November 10, 2006

“A Very Different Market”

A housing report from the Virginia Pilot. ” A pronounced slump in home-building permits in Hampton Roads will dampen demand for construction workers during this quarter and next year, economic forecasters at Old Dominion University said Wednesday. The full effect of the downturn in home-building won’t be felt until next year, which would coincide with the closure of the Ford truck plant, said Vinod Agarwal, chairman of ODU’s economics department.”

“‘New home construction,’ according to the economists’ report, ‘has slowed as builders react to the excess inventory, roughly three times that of 2004, of both new and re-sale housing in the region.’”

From the Hook in Virginia. “Is it still smart to buy a house in Charlottesville? Will people who paid those princely sums for a house over the last several years ever see their money again? It doesn’t take an economist, however, to see that things have changed in the housing market on both the local and national level.”

“Eighteen months ago, the MLS offered 1,100 properties, says Charlottesville Area Association of Realtors CEO Dave Phillips. And as of press time this week, there are approximately 3,000 listings in Charlottesville and Albemarle. The number of transactions completed or pending in Charlottesville or Albemarle during the third quarter of 2006 is down about 18 percent from 2005 figures.”

“While the last few years saw a flipping frenzy, those days are over for now, Realtor Jim Duncan says.”

“‘In the last several years, people had gotten away from the ‘buying smart’ mentality and were just buying,’ he says. ‘I don’t want it to sound like it’s a scary thing. It’s a really good time to buy, it’s just a very different market.’”

“To those who suspect that agents are just feeding the public a line to keep their own heads above water, George Overstreet, associate dean at UVA’s McIntire School of Commerce and an expert in real estate investment, says that’s not the case. ‘People think we’re in some sort of bubble, so they’re on the sidelines,’ says Overstreet, ‘but interest rates are still down, and the demand has shifted back to the left. So prices have dropped.’”

“If all this news is actually good for the real estate market, there’s one group who may be doing some teeth gnashing: the agents themselves. In the last five years, the number of realtors in the Charlottesville area has risen 50 percent increase, according to Phillips.”

“‘If you do the math, it’s less than two transactions per realtor,’ says Phillips. Duncan says a realtor needs to have 15 closings, to make a decent living. ‘There’s a bursting of the agent bubble,’ says Duncan, who is glad to see the competition stiffen. Having real estate agents ‘who do the job as a hobby,’ says Duncan, ‘detracts from the professionalism.’”

The Baltimore Sun. “Local homebuilders are slashing overhead, holding off on some projects and redoubling marketing efforts as they adjust to the slump in the once hot housing market.”

“Buyers are hesitating to buy, and more are backing out of contracts ‘The psychology has changed,’ said Michael Carliner, senior economist for the National Association of Home Builders. ‘Until people think it’s a good investment and prices are not going to go down, people are reluctant to buy.’”

“Many speculators got into the housing market to capitalize on the rapid appreciation. Now speculators are fleeing the market and potential homeowners are fearful of values dropping, he said.”

“In Baltimore and the five surrounding counties, standing inventory increased more than 61 percent in September compared with a year earlier, according to Hanley Wood Market Intelligence. When homes to be completed within one to six months are included, the number of unsold homes soared 130 percent, Hanley Wood said.”

“In Clarksburg, in Montgomery County, where many new home projects compete, Beazer dropped prices about $40,000 per house on single-family homes that were selling in the high $600,000 to low $700,000 range, said Dave Carney, Beazer’s division president for Maryland.”

“To generate interest in its homes, Toll Bros. has held weekend- long events in which it features special offers, such as making specific options available for $1. One event caught the attention of Deb and Joe Sundberg, a Howard County couple who were not looking for a new house since they had just finished major remodeling on their 19-year-old, four-bedroom home in Columbia.”

“But after seeing the spacious lots in Ellicott City, and attending a barbecue at the property off Route 108, the couple signed a contract on a $1.2 million luxury home with four bedrooms, two-story great room and a big foyer.”

“‘They were offering pre-model pricing for Phase I of the neighborhood, so this was a chance to get in on the ground floor, and the possibility of using this house to be our nest egg for retirement,’ said Deb Sundberg.’”

“‘We’re looking at it as an investment as well as a nice place to move.’”

“The Sunbergs became more convinced of their timing after taking a complimentary limousine ride to a Toll Bros. model home in Potomac for an evening of hors d’oeuvres that featured a talk by an economist who said it was a good time to buy.”

