Bits Bucket And Craigslist Finds For October 22, 2006
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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I think we can settle one debate we’ve had on this blog: will prices decline first from the top tier or the bottom?
The answer: housing prices decline first for the most expensive houses in the market. That’s the conclusion I’ve drawn from looking at the recent Housing Tracker information. In market after market, the decline has begun with the 75%ile houses first; in some the median has declined an the least expensive houses are still increasing in price.
Careful, quartiles/deciles are exactly like medians except even noisier. Shifts in the quality of what is on the market and buyers seeking quality can make the high end look like it is doing poorly when it could be that lack of sales and building inventory at the low end is merely shifting the quartile point.
Simplified example:
Inventory: 10, 10, 20, 20, 30, 30, 40, 40
Quartiles: 10, 20, 30, 40
Inventory: 10, 10, 10, 10, 20, 20, 20, 30, 30, 30, 40, 40
Quartiles: 10, 20, 20, 30
And remember, if high end houses are still selling they represent an even smaller instantaneous percentage of the availble asking prices. Statistics is funny stuff.
I tend to believe the lowest-priced homes will actually do okay. There is STILL a genuine belief out there that housing is a decent investment, and let’s face it, at the right price almost ANYONE will buy to “achieve the great American dream of homeownership.” Since interest rates haven’t gone up all that much, and the economy is decent, if not great, overall, you may see the low end of the market hang in there as your average, non-investor buyer snaps up property once it falls into his/her affordability range. In my view, the flipper-infested middle market, and the “lower high end” where Baby Boomers and other “I want to prove how successful I am by purchasing too much house with an IO/option ARM” types thrive, will be the hardest hit. This is where most speculation and most over-stretched borrowers reside. With Frankenstein Financing poised to get tighter, I think that part of the market will suffer the most.
ttp://interestrateroundup.blogspot.com
I tend to believe that a glut of McMansions and luxury condos that will not sell as priced but are still more desirable than used low-end housing will eventually crush the low end down.
This is what I think too. In fact, I’m already seeing it happen.
Once that 450K relatively nice house starts heading closer to 300K, why the heck would anyone pay 250K for a true hole in the wall piece of junk? It’s GOT to push the 250K house down.
This happened in the Bay Area after the tech stock bust, though it is hidden in the aggregate data. Prices and sales dropped a great deal in the South Bay, while they both kept steadily rising throughout the early 2000s in the East Bay (much lower-end market). My hunch was that some high-end buyers were crowding into the lower end. If you have beauceau bucks and are willing to catch a falling knife, then you want to make sure the knife is not large enough to inflict a fatal blow. If many are following this strategy, the knife might not even cause a flesh wound.
Speaking of the Bay Area, is it just me, or is the commute traffic getting worse this fall?
FIAT;….Your observation is spot on;…There has been a definite spike commuter traffic in Silicon Valley….I thought it may have to do with school starting but I am now convinced and others agree that the valley is definitely on the up-tick….Big buildings are starting to be leased I.E. Sabrato Co. just leased the 10+ story building in downtown San Jose (are you ready)…..to 1 tenant…. I don’t think (barring any international shock) we are going to see property values in Silicon Valley fall much any time soon….
Well, considering that I’ll have my MBA and be on the job market in about 2 months, I can’t say that I’m completely displeased with events …. but even 280 is getting clogged up these days. Bleh.
I haven’t posted in a while re Hampton Roads. I’m curious what others are seeing. It seems the decline is proceeding in fits and starts: there will be a sudden 3 or 5 % decline in asking prices and then the relatively more reasonably priced properties are bought, and the remaining sellers think they can still hold out at top-of-the-market prices.
Developers are pricing new housing stock less expensively than last year. That doesn’t seem to be having a big impact on the rest of the market.
Any other observations from anyone? Anyone seen the last month or two’s sales price data from the MLS? Thanks
Anyone know where the best open house treats are in the Orlando
area?…I really like cupcakes and cookies….Homemade juice is always a plus!!
just look for the open houses with the most balloons! LMAO
found on NY Craigs list:
http://newyork.craigslist.org/lgi/cas/223053350.html
“male looking for business - m4mw - 28
Reply to: pers-223053350@craigslist.org
Date: 2006-10-19, 8:40PM EDT
mortgage broker looking for a real estate agent for deals willing to trade sexual favors for work
this is in or around nassau”
I fully expect to see many female brokers falling back on that one since a lot of them appear to be completely empty-headed, but to see a man is suprising.
