It Seems “Dramatic” As “Prices Come Down To Normal”
The Asbury Park Press from New Jersey. “A boom in townhouse and condominium construction has been a vital part of oceanfront redevelopment in the city, but the market here is not immune from the slowdown affecting the rest of the real estate industry.”
“‘That construction (along the ocean) was in reaction to the renaissance of Long Branch, coupled with an overheated..residential real estate market and the beachfront locations,’ said (appraiser) Jeffrey Otteau in East Brunswick. Those units helped to meet a demand for condos and townhouses in Long Branch, Otteau said.”
“Now there are signs that the city’s real estate market is slowing down. As of Oct. 1, there was a 12-month supply of condos and townhouses on the market, compared with a nine-month supply a year ago, Otteau said. ‘Today, because of the large increase in home prices for many of those properties, coupled with the deterioration of the overall housing market, what we’re finding is that demand there is less, and the vacation market has gone dormant for now,’ Otteau said.”
“More new projects, such as the second phase of Beachfront North, a 185-unit luxury condo-minium development, are on the drawing board. Diamond Beach, a condominium project across from Seven Presidents Oceanfront Park, which will have 96 units, also has city approval.”
“West Long Branch real estate agent Dot Schulze said there are 18 condominiums for sale at the Grand Resorts. Priced at between $600,000 and $1 million, depending on the ocean view, the community consists mostly of people who have purchased second homes. ‘Because of the whole market, we are slow no matter where we are,’ Schulze said.”
“She is optimistic. ‘I feel very strongly that when you are along the ocean, there is always a need for condos,’ Schulze said.”
“‘I think there is an awful lot out there available,’ broker Liz Scott said. ‘There is a lot more inventory than there are buyers.’”
The Boston Herald. “With Boston home foreclosures up 10-fold since 2004, Citizens, Eastern, Mount Washington and Sovereign banks are joining Bank of America and Boston Private Bank & Trust in setting aside $100 million to help people refinance out of bad loans.”
“The banks also signed a code of conduct aimed at banning abuses, such as steering unsophisticated customers with good credit into costly subprime loans. City officials also plan to contact 6,000 residents with mortgages from questionable lenders, offering help to those in jams.”
“Market watchers also see some weaknesses in the effort. For instance, some conduct rules only require banks’ ‘best efforts’ to halt bad practices.”
The Pittsburg Tribune Review. “The Pittsburgh region finally is experiencing the effects of the national slump in home building, according to a report. Single-family home construction for the six-county area declined about 8.8 percent for the nine-month period that ended Sept. 30, according to a Ross-based market tracking and research firm.”
“Tall Timber’s report showed there were 1,991 single-family housing starts through the first nine months of 2006, down from 2,183 units for the comparable period in 2005. The company bases its figures on building permits issued in Allegheny, Beaver, Butler, Fayette, Washington and Westmoreland counties.”
“The local market is better for buyers, with some price breaks possible, said John Auciello, of the Builders Association of Metropolitan Pittsburgh. ‘Houses priced in the $450,000 to $650,000 range have been very slow,’ he said.”
The Souderton Independent from Pennsylvania. “Local housing proposals are filtering through the pipeline and new homes continue to be built, but sales are lower than they used to be.”
“‘From what we’re hearing, this year it’s starting to slow down,’ said Brian O’Leary, of county planning for Montgomery County Planning Commission. ‘But there’s still a lot of activity going on. Unless the market were to really go south, it’s not as if people aren’t going to see a lot going on around them.’”
“Real estate broker Beth Hershey said that residential real estate sales were extremely slow over the summer. There are a lot of houses on the market right now, but for some reason, not a lot of buyers, she said. Compared to how the market was 18 months ago, the change might seem dramatic.”
“‘I think we’re seeing a correction after the hot market that we’ve had for the past few years,’ Hershey said. ‘It’s not that the current market is bad. It’s just, given the past market, it seems that way.’”
“Broker Lisa Collins said that prices are not dropping, but rather flattening out. THP Properties’s pricing has held firm, dropping only a couple percent in the last year, Todd Hendricks said.”
“‘People are afraid that if they buy now and sign a contract, prices will go down and they’ll have to pay a higher price,’ said Greg Lentine, director of sales for Heritage, which so far has sold 51 of 137 planned homes at Lederach Golf Club. ‘If that happens, we’ll give it to them at the lower price. That’s how sure we are we’re not lowering prices anymore.’”
