“Sellers Waking Up To Harsh Reality”
The Arizona Republic. “The stalled housing market is hitting builders in their wallets. Revenue and profits are down, and slower sales and canceled deals are pressuring builders. They’ve responded with layoffs and by unloading or revaluing land they bought in the housing boom.”
“Most of the big builders have operations in Arizona, and the Phoenix area has been a key market. Among them, Scottsdale-based Meritage Homes. Meritage also reported a third-quarter slide Wednesday. Cancellations hit an all-time high of 37 percent. Meritage also is adjusting its land position and rebidding construction contracts. The company had layoffs in some markets.”
“The latest new-home data from analyst RL Brown shows a market seeking, but not yet finding, a bottom. There were 2,281 new-home permits issued in the Valley in September, off nearly 53 percent from the same month last year and the lowest monthly total since December of 2001.”
“‘We’re bumping along the bottom,’ he said. ‘The builders are kicking it in the tail, marketing their inventory. When you cut a $195,000 house down to $118,500, that attracts buyers.’”
From USA Today. “Builders, with no emotional attachment to their homes, have become one of the biggest financial threats to individual sellers. Faced with a huge number of cancellations, builders began trying to lure buyers with eye-catching deals, such as free vacations, media rooms and landscaping.”
“That’s what’s hurting Bryan Rauch. In January, he bought a home in Anthem, Ariz., where Pulte Homes is offering a slew of incentives. ‘The plan was to renovate it and flip it,’ says Rauch.”
“He put the home back on the market in February, at $284,000, then lowered the price repeatedly until he hit $270,000. Still no buyers. After six months, he rented it out at a $500-a-month loss. ‘The problem is the builder is giving away homes,’ Rauch says. ‘Properties like this are now selling for the low $200s.’”
“But Rauch needs to cut his losses. So he’s putting the home back on the market at $260,000 and crossing his fingers, like a lot of other sellers around the country.”
“In the softest real estate markets, sellers are waking up to the harsh reality that they can’t get anywhere near what their neighbors sold their homes for last year. So they’re grudgingly reducing their asking prices and offering to pay closing costs.”
“At the same time, many buyers, emboldened by the transformed market, are low-balling sellers and getting deals they couldn’t have imagined last year. In 2004, Sevan Derderian bought a house in Las Vegas as an investment for $281,000. He found tenants, but he kicked them out after 10 months because their rent was always late.”
“‘I found that it’s really hard to be a landlord from a state or two away,’ says Derderian, a salesman in Los Angeles. He held onto the property for another year, hoping prices would keep going up. Once the market turned south, though, he panicked.”
“He listed the house in the summer for $305,000. Having owned real estate only during boom years, he assumed it would sell in about a week. After a month, he cut the price to $289,900. Another week went by. He offered to pay nearly $9,000 toward a buyer’s closing costs.”
“Then along came Reggie Johnson, who snapped up the house and boasts, ‘I got a great deal.’ Derderian, meantime, lost about $25,000 from paying the mortgage on an empty home.”
“That’s a risk confronting sellers in 56 metro areas, including Las Vegas, San Diego, Phoenix, New York and Miami, that are expected to suffer annual price drops, according to a study this month by Moody’s Economy.com.”
“‘It was surprising just how quickly the market seemed to turn,’ says Mark Zandi, chief economist for Economy.com. ‘It was like, boom, boom, bust. It was like, ‘What happened?’ The psychology in the marketplace unraveled very rapidly.’”
‘In Las Vegas, we’re are looking at a big cut back in new home permits and that might boost resales. New permits have fallen to the lowest level since the early 1990s. And there are other signs that population growth is slowing such as fewer driver’s licenses being turned in by out-of-state drivers and much slower hook-ups of new electrical meters.’
I believe this is referring to Benson, Arizona:
‘Las Vegas developer Development Funding Group Inc. is asking the city to annex 700 acres so they can build a 2,200-home development.’
Vegas is a great place to buy an over priced stucco box. I lived there for ten years and couldn’t wait to get the hell out! Great place to visit, but a horrible to place to live.
“Great place to visit, but a horrible place to live.”
That is true of any casino town and/or Nevada border town.
I think Reno wouldn’t be so bad–at least you have quick access to snow and Lake Tahoe.
Let’s see…..30 minutes to Heavenly, 30 minutes to Kirkwood, 45 minutes Squaw Valley, less that 30 minutes to some of the most gorgeous stretches of the Pacific Crest Trai………yeah, I guess it’s okay living here.
