheets of the way overindebted SCal FB,s.
Nobody has Exxon by anything. The prices went ludicrous because of speculation. I think big hedge funds manipulated the market, betting on a “big shortage”, only it turned out there wasn’t. So now we’re enjoying excess and lower prices. Sound like any other falling market right now?
I agree with you.
I believe you’re right on with that assessment. Besides, everyone in the industry knows that the oil companies control only 15% of the worldwide production. The rest are controlled by governments such as our friends, Venezuela, Saudi Arabia, Iran, Nigeria, UAE, etc.
And we all know that oil is a renewable resource. Dum de dum de dum!
“I have a funny feeling the fourth quarter is going to be strong,” he said.
Well you gotta admit, it IS funny…
we might see buyers offering less than 200K on 600k homes and sellers accepting the offers in most part of Southern California in the next few weeks.
What would cause such a dramatic acceleration in pricing decline?
That would be nice… What makes you think that?
Yea gotta hear this theory, please expand
“I have a funny feeling the fourth quarter is going to be strong,”
That funny feeling is Robbie pissing in his pants as he joins the lunch crowd at the Salvation Army soup kitchen
Vancouver area suburbs are seeing a lot of price reductions and increasing inventory. Houses are sitting longer and LONGER.
I see more bearish news out of Canada everyday. Keep us posted.
Here is a local ad from the seller who slashed his asking price this past week:
‘BROKERS $424,950 reduced $100,000, needs to be sold today. Buyer pays sellers closing costs. Please call ASAP.’
Is that a typo. Am I reading that correctly. wow
Oh yes. Here in Prescott (AZ) those $100K reductions are increasing. But still, there are those hilarious $500 reductions on $750K properties. What’s more interesting is that the more serious discounts are being offered by realtor/OWNERs!
“Buyer pays sellers closing costs”
That’s what caught my attention. I wonder if he meant the commission as well being the ad was directed at brokers. That was a first. I had never seen that before.
‘Seven years of plenty and seven years of famine’. Means 2012 before the bottom. Or maybe 2010 give or take. Stay tuned for the latest from the left coast.
Thats about what I think also, a long slooooooow fall in RE.
Anyone else find it somewhat amazing that the term “McMansion” is used in Australia? Behold the power of the Internet!
Behold the power of McDonalds!
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“Pay-Later Poor”. I like that. I could not find a link though to St. Vincent DePaul ever saying that/full quote though. Anybody?
Palmdale 93551 inventory SFR is at 10.4 months. Median asking price is holding firm.
In Ridgecrest to the northeast of that, prices are also firm. My 1990 house I sold in 1996 for $79,000 is on zillow for $215,000. I think that’s a fair price, given that a few months ago the Base Realignment and Closure outcome was that the China Lake Naval Air Warfare Center will be increasing its civilian and military employees by 2,000 people. The community has a population around 30,000 people, so that announcement was significant. It’s too late to take advantage of those people moving to Ridgecrest. Prices hit the roof within a week of the announcement. I think that was one year ago.
I think Ridgecrest prices will stay high for a few years while Palmdale/Lancaster and Victorville/Adelanto/Hesperia prices suffer by 50% losses.
I have no regret for selling that house when I did. I profited much more from other ventures and my income increased 300% since leaving in 1996.
The current beginning of the loan resets will also mark the beginning of the price resets.
posted by dude “Palmdale 93551 inventory SFR is at 10.4 months. Median asking price is holding firm.”
And right they should! Don’t give up one mm! Given the power I would premote everyone out there to FIELD MARSHALL…. let the cry be “Stalingrad”
latest observations from the Netherlands:
September home prices were up 0.4-0.7% from previous month and up 4.5-8% from last year (% gain depending on area). This data covers all Dutch home sales (unlike the ‘official’ NVM realtor numbers) but because of the procedure used the data is lagging the actual sales by about 2 months.
Dutch housing bubble is still growing, general public still optimistic regarding the potential for future home price appreciation, many people looking at purchasing (more) foreign investment homes and NO word about problems in the US housing market, nothing at all.
Probably the situation in most of Europe is similar.
I have one example from Fredrick Maryland. A friend bought a townhouse in 2002. By the time of settlement, the house next door (smaller and not an end unit) sold for 10% more then her purchase price. The sales last year and early this year were running 80% above her purchase price. There are 6 homes currently for sale on her street. The lowest priced house, which is not seeing any traffic, is priced at my friend’s 2002 purchase price.
I am stunned by how fast that drop happened.
Here in PA, the listing prices are still outrageous. We have seen 2 houses that meet our qualifications sell, after reducing by a least $100K (One was $609, pending sale with listing price of $499 the other was $529 sold for $420) The rest are still on the market. We know of at least 5 houses that are carrying 2 mortgages.
I meant that we know of 5 vacant houses where the owner has already moved into the new house.
-
Be patient. The oxygen is running out for the FBs.
“Angel McCormick held her ‘For Sale’ sign while wearing the bright yellow duck outfit for nearly 11 hours over four days on various well-traveled streets near her home. It brought her lots of smiles and waves, one unappreciated hand gesture..”
LOL. Is this what sellers have resorted to? I’d feel like a complete dildo sitting outside in a duck suit all day with passersby giving me the bird. Too funny.