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Comment by Ben Jones
2006-11-10 08:22:20

The Sunbergs may be interested in this:

‘Consumer complaints about builders have gone up more than 50 percent in the past five years, according to the better business bureau. One Maryland house had drastic structural problems. The contractor shoved the main support beam through the outside wall when he couldn’t get it to fit right on the other end. Inside the house, inspector J.D. Grewell said the entire roof could come crashing down because it was installed wrong. ‘This is to the point of let’s start over, let’s start rebuilding,’ he said.’

In Richmond

‘The much-anticipated Miller & Rhoads hotel is still on hold. At a cost now topping $100 million, construction on the former downtown department store was expected to begin in late September. Rising construction prices, however, and ’some trepidation’ in the housing market have forced the timetable back a little, says Hal Fairbanks, director of site acquisition for New Orleans-based HRI Properties, the lead developer on the project. ‘We still have a few things to work out,’ Fairbanks says.’

Comment by Arwen U.
2006-11-10 09:15:20

Are you sure those last five paragrahps aren’t from scrappleface?? In the words of Dave Lister as he stares at the tarantula he’s about to be forced to eat, “you’ve GOT to be yanking my chain!”

But hey, somebody’s gonna get a nicely remodelled 19-year-young 4-bedroom in Columbia on the cheap! Yee haw!

Comment by moqui
2006-11-10 09:32:31

I was getting ready to write a subcontract to a mason who specializes in tract work for some of mid size home builders, I did my usual search superior court search for this guy and hit on a bunch of recent class action construction defects suits filed against the builders. What was interesting here is that the builders cloaked their names with the LLC’s for each development so you don’t necessarily see the true amount of litigation against each builder

In the 90’s, these type of suits were all the rage, it’ll be interesting to see how they increase as property values fall. IMO, Same crappy workmanship 4 years ago as there is today.

Comment by Annata
2006-11-10 10:32:01

Unfortunately, this is a rather permanent side effect of real estate booms. You end up with all these houses built to subpar standards because people buying during the craze did not hold builders accountable.

It’s not so much that the workmanship went downhill (although that also tends to be true during boom times), but that people let builders off the hook because they think the market is so competitive. The guy who bought my loft waived his right to have the property inspected. The building is 100 years old!

Comment by Bill in Carolina
2006-11-10 18:37:07

Same thing with the house we sold in Sarasota. It was only three years old, but no inspection? We got the impression that the buyer (a retired MD) was one of those know-it-all types.

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Comment by rent2home
2006-11-10 08:36:26

“The Sunbergs became more convinced of their timing after taking a complimentary limousine ride to a Toll Bros. model home in Potomac for an evening of hors d’oeuvres that featured a talk by an economist who said it was a good time to buy.”

featured a talk by an economist who said it was a good time to buy….

It is just the beginning……soon the builders will get hold of their 92 year old sick and dying Grandma telling her last wish…

Comment by Pete
2006-11-10 08:52:38

I’m sure this “economist” was completely fair and impartial. Hah. And in other news, car salesmen say its a great time to buy a car. BT Barnum was very right.

Comment by CA Guy
2006-11-10 08:53:18

Yes, this story was a stunner. That is a pretty shady sales tactic, but it is no surprise coming from the building industry. The really amazing part is that there are people who fall for this! A bbq and limo ride, followed be a paid “economics” speaker, and they are ready to saddle themselves with seven figures of debt. If it is indeed going to be their nest egg, I hope they don’t plan to retire for another twenty years.

Comment by kpom
2006-11-10 09:24:24


Good work Toll Bros!

Comment by P'cola Popper
2006-11-10 09:46:21

I bet the guys from Toll were doing the end zone victory dance, moon walking, high fiving, and laughing their azzes off after signing the Sunbergs.

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Comment by implosion
2006-11-10 12:59:45

Did not get the impression they had sold their current house when they signed the contract.