And correct me if I’m wrong, but gaming is growing in Reno at a much slower pace than other business, correct? My understanding is that there are significant distribution facilities going up East of Reno, and many tech companies are location financial divisions in Reno (MSFT licensing for one–there are others as well).
Or is this a bunch of BS.
Reno is what Vegas used to be. Well, except for the housing prices.
Casino and mafia town. It a perfect picture of the US globalisation.
Ahhh, so that’s where I can get my suitcase back.
And the Inland Empire is better? I can’t stand Vegas either, but at least you can breath the air. I’ll take 110 degrees in Vegas over 95 degrees in Riverside/San Bernadino anytime.
I concur. I grew up in Vegas and still have friends and family there so maybe I am biased, but I’ve always liked living there. The 909 is midwest in west’s clothing.
Posted “From USA Today. “Builders, with no emotional attachment to their homes, have become one of the biggest financial threats to individual sellers.”
I like this one best out of the whole story. So now the truth comes out….. they do eat thier young!
The sellers can go hang themselves.
“‘We’re bumping along the bottom,’ he said. ‘The builders are kicking it in the tail, marketing their inventory. When you cut a $195,000 house down to $118,500, that attracts buyers.’”
I knew there was builders profit, but I didn’t know there was that much.. I hope they go down hard.
Oh yea their greed level is amazing!
These builder f*cks are the new royalty thanks to Greenspan.
Too bad the houses they built are POS.
“I knew there was builders profit, but I didn’t know there was that much”
I think that that fact is the biggest boogeyman in the closet. It is going to pulverize used-home sellers in competing neighborhoods.
One thing it takes getting older to learn: the margins in businesses you are not involved with or don’t understand are consistently larger than you think they are.
I have no problem with an open competitive business having good profits as long as there were no barriers to entry of new companies. In this last bust, it looks like tons of little builders got going.
Now it looks like the big guys will keep building and profitably for at least another 12 months. (Declining land, material, and labor costs).
2007 house prices are so toast. The more overhang that is built the sharper the eventual bust.
Neil
“‘I found that it’s really hard to be a landlord from a state or two away,’ says Derderian, a salesman in Los Angeles. He held onto the property for another year, hoping prices would keep going up. Once the market turned south, though, he panicked.”
No kidding! I’ll bet they didn’t tell about that in get rich quick video that enbolden you to become a RE magnate. Live and learn and burn.
As an out of state landlord I know it’s a trial sometimes. How he didn’t think that through ahead of time is a sign of the frenzy mentality.
What is so hard about hiring a property manager for out of town landlords ? sure it cuts into your rent, but the renter calls the property manager when things break, not you.
Since they are probably renting at a loss, the thought of paying out even more each month is just too much to bear!
I was a rental owner for 10 years (never again.) It was near my house, but I found I had to go there weekly to check up on things. What I found:
Neighbors using the hose to wash their cars: big water bill.
One of the tenants (of 4 units) setting up aluminum can recycling in a garage.
Another tenant setting up a repair shop in a garage.
Tenants putting in big freezers in a garage: on my electric bill.
Tenants storing flamable liquids in many containers in garages.
Tenants washing neighbors clothes in the common washing machines for money: on my water bill.
Tenants moving in multiple friends. This increases the water bill, wear and tear. There is a limit on their rental agreement on numbers of occupants.
Woman moved in her son with a Pit bull dog (no dog policy in rental agreement.)
Tenants have a yard sale every weekend.
Tenants store very heavy items on balcony. Tenants have multiple plants on balcony, muddy water spills over and stains walls.
I could go on, but the above increase costs, bring down the quality of life for other tenants and you risk them leaving. You have to be close and get out of your car and walk around and inspect at least once a week or you will be sorry.
“You have to be close and get out of your car and walk around and inspect at least once a week or you will be sorry.”
Once a week?! With all due respect, that seems a little excessive, or obsessive, to me. Glad I don’t rent from you! I couldn’t handle a stalking landlord.
why as a landlord would you pay the water and electric.i wish you were my landlord.
“What is so hard about hiring a property manager for out of town landlords?”
Mo Money — I have a son-in-law who does that and, so far, apparently quite successfully. I don’t have the stomach for that much risk/potential hassle, but he seems to thrive on it and so far has done well.