P.S. My work has officially blocked Ben’ blog so I won’t be able to post timely news articles that often anymore. Pisses me off.
FIND A NEW JOB THEN. LOL.
Ha ha ha crispy…I might just have to do that…I mean, they actually want me to WORK at work?
lol
Damn, that is pretty bad. That rules out taking a job at SCE. They are trying to hire quite a few bodies in the energy efficiency group. If I wanted another big raise I would just have to pick up the phone, but then I couldn’t read Ben’s blog.
Hmmm….
That’s why you need to be in I.T. The I.T. guys are never blocked from anything because they run the programs that do the blocking.
Too true.
“The I.T. guys are never blocked from anything because they run the programs that do the blocking.”
Plus, the IT guys determine who gets ratted out to management
for “goofing off on company time.”
I am in IT. I tell people there are 3 people in each business not to piss off - the IT guy, the person who cuts your check and the janitor.
Also, if you want to bypass filtering systems, see if you can surf to Ben’s blog through an anonymous relay server.
Last week, I was looking over the network admin’s shoulder and got the override password for the proxy.
Still, I don’t go on that often. Whoever invented the cublicle was an evil genius. Sitting with my back to an open walkway with my computer screen visible always keeps me at least paranoid enough not to screw around.
Get a rearview mirror on the monitor!
Is that legal?
Vegas report: Inventory now 24,260 per zip. Still not seeing big price reductions, but cracks are starting to show. IMO, flippers will start selling in bigger numbers next year, and price reductions will be larger.
Anecdotal: I work for a business bank in Vegas. Work with title companies, who are laying off staff. Some title companies have changed ownership, volume of transactions is off over 70% from a year ago. We keep a close eye on their shrinking balances. Bad loans to small businesses on our books are up. This week a small builder came to us needing help. We loaned him to build, now he can’t sell. He needs restructuring. I expect a lot more of this. I am getting out by the end of the year. Will keep you posted until then.
I check ziprealty for LV daily, specifically 89117, very few budging. We’re renting in that zip now. The house behind me is bank owned, empty for months. The house next door is in pre-foreclosure as of two days ago. Something’s got to give soon. We’ll rent as long as is necessary, uncomfortable as it is.
Big price reductions are happening in Vegas. When I punch in summerlin zip code 89138, 89135, 89144 in the MLS, and then sort by price and then by sq ft, there are distressed sellers offering major price reductions. Don’t know if it is to early to jump in, but these reductions are priced back to Dec 2003.
I swear most agents have no idea how to work their own info. I joined MLS so I could be “live” with numbers I could use to buy for my own account
Getting out of the business, or out of Vegas?
And does anyone remember the Savannah poster who moved to Vegas in the summer? Are you out there?
I am here. I just don’t have a lot of time to check the blog on the weekends right now. Sorry for the late response.
Just back from Vegas. They are building like crazy on the strip. Knock it down and build new. The whole deal, shopping, condos, casinos…. build, build, build. If you read this blog and look down the strip…. somebody if full of crap? I must say the builders have put “thier money where, thier mouth is”
posted “They are building like crazy”
Great post Newman! The samething is going on in Oxnard/Ventura/Simi Valley!
Hey wait a minute. Did you just complement your own post?
That’s funny!
huggybear posts “Hey wait a minute. Did you just complement your own post?”
Busted! But I get a smart reply!
“They are building like crazy on the strip. Knock it down and build new. The whole deal, shopping, condos, casinos…. build, build, build. If you read this blog and look down the strip…. somebody if full of crap?”
From what I understand the financial people are realizing that home building is in trouble but they are saying commercial building is fine. I don’t know, but I would think that the same kind of bubble pressure hit the commercial market but we don’t see it since we don’t get to see the numbers like we can see the home price numbers, especially since we can’t see whether or not the companies buying this commercial real estate are actually making money off of it. This is especially true if their business models were working from the idea of all those empty homes being full and all those homes having equity that the homeowner can pull out so they can visit the Casino or the shopping center.
Graspeer posts “This is especially true if their business models”
Yes, I am sure the “models” are 2-3 years old. With the time factors involved. I have no doubt these projects get a life of thier own! But even if half of this stuff I read and write here is true, these folks are walking into a tree shreader! Or a money shreader!
Vangards REIT fund VGSIX is doing well. I suspect its residental RE thats in trouble and other types of RE is doing very well?
Don’t know if this was posted already.
Falling Home Prices: Bargains Ahead?
The Wall Street Journal Online
A real estate report predicts price drops in 100 U.S. cities over the next few years. Find out where the market is weakest, and see if you should wait to buy
http://tinyurl.com/umomu
..and a few low-ball offers, however, her house remains on the market.
If low-ball offers are the only offers they receive, then that’s market value.
I live in a nice Anaheim Hills neighborhood where 2 houses listed at $850K have just gone into escrow this last week. Man, if the buyers only knew what’s about to happen.
Is there any way to discover the selling price before the deed gets recorded?
If you know the seller, realtor or escrow agent they could give you the skinny…but I think that’s the only way
I have been waiting for Zillow to update their sales history. I know there is a faster way (probably county recorders website) If anyone could let me know I would appreciate it. Primarily interested in OC/Riverside county.
Usually county websites updates are way behind. MLS is supposed to put selling price and listing price on the listing on the day it closes.