I was surprised too, txchick!
I remembered that CL woman post from last week and wondered if it was a revenge thing or real… So I went to CL, casual encounters, and typed in Real Estate as the search term. What shocked me is that more than one ad came up. This posting above was the most overt (sex for deals) but several others were covert (sex ads which awkwardly injected a mention that they did Real Estate for a living)..
And you think honest and ethical appraiser’s have a chance in this cesspool?
LMFAO!
Another wholescale indictment of the sleaziness of the mortgage lending world
Here are some more.
http://tampa.craigslist.org/cas/206947183.html
I am looking for a mutually beneficial relation ship with a real estate agent. I am in the mortgage business and I have many referrals to give. I am a clean cut professional white male. I am 6′ tall and weigh 195lbs. I am also an oral/g-spot expert and well endowed. Please respond with a pic if possible. let me know if you have any questions or ideas.
Give him my phone number!
Hahah. Kidding.
Oh geez . . . I didn’t look at the ad.
NSFW if anyone is at work.
Ooops YES, there is a pic lol.
Are you at work TX? Sorry….
Yeah but work is at my home office. No problem. Wouldn’t have wanted the B&C to walk in though and see me looking at that! Would have some ’splaining to do!
Just hope it wouldn’t cause an inferiority complex or anything… That might be devastating. I’d feel horrible lol
Hey folks….I love a good laugh as much as the next person; but would it be too much to ask to label NSFW when you post links like that?
Thanks
You should have had a warning with that link. Good thing I’m not at the office. I wouldn’t open any hyper links with the information like that if I read it at the office anyway.
Think the bubble mindset is gone? Think again
http://www.palmbeachpost.com/pbcsouth/content/local_news/epaper/2006/10/22/s1c_HOME_SALES_1022.html
from this story:
Although the five-year housing boom has abated and median prices for existing homes in the county have dropped from $411,400 in August 2005 to $386,000 last month, according to the Florida Association of Realtors, Saturday’s offer was viewed by many as a great investment.
Angela Lemessy, an accountant from Wellington, planned to buy a home and then either rent it out or re-sell it at a higher price.
“I am trying to take advantage of the market. It’s better than keeping the money in the bank,” she said.
The above story illustrates the value of this blog. Angela has just bought into real estate that’s entering a tailspin - as an investment. It’s hard to believe anyone on this site would do something like that.
–
Greed will set her free! She wouldn’t have the problem of money to put in the bank. Let us see how long before she loses most, if not all, of her investment.
Jas Jain
Try this failed auction of 15 houses in San Diego:
http://www.signonsandiego.com/news/northcounty/20061022-9999-2m22auction.html
In the end, the potential buyers wanted too much of a good thing, and the auctioneer’s hammer never fell.
——————————
But Amanda Pion-Goureau, a Bressi Ranch resident, wasn’t buoyed by the auction results, saying a house “ultimately is only worth what someone is willing to pay for it.”
She thought the prices being offered by the bidders “reflect the true market value.”
“The good news from the auction is that the investors did not lower the price and kept the value up for people who live there,” said Kelly McLaughlin, a Prudential California real estate agent.”
LMAO. The investor group (a bunch of lawyers) just didn’t have the balls to realize the loss. They are SOL and so are the comps Ms. McLaughlin. You may have dodged a bullet this time around but just the same you are a “dead man walkin”.
“But the owners, Model Homes Investors LLC, a group of Los Angeles-area lawyers, apparently would need about 80 percent of the asking price in order to clear their own debt with the banks holding the mortgages”
At least they can get their BK done without paying excessive legal fees!!
A Realtor (TM) (Susan Suchasmuch?) posted her lament here a couple of days ago that this blog insinuates all Realtors (TM) are stupid. If so many of them were not so eager to offer insipid remarks to the print media, then maybe we would not have such a low opinion. How does the fact that the greedy attorney-investulators managed to sell none of the homes they tried to auction support the delusion that market prices in Carlsbad have not fallen off a cliff? The only thing you can conclude from the auction results is that Carlsbad prices are much lower than the attorney-investor group thought they were — otherwise why would they have gone through the hassle and embarassment of holding an auction with no sales?
good point, stucco. now here’s the real problem for these idiots. how do they plan on selling these turds? will this proud realtor now take them on? will they go back on a new auction? next time around the bidders will lower their offers. here’s the point: these offers were the highest they will get>>>>it’s all down from here.