“It seems that potential homebuyers need that kind of reassurance, because while the number of actual sales has decreased, Lentine said. ‘What we’re seeing is there are people that want to buy. But the media is putting out so much negative information, it’s putting them off,’ Lentine said.”
“‘The issue is more [about] the public psyche,’ Hendricks said. ‘With all the media frenzy over the housing ‘bubble,’ it scares people. That’s the dynamic that we have to deal with.’ But as prices come back down to ‘normal,’ the time to buy is now, Lentine said.”
“‘The building industry is prepared for a softening of the market,’ Hendricks said. ‘We all knew that conditions that existed a year-and-a-half ago were not sustainable.’”
“Hershey said she thinks the market is correcting itself following the surge of the past three years. She doesn’t expect a crash. ‘I think there’s going to be a period of correction,’ she said. ‘You’re seeing sellers maybe having to reduce their price before they get a buyer … It’s not the end of the world.’”
In case you missed it:
‘In a very short time, the rules of the real-estate game have changed dramatically—and buyers are more in control than they have been in a while. ‘They’re taking their time, and they’re not afraid to make an opening offer that’s 10 to 15 percent off the asking price,’ says Corcoran’s John Gasdaska.’
A reader posted this flashback:
‘Every New Yorker has seen advertisements for co-op apartments that seem too cheap to believe. What are those apartments really like? To find out, this reporter tried to see every apartment listed in the May 1 classified section of The New York Times that met the following guidelines: full two-bedroom apartments under $200,000, one-bedrooms under $100,000, studios under $65,000; between the Battery and 96th Street — Manhattan’s prime co-op area — with carrying charges for two-bedrooms under $1,400 a month, one-bedrooms under $1,100, studios under $800.
corcoran- she was the RE will be up jan 06 on the tube
That article brought back painful memories of when I was trying to sell my “classic six” on W. 71st a block from CPW and couldn’t even get $200 sq ft for it. Lost my shirt and learned the painful lesson of just how ill-liquid RE can be even in NYC.
A reminder that co-op and condo prices can be tricky. If you are accepting part of a common mortgage (included in the maintenance), the price you pay isn’t the whole price of your unit. Sort of the reverse of all those incentives — makes the price seem lower than it actually is.
UFB: Casey Serin was on a public broadcast radio (PBR) news article today on flippers. He has gone mainstream.
They’ll archive it sometime soon.
How would you like to be labeled housing bubble Schmuck of the year?
At the end of the day, however, Casey is again contributing to Kindleberger’s description of the housing bubble.
After contributing to the ‘manic’ phase, Casey is now contributing to the ‘revulsion’ phase where fraud and malfeasance are exposed. He is exposing all the participants: the Get Rich Scheemers, the Appraisers, the Speculators (himself) , and the Bankgsters.
It seems like he’s doing a much better job with the ‘revulsion’ phase; scandal sells, after all. The more people he reaches the better b/c the masses will soon revolt which will lead to the ‘panic’ phase and irrational selling.
He sure is getting his 15 minutes. You can see what news outlets have picked up his story via Google News:
http://news.google.com/news?hl=en&ned=&q=Casey+Serin&btnG=Search+News
He was also on a local San Francisco news show (link to news clips on his blog).
He’s going to get much more than 15mins from this.
This twit is going to become the poster child of what was wrong with the housing bubble.
He’s such a blithering idiot that he even believes all this media coverage is good for him. It’s only a matter of time now before he’s arrested for loan fraud (something that 20 somethings have a hard time grasping is that you can’t go wrong by keeping your mouth shut)
From one of the articles google returned:
Heh, a revealing slip from the twits on West 43rd St:
“the Sacramento resident has done what any blue-blooded young American would do”
Two funny things on CNBC this morning. The redhead and another women were talking about Ca. rising forclosures rates. The redhead says: “that number caught me really by suprise” or something to that affect. Much like Hastert, it appears now it’s time for all guilty parties to act stupid and pretend to be surprised at what they knew was happening all along as a way to deflect blame and responsibility.
At the end of the segment, the redhead also mentioned blogs about housing troubles and gave a plug to Iamfacingforclosure.com.
I was starting to think Casey was a fake, but I pulled the title on the Modesto property and sure enough, it’s his. Purchased for $323K with 100% financing. The last sale price was $133K in spring 2000. This guy is truly an idiot.