Here in Naples 46 houses to be auctioned. The word is that some lady owned 26 of then and must liquidate. The local paper says the realtors will not list the sales prices on the MLS report. Anyone know if that is legal? If prices are knocked down 25% in this sale and it is not reported does that stay out of the comps? Smells like realtor manipulation to me.
Some real-whores are resorting to 2004 prices (2nd post):
http://bakersfieldbubble.blogspot.com
slightly OT… What does “seller selects all services” mean? Other than, like saying “will entertain offers between…”, they think it’s 2004..
It means they choose the various r/e companies (e.g. escrow, title, etc.) that handle the transaction.
Yeah, I laugh when I see those too…they still think it’s 2004
How about “seller will entertain you by wearing a ducky suit”?
Work with title companies, who are laying off staff.
Talked to an old HS football team-mate last night at a big local game. Smart dude. Undergrad degree from Tufts-MBA from BC.
Runs a mortgage op with offices in Boston & NY.
Says biz is horrendous-”A lot of single mother’s” workin’ for him are cryin’ the blues. Feels poorly about the situation but there’s nothing he can do.
Makes me wonder how many women in the real estate biz (who are predominant in the industry) made the decision with a fat$$$ 4 years, that now just might be the time to ditch hubs in divorce court.
Who the fook needs that worthless slob around anymore!
Thousands soon to be worthless fodder for MickeyD’s and typing pools will rue their decision making process.
There’s a reason women get into RE. It’s the same reason today as it was when my own mother got her license back when sis & I went to school: it’s a reasonably well-paying job that does not require excessive amounts of time away from the kids and the barrier to entry is low.
And frankly, your assumptions are more than a little misogynistic. Why assume that all those women woke up one morning and decided to dump their hubbies for no reason? It could just as easily be that they were the dumpee, not the dumper. Or maybe their husbands were two-timing losers who deserved to be dumped.
I don’t know, and neither do you.
I just returned home to Maui from Ridgway Colorado. I was in Ridgway painting and fixing up our rental. On Sunday I took a break and went to play golf at Cobble Creek. On the way up to the course I counted 10 driveways. Six of those driveways have for sale signs on them. Still lots of building going on but everything is for sale. I golfed with a local builder. He said that his crew is still busy but after his current project is done there is nothing in the pipe to move on to next. If there is no change he will lay off the crew and move on. I almost asked “move on to what?” but I didn’t want to get hit with a 4 iron. The poor guy was stressed. He said there is a blood bath right around the corner. I hope he saved his pennies for the upcoming hard times. But I doubt it.
“…but I didn’t want to get hit with a 4 iron.”
lol
Crash and burn,
I live down the road from Ridgeway near Grand Junction, Colorado. Yours is the first comment vis-a-vis the housing market in western colorado softening. Are there any other bloggers with similar observations about this area?
Having trouble selling your overpriced home? How about trying out your ingenuity and dressing up like a duck…
http://www.signonsandiego.com/uniontrib/20061014/news_7m14bell.html
Sorry — just noticed this one already was posted (doh!)…
I hate when I do that too…have another coffee
Here’s a $1 million McMansion going to foreclosure 6 months after purchase. Of course zero percent, 100% financing is involved. But what about mortgage fraud? Banks usually serve the notice to bring account current, a precursor to NOD after 3 months of non-payment. After 45 days the true NOD is filed. Counting back from NOD filing date of 9/29 to purchase date of 3/06, sounds like this guy has not made a single payment of his $8000/month mortgage.
flipper city man…9% on a 1 mil note…that’s going to leave a mark
Anyone have any insight into the Chicago market? I would like to buy a 3 bed condo in a low-rise in about 12-18 months. The prices are frothy, but do not seem as insane as the coasts. Lots of converted and new inventory coming on line soon…
I was about to ask the same thing. It seems to me like Chicago is a lot less bubbled than many areas, but they are churning out a LOT of downtown condos. Many of these are in less desirable areas and almost all have outrageous wishing prices, often with incentives already included. I’d wait at least a year if you can, to get a better read on the market. Something tells me they will be available cheaper as time goes by.
I would also wait before buying. We are contemplating buying a second home in downtown Chicago. There is a whole lot of inventory scheduled to go on the market over the next few years. Chicago may look like a bargain compared to the coasts, but median income is much lower and the brutal winters make it less desirable. Like so many metro areas, a lot of Chicago’s economic strength has been directly tied to the urban renewal. When the condo craze slows down, they could be hit doubly hard.
Thanks for the comments. I was just there a couple of weeks back and was amazed how many high-rises had huge banners such as “CONDOS FOR SALE 312-XXX-XXXX”. Seems there is a huge amount of inventory.
I am in no rush - will rent for at least a year to learn the neighborhoods as well as bargain shop.
In my hometown of Wheaton, a well-established suburb of Chicago, 2 buidler homes were at auction today. Both were originally listed at 775K+. Now one said 450K minimum and the other was 559K or best reasonable offer. This is a major turn in this gentrifide area. If you are from the Chicago area, you know what I mean. This could turn into a 30% wack for the builder (at least from expectation price). Both of these homes were sitting for about 18 months+. Not good…
This is worst I’ve seen so far. I just drove by the intersection of the two main streets in my little town. There was an elderly man standing on the corner holding a hand-printed sign advertising his house for sale. It was cold and windy out and I could see he was miserable. I drove by the house-it was a small 1920’s house, pretty run down, needed a new roof and paint. This is the first time I’ve seen this in my area. A few years ago there were virtually no houses for sale and you had to know somebody moving away to even get one. Inventory is building here and nothing is moving. It’s going to be a long winter I’m afraid.
crash.. is this in Wyoming?