Comment by Fresno Dude
2006-11-10 09:47:26

Thursday we took a trip where we went by the D.R. Horton Bella Largo at Greenhills Estates in Chowchilla, between Merced and Madera, 40 miles up the road from Fresno, offering four plans from upper $300,000 to low $500,000. The cheapest plan has 2211 square feet 3 to 4 bedroom, single story with 3 car garage. The most expensive is 3458 square feet, 5 bedrooms, two story with 4 car tandem garage. These homes were like peacocks in with the domestic turkeys. Chowchilla is a nice ordinary agricultural town along Highway 99, but nothing special. In my mind the biggest problems are the heat in the summer and smog. Fresno has smog worse than Los Angeles although Los Angeles does get higher spikes during the day. If you go east five miles out of Chowchilla past D. R. Horton, the orchards, vineyards and poultry ranches, at night time you will see an orange glow lighting up the sky a little to the south. We investigated one time and found ourselves in front of the California State Correctional Facility for Women. With the strong prison guard union in California, a job at this facility would most likely be the best paying in the area. On the way back from our Thursday trip, there was a sign right there at one of the entrances to these D. R. Horton homes saying RV Park. Out of curiosity, we stopped and it was the weirdest thing. A normal RV park will have a great variety of motor homes, travel trailers and fifth wheels with cars and trucks, kids and dogs, a little store and Laundromat. This was only about 25 travel trailers, all the same manufacturer, arranged about green lawns and nothing else, not a person in sight. Afterwards it somehow reminded me of setting out duck decoys in a pond, hoping for a flock to come along so they can be blasted out of the air. We have been past here maybe a dozen times, but have never seen anything except construction workers drive in and out, and at night time, no lights.

Comment by jag
2006-11-10 10:00:57

The limo….just like what casinos do with their “whales”…or would be whales.

Boy, the Sunbergs better have deep pockets because they are likely to be in the running for “last, best, greatest fool”.

Comment by phillygal
2006-11-10 12:51:16

Ah, the Brothers Toll…
worked for them briefly in 1998 at the Valley Forge Woods Development. People shelling out big (for the time) bucks for these homes. One day, I was in the office alone and started cleaning and organizing just for yucks. Came across the litigation file. Unbelievable mess-ups in construction: one resident had their ceiling cave in on herself and dinner guests while daughter took shower upstairs in “Princess Suite”:Plumbing not properly installed.
Another residence’s electricity wasn’t correctly grounded…yes we’re talking basic journeyman screw-ups, nothing exotic here.
Later I took a drive around the development…couldn’t believe the lots these $450K homes were built on. One home had a lovely 70 degree slope going down to the street, just steps outside the front door.
At the time I thought: what nitwits are buying these POS’s…so I looked into the files of the buyers. High level execs, doctors, university profs, all the usual “educated” suspects. No liar loans here…these folks had the $$$ to buy, with the docs to back it up.
And they squandered it on a Toll Bros. home.

Comment by CA Guy
2006-11-10 13:39:54

this will not surprise you, but the Brothers Toll continue their high standards of construction. I am actually renting one.

In summary, we are the first people to live in this unit. Phone jacks did not work properly (horrible buzzing sound, and this was the case in 90% of the units. Toll had to fire the original sub that installed them) Hot and cold were reversed on two shower heads and one sink. One toilet would not flush completely. One shower would not drain (construction debris in the pipes). A couple of weeks before we moved in, a large area of living room ceiling cracked, bulged, and leaked (this is a condo, and the neighbors plumbing was improperly installed, hence a leak onto our ceiling). Toll came out and repaired all this stuff, but most of the guys have english as a second language. If they were journeymen then I am the king of siam. Everything seems to be working since, but it does make one wonder just how long these condos will last.

Comment by TG in Norfolk, VA
2006-11-10 15:23:47

Your description of your experience with Toll Bros. is why i do not understand why anyone would prefer buying one of these awful, cookie-cutter, mass-produced McMansions. The quality always seems to be crap, even with the higher end builders like Toll Bros. Then the crappy home is on a postage-stamp sized lot, with neighbors on all sides a few feet from your home, and no mature trees or landscaping. How can anyone pay in the $1 million range for depressing “homes” like these?? I would rather spend the money on an older home with some character. Yes, there are some significant maintenance costs with an old home, but it sounds to me like you have quite a few expenses and problems with the new homes, too.

Comment by Market Participant
2006-11-10 21:59:43

In Re talk from Economist:

I wouldn’t blame him, David Lereah has to pay the rent too.

Comment by mrktMaven FL
2006-11-10 08:40:28

“The Sunbergs became more convinced of their timing after taking a complimentary limousine ride to a Toll Bros. model home in Potomac for an evening of hors d’oeuvres that featured a talk by an economist who said it was a good time to buy.”

It’s jaw dropping to read people entrusting their financial future to a pitch by a well informed economiss. Although rare, GFs still exists. Nice find Ben. ROTFLMAO!

Comment by Ben Jones
2006-11-10 08:46:19

Spending over a million bucks because of two or three hundred dollars of perks? The article said he was a government worker. Overpaid?