We never see our property manager. They checked us out and liked what they found. If I found the landlord or their agent skulking around the house every week I’d probably turn the hose on them.
The USA Today article really highlights why this bust will be much worse than many “experts” are anticipating. “Flipper” Rauch and “Landlord” Derderian were/are an all too common bubble ingredient. Rauch wanted to renovate and flip a house where Pulte is presently discounting? That would indicate that his house can’t be all that old, so just what did he intend to fix? Granite counters and hardwood floors? Sorry, that’s not renovation. Derderian fancies himself an investor, but he no doubt hasn’t the slightest clue about basic RE investment principles. The classic GF: buy high and sell low. Multiply these a$$-hats by the thousands and you get a good idea of what happened.
Exactly, if you expect to “fix up” a house and feel safe to make a profit in most markets, the house better be broken to begin with. What I mean by broken is that few, if any, people would be interested in living in the place as-is.
At least then you know you can get a reasonable price in most markets, and your hard work in fixing the roof, plumbing, kitchen, repainting, siding, dry rot replacement, drywall replacement, etc. will likely be rewarded.
Buying a 5 year old house, and upgrading an already liveable house is playing with fire–especially when the market has already had a sustained boom.
“The classic GF: buy high and sell low. Multiply these a$$-hats by the thousands and you get a good idea of what happened.”
Thes fools number in the tens of thousands, if not hundreds. Speculation drove this market plain and simple. False demand. Time to pay the piper and bigtime.
Hey, he went to Donald Trump’s Millionaire school and bought one of those $7,000 courses in a box. Do you mean Trump lied to these overnight suckers? Donald is in Anaheim, CA soon and adverises he is getting $1.5 million dollars for his appearance.
Here goes 50,000 more future millionaires of America.
Wait. So the guy in Anthem, AZ admits that builders are selling new homes priced in the low $200,000’s, so he prices HIS house at $260,000.
I am not trained in psychiatry, but I believe that this home seller is suffering from some sort of clinical disorder. I mean it.
Is there a doctor in the house? I would like to know if there are any professionals out there that can explain to me if this kind of behavior has its roots in mental illness. I’m being serious.
Obviously his house is different!
Well, yes, but it’s different because it’s more expensive, not more expensive because it’s different.
Nope, This is just a textbook case of Recto-Cranial inversion.
i.e tell him to pull his head out of his A$$
He was cupcakes.
has cupcakes. was not wise in flip 101.
I call it the force-field syndrome. Consequences of stupidity may befall others, but somehow I’m magically protected from it myself….
LOL, I like that I’m going to use that.
mark posts ” I call it the force-field syndrome. Consequences of stupidity may befall others, but somehow I’m magically protected from it myself….”
You nailed it! Now that I read this, I can recall many people in life, I have met like this!
Look up narcissistic personality traits on the Internet–
the I’m special, rules-don’t-apply-to-me thinking fits right in.
Like the guy who kept on saying “Stay the course”, until his spin doctors told him to stop.
Seriously. The article even level-sets, “But Rauch needs to cut his losses”. I was with him till here, but the next line is, “So he’s putting the home back on the market at $260,000″ wtf? Hope this guy gets the financial fleecing he deserves.
I like the part where he lowered the price ‘repeatedly’, descending all the way from 284K to 270K. What were the increments? $500??
It must have been a 2 week rollercoaster ride!
I had that same thought myself. Didn’t it occur to him that no one’s going to notice a $100 price drop on a $300,000 house?
Clearly he is in denial about true market conditions…
‘Properties like this are now selling for the low $200s.’
But Rauch needs to cut his losses. So he’s putting the home
back on the market at $260,000 and crossing his fingers
That guy is REALLY, REALLY lacking common sense. Can he even hear himself talking? He himself admits that houses like his are in the low $200k’s, hence he’s apparently not even thinking that his house is “special”. So how on earth can he justify wasking $40k more than other houses? The fool!
The HB is going to nail his nuts to the wall.
Just like we’ve been calling out here for some time now. Pretty soon no more incentives, just flat out price reductions and “I’ll race you to the bottom.” (I’ll save you the suspense - the HB’s win every time.)
Yes - in the game of “I can think of a lower sales price than you can,” I’ll go with the HB.
The question that will break through the BS is a very simple one:
“Mr. Rauch, would YOU pay $260k for the house you are trying to sell?”
No, no, you’re not paying attention. Can’t you read?? He’s got his FINGERS crossed. That house will be gone in a couple of days.