Stucco/Spiral;…..It will change once the banks get their hands on these houses….Then you will see a REAL auction with either a very low reserve or no reserve at all…
“But the owners, Model Homes Investors LLC, a group of Los Angeles-area lawyers, apparently would need about 80 percent of the asking price in order to clear their own debt with the banks holding the mortgages.
The homes, all two-story, were being sold with about $350,000 worth of upgrades, Weitz said.”
Awesome. I’d love to see these greedy investors ride the market down. The next time they try the auction (about 6 months from now when they get no other buyers), people will offer 10% - 20% less than this time. The greedy investors will accept maybe 2-4 and then the real fun begins.
These are lawyers who are suppose to be smart. I guess they didnt realize that the market is no longer in 2005. Enjoy the alligator loans and the pride of ownership of some damn expensive houses.
And don’t forget the 6 months of carrying costs plus add in the time spent on these properties instead of being lawyers.
“And a few people were simply sightseers.
“I just wanted to see what kind of a fool would buy these overpriced homes,” Bruce Azimi of Oceanside said. ”
Best quote EVER in the San Diego Union Tribune!!!!!!
Bruce Azimi wins the smartest man in the newspaper award!
I cant beleive they printed that. The pyschology has changed. BAHAHHAHAHA!
This guy is my hero.
“I just wanted to see what kind of a fool would buy these overpriced homes,”
There seems to be a shortage of GFs around Carlsbad these days…
One of our posters (wawawa?) attended this event yesterday. I wonder who it was?
Guys, this is getting to be too much fun!!!!
And by the way, I was up in Carlsbad yesterday for the first time in over a year. The new home inventory overhang is apparent in all directions, and there are huge bulldozed tracts of land on which construction has just begun. It seems the builders are determined to make sure the landing is catastrophically hard up in Carlsbad. Good luck, Model Homes Investors LLC!
GS,
According to DataQuick’s September numbers, Carlsbad (92009 - La Costa) is already down 15.2% for SFHs and 10.9% for condos, from 2005 prices. Mind you, this zip has had basically no appreciation since 2004. I’m seeing homes listed at late 2003 prices…and not moving.
BTW, for those who are not familiar with the area, La Costa, Carlsbad is coastal (with houses perhaps going 5 miles inland), and is considered very desirable. So much for the theory that the high end won’t fall.
And we’re just getting started…
I was surfing Craigslist this weekend and found this gem. The asking price is $400K ( not bad ) for a good location in Oceanside, San Diego. No view but 6 blocks from the beach.
http://sandiego.craigslist.org/rfs/224043016.html
Unfortunately you only get is an empty land and nothing else. No house. No front or back yard. No bedrooms. No bathrooms. Nothing. You might ask how big is the lot/land? How about 5,000 SqFt for your pleasure. What a bargain… What a joker.
Sellers in Southern California seem to be the last to “get it” that the bubble is bursting, so I’ve noticed they’re more apt to ask ludicrous prices for virtually nothing.
That shot of the ocean from a palm lined street makes me home sick!
Me too. It reminded me of going down Naragansett street toward the ocean in OB
RERIP,
You’re kidding about that being a good area, right? Only if you like living with hookers, druggies and gang bangers cruising your street at all hours of the night.
Hilarious.
My sister and her husband (recent GF’s) rent a 3/2.5 2,100 sq feet sweet condo with a boat slip about two-three condo’s closer to the Brooks Bridge than this Craigslist entry. Why pay $600,000 plus property tax plus insurance plus condo fees and no boat slip when you can rent for $1,200 per month? Unreal.
http://pensacola.craigslist.org/rfs/223448321.html
last line of the ad says it all: “Sellers are licensed real estate agents”
5/4/2 condo in Gulf Breeze (Tiger Point) on the water. Seller brags that the deal is sooo good he must be stoned! Buy it before he puts the bong down!
http://pensacola.craigslist.org/rfs/222270980.html
On the south burbs of Syracuse, SOLD signs still continue to surprise me. On a sought after village road, 2 historic victorians are sporting sold signs. Both were in the $300s, higher end for the greater Syracuse area but not for this town. One was probably priced pretty competitively but still 2005 prices. It had been on the market about 6 mos. I do believe there was a reduction. The other one was only on a few weeks and I thought it was priced too high. I was surprised to see it go.