Comment by flatffplan
2006-11-10 09:20:10

all pay and no work= gov workers
here’s their list of accomplishments

Comment by mrincomestream
2006-11-10 10:25:32

LOL flatffplan you seem to have a problem with people making money. I’m curious what do you do for a living. Are you a disgruntled Taco Bell Manager or something.

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Comment by Annata
2006-11-10 10:44:08

I used to do government work, but I’m in private industry now. Truthfully, I got a lot more done in my government jobs. I have more *indicators* now that make it look like I’m accomplishing a lot now, but I accomplish less even though it takes more time and I get paid more. Which one is more efficient?

And let’s not forget that this wonderful internet we are using was created by government workers who created it as a side project to share date between national lab sites. (I’m not talking about politicians who voted for internet funding, but the guys doing the actual work.)

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Comment by Fresno Dude
2006-11-10 12:32:30

In California studies have been done showing that Caltrans design and inspection are something like half as expensive as private design firms because there is no profit to be made with much less overhead. I saw this on Also take a look at the Big Dig in Boston; there was no involvement by government inspectors or designers. It cost $14.6 to construct with original cost estimated at $2.5 and now leaks and falling ceiling panels are serious issues. Many times it is a good idea to have government workers involved. State workers are easy targets for politicians who what to get elected.

Comment by ronin
2006-11-10 12:33:43

Universities, including employees & students, were a big part of the DARPA project, albeit funded by Department of Defense. Thus spawned the internet.

Comment by pismobear
2006-11-10 12:40:53

And here I thought it was created by a Finn (and algore). You learn such wonderful things reading the blog here. Gov workers in my town couldn’t even create a wet dream. Let’s hear it for the gov workers, rah (sounds of flatulence).

Comment by NotAnotherFB
2006-11-10 23:40:12

FYI: While in Congress, Al Gore did actually play a major role in sponsoring legislation to fund the creation and expansion of the Internet. So yes, even though his statement that he helped create the Internet was much-mocked (and repeatedly misquoted as “I created the Internet”), Al Gore did in fact help create the Internet. Phew! Just had to clear that up.

Comment by yogurt
2006-11-11 01:31:52

And here I thought it was created by a Finn

Well you would, wouldn’t you? You’re probably confusing the Internet with Linux, which was invented by a Finn, Linus Torvalds.

And the World Wide Web, which is the application that actually made the Internet popular, was invented by a Brit, Tim Berners-Lee, while working at the EuroSocialist atomic research center, CERN.

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Comment by ed in texas
2006-11-10 08:47:09

Next up, real estate sponsored lap dances !!

Comment by ed in texas
2006-11-10 08:47:44

Next up, builder sponsored lap dances !!

Comment by jonaskinny
2006-11-10 08:51:35

builders in NY had scantily clad women at a cocktail party in a new condo development they were pushing… was in one of Ben’s prior posts. I’m sure you could have worked out a hour or so in the unit of your choice.

Comment by P'cola Popper
2006-11-10 09:04:48

I’m still waiting for the Vegas HB’s to offer a free weekend at the Mustang Ranch!

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Comment by captain jack sparrow
2006-11-10 09:11:31

Now there is a great idea. That would be the best incentive I’ve heard of yet.

Comment by arizonadude
2006-11-10 09:29:31

Didn’t the ranch shut down some years ago?

Comment by Wickedheart
2006-11-10 10:19:13

“Didn’t the ranch shut down some years ago? ”

It sure was. Dude didn’t pay his taxes. The US Government actually ran the brothel for awhile.

Comment by Backstage
2006-11-10 10:26:50

It did, in 1999…..But you gotta use name recognition where you can.

The buyer thinks they’re in for a fun weekend. But they are unaware of the news. Presto! The limo drops him off at a deserted, rundown, tumbleweed strewn parking lot with no one else in sight.

Driver says, “I’ll be back on Sunday, enjoy.”

Buyer sits shivering by night and sweating during the day in the Nevada desert. His only cheer is that he has his house, and that will provde him with comfort during his retirement.

Meanwhile the builders have his signature, and are laughing themselves silly.

Kind of sums up the whole housing situation: If you buy now, the jokes on you.

Comment by jonaskinny
2006-11-10 08:53:22

NY condo developers had scantily clad women at a cocktail party while pushing sales. I’m sure you could have worked out an hour in the unit of your choice.