LOL
Try “cognative dissonance”. You see one thing yet believe something else.
This guy is a true moron. Resales in Anthem have been competing with builders for a couple years now! Anthem is a “master planned community” miles north of Phoenix and the only way in or out is through a two lane stretch of the I-17. Ouch!
Anthem is a mess. I have some friends that live there. I made my first trip up there last weekend. The housed all look the same, the lots are tiny, and a nightmare commute. However, I must say my friends who moved there just over 2 years ago were living in a 1400 aquare foot home in Moorpark, Ca……. Anthem looked like a paradise to them comparatively.
Hey,
His ‘fixing up’ of a brand new house increased its valuie by 60k. Did this guy actually visit his investment? Going south on the 17 in the morning and going north in the evening is a nightmare!
‘It was surprising just how quickly the market seemed to turn,’ says Mark Zandi, chief economist for Economy.com. ‘It was like, boom, boom, bust. It was like, ‘What happened?’ The psychology in the marketplace unraveled very rapidly.’
The sudden change in sentiment should have been no surprise at all to an economist, who should know a bit about the history of speculation-fuelled booms.
The fine folks on the housing bubble blog predicted it!
On May 25th 2005, I wrote “Behold the bubble is about to pop. The bubble will pop (price declines) within the next 12 months.”
http://bubblemeter.blogspot.com/2005/05/bubble-will-burst-soon.html
Hmmmmm….. May 25th, 2005 is the day we went into escrow on our house in Reseda, CA. We purchased in July 1998 (169k), and sold June 28th 2005 (570k).
Looks like I timed the market just right.
By the way i have been a happy renter ever since…..
How out of touch can people be? It was more like “boom, boom, boom, oh wait a minute, gee this thing is looking toppy, damn the easy money is over, bust.” This thing rolled over for at least a year beginning in early ‘05 to early ‘06 (depending on the location) before true price reductions set in. Everybody with a brain in their head and a bit of fire up their butt (that’s the problem for most people - there’s always tomorrow) had their chance to get out. Give me a break already.
“‘It was like, boom, boom, bust.”
You mean “Boom Boom, Out go the lights!”
‘The problem is the builder is giving away homes,’ Rauch says.
No, the problem is morons like you trying to flip them.
“Then along came Reggie Johnson, who snapped up the house and boasts, ‘I got a great deal.’ Derderian, meantime, lost about $25,000 from paying the mortgage on an empty home.”
Reggie Reggie Reggie…Knife catcher. Oops
Watch out for those “great deals”.
He will soon experience cognitive disonance and perhaps depression. Euphoric emotions from the deal of a lifetime will quckly turn to sinking emotions from omg what have I done? Calamitous cognitive carnage.
Reggie will be pushing a shopping cart filled with aluminum cans and drinking Thunderbird out of a paper bag in a year or two, and he won’t be feeling quite so clever.
posted “Reggie will be pushing a shopping cart filled with aluminum cans and drinking Thunderbird out of a paper bag in a year or two, and he won’t be feeling quite so clever. ”
Hey! I feel smart and all of my friend are too!
“It was a little risky, but we got caught up in it. Everyone was doing it. … ”
Another moron from the article. Unfortunately justice was not served and she managed to get out with $175K in profit. Still, a great example of why we are at this present juncture. It’s no wonder the current Vegas/poker craze went up right along with housing. I for one will be grateful to see the poker championships gone from TV. Anyone else?
I think all the poker is finally our sign we have too many TV channels, but I do agree there’s the “ordinary guys making more money than they deserve” correlation.
I’d like to see hearts tournaments played on TV, actually. Think of all the graphics they could do, all the commentary about what people passed and whether player X can shoot the moon with A-K of spades and A-K-Q-10-8 of hearts… it would be a million times more riveting than poker.
I vote for a hearts tournament also. We have some pretty mean heart tournaments in my family. I love that game.
WAY too many channels. Maybe we need reality shows where you can watch other people watching TV, to see what they watch, and that way we can all relate and say “Hey, I watch that too!”
Jokes aside, I’m curious what the next season brings for the flipping shows?
“I’m curious what the next season brings for the flipping shows?”
Torch this house? Repo my house? Jingle Mail? The Biggest Loser: Housing Addition?
“WAY too many channels. Maybe we need reality shows where you can watch other people watching TV, to see what they watch, and that way we can all relate and say “Hey, I watch that too!”