“My message today to all Boston homeowners is this: ‘If you are in trouble or you think you are headed for trouble paying your mortgage, there is help available….” said Mayor Thomas Menino.
Let the FB bailouts begin! Something tells me there is’nt going to be enough tax revenue to stop the dam from breaking; as a result, we may soon read about a new revolt, the Boston FB tea party.
I believe the government put in very little, but this is an odd bail-out, to be sure. Ameriquest is pitching in too.
local govs will be strapped in 07 as they ALWAYS spend all the dough,
be it illigit breeding programs or edu-baby sitting
They are asking the BANKS to extend additional credit or forgiveness of debts for those in trouble. This is a CYA because the volume of forclosures is so high.
This also pisses me off! These buyers stepped in line in front of legitimate purchasers by using financial leverage that they could not qualify for. lt’s only fair they be made to pay for their mistakes, but they are being handed a pass.
This type of action will help support the extended market pricing.
It is a terrible policy, but leave it to those socialist morons in Massachussetts to say this is a good thing. I guess it is if you want to support higher real estate “values”.
I could not agree more. They are the ones who signed their lives away, its not my problem that they don’t understand leverage, interest rates, teaser periods, etc. I would NEVER put my signature on something that significant without reading extensively, or at least having a few professionals look over the terms (not all people in the same bank either, how about your accountant/financial advisor/etc).
I would be SO pissed had I put down a significant amount of money to buy a home in the past few years. The people who are most going to suffer are those who used intelligent loans and/or bought well within their means. They get no debt foregivness, and will have to help pay their idiot neighbor’s morgage as well.
Let them go down in flames; its the only way to make them learn a lesson, and it will balance the market back out for those of us ready to buy. If they allow housing to continue on this “ponzi scheme” direction, I, personally, will never buy a home. Its just too risky, how do you know when the music is going to stop?
“The people who are most going to suffer”
Michael, I keep saying this and it seems to be falling on deaf ears. Maybe people will listen to you? Those late to the game (that created the insanity we call 2005) typically didn’t have any skin in the game. Now they’re in distress and are either forced to sell (if they’re lucky) or into foreclosure in effect dragging down comps and in the process squandering YOUR down payment! I have so many options now before me that just were not possible when I was shackled to a mortgage payment. I (like you) may never own again. Hell I’m thinking about getting a “live-aboard” boat for the summer months! Plenty of water here in Portland!
Before I bought my house, I took an all-day course on homeownership. It was aimed at first-time homebuyers.
One of the things I clearly remember the instructors saying: If you don’t understand any of the mortgage documents you’re asked to sign, don’t sign it. In fact, the organization sponsoring the course URGED us to come in with our mortgage documents (unsigned, of course) so that the staff could go through them with us and explain them. There was no charge for this service.
They were adamant on the point that we should not be pressured into signing anything that smelled fishy.
You are right, Michael Fink, but it seems most likely that the “bailout” will be window dressing. Even David Liar Lereah admits that realtors need prices to go down in order to see any volume, which is their bread and butter.
Diogenes-What can we expect from Kennedy land. Remember, it is easy to be a socialist when you are rich.
Greenspan is a Republican.
Just sayin’.
PG posts ” Remember, it is easy to be a socialist when you are rich.”
Very good line! Nice and tidy and to the point, plus it rings very true! George Soros comes to mind.
Some of the most “liberal” women I have known were daddy’s little rich girls. The could afford to flaunt convention and be oh! so indignant if you took a more conservative view of the world.
George Soros comes to mind.
And just what is “socialist” about Soros? Or has that term now been extended to include anyone who doesn’t worship the Idiot-in-Chief?
Soros had the brains to oppose the Iraq war, which the Republicans are now preparing to cut-and-run from after almost 3000 American deaths.
Menino is, literally, the biggest idiot in Boston. This is all for show, they can’t bail out all the people who need help here. In fact, the appearance of this “effort” underscores how bad things are ALREADY.
Everyone in and around the industry knows the market is dead but no one, officially, can say it because it would be suicidal. Its a classic “emperor has no clothes” moment. And we know how that fable turns out, don’t we?
A lot of the commenters here are taking this way too seriously. There’s an election in 2 weeks, Menino (nick-named “Mumbles”) is a sleazy imbecile, there’s no real money being set aside for this, and the Herald is a Rupert Murdoch tabloid written at a 3rd grade reading level.