Comment by TG in Norfolk, VA
2006-11-10 15:36:09

LOL … There was a post on another housing blog several months ago about an upscale San Diego downtown condo that had a party for their target buyers, 30-something single yuppies … Guy who posted went to the party, and posted some amazing pics. While at the party, you could go visit a couple model units to take a look. From the model unit, you can view a “staged” unit across the way, fully furnished, with an attractive, skantily clad woman (apparently an actor) prancing around the unit trying to act natural, with curtains wide open. One of the lower units, also in full view of the windows for the model unit, had a bare chested male “resident” who looked like a model lounging around watching TV while displaying his washboard abs. I guess the message is … Look who your neighbors might be if you move here! And since you will have no money left to spend after paying your mortgage, you can entertain yourself by watching your hot neighbors parade around their condos half nude! Amazing the lengths to which they will go to hook you … but I guess when you’re trying to find suckers to buy a $750K condo in a rapidly declining market, you have to try everything.

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Comment by P\'cola Popper
2006-11-10 09:02:24

Yeah but before the limo ride they attended a barbecue. Throw a couple of ribs and a baked potato at me and I’m always good for $1.2 million. Wonder if Steven Raichlen cooked the barbecue?

“But after seeing the spacious lots in Ellicott City, and attending a barbecue at the property off Route 108, the couple signed a contract on a $1.2 million luxury home with four bedrooms, two-story great room and a big foyer.”

Comment by Davey Jones
2006-11-10 11:37:18

Very strange. These folks buy a house in Ellicott City and yet they tour a house in Potomac. Now if you are familar with the geography of the DC metro area, this simply does not make sense.

Ellicott City is just outside Baltimore. It is a very nice area or at least it use to be (been several years since I’ve been there). But Potomac is in NW Md outside DC. And Potomac is very, very nice and is one of the premier places in the entire DC area (most of it is anyway). Much more so than Ellicott City. Did these people buy in Ellicott City thinking they were getting something equivalent to Potomac? NOT GONNA HAPPEN.

Comment by Chrisusc
2006-11-10 13:03:58

LMAO Good thing I didn’t have food in my mouth…

Comment by txchick57
2006-11-10 08:42:47

an evening of hors d’oeuvres that featured a talk by an economist who said it was a good time to buy.”

Wonder if the cherry flavored Koolaid was served at this little get together?

Comment by SimpleSimon
2006-11-10 08:53:09

Nah, they probably had Alice B.Toklas brownies.

Comment by mrktMaven FL
2006-11-10 09:35:43

Although completely meaningless to readers of this blog, a kool-aid bottle brightly labeled ‘economist approved’ is irresistible for those needing to quench their extremely gullible thirst. The buyers are classic GFs.

On the other hand, you’ve got to give the guys at Toll credit for recognizing credibility sells. Mortgage originators used a similar tactic quoting Greenspan after his infamous ARM speech.

In addition, Toll’s tactic further demonstrates the effectiveness of personal selling and the ineffectiveness of poorly trained unresourced resale Realtors. How can they compete against highly funded builders with friggin limos, paid economists shills, scantily clad women, and BBQs? Heck, resale Realtors don’t even recognize the game is on!

Comment by Catherine
2006-11-10 08:44:56

Ok. I always want to buy stuff after some a ride in a limo and some hor d’ouveres…usually a house. But sometimes I’ll buy a diamond necklace, or some land in Dubai. If they’re really good hor d’ouveres, I’ll spring for a solid gold Hummer with granite dashboard.

Comment by CA Guy
2006-11-10 08:55:08

Catherine, I like your style. Thanks for starting my day off with a good laugh! Granite dashboard in a Hummer; you’re killing me.

Comment by Ben Jones
2006-11-10 09:01:14

And the NAR spent $40 million for ads when all they needed was olives and cheese.

Comment by WillB
2006-11-10 09:59:03

Some stretch Hummers currently come with granite floors and countertops. I don’t know if they have a solid gold model yet, but I bet you could special order it.

Comment by jonaskinny
2006-11-10 08:46:19

This sounds just like what people do right before joining Scientology.

Comment by moqui
2006-11-10 09:52:05

I did a job for them fruitloops once, when it came time to collect my money, I was told to sit in their waiting room while they “locate” the person with the check. (I look back now and I realize I was set up) I sat in a dark room surrounded by L. Ron Hubbard books with an E-Meter on the table. I asked what the machine was for (as they planned) and next thing I know they put the thumb pulse detector on me and began asking questions.
I ended up with the hardback book which they deducted from my final retention check later. (I had them mail the final payment)

Comment by jonaskinny
2006-11-10 10:18:15

they sometimes set up a tent (always a tip off when your hawking something under a tent) at the beach where i live… trying to get kids to sign up. i always yell at them that they should at least tell the kids that its a cult and explain the zombie alien backstory. man they must hate the internet.