Inventory levels have started dropping here in Billings (MT). However, I don’t think it’s due to high sales numbers. Related, I’m having a devil of a time getting simple monthly sales information! Realtors will not give it up. Local media does not report it. I had been relying on a brokerage web page which gives YTD sales updated each month. I write them down so I can check against the next month. But September YTD showed a lower number than August YTD! Something’s screwy.
BTW, even with the decrease, inventory is still 30% above last year.
Yes. Inventory numbers are secretive here also. All the real estate people will tell you is that business has slowed a little bit.
We have been considering re-locating to Billings area next year from Seattle, compared to seattle there seems to be no bubble as far as pricing. I have been looking at real estate in the area and it seems alot of inventory for the population. Could you give more info on the bubble there, relating to runups and speculation, also how do you feel Missoula is on the bubble meter.
There is a nice web hosted web documentary on Billings real estate:
http://apps.dailycamera.com/blogs/business/index.cfm/user/osman_parvez/blogs/entry/alias/billings_housing_bubble_85
I live in Bozeman and the market is falling hard here–particularly for the mid to upper end ($400k and up). Missoula seems a little better off, but clearly inflated prices.
Darn it, so you’re part of that pesky horde of immigrants I keep hearing about! Maybe the Realtors are right and we will go up forever.
I whipped together this little video/mini-documentary for you so that you will know how things are going here:
Housing Boom in Billings
OK, I’m kidding, I actually made it last month. Should give you a good overview. I’m also working on a companion webpage with new data and charts, so shoot me an e-mail at the address listed in the video if you are interested.
I don’t know much about Missoula and the rest of western Montana, but my gut feeling is that it’s been more speculative and may fall farther. On the other hand, western Montana looks more like “real” Montana to most people (trees and mountains). So it may be more stable.
I would vote in Bozeman as the most bubbly town in the northern Rockies. Low wages, median asking price nearly $400,000, and spectacular inventory levels.
As a Bozeman native, have to agree. Inventory is incredible, probably in the neighborhood of 2000 units total in the valley including FSBO’s. At least half of those vacant.
Here is the kicker. If Senator Conrad Burns does not get re-elected, Montana State University (Bozeman) stands to lose about $20-30 million in annual grants and contracts. Conrad is one of the top pokers in the senate, senior member of the appriations committee, and very generous to MSU.
THe university is the only economic engine in the town and total employment could shrink dramatically if Burns is voted out. The university adminstrators have taken on a huge amount of debt to build new buildings and are in a complete panic about this potential outcome.
This might dupe, but I wanted to make sure you get it.
Darn it, so you’re part of that pesky horde of immigrants I keep hearing about! Maybe the Realtors are right and we will go up forever.
I whipped together this little video/mini-documentary for you so that you will know how things are going here:
Housing Boom in Billings
OK, I’m kidding, I actually made it last month. Should give you a good overview. I’m also working on a companion webpage with new data and charts, so shoot me an e-mail at the address listed in the video if you are interested.
I don’t know much about Missoula and the rest of western Montana, but my gut feeling is that it’s been more speculative and may fall farther. On the other hand, western Montana looks more like “real” Montana to most people (trees and mountains). So it may be more stable.
I would vote in Bozeman as the most bubbly town in the northern Rockies. Low wages, median asking price nearly $400,000, and spectacular inventory levels.
Hey, Boulder Bo, you out there? Is this the deal the realtor says it is?
http://silverfernrealty.idxbroker.com/mls/detail.cfm?cid=5615&list_numb=509415&list=66&type=SFR
You know, this is just an observation from Oklahoma City, but I am not seeing any appreciable drop in housing prices here locally. Although our home prices have risen in the last 5 years, in the particular kind of house that I have been looking for (2-3 bedroom with ~1000 sf and 1 car garage in a nice, safe, middle-class neighborhood) the prices seem to be pretty stable here. The houses are all going for around $60 to $75 sf with about $7-10 per sf of yard space. That means the houses are selling for around $70K to $90K each depending on the condition of the home and desirability of the neighborhood.
At those prices, even people of modest incomes can buy them on a 15-year fixed-rate loan with good credit at about 6% to 6.25% interest with payments of ~$500/month with 20% down. That is also about what the “equivalent rent” would be. Actually, that is probably less than what rent would be for a comparable property.
While I have been following this phenomenon pretty closely, I am starting to wonder if maybe this whole housing bubble thing is a myopic view of the writers who are in the most bubbly areas.
So, I guess what I am asking is: is this really a national problem (and therefore I should wait for even OKC to correct) or is my local market pretty much within a range that is “normal” with not much cause for concern? Is it possible that the craziness in housing prices are limited to the coasts and big cities that are the most desirable?
There are a handful of places that haven’t had big run-ups, but the list is small. Far north Arizona hasn’t had any growth, but the economic/cultural activity there is slim. I don’t recall hearing much from the Dakotas, etc.