That’s an SNL skit all day long!
I like watching the WSOP on TV. You’ve got arrogant players getting a bad beat from a hopeless fish who needs a king on the river and gets it. Plus, there is a lot of interesting psychology that goes on in a high-level poker game.
Poll on Yahoo finance… talk about the mass psychology of the market taking a turn FAST…
Finance Poll
In September, new home sales prices fell by the largest amount in more than 35 years. What next?
Lower prices 56%
stabilization 40%
Higher prices 5%
12657 Votes to date
You left out the other poll: Who will be affected by falling housing prices?
Everyone else but not me, becuase my house is special 99%
My house too; this sucks 1%
I like the stable people. They live in a nice world.
What is “stablization”?
Have you ever looked at the price of anything? It never sits at one price. It’s always up and down and up and down.
now it’s 59% for “lower prices” with 15,000+ polled.
Existing homes sellers are going to take it in the chin from HBs. By the time they figure out what’s happening with prices, HBs will be on their second or third price cuts. It’s a mad rush amongst the HBs to see who will reach the bottom first with the least amount of inventory and the maximum amount of profits. GFs and FBs are now F’d Sellers and FSs be damned!
The problem is the builder is giving away homes,’ Rauch says. ‘Properties like this are now selling for the low $200s.’”
I wish they wouldn’t say things like this when I have a mouth full of coffee!
“In the softest real estate markets, sellers are waking up to the harsh reality that they can’t get anywhere near what their neighbors sold their homes for last year.”
This certainly is not reflected in wishing prices. In the Reno area, I have been tracking one zip code for well over six months, and the same homes just sit and sit and sit with no price reductions. It is hard to imagine what these fools are thinking. A large percentage of the homes have plenty of room to negotiate as I have looked up the purchase prices on Zillow. I seriously doubt they are HELOC’ed to the max considering the wishing prices are, in some cases, four times what the sellers paid. The denial runs deep. Here in the Seattle area, wishing prices are still in the stratosphere as well. Inventories continue to climb and homes just languish on the market. I think this is going to take years to play out.
These types of sellers need to be handled with kids gloves; in fact, I would’nt go near these sellers b/c vile emotions are building and you don’t want to be near them when they erupt!
Same thing here in Miami. Tons more inventory, very small price cuts, if at all. I get the feeling this housing bust is like a dam holding back a river of steadlily rising water. Everything is holding together for the moment, but at some point, the water starts to trickle over the top of the dam, then it starts to flood, then it becomes a rushing torrent. I can picture if perfectly, but it’s taking a lot longer than I expected for the flood to start. How much longer is the dam going to hold the flood of inventory before all hell breaks loose and prices start to plummet?
“I get the feeling this housing bust is like a dam holding back a river of steadlily rising water. Everything is holding together for the moment, but at some point, the water starts to trickle over the top of the dam, then it starts to flood, then it becomes a rushing torrent.”
Just insert “stock market” in place of housing bust. That is what I fear.
My next door neighbor in the Seattle area put his house on the market four months ago asking $75K over what the most recent comparable home sold for in the neighborhood. After a month, they cut the price by $25K. Two more months and another $25K reduction. The other neighbors all ask each other “I wonder why it hasn’t sold”. To avoid unpopularity in amongst my neighbors, I resist the urge to say “By definition, it hasn’t sold because they are asking too much money”
Wow, this stuff is porn for bubble sitters!
Yeah, and we’re all worked up waiting and waiting and waiting for the money shot.
KB Home’s unsecured debt may be downgraded
Standard & Poor’s and Fitch Ratings said they might cut their ratings on Los Angeles-based KB Home.
The fifth-biggest builder postponed its third-quarter report, saying it had not concluded its review of stock option grants. The delay triggered a notice of default on some of KB’s debt.
The rating firms are concerned that the delay will lead to additional claims of default. Both S&P and Fitch rate KB’s senior unsecured debt BB-plus, one level below investment grade.
CB Richard Ellis profit up 62% on more leasing
http://tinyurl.com/yyhs5c
I find that to be odd. I’m seeing an increase of vacancies on the market. I’m going to have to dig for more details on that. I wonder if they are speaking Internationally or Nationally.
Sounds like both.
Yea, I reread it, it’s foreign money. Or should I say American money flowing to foreign countries for cheap labor and call centers.