I agree, we have to get a few weeks past the election to take political comments seriously.
Besides, I’ve seen the bond ratings many of those governments have. CA is still stuck with a single “A” rating from both bond rating agencies. MA has a AA, but its rating is on the decline. Boston actually has a large number of cities who so far have ok bond ratings (mostly AA)…
But I’m not seeing them able to spend much. With the job decline due to the real estate decline, tax revenue will drop anyway. This only postpones the pain for a few months. It would be much smarter to take the money and build another subway line.
Neil
“‘People are afraid that if they buy now and sign a contract, prices will go down and they’ll have to pay a higher price,’ said Greg Lentine, director of sales for Heritage…. ‘If that happens, we’ll give it to them at the lower price. That’s how sure we are we’re not lowering prices anymore.’”
Now, that’s how you wrestle a bear. Pound your chest and tell the market, “You can do whatever you want but I’m not lowering my price.” See you in BK court pal. With that bluff that’s where you are heading.
Yeah, I want to bet on a builder remaining solvent long enough to pay off on this kind of “promise”. Anyone taking this “deal” should say “show me the money”, how much money are they putting in escrow to repay losers and when do they get paid?
Bankrupt corporations don’t pay off on warranties but, in order to stave off failure how bad an idea is it to see if you can suck in a few more buyers with this ploy?
Relax, people. There will be no mass bailouts of the FBs. The banks are setting aside a relatively token amount not out of any concern for the FBs, but rather to attempt to forestall the backlash and regulatory scrutiny they are going to face when things really get ugly. It’s a band-aid gesture, not a bailout. It’s also way too little, too late.
I just read a really obnoxious piece about how great high end retail, including Porsches and Range Rovers, $900 boots, etc. is still doing in S. Cal. This whole system is so screwed up, it will take a financial Armageddon to change mindsets.
You know, I used to think “yeah, well I’ll buy that stuff on ebay and in classifieds for pennies on the dollar in short order, pal!”, but now it all sickens me so much, I wouldn’t touch any of it.
It’s the whole concept of getting “stuff” that is so messed up, even at bargain prices.
You can sit there, judge other people’s behavior all day long, get pissed off about it and the only person that it hurts is you. Society doesn’t care what you think. If you want to live the simple life then there are plenty of ways/places you can do it. I wouldn’t want to live on the coasts because of the pretense there, but then, hey, the people out there wouldn’t want to live in West Michigan either. Different strokes for different folks.
I’m not judging and I’m not pissed. Amused, probably.
You really misread that post…the point was that people, regardless of what coast they live on, or in between, place way too much emphasize on stuff…and many of the
“50K millionaires” (to quote txchick) can’t pay for it. I have no problem with those who can pay for their stuff, I just believe most stuff has been bought on credit. You know, the kind of credit that is gonna hurt. And “society” suffers for it, in one way or another, so it’s not so simple as “different strokes for different folks”.
The rich aren’t and won’t be hurting too much.
I doubt it’s the really rich buying this stuff, but rather the $50K millionaires.
Damn straight! Ahh So Cal….land of the inferiority complexes and the plastic fascade. Looking great is everything. Feeling great?…isn’t that what they made Prozac, Paxil, and Zoloft for? I tell you what, here’s a challenge for any takers: Go down to So Cal and try to find someone that is truly happy, at peace, and content. Good luck with that…..
exactly. The richest person I know drives a Civic. The dork who runs a home organization business drives a Hummer. The ones who are confident and smart enough to make $$$ don’t need the painfully obvious. The ones who are all confused about net worth/self-worth are the ones debt and dumb stuff. And still buying more.
Go down to So Cal and try to find someone that is truly happy, at peace, and content. Good luck with that…..
Auction Heaven in 07 may be as close as you’ll get.
My experience is that, more often than not, people who appear “rich” aren’t rich. Its the people who desperately want to be KNOWN as rich (at any cost) who flaunt.
You are all on target. I am here and there is so much pretense and fascade it is kind of hard to be around. There is a very high visible level of the stuff of “wealth” like shiny new euro cars, hummers, and lots of designer everything and now those horrid “Greek Shipping Magnate Tycoon sunglasses” are everywhere. It’s bad here, how bout everywhere else?