I think we’ve seen a lot of new inventory being offered in the past month but I’d say it’s moving better than in the summer which in this place is life as normal. Everyone’s out having fun on vacation in the summer.
BTW, for anyone new to the blog, these sales REALLY surprise me. I’m stumped as to why things are still moving along but I do think it’s just a lag and we’ll be feeling it too. I wish one of the blog’s worldly travelers would ring up one of their local friends and dig for insight.
Upstate NY is being passed around as a place RE investprs can still make a profit (it is not true, they just think it is because of prices). We had a couple of “will buy houses” people sniffing around Ithaca this summer.
Not sure if this helps, but the exact same thing happened in my neighborhood in Minneapolis this summer (July or so). Most on the blog here were reporting little/no sales, I was seeing “sold” everywhere.
Then in August, BANG, it just stopped like a car accident.
I’ve heard Seattle is still going fairly strong as well so far… you may be part of “the lag”…
good luck to you!
Seattle inventory is climbing and climbing and 30% or more is price reduced. The flippers and investors are starting to get out, or at least not buy any more.
But Upstate NY indeed has the reputation for cheap homes, comparatively speaking. Our favorite Seattle flipper, Eric, now famous because of his blog and numerous “investing” mistakes pulled out of Seattle (or anyway he’s TRYING to do that) and headedfor greener pastures with Buffalo RE.
These people are trully clueless. They do not understand that 200K in one area is as high as 800K in another. They don’t get that that 200K property upstate will go back to where it was just like the 800K property will.
I saw it in the Albany area last year. People from San Francisco, NYC, Boston, scooping up overpriced property that looked “cheap” to them as investments. They’ll be shocked when they find out in the next couple of years what that property is REALLY worth.
If those Victorians were nice, in a good location, and that type of home rarely comes on the market there, I’d expect to see them go at a premium. There are people who will pay extra $ for old homes like that if they are quality (condition and location).
“historic victorians” — that’s the key.
Carrie Ann,
How did everything go with the surgery? Hope you are feeling well.
Take care!
The Denver Post did a story this morning about Wyoming recruiting workers from depressed areas like Flint, Michigan to work in the oil and gas fields of central Wyoming. According to the article, one of the transplants home near Flint was appraised at $160k last year. They’re asking $120k now. “You always heard that housing is a good investment. Well, not in Michigan”, said Ramona (Nolan).
Wait till you buy an overpriced home in Wyoming and the gas business goes bust, Ramona. Like last time. You think there’s little opportunity in Michigan? Some people are willing to take it until it hurts.
I am very interested in the recent (yesterday) Naples FL auction of about 45 properties. The initial news is that sales prices were about 35-50% off list. There was some concern about whether “reserve levels” were met. My recollection was that at least some of these sales had no minimum prices. This was an important auction, since it was in one of the previously hottest and most over priced markets and the number of properties should have been enough to get a take on where the market really is, or at least where it is going. Any new news on the auction? Even if many of these properties don’t change hands, who is going to buy in the area at higher prices? Oh well, there may still be some GF’s.
Bill– I think that the real interesting bit about that auction was how much off the last sale these places were. 20-25-30% haircuts. OY! (yesterday’s observations or bits).
sorry– here’s the link:
http://www.proxibid.com/asp/Catalog.asp?aid=5100
run em thru zillow & check last sale.
I’m a thinkin that there are some mighty unhappy neighbors.
Some rare news from Houston. Foreclosures are up big:
http://www.chron.com/disp/story.mpl/business/4277531.html
“I used to work for a builder and saw the tricks of the trade. It just didn’t register well with me,” he said. “I’m a minister, so I don’t try to hurt people and get them into homes when they can’t afford them.”
Burgs, president of The- NewHomeShop.com, said he can’t remember if he went to Addison’s closing, but he said he is certain he always discloses everything to all his clients.
“It was a long time ago, so I can’t recall everything or every conversation. But a lot of times buyers want the homes so bad, and then they get into a situation and they realize how hard it is to be a homeowner and this happens,” Burgs said. “They’re getting in by the hair of their chinny chin chin. I’m quite sure everyone disclosed the information, but when the situation changes, they get upset.”
wow, I didn’t realize property tax in Houston was so high. 400-800 per month for taxes? That doesn’t seem right.