But how about over-building in and around OKC? Also, how much interest-only, no-doc lending has occurred? Have you seen significant speculation?
Ben:
As a bankruptcy attorney, I can say that some of my clients have ARMs, and it is not good. And I have heard rumors of a high number of ARMs (I have heard as much as 60%, but the person who said it was working for Primerica — which I researched on the internet and found to be a probable scam MLM company; so I discounted that), but I don’t know the exact figures. Oklahoma has always been a low-income area, so it is very possible that there are many people who wouldn’t quailify. I honestly would have to defer to someone else on that. Where would I get such information?
I am not aware of any speculation here, nor overbuilding, but I suppose it is always possible. I am sure we do have some speculation. I have been to some seminars where these guys from Utah come in waving the American flag, having people sing the National Anthem, pledge allegiance to the flag, have an opening prayer and get the crowd all hyped up, but I think their impact has been minimal.
OkieLawyer: I have property in Edmond and the values over the last 5 years have only gone up ~25-30%. There has not been the same bubble effect in the Oklahoma City area which has been associated with the costal areas. I think Oklahoma City and most of Oklahoma will be OK due to the fact that Oklahoma saw housing apriciation and depriciation in the early 80’s. The purchsed my property in 2001 at approximatly the same price it was selling for in the early 80’s before the oil bust.
There has been some recent increses in prices, however Oklahoma realestate is still very affordable.
I’d say just follow the old rules: Plan to live there 7+ years, put 20% down, and make sure PITI is less than 1/3 gross income. If that all works for you and you find a place you like, go for it and don’t worry what the market does.
Could OK prices go down? Quite possibly. I doubt they’ll see a major crash, though. And if you do sit around for years anxiously watching the market and wishing you could get in, you risk becoming a jealous bitter renter (for real this time!).
That said, if you are willing to wait a year to see where things are going it sure wouldn’t hurt.
OK city goes down 20% on a 90K house -18K big deal. Cali goes down 20% on a 750K house thats 150K. Thats real money.
Thats how I look at it.
I’m in SW MO between Joplin and Springfield on I-44 and our small town has become bubbly both in the existing houses and the new ones. [Republic south of Springfield (MO) supposedly has 400 empty new homes.] We are about 2 hours from Tulsa. There are $200+K McMansions for sale in a town where the average worker makes minimum wage (when working that is). Yes, there are some high salaried jobs (in health care mainly) and from commuters to jobs in Springfield, but even a good paying job is $45K or so.
As my handle says, things don’t seem very bubbly here either (northeast Ohio, Akron/Youngstown area). We had a nice brick 1600 SF house (Cape Cod-ish style w/basement, 1950’s era, 2-car detached garage, nice brick terrace in back, corner lot)in my neighborhood list for 140K three weeks ago and it sold within 5 days. It was in tip-top condition, very neat and tidy, so that probably helped.
Still, I hope I don’t have to try and sell any time soon (bought in 2001).
I agree with what everyone else said–if it works for you under the “old rules” and you really want to stop renting, then go ahead and take the plunge.
I have been following Oklahoma prices since I am considering relocating there. CNN Money has Ok about 8% percent underpriced and one of the few values in the United States. They did not see anywhere close to the run up as the coasts, AZ, Wash, Chicago and almost every Metro area in the United States. Just normal appreciation. So I don’t forsee any crash there but I also don’t see much appreciation either. There is lots of buildable land near the cities. Also, they have lost population over the last ten years. I was there last week and was amazed I could buy a home for 180,000 with 3000 sq feet in a great neighborhood. Prices will run up only if you get California transplants like myself.
I was in Ok City two weeks ago. What an armpit that is.
txchick57 Must have been just like home for you then!
I watch the New Paltz market (near NYC, some skiing, climbing, hiking, fishing, etc.) Unimproved land runs around $20K/acre.
Lots of nice, old, stone or wood, places on decent plots are available at reasonable prices.
This mess caught my eye:
It’s got views of three mountain ranges and a 27 foot high great room with giant picture windows. How much do they think this is going to cost to heat?
Facade of the house is two garage doors! It’s on three acres for God’s sake - couldn’t they at least put the front door at the front?
Usual granite countertops, etc.
It’s like they airdropped a McMansion onto the site without any thought for local style, weather, or plot. It’s only about $800K overpriced.
“It’s like they airdropped a McMansion onto the site without any thought for local style, weather, or plot.”
They also went overboard with the wood flooring, I like wood flooring but if I was getting a house in the hills of New York I would want to put some tile or something in the entrance ways since who wants their nice wood floors messed up with snow and slush. It claims to have been designed by an architect but it seems the architect forgot that a house is suppose to fit the land it sits on and that house looks like any other McMansion you can find from Florida to California
They are still building new houses in my small town in SW MO. Town of 4,000 people. Most new houses are outside the town, the town itself is full of old mostly junky houses. Where I rent is an area inside the town but the little road that carries all the traffic is way overloaded but still they are building more houses in the street behind me. About 25 SFH no basements (here in prime tornado country). I don’t know what size the houses will be they have built a mix in this area ranging from McMansions to small duplexes (I live in one of the duplexes). All of the recently built houses are still for sale. Nothing in this 8 block area or so has sold for months. But they are working every week day on the new houses.