“Greek Shipping Magnate Tycoon sunglasses”
LOL……
And they’re all driving SUVs the size of Oil Tankers…. Every time I come up on one of these the windows are all Black till the drivers.
Then you see these little skinny wrists holding the steering wheel. If she looks at you through her shades, looks like insect with long hair staring down at you!… And she’s the only one in that Behemoth! 7 mpg oh yah!
“Greek Shipping Magnate Tycoon sunglasses” Ha,Ha,Ha I Hate those damn things, makes them look like flies, but they think they are so chic!
I agree, I hate em and think they look anything but chic.
And the killer of all of this is that most of these folks are plain old wannabes in debt up to those GSMT shades and squirming big time.
I know a real tycoon and he told me once, “Eddie, the whale has to spout before he can be harpooned”. With every bit of bling, every flashy car, designer accessory or pair of GSMT shades, these whales be spouting higher and higher.
Oh, BTW, the tycoon I know carries a green amex card folks and he could probably buy amex.
Look, it’s not about being a big fish in a little pond, it’s about how much can you save from what you earn. And Duh OC is not the place to do that.
Bingo TXChick yet it’s like that EVERYWHERE, just scaled differently. I’m in NJ and if they’re not driving a gargantuan gashog like a Ford Excretion, they mortgage their future for some EuroTrash like Audi, volvo (not to be confused with female anatomy) or a Jaguar (ford taurus with a jag emblem). The prententiousness here knows no bounds.
you probably refer to the former Ford Mondeo, which was in fact “relaunched” as a Jag.
txchick57, you relate the continued consumption of high-end retail goods to the same idiot mentality of FB’s. I’m not sure. In a thread on this blog the other day, a whole bunch of renters were bragging about buying Beemers with what they saved by not buying houses. On the whole, I’m happy to allow the renters to reward themselves for contributing to the rationalization of the housing market.
As a renter, I live well within my means and, sometimes, feel free to buy things that I don’t need but want, without credit of course. I do care about my bank balance but not about consumables to show off.
I just read a really obnoxious piece about how great high end retail, including Porsches and Range Rovers, $900 boots, etc. is still doing in S. Cal. This whole system is so screwed up, it will take a financial Armageddon to change mindsets.
No kidding. I’m shooting Fashion Week in LA this week and the premiere posers of Los Angeles stepping out of the endless stream of $90,000 cars with their meticulously intended wardrobes and the obligatory double-cheek “air kiss” to anyone worthy is a rather vulgar display to behold.
OK, if it wasn’t the “idol” worship from the “have nots” spending their Wal Mart salaries on rap music, movies with no talent actors, over priced clothes from drugged up models, Hollywood would be driving Fords. Nobody in LA looks twice at Paris Hilton, yet she is on every magazine cover and TV entertainment show. Its middle America that allows this excess to happen. Stop the money flow, and we will be back to Fords and Chevys.
Amen to that! I have never been into this stupid idol worship, even as a child. I can’t understand what the big deal is. It is incredibly disgusting to me that you can get paid millions of dollars for getting in front of a camera, throwing a pigskin ball, hitting a ball with a stick…etc.
I wonder how many of these “talented” people would be willing to continue their current occupations if they paid 40k a year. Meanwhile, the people who do contribute something meaningful to this society, firefighters, nurses, teachers…etc, can barely afford to cover basic necessities. Makes me wanna puke. I have owned a home twice before, and I own a nice car. But I worked hard for them…if I don’t treat myself once in awhile, what’s the use? But I certainly don’t buy anything based on what someone else has.
Why would I give a flying f#@* about a celebrity?
My life has absolutely nothing to do with theirs.
And it is true for the most part that people who are comfortable with their finances don’t have a need to flaunt it.
txchick57 posts “I just read a really obnoxious piece about how great high end retail, including Porsches and Range Rovers, $900 boots, etc. is still doing in S. Cal.”
Add they are still building with both barrels. Really nutty projects all over my travel routes, you should see this master mess called “Riverpark or something like that in Oxnard 15 different pland communitys or some such rot. On and on it goes.
How can this be?
Spot on Sammy. Thats exactly what it is. Banks need to appear to be concerned and proactive so they have room to say they tried after the smoke rises from the ruins. Nevertheless, if there is even a the slightest appearance of forgiveness of any of a borrowers debt, I’ll blow a head gasket.
haha.. I think I already blew one when I read that previous thread!