While the $800 is to cover the shortfall from the previous year, TxChick warned awhile back that property taxes in Houston are outrageous.
“includes the shortfall” rather than “is to cover the shortfall”
Property taxes in Texas are 3%.
Taxes run close to 3% in Texas.
So THAT’S why RE is so cheap in Texas. Imagine paying close to $6,000 per year in taxes for a $200K house. We got out in 1985, too long ago to remember what our tax bill was.
No State income tax though…That helps off-set I suspect…
“No State income tax though…That helps off-set I suspect…”
Not for retirees.
–
The Housing Market Is NOT Local!
NOTE: All commentaries on economics, investments and politics is about human behavior.
Here I don’t mean geography but rather as segment of the economy.
All the dishonesty that people on this blog notice is common all thru the economy.
The best economic model, to describe the behavior of various participants, is that of Pimps, Whores and Johns! The goal for the Whores is to turn Tricks! And the Pimps collect their fair share. This model is best applicable in the case of Wall Street and the Scam Market.
Jas Jain
Greater West Palm Beach, FL area home sales/inventory/pricing data has been posted at a local brokerage’s web site for September. “Official” figures from the Florida Association of Realtors won’t be out for a few more days, but these show yet another massive slump in sales (looks like -60%+ from year-ago levels), a dip of about 4% YOY in median prices, and a renewed surge in for-sale inventory (which is up about 160% YOY).
http://www.ipre.com/trendg/images/palsld.PNG
Mike
http://interestrateroundup.blogspot.com
the santa rosa paper yesterday had ads for 36 new home developments,and one “auction” the auction is for 16 townhomes n napa,the reserve price is about 2x economic value.2 developers offering 100% financing and no payments for a year,4 offering plasma tv’s,one, “montini ranch” has 3 homes for sale,that appear to have fallen out of contract a couple of times since they only had 1 left for sale in early may.lots of incentives on the new stuff,and a lot of townhome/condo developments just coming on the market.has global warming caused november to become the new buying season? my favorite here is chanate vilage,better get a 15 year loan if you buy there,cause it won’t last longer than that.does the ‘06 construction quality match the ‘06 loan quality? looks like a dead heat here.
Yes, that’s the issue with these boom houses. I’ve owned 4 houses…built in 1980, 1933, 1773 and 1935. The 1980 house was the poorest quality. We had 3 fireplaces in the 1773 house. The two in the orginal house actually heated the house. The one in the 1960s add-on s*cked, literally, the heat right out of the house. The 1933 and 1935 homes were the best quality. Friends that had homes built in the mid-1990s or 2001 had signficantly more problems and work to do in “new” houses than we had to deal with!
My folks own a 1930s era home in CT. It’s lovely and well-built, but they had to do a fair amount of work over and above regular maintenance on it over the years to get it up to current code & standards … for example, electrical rewiring, septic tank, insulation (it was originally a summer-only residence), HVAC.
Still, it’s a great house and will likely be standing long after I’m gone.
True, if the old home is “vintage” or “original” that spells work! Needless to say, the 1773 house had been updated many times, last in 1980s when er bought it and we did a bit to it as well over 10 years. But we did not have the trouble that some friends had with brand new houses.
Capital Pacific Homes in Denver, cph-colorado.com, is offering a $240,450 home for $987/mo., with a free washer, dryer and refrigerator, rear landscaping package, faux wood blinds, and a plasma TV/Bose entertainment system. The little tiny print under the ad states the following: Subject to change without notice. 680 FICO score required. Financing based on an 80% first and 10% 2nd with a down payment of 10%. Taxes and insurance not included in monthly payment examples. Annual percentage rate of 7.072% on first mortgage. 2nd mortgage is a HELOC with a start rate of 7.25% for the first six months. First mortgage is a 5-year ARM interest only at 5.25%. Specifications on the TV and Bose entertainment system may vary based on availability and are subject to change at the builder’s discretion. Washer, dryer and refrigerator model numbers and colors may vary based on availability and are subject to change at builders discretion. Blind selections are to be made at CTI or BSI. Value not to exceed $2,500.00.
Any takers?