Here’s a great advertisement from Colorado Springs “Richmond Homes”.
http://www.sellersbroker.com/activepages/newconstruction.htm
“Debt-stricken families with new homes, cars and plasma televisions in Sydney’s sprawling housing estates are relying on charity handouts to buy food. Welfare agencies report a worrying increase in the number of middle-income families with big mortgages seeking help to pay grocery,”
—————————————————————————
wheat prices hit 10-year high due to Australia drought:
http://www.spokesmanreview.com/business/story.asp?ID=154456
Took my weekly trip through downtown St. Petersburg Fl… SO many condos in some phase of construction. There is a row of horrid 80’s style, wackass townhomes where EVERY SINGLE unit had a “for rent” or “for sale” sign. Amazing.
What’s even more amazing is that is was a Saturday afternoon, beautiful weather, and not too many people around. I know, I know, all of the snowbirds haven’t arrived yet, but still…
Clearwater Beach/ Indian Rocks and the GULF COAST BEACHES:
These areas have been tear-down condo havens for the past 3-4 years. Many houses and small apartments have been dozed to make way for the “new economy”. It’s been happening all over the Florida Coast but a few things have changed.
Nothing is happening. The razed lots with the pretty pictures are still vacant, and the pre-construction price signs are starting to look old. I saw this in Jax Beach and Atlantic Beach on the other coast a few months ago.
In one case in Clearwater, the “developer” is trying to sell Condo/time shares…MONTHLY for 285,000. That’s about 3.5 million per unit, a ridiculous price, but then, why not? Everything else has been pretty ridiculous.
Existing construction of all the towers that got out of the ground continues at a snails pace. Units that could have been completed months ago are still moving along………..SLOWLY.
But, here’s the BEST observation I have seen All year:
Vacant land, originally had 3 or 4 buildings with 6 to 8 rental units on it, and I think on house, with a PRE-CONSTRUCTION Condo picture on it. The sign was boarded-over with a new sign:
LAND FOR SALE: 32 Units.
The dumbasses got rid of cash-flow positive units, bought out the original owners for a pie-in-the-sky dream of easy Condo dollars.
They are now trying to find someone to bail them out.
Good luck, boys!
From the OC– just went thru the Villages of Columbus development ‘Irvine adjacent’. Crews (mostly finishers/interior) hard at work. A few of these places occupied (full buildout = 880 units, 1/2 SFH, 1/4 TH, 1/4 Condo). The 1000sq TH start upper 400k. SFH top out WELL over 1M.
Saw some lookers. More work crews than anything else. Keep in mind that 12-18 months ago, people were waiting in line for the interest list. Now the interesting tidbits:
1- on a 1 block street, with most still needing landscaping– 6 had builder signs “I’M AVAILABLE!!!”.
2- across from one of the sales offices—- the first THREE houses on the street had realtor signs ! 1 block down, new build units still in progress. Of course, at 1.3M, I’m SURE this is a great deal.
3- looks like one of the sales agents figured to try to get a sale, one way or the other. Parked in street in front of the other sales office, a nice Jag XK8 (04/05?) Fluorescent Orange FOR SALE filling the entire windshield. Small print says it’s 10k under book. Actually is too.
Plenty of open house signs scattered around Irvine today as well. 6 to 8 on many corners.
The McCormicks paid $444,500 for the house on 8/24/04
I came across this on Ebay. What a joke?
http://cgi.ebay.com/3-2-House-for-Sale-in-Palm-Beach-County-South-Florida_W0QQitemZ290038032904QQihZ019QQcategoryZ12605QQrdZ1QQcmdZViewItem
Sooo, just for kicks and giggles I did some research and emailed the agent the following:
I have a few questions
1. Why do you state the location in the Ebay auction as Boca Raton when the property is actually in Lake Worth? Is that because Boca Raton is a much more desirable location?
2. Who did the “certified appraisal” that supports a listing price of $379,000 and what date is it?
3. I am looking at several comps:
1. 5737 RACEWAY RD, LAKE WORTH, FL 33467-5434
Sold 9/16/06 4 bed 2.5 bath 2028 sq. ft. for $349,000 or $172/ sq. ft.
2. 10021 JOCKEY RD, LAKE WORTH, FL 33467-5430
Sold 8/3/06 3 bedroom 2. bath 1820 sq. ft. for $ 350,000 or $192/ sq. ft.
3. 5796 RACEWAY RD, LAKE WORTH, FL 33467-5435
Sold 5/3/06 3 bedroom 2.5 bath 1820 sq ft for $ 360,000 or $197/ sq. ft.
Considering this house was purchased in 2003 for $220,000, what is responsible for the property to increase in value 70%? The current Tax assessor’s market value is $265,604. The assessed tax value is $213,804.
I doubt I will get a response..
I think everyone should have some fun and email some realtors with some hardball questions…..Too funny.
Sorry, but I couldn’t resist;
http://cgi.ebay.com/Single-Family-Home-Florida-Hollywood_W0QQitemZ250033805471QQihZ015QQcategoryZ12605QQrdZ1QQcmdZViewItem
This guy is asking a STARTING bid of $350,000.
“This house is completely remodeled, upgrated and has been appraised $390.000.”