Mr. IS.,
I agree. From my corner of the universe, suburban Boston, office lease signs are coming up just as fast as home for sale signs. People everywhwere are getting month to month leases on at good rates.
My sense is Downtown Boston is tight, but the suburbs seem empty. I would think companies would take advantage of that.
doesn’t commercial lag res on the way up and down ?
REITs are nuts- up 30% ytd
REITS are really nuts. They’ve averaged some 25% or so for the last five years.
How this can be sustained is beyond me. I won’t touch em just for the fact that if they do revert to the norm you’re dead.
“The stalled housing market is hitting builders in their wallets. Revenue and profits are down, and slower sales and canceled deals are pressuring builders. They’ve responded with layoffs and by unloading or revaluing land they bought in the housing boom.”
They (at least the Wall Street big boyz) have also been rewarded with gradually climbing stock prices against the backdrop of month after month of continuous bad news (or as minyanville put it, the housing collapse is stabilizing). Go figure…
http://tinyurl.com/fzeuw
“Builders, with no emotional attachment to their homes, have become one of the biggest financial threats to individual sellers. Faced with a huge number of cancellations, builders began trying to lure buyers with eye-catching deals, such as free vacations, media rooms and landscaping.”
Does anyone have good stats on the shift in the rates that new homes are selling versus the rates that used homes are selling?
Why didn’t we read… “Flippers, with no emotional attachment to their purchases, have become one of the biggest financial threats to individual home buyers. Faced with rapidly escalating prices, home buyers are being lured with eye-catching deals, such as exotic loans and promises of future price appreciation.”
“Does anyone have good stats on the shift in the rates that new homes are selling versus the rates that used homes are selling?”
GS — that’s a great question, if not THE question. My guess is that it is lopsidedly in favor of the new homes, say 75-25.
O.C. economy to slow through 2007, CSUF predicts
http://tinyurl.com/yxao6n
So there are some OC economists who are sticking to their forecasts?
‘Housing prices are expected to drop next year, the forecast said. The median price of a single-family house in Orange County is forecast to fall by 2 to 4 percent next year, Puri and Farka wrote in their forecast.
Last year, Cal State Fullerton predicted a 2 to 4 percent drop in housing prices for this year, and Puri and Farka are sticking with that forecast.
“As of August, the price increases on a month-to-month basis have turned negative. On a year-to-year basis, the increases have completely stopped, and by the end of the year, unfortunate in some respects, our forecast is likely to prove accurate,” they wrote.
The Fullerton economists also predict a 12 percent drop in Orange County housing permits this year, and a 20 percent drop in 2007, “before recovering slightly in 2008.” Construction spending is also expected to fall.’
Who cares? They’re all wrong. The prophetic Gary Watts was recently quoted AGAIN in the OC Register (10/23) as saying that those in the OC would be laughing at us bubblesitters by the end of the year, when their homes have appreciated 16%. Worst of all, they quote his minions (mostly Realtors (TM)) who say he must be right because he’s never been wrong before. Watts is now the “Housing Evangelist” Man I can’t wait for this guy to fall on his face….
http://www.ocregister.com/ocregister/money/housing/article_727675.php
I wonder what qualifications you need to be an economist for the OC Assoc. of Realtors. Maybe just making “it’s in the bag” predictions…
DUUUUD. You’re smokin some good stuff. That Was October 2005, not this year.
He knows he is soundly trounced this year and is laying low.
John Doe
“Watts suggested that real estate agents use a new sign on clients’ lawns. To make the point, he held aloft a placard reading: “For Sale – Rich People Only.”
Wow. Ballsy.
Wow. Stupid. Did it ever occur to him that such a snobbish-sounding placard might discourage the only GFs left in the market from checking out the seller’s overpriced home?
Actually, the snobbish-sounding placard is a good fit for the OC…ha ha
I predict that Gary Watts (1) will quietly ignore this year’s OC price drop and (2) going forward, he will continue making whatever predictions pop into his head without regard to his past record.
GS posts “I predict that Gary Watts (1) will quietly ignore this year’s OC price drop and (2) going forward, he will continue making whatever predictions pop into his head without regard to his past record.”
I think you are right. Too bad all of the RE folks that drank mightly from his batch of kool-aid will be eating dog food.
Check the date: Sunday, October 23, 2005.
But what a difference a year makes. Still helpful to know.