I’ll buy ten and put in granite countertops and sell them for $400,000 each.
LMAO!!!!
Gotta love this shit!
Granite and stainless in the ghetto!
Go capitalism, GO!!!!!
i think i saw a blurb for the brian williams nightlyt news show. He mentioned airing something about the bubble as the “in depth look story”. Anyone else see this this morning and know when it is airing?
(Aside… Reality Check was the name of David Lereah’s August 2006 powerpoint presentation to a REIC convention.)
——————————————————————————————–
Reality check
Will changing market cool hot real estate shows?
By Jeremy W. Peters
NEW YORK TIMES NEWS SERVICE
October 22, 2006
Reality TV has been slow to catch up with the flip side of the real estate boom.
What has become a buyer’s market in many places has taken a lot of the drama out of “Million Dollar Listing” (Bravo), “Flip This House” (A&E), “Property Buzz” (HGTV), but many of these programs still portray a real estate frenzy that has become a fading memory.
http://www.signonsandiego.com/uniontrib/20061022/news_1h22realitym.html
Lord Yes, time to get these shows off the air. But I hope they save the tapes somewhere so we can all go back and be reminded of just how stupid we really were during the great turn of the century RE boom.
In real estate, location is everything — don’t worry if your expenses exceed your sales proceeds…
————————————————————————————————–
Trump puts ‘brand’ on Baja with condo-hotel
By Lori Weisberg and Sandra Dibble
STAFF WRITERS
October 22, 2006
Donald Trump says he will be a “significant” equity investor in a Baja development bearing his name.
In the world of real estate, Donald Trump has planted his flag on many lands, from Manhattan and Chicago to more distant reaches of the world, as in Seoul and the Grenadine Islands. Now, the latest addition to his empire – Baja California.
Already a popular choice for Americans looking to invest in oceanfront property, Baja’s northern coast has caught the eye of The Donald, who said he was drawn to the area, in part, because of its proximity to San Diego.
Trump, whose mantra is “Location is everything,” is teaming up with a Los Angeles-based developer to build a trio of condo-hotel towers just north of Rosarito Beach that his team is touting as the tallest and most luxurious in the area.
http://www.signonsandiego.com/uniontrib/20061022/news_1h22trump.html
Would-be Temecula and Murrietta commuters to SD jobs, take note…
———————————————————————————————-
Commute eats up housing savings for many
By Emmet Pierce
STAFF WRITER
October 22, 2006
Housing and transportation costs are draining the resources of America’s low-to moderate-income households, the Center for Housing Policy said in a recent study of San Diego County and 27 other metropolitan areas.
For years home buyers in high-cost communities have followed the real estate adage, “drive until you qualify,” researchers noted. That means looking farther and farther from employment centers for homes that are inexpensive enough to allow them to qualify for mortgage loans.
As gasoline prices have soared, long-distance commuting has become a less viable economic trade-off, the study finds. Around the country, the money saved on rent and mortgage payments is being offset by increased transportation costs.
In 17 of the 28 metro areas studied, average transportation costs for working families match or exceeded housing costs. In San Diego County, where median home prices doubled between 2000 and 2005, housing remains a slightly larger drain on the household income. The study found that working families here spend 31 percent of their resources on housing and 28 percent on transportation.
Transportation costs “tend to increase along with commuting distance,” the study said. “At some distance, generally 12 to 15 miles, the increase in transportation costs outweighs the savings on housing and the share of household income required to meet these combined expenditures rises.”
http://www.signonsandiego.com/uniontrib/20061022/news_1h22prices.html
It’s not just the gasoline, though that can become a problem (right now, people are getting a reprieve). It’s the TIME lost in the car too!
And car maintenance and replacement. I think many people are doubling what they would have to pay if they lived closer (over X# of years).
I am wondering how the boomers’ “passion for real estate” will evolve as the air continues to leak out of the bubble over the next few years…
————————————————————————————————-
NATION’S HOUSING KENNETH HARNEY
Baby boomers own real estate in record numbers, study shows
October 22, 2006
WASHINGTON – Rename them the real estate boomer generation: A comprehensive new demographic study reveals that the 78 million Americans born between 1946 and 1964 have a passion for owning real estate unlike any in the nation’s history.