He bought this property in December 2005 for $290,000. Since then, he has taken a first and second loan on this property for 100% of the purchase price. Then two months ago he refied out again with a 1st and 2nd for a total amount of $340,000.
Now he wants the next fool to pay $355,000 for a profit of $65,000 in less than a year, in a declining market.
The internet is full of these deals, and people wonder why we are in a bubble.
i just did a 950 sf garden 2br/1ba condo in massachusetts about about 10 miles north of boston. it has sold 6 times from since 1992 when its sold for $70.5k; 1996-79K; 1997-87.5k; 2000-110k; 2001-170k; & 2005-253k. i’m kinda of amazed someone would pay 60k more in one year from 2000-2001. its one heck of a increase from 2000 to 2005 where it increased 150%. there already refinancing after 1 year of owning it. gltt (good luck to them).
Looks like a $200,000 house to me.
Info from Topeka, Kansas supposedly one of the most affordable places to live……why is it affordable? Because NO ONE want to live here!!!!! No jobs that pay more than $12/hour, main reason for it’s existence is the large State/Military/Santa Fe railroad retiree population. As I remember from a news report a few weeks ago, they have only gained approx. 200 people in poulation here since 2004.
Definite backlog in unsold new homes…..last year, new homes weren’t even advertised, now all of the weekly Real Estate guides have several, especially in the $300-400K range (a McMansion around here). Several homes near the ex-wife’s house have been completed since early this year, still unsold…..others showing as “sold”, but no apparrant move-in activity in the month since. New houses still going up……I was told once by someone that builders will keep building, as long as the banks keep loaning them money. Evidently, the banks are still loaning…….
Had to sell my house in early 2004, because it looked like I was going to have to move to another city……….thought about rebuying in 2005, but prices seemed to have gone up 20% in less than a year, on speculation alone, since there were no local economic reasons to justify the run up.
Would like to find a source of hard, factual data to confirm that I am not imagining things when it appears the local housing market has slowed quite a bit. The local media poodles aren’t doing anything with this story, other than interviewing the local realtors talking heads, who say things are great.
I’ve been noticing a lot of apartment conversions here in Portland with ridiculous asking prices. $250k for an 800 sq/ft apartment that probably rented for $800 at best is crazy for Portland.
Whoever said apartment conversions were a good indicator of the peak got it right.
I’m going out to hit open houses in Jacksonville today (Sunday). I’m sure it’s going to be the same as every Sunday. My wife and I will be the only people at the open houses and we will have plenty of time to laugh at the asking price and suggest a 30%-50% reduction.
Went looking at houses. Had two realtors pull us over like police officers when they saw out of state plates on my car. One pulled up in front of us and stopped their car forcing us to stop. They jumped out of their car and started shoving flyers and business cards through the window.
That’s really funny!
did you notice any paparazzi?
We’ve been talking some about the slowdown for construction, and how they are returning calls faster for small jobs.
A few years ago, if I needed some trees trimmed or stumps grinded, I’d have to leave a message… and only half the time would my call be returned a few days later.
I just called a tree guy on Sunday morning, for some more trimming. He volunteered to come right away and make a bid.
From Phoenix. . . My wife and I have been renting since February and dont plan to buy anytime soon. However, we still visit new home communities once or twice a month to gauge our local market. Ryland on 99th and Lower Buckeye has a $50,000 incentive on all specs. The on-site agent asked the typical questions, what size of home do want? What’s your price range? Have you already sold your home? Boy did her face light up when I told her we had no home to sell. I asked her if we could make a lowball offer. She started ranting about how these are the best prices in years, unprecedented savings opportunities, a buyers market yada, yada, yada. I described our situation: Great credit rating, cash in the bank that would easily cover a 20% down payment, and we’re renting month-to-month. She just stared at me for a few seconds then at my wife. She then glared at the far wall, took a deep breath and looked at me again. She smiled and said, “I bet if I call my boss I can get you an additional $20,000 price cut if you close in 30 days.” My wife and I looked at each other, smiled and told the agent we would be in contact with her later. To quote George Lopez, “Not right now, right now, later, later. . . “
The house that my wife and I have been watching for a few weeks saw its first price reduction yesterday: $10k to $275,000 (it listed 8/22 for $285,000–Zillow priced it as high as ~$320,000 in 2005). We’re waiting for it to drop below $250,000 and then consider making an offer for $200,000-$225,000 (which would put it at around early 2004 levels, per Zillow).
LA Times - Dataquick numbers for San Diego county for August (hey, LA times, when do we get LA and Orange County?):
http://tinyurl.com/yff3m8
Seattle Times Sunday RE section has completely given up on trying to pump the local market. Not one single rah rah article about hot sales. This is HUGE.
So they’ve taken a new tact. Beginning today, rather than trying to pump sales directly, they’ve taken the indirect approach: Huge article on how rents are going up embedded in pages and pages of new condo sales ads.
A lot of new condos are just beginning to come on the market here. Six months ago most of them had full or half page ads. Now they’re cramming 7 or 8 ads on each page.
I just hope this thing doesn’t unwind too fast.
I would like another solid year of saving so I can have a larger down payment as well as pay off a student loan. Maybe even two years.
A 2010 bottom would be a freakin’ dream. I’d be at zero debt and close to 50% downpayment of my target home.