Sorry Mousebender - found an older column. But here’s a link to his new stuff. He says 2nd half of ‘06 will be more active than the first, and the excess inventory will shrink. For 2007, he predicts 7% appreciation for SFRs and 4% for condos.
http://www.homesforsalehuntingtonbeach.com/economic_outlook_2005.shtml
Thanks for the link, SFer. Watts is dreaming.
Sharp eye you have mousebender.
Yeah, Watts is nuts.
To take a line from the movie Airplane he “picked the wrong week to stop sniffin’ glue!”
I know that real estate is a religious matter for many Southern Californians, but this is truly beyond the pale…
‘Gary Watts calls himself “an evangelist” of real estate optimism, peppering his recent speeches about the future of Orange County home prices with cries of “Hallelujah!”
And the 650 real estate agents, mortgage brokers and escrow officers who came to hear him Friday say he speaks the gospel, even though his 2006 forecast defies many other predictions of a cooling in the housing market.’
Yes, apparently “faith” has replaced logic in the economics of housing.
I sense a “Come to Jesus” moment soon for Mr. Watts.
GS posts ” ‘Gary Watts calls himself “an evangelist” of real estate optimism, peppering his recent speeches about the future of Orange County home prices with cries of “Hallelujah!”
Too bad I doubt we will see a Jimmy Swagard moment… teary eyed…. “I have sinned”
And he cuts-and-pastes sections from earlier prediction reports into his current one - a true sign of intellectual laziness. He can’t even take the time to update his rationalizations.
Why would he? To paraphrase his apostles, “he’s never wrong.”
I know, I can’t believe it.
Hubris, I would say…or at least self-pride. A world class mountain climber recently fell to his death in Yosemite, pointing to the fact that even the most skilled, most able can attempt one feat too many. Watts may have finally reached the end of his mental rope.
Check this out. Must be nice.
The Cost of Owning a Mansion
http://tinyurl.com/vdbva
Wow, just like the English feudal lords of yesteryear. I would hire personal bathers like Eddie Murphy’s character had in “Coming to America”
“It’s no secret that the rich are getting richer. This year the Forbes 400 list was made up entirely of billionaires, and the Federal Reserve Board’s Survey of Consumer Finances shows that nearly 40 percent of the country’s wealth is held by the richest 1 percent.”
Whoa. I’m a Rothbardian free-market type, but this much concentration of wealth, if correct, reminds me of the years before French Revolution. Interesting. Glad I’m out of the running.
“this much concentration of wealth, if correct, reminds me of the years before French Revolution”
Also the U.S. in 1929.
“Then along came Reggie Johnson…”
With a bucket of cash and a box full of stupid!
I think this is BS but check it out, Californians:
http://dallas.craigslist.org/rfs/226149253.html
I’d be interested to know what the address is. That would say all. She should include whether or not it’s a uzi or non-uzi area. Being she didn’t put the address it’s probably a Apt conversion in a double uzi area.
Wow: it has a kitchen, electricity, and water!
I think I will call right now.
When was the last time you saw anything in LA county or OC under 200K
Wow: it has a kitchen, electricity, and water!
I think I will call right now.
Tears in my eyes…
Make sure it doesn’t have a $800/mo HOA. I’ve seen such places. Cheap price, expensive HOA.
Long Beach has its good and bad places. It’s an industrial area with a lot of crime but also has some nice areas near and around the harbor.
199k doesn’t get nice area near and around the harbor.
txchick posts “I think this is BS but check it out, Californians’
It did say two full toilets…. most likely full of poo. Then only 10 mins from LAX …. nothing like jets 24-7
(“‘It was surprising just how quickly the market seemed to turn,’ says Mark Zandi, chief economist for Economy.com.)
What surprised me is how long the boom went on, and how little affordability was left before it ended.
This phenomenon should be examined more in
Massachusetts. Builders have brought re-sales to a
grinding halt in that state, especially in the rural/
rural-suburban small towns that make up much of the
state. And I’ve noticed aggressive down-pricing, to
the point that builders have saturated both the
high-end and low-end sales points in most of these
towns with cheap vinyl-and-pre-fab new “homes.”
In Rome they had physical “torture shows”…they were viewed by large crowds and were very popular in their day.
In Japan they have physical “torture shows”…they are viewed by a large number of TV viewers.
In the U.S. we will have financial “torture shows”…they will be viewed by a large number of TV viewers.
You know its coming. Since people have a morbid fascination with others misfortune (e.g. rubber-necking freeway accidents) you have to wonder what the next step in “Reality TV” will be.