Makes me so mad to even contemplate the idea of bailing people out who, indirectly, helped price me out of homeownership. Not that homeownership is such a great thing, especially in S. FL, but I am still very mad that I am about 3X the median income in S. FL and still priced out (using conservative numbers, admittedly, but I am not going to buy into something and be cash poor).
So sad. I see people making 1/2 what I do driving around in their Range Rovers. I have a nice car, which is new, but its about 1/2 the car the dealership wanted to sell me.
I just don’t know how these people can sleep at night. Must drink plenty of beer to be able to close their eyes without panic attacks.
I agree Sammy this is an attempt to forestall the impending regulatory backlash. However, we’re all going to get soaked.
The banks always win b/c they are the ones with real leverage. We can’t function without banks and bankers know it; so, they lever our FDIC insured deposits against elected officials to continuously protect themselves. Nobody wants a run on the banks, after all. That’s just too friggin scary.
I am afraid we are all snookered my melancholic friend.
I could function very nicely without the current sort of banking system, which after all is completely based on fraud. Only after it is gone will we get honest banks, the kind where a crook gets strung up instead of getting millions of dollars in stock options.
“Relax, people. There will be no mass bailouts of the FBs.” These banks have stockholders and board of directors who depend on bank profits for dividends. Don’t think these stockholder-owners are not going to have a little negative imput on this ploy at the next meeting. This idea is not going anywhere
“You’re seeing sellers maybe having to reduce their price before they get a buyer … It’s not the end of the world…” says Beth Hershey.
Of course not Beth, it’s not your money. I bet your cold indifference just gently simmers the upside down FB’s blood with that pitch.
It wasn’t the FB’s money either, which is the whole reason why this ridiculous bubble got started in the first place. Can you imagine how low house prices would be if people couldn’t borrow to buy them at all?
I have nothing but contempt, never mind “cold indifference”, for clowns who inflate housing prices with OPM.
“Market watchers also see some weaknesses in the effort. For instance, some conduct rules only require banks’ ‘best efforts’ to halt bad practices.”
Smells like a last-ditch-pathetic-effort to keep the feds from regulating their bad faith dealings. Either way, the mortgage brokers and lenders are going to pay for what they’ve done. Too bad, the FBs are going to suffer much worse - loss of home, destroyed credit, shame, sadness, depression, etc, etc, etc….
““Market watchers also see some weaknesses in the effort. For instance, some conduct rules only require banks’ ‘best efforts’ to halt bad practices.”
Now there’s a screaming loophole! Just another example of CYA.
“Broker Lisa Collins said that prices are not dropping, but rather flattening out.”
The common theme thread of denial . Yet the REIC fruitcakes keep repeating it just the same. A part of me gets enraged when I read crap like this and another part tells me prices are dropping by virtue of the universal denial.
It is plain outright fraud, but look around… fraud is everywhere, in our government, our schools and our corporations, and no one seems to care (that has any power to do anything about it anyway)
The real estate industry built up the myth that property is some mystical asset that can never go down in price.
To admit, to the contrary, that this was not true means either they didn’t know what they were talking about or that they were lying.
They’ve built themselves a trap, one built on appeals to greed, which is now coming back to haunt them and should haunt the industry for a generation.
For the time being they can comfort themselves with comments like “prices are not dropping but rather flattening out” but most potential buyers aren’t that stupid. They can see prices dropping and, if one of the biggest reasons for buying something is its future appreciation and that CLEARLY isn’t happening, there’s only so long the “flattening” BS will fly.
They’d be better off admitting it, prices are in decline and appreciation is not likely for the forseeable future. At least then, they’d retain some credibility as “professionals”.
- Greg Lentine, director of sales for Heritage, which so far has sold 51 of 137 planned homes at Lederach Golf Club. ‘If that happens, we’ll give it to them at the lower price. That’s how sure we are we’re not lowering prices anymore.’”
- FINE, so ‘we’ll give it to them at the lower price.’
The only problem is that they will give the new buyer free upgrades to maintain the higher prices.
Someone on my block just turned down a offer that was 10% below her 10% reduced priced from the 2005 high .In other words the new buyers wanted 20% off from the peak.Apparently these buyers that made a bid had to sell their home for a lower amount so they wanted the same discount .I think that’s the best offer this sellers is going to get . Also a new condo project down the street from me just reduced their prices 12% .