Consider these findings:
Ninety-six percent of all baby boomers believe that owning a home is a very smart financial investment, and nearly four out of five of them now own homes. One in four boomers owns other forms of real estate besides a primary home – including one or more vacation or seasonal retreats, acreage or income-earning property.
http://www.signonsandiego.com/uniontrib/20061022/news_1h22harney.html
–
“Baby boomers own real estate in record numbers, study shows”
The same was true of the ownership of Scams during the Scam Market bubble.
Baby Doomers are serial-bubblers!
Jas Jain
‘Serial-bubblers”—good one!
Phoexix Metro:
http://www.azcentral.com/arizonarepublic/news/articles/1022homeprices1022.html
The Phoenix realator says that if you bought recently, you will now need to wait three years to break even. There will be a lot of panic this spring when the bottom is not in sight and waiting three years will just look like bigger losses.
One of the “tricks” being used is to relist a house with a new MLS number and a lower price, to hide the days-on-market number and make it look like a new listing. With the explosion of MSM articles about the soft housing market, I wonder if that’s now a mistake.
Buyers may not want to look at such a new listing, preferring to look at “stale” houses or those advertised as “reduced,” where the buyer can assume seller may be getting desperate,
What’cha think?
Our MLS precludes masking the “Days on the Market”….Our hostorical data goes back 10 years or so for any property that was listed on the MLS….
This is HUGE in Seattle. I first noticed it last November when I started scrutinizing the MLS lists for certain neighborhoods. Who knows how long they’ve been doing it.
Don’t know if your reverse psychology idea has merit but it would be a great thing if this practise was stopped. I guess if realtors became convinced it backfires, that would do the trick. Right now though, they’re still convinced that it helps to sell houses so are enthusiastic about continuing the deception.
And apparently, there is NOTHING to stop them from doing so. Forthright and gleeful liars…
Page A23 of today’s Arizona Republic has a table showing real estate price cuts since the peak in the Phoenix area. Among these:
Anthem 85086 Aug: $358k, April $455k (-21%)
Queen
Creek 85242 $401k March $413k (-3%)
Phoenix 85020
(my former zip
code) $245,603 January $405k (-39%)
Phx 85044
(my current zip code)
Aug $309,900; April: $354k (-13%)
There are a bunch of other zips in the list. But those are interesting to me for now.
The 39% drop is no typo from my end. Not sure if that is a newspaper typo. Zip code 85020 is part of north Phoenix that includes the area around North Pointe resort. I lived near 7th Avenue and Peoria. It’s like a checkerboard. There are nice and neat apartments and houses, and there are also trash heaps in the area. Go slightly east to Cave Creek road and you will see lots of check cashing shops, and suspiciously skinny middle aged white people who must be meth-addicts. Once I was at my storage unit parking area on Cave Creek road with my sister. We saw a young white woman in an icky trash bin collecting soda cans. Phoenix is not alone in having a chessboard of trashy areas and nice areas. I noticed this in Northern New Jersey in the ten mile radius from Manhattan. The further west, the better, so I lived 30 miles west of Manhattan for a few months. I also notice trashy places all over Los Angeles next to nice places. This is America. This is what the people want. Frankly, I’m tired of the trash. North Scottsdale and Ahwatukee (85044) are not so bad. I also like the HOA areas of Maryland, where you have to maintain a sense of cleanliness.
Okay, that’s all from my soapbox.
You’re right, Bill. I’ve noticed the same thing, and it makes it very difficult to choose a place to buy because you never know how long the good areas will stay that way. In downtown LA, you will see many homes with beautiful architecture located in the absolute worst parts of town. They were once homes of the “rich & famous” and were sectioned off into boarding houses. The rest is history. I’ve heard stories like this from various parts of the country, so it’s not just a local thing.
If someone could form a country where all people had to agree to be clean, honest, friendly, helpful, etc. as a condition of entry, I imagine it would be the most densely populated place on earth.
No Savings?
Another “swell” article in todday’s Arizona Republic in the business section. It predicts the Americans’ savings rate is likely to stay negative for two consecutive calendar years - something that hasn’t happened since the government began tracking these statistics in 1929. The article attributes this to the relative confidence in jobs - low unemployment rate of 4.6% versus the 10% unemployement rate in 1980, when the savings rate was 10%.