What do you guys think? Do you have trigger points or is everybody just waiting to see what happens? Possible thread topic, Ben?
Some of you have a time target, some of you have a sq. ft. target, some of you have a neighborhood target, some of you have a price target… all of us probably have some combination…
>
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This RE collapse is only beginning and it’s going to be severe and lengthy.
To the youngsters out there…Keep your powder dry, esp. in the bubbly areas.
We’ve got a couple different targets. First, we’re not going to pay more than $175/sqft in Sacramento area for a 3/2, ~1500sqft, on a ~5000sqft lot.
Second, we won’t buy until we can put 20% down, cover closing costs, and still have 3 months in cash reserves (outside our retirement accounts). Assuming no financial crises, we’re probably about 12-18 months away from that point.
Third, we have to feel secure about both our jobs. My wife is a teacher in the Elk Grove USD with tenure, so we have confidence that her income and benefits are reliable for pretty much as long as she wants to work. I’m currently employed as a purchasing agent for an electrical contractor that does mostly non-residential projects… based on what the company has on the books, I’m confident that my position will continue to exist for another 8 months. But June 2007 or a year or two from now? Depends on how much collateral damage residential real estate does to commercial construction. If things go south, its reasonable to expect that my position would be eliminated during a downturn. So even if we woke up tomorrow and housing were to fall to $175/sqft and we suddenly had sufficient cash on hand, I don’t think that we would necessarily buy right now. I’m quietly seeking out another job that might offer more security, but I’ll probably never have a position that offers as much security as her’s.
We’ve structured our finances so that my wife’s salary could cover all of our monthly expenses if necessary. Basically my paycheck is used for savings and paying down debt. If we went from a $900/month rent to a $1500/month mortgage (plus property taxes and insurance), I don’t think that we would have that type of security.
For the time being, we’re going to continue to save, pay down debt, and watch the market. No kids (although four cats), she’s 27 and I’m 26, both with college degrees and credit scores of about 750 each. At some point in the next five years we’ll probably buy, but we’re not going to do it until we’re “more than ready” in the eyes of a lender.
Went to an open house in Colorado Spring’s Old North Side this weekend. As soon as I walked in the door the realtor was on me like e-coli on undercooked hamburger. When I told her breezily that I’m not planning on buying until “things REALLY implode, in a year or two,” her face fell like a mob informant into the East River. She automatically slipped into NAR tout mode, and tried to give an unconcerned laugh, only it sounded like that noise a dog makes right before he pukes. She started launching into the Colorado Springs NAR minion “it’s different here” mantra, sounding eerily like a Moonie at the airport, only you can reason with a Moonie. Fortunately we were interrupted by the arrival of a bevy of soccer-mom looky-loos, and Ms. Realtress practically shoved me into a hallway before I could expound on my bubble theories.
I have noticed a sea-change in local perceptions of the real estate market. Last Spring I felt like the proverbial Voice in the Wilderness; now it’s an almost universal assumption that the market has turned and time is on the side of the buyer. When people find out we’re renting, they seem almost envious now, as if they’re well aware that they overpaid in 2004 and 2005 and that we’ll almost certainly get a lot more house for a lot less money than they did.
Multiple LOLs on that one. Nice. I agree with you on the change of perception in the last year. We sold last year and rent now. A year ago, people thought we were nuts to walk away from the gravy train. Now people wish they had done the same thing.
posted by Sammy : Ms. Realtress practically shoved me into a hallway before I could expound on my bubble theories.”
Right then is when I let em’ rip….the green fog of death! My Bubbles are fact and can maime!
That’s just wrong!
You are smart to rent. We rented up in the Boulder area for the last year plus. I watched a property since last January. Just made an offer two weeks ago at on half the price it started at when first listed in January. We close at the end of the month. That is a 50% drop in only 10 months. There were other properties we could have bought only every buyer was so upside down they couldn’t take a low offer!
A couple we know here are upside-down on a house they bought in Baltimore three years ago (not sure how they managed that — must’ve been a HELOC somewhere along the line) and would have to bring $45K, minimum, to the table to sell the house — which they don’t have. He had a chance to break even when he first put it on the market just over a year ago, but wanted to hold out for a “little profit.” They’re living in an apartment now, and the Baltimore mortage is eating them alive. I’m glad I’m not renting under those circumstances.
LInk to Tampa Tribune article: “Property Owners hit roof over valuations.” Quote from article: “It’s not like you’re ready to sell. You are going to sell–or you’re going to lose it. One way or another they are getting you out.”
http://www.tbo.com/news/metro/MGB3G0WXATE.html?imw=Y
Lies, Damn Lies, And Statistics in New Canaan, CT. This burns me up and I wish I could do something about it. A prominent broker just sent out a mass mailing claiming that the local market is just fine. The broker hides the true decline in prices by breaking the market into two price groups. The problem with this is that if every house on the market drops by 20%, then the houses that used to be in the bottom of the higher priced group drop out skewing the average price higher. At the same time those houses are now at the top of lower priced group skewing those prices higher. Thus the broker can turn a 20% drop in average price into a 10% drop in each of the two groups. It pisses me off that accredited professionals can lie this way to customers with no one calling them on it. It also pisses me off that I don’t have access to the MLS data so that I could do my own analysis and come to my own conclusions.