I would just like to know where all the food went to at these open houses ?
Yeah, I want the food back. The smell of baking cookies always made me want to sign my life away.
How does a builder’s thought process work? Hmm, the market is heading down and there are a glut of properties for sale. I know, I’ll build some more! That other guy made a fortune on his development 2 years ago, so I’ll make even more.
This happens in the commercial market too. Look at all the shopping centers that get built when existing ones have been half empty for years. Is there no requirement for being a builder other than mass stupidity and a complete lack of business sense?
If the banks fund it, they will build it.
Sadly, true Norcalray.
“If the banks fund it, they will build it. “
That’s the business they are in, lending and building. If they don’t do it they are out of business especially the ones which live off the cash flow. I would not doubt that a significant number of builders and not a few lenders simply can’t stop since they have built their business on the bubble economics.
Reminds me of the old joke saying that they lose money on every sale but make it up on volume. Makes you wonder if some of these people flunked remedial math.
Plus, I think some (many) of these geniuses believe their own hopes that things won’t get that bad so they’ll gain market share in the slowdown and emerge that much stronger afterwards.
There are a lot of people who have been rewarded for not being conservative for a long time and either don’t remember, have purposefully forgotten, or are too young to have experienced the last downturn (this includes builders, bankers, and FBs). The market will likely provide some education in the relatively near future.
It Seems “Dramatic” As “Prices Come Down To Normal”
This almost sounds like prices have already fallen to normal. Wait two to four years and see “Dramatic” and “Normal”
Right now, prices are still near their peak, and 5 - 10 percent is a drop in the ocean…
many people i know in the real estate biz have so much invested,emotionally and financially,in the idea that double digit price appreciation is inevitable and normal,that they can not see the facts.i know one broker who lost at least $100k on his last flip,and is champing at the bit to pick up one of the many “bargains” in the market….he’s going to use an i/o loan of course.i also had a conversation with a friend of my wife’s last week who told me her home has never lost a dollar in value during the 25 years she has owned it…..i offered,very politely,to show her the numbers,and she got quite upset,and told me i couldn’t possibly understand since i was a renter…..her house has conservatively lost $80k in value since the peak,based on the few recent sales in her older subdivision….oh this gal does know i’m a loan broker,licensed appraiser,and had my first r.e license in 1976….but hey,i’m a renter.
Tom -
Wow, according to your home owner (debtor?) friend being a “renter” makes one stupid, no matter your professional background and education. I guess we’re all just a bunch of stupid, bitter renters gathered at this blog to discuss a subject that we have absolutely no understanding of!
If all renters are dumb and always make stupid decisions, then doesn’t that mean that any renter who decides to go buy a house is making a stupid decision?
tom, I feel your renter pain…lol. I’ve politely tried to point out the obvious to various people, one of which is a nephew, normally very smart and conservative…however, he got deep into Phx real estate doo doo, and even the most benign conversation with him turns defensive…then offensive when he points out that we don’t even “own a house”. No need to run the numbers for him…he’s smart enough to know what we’re banking (after selling at the peak, everything with a parcel number attached to it) and what he’s throwing toward declining equity…but he can’t help the emotions, so I’m politely avoiding conversation with him.
““‘People are afraid that if they buy now and sign a contract, prices will go down and they’ll have to pay a higher price,’ said Greg Lentine…”
My man Greg, last year talking about “People are afraid that if they don’t buy now and sign a contract, prices will go up and they’ll have to pay a higher price.”
Which way to go? So difficult.
Spoon boy: Do not try and bend the spoon. That’s impossible. Instead… only try to realize the truth.
Neo: What truth?
Spoon boy: There is no spoon.
Neo: There is no spoon?
Spoon boy: Then you’ll see, that it is not the spoon that bends, it is only yourself
There is only one way to bend for the sellers.
Jag said….They’d be better off admitting it, prices are in decline and appreciation is not likely for the forseeable future. At least then, they’d retain some credibility as “professionals”.
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This is about as likely to happen as the Hummer salesman suggesting that a Honda might be a smarter long-term purchase decision.
Once the majority of the dolts realize that RE has a stronger chance of going down than up in the foreseeable future, then the only real puchasors of RE will be those that need a place to live, which I’m guessing is a considerably lower ratio of buyers.