I figure the savings rate will be 2% in 2007, and grow back to 10% by 2009 when the economy caves in. Money market funds, CDs, T-bills, all will be discussed at the water cooler. There will be bragging rights about snagging a 9% 2 year CD. While in 2004 the discussion was about how much ones’ house has appreciated.
Real Estate-related jobs are disappearing all over every day now. So eventually unemployment will increase and drive savings rates up and consumption down.
My 2001 series I savings bonds earned over 8% the previous 6 months. Now that’s something to brag about! I am glad I zigged while the other boomers zagged! I’ve been mostly into Series I savings bonds and Arizona municipal bonds the last 5 years. In fact, the interest on them pays for my share of apartment rent.
And I’m really into the T-bills too. They are my new obsession.
Another SWAN (Sleep Well At Night) investor!
Bill, by now the people on this blog probably know more about your investments than your wife does!
We even know that he has no wife because he’s afraid women are dating him for his money. (not trying to dis you, Bill, but you need to find different women)
Anybody notice where the Californicans are going to nowadays? I swear, I think more are moving to New England lately.
“I swear, I think more are moving to New England lately.”
Well, THAT’S good news! Hear, hear. Enjoy!
Las Vegas:
http://www.reviewjournal.com/lvrj_home/2006/Oct-22-Sun-2006/business/10271534.html
Way OT: Found these stories in the margin of the Tampa link in Ben’s post. Ripping off 30 Philly police officers is not a smart thing to do:
30 Eagles Fans Are Here; Their Bucs Tickets Aren’t
They traveled more than 1,000 miles to see the Philadelphia Eagles play at Raymond James Stadium, but 30 police officers probably will be watching the game on a hotel room television.
http://www.tbo.com/news/metro/MGB9BRDHJTE.html?imw=Y
But then:
Bucs Give Officers Tickets
http://www.tbo.com/news/metro/MGBWE96YKTE.html?imw=Y
What a great story — Bucs win on an incredible kick at 0:04. Cops are sorta’ happy, having expected to trounce our hapless Bucs. Good stuff.
Here is a fun craig’s list ad from baltimore.
$390000 Why Canton is still a good buy at $390,000!!
——————————————————————————–
Reply to: hous-223971949@craigslist.org
Date: 2006-10-21, 11:20PM EDT
We have almost completed a beautiful 3BR, 4BA, Brick Townhome on Hudson Street in Canton. Of course it has granite, stainless steel appliances, wired for sound/internet/phone/cable, bricked back yard patio, roughed in roof-top deck (we aren’t giving this away, it costs $$ to put these up!!), 8’ basement, new roof, new electric, plumbing and hvac, ceramic in all four bathrooms, new stairs, formal dining room, architectural ceilings. Could accommodate roommates. For the right price we will cover closing costs and help work out your down payment. Appraised at $405,000 a few weeks ago. Real housing information below…
As an appraiser, in the ‘better sections’ of Baltimore City, 10/20/2006
Total Active Listings Number 3620
Total Contracts Number 1228
Total Proerties sold in the last 12 months are 5668
This means that there is an average of 85% available housing stock in Baltimore City’s best locations from last year’s. [Disclosure-Canton is slightly greater than 100%] Waiting and looking at 50 houses will deplete this stock further as the owner’s rent them since no one can sit, indefinitely, on their investment. The majority of these people won’t give the best properties away. They simply won’t be available for purchase and you will feel you have to look at more and more properties since there will increasingly be less and less “good” properties from which to choose.
Action: Choose the area or zip code first, amenities second and pick the best 5 that meet your criteria from the listings! With that in mind- don’t waste your time looking at fifty properties. When you find the property that meets all of most of your needs don’t let it get away to the rental market!
When you find the property that meets all of most of your needs don’t let it get away to the rental market!
————————–
Why not? That way, you get to live in the same house, but for less money — and you don’t even have to worry about the maintenance!
Bring on the rentals!
Totally OT, but it’s been a bit of a cranky day on the blog — hope no one is too much at risk re the Fed rate call.
Could the next bubble be in exotic cars? From the U.K. Sun today:
“Now they have four — the 911, Boxster, Cayenne and Cayman — and last year sold 88,379 with an incredible profit of £4.6BILLION.”
I calculate that as an average profit-per-vehicle of 52,049 British Pounds. Whoa — either their editors are as math-challenged as ours, or those profits include a lot more things than cars, or maybe some of those beauties are pimped Volkswagens.