Comment by Seattle Renter
2006-11-10 10:36:30

I think with the south park thing out it’s gonna be a tough sell to the youger generation.

“Mom!Dad!Tom Cruise won’t come out of the closet!!”

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Comment by AnonyRuss
2006-11-10 16:14:11

Here is a link to a post by a Phoenix realtor/Scientologist.

Comment by Anthony
2006-11-10 08:48:10

“‘They were offering pre-model pricing for Phase I of the neighborhood, so this was a chance to get in on the ground floor, and the possibility of using this house to be our nest egg for retirement,’ said Deb Sundberg.’”

Wonder if these fools were from California originally? Still goes to show there are still plenty of GFs out there…it is sad such ignorant people have so much money to throw around. It will be funny when they file for bankruptcy next year.

Comment by Nikki
2006-11-10 10:06:56

Did you notice the part about how they mention it as an investment and a nice nest egg for retirement? Do you think the Sunberg’s considered for one second that they home may not be valued at $1.2 million when they go to sell it? These people are taking on mountains of debt without considering the risk involved. A nice investment that yields a nest egg is usually bought below market value. There people are buying at what is still the top in our metro area. It will be funny when that $1.2 mil precon. price is $300K higher than what the finished product sells for a year or two from now. Howard County is full of $$$, but who the hell overpays for a new house when they’ve just redone their old one? I wonder if they’ll tack on 150% of the remodel bill onto the price of their old house so it’s way overpriced. It’s fun that I can find out when the time comes…

Comment by pismobear
2006-11-10 12:54:40

Just finished lunch with a friend of mine. He had sold a triplex for over $2.1 million in November ‘05 near the beach in Avila (N. of Pismo 5 miles). It’s just been listed for sale wih a 4% commish for $1.9 million with the comments of ‘Please bring offers, don’t be shy!! A $280k haircut in one year here on the Central Coast.

Comment by Betamax
2006-11-10 10:50:36

a chance to get in on the ground floor, and the possibility of using this house to be our nest egg for retirement

sounds like she’s quoting right from the sales brochure…these are the kind of morons who keep telemarketers in business.

Comment by ed in texas
2006-11-10 08:51:00

I can picture being these twits investment councellor; having to follow them around with a pickup loaded with 5 gallon buckets of cold water in case they see something shiny on the side of the road…

Comment by CA Guy
2006-11-10 08:58:33

Okay, enough already! The comments just keep me laughing the farther down I read in the thread. You guys are going to get me fired! What an image you have painted, ooohhh look something shiny! So true, it is almost not funny!

Comment by lefantome
2006-11-10 12:24:35

This is not a LOL line, it’s a sit at your desk with tears running down your face! I guess different things strike people funny ….. I vote ed, comedy writer of the day.

Comment by zeropointzero
2006-11-10 08:51:16

Someone has to find out the name and credentials of this “ecomomist” - I am guessing he is either an analyst for the Maryland or local realtors assn. or an econ teaching assistant at Montgomery-Rockville Community College (the Harvard of Columbia Pike, you know).

Did he tell the folks it’s a “great time to buy OR sell” as the braintrust at NAR assures us? Or just “buy”?

Comment by Chad
2006-11-10 09:32:23

I think his last name was Overstreet.

Was he former head of the NAR????

What a jerk.

Comment by Housing Wizard
2006-11-10 09:33:39

After remodeling their old home this couple buys the palace . But they didn’t sell the old home first ,so what do you want to bet they will have two mortgages . Guess they will need to have a bar-b-que and a limo ride for the buyer of their current house .
After a remodel it usually causes a divorce not buying a 1.2 mil. home . ha ha ha he he he ..I keep picturing that limo ride …hehe

Comment by AZ_BubblePopper
2006-11-10 09:49:36

2 mortgages AND a bridge loan. Check the overhead and carrying costs of a bridge loan. These chumps set the trap and jumped into it themselves as they chase the market down with all that leverage working against them overtime and the financing costs eating them alive every day.

These are the FBs we’ll be reading about ad nausium in 2007 as they try and hang on by their fingernails and finally loose their grip - slipping into insovency.

Comment by AZ_BubblePopper
2006-11-10 09:51:48

nice if i could spell. nauseum.

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Comment by 45north
2006-11-10 10:49:33

2 mortgages and a bridge loan

too bad you’re right!

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Comment by Market Participant
2006-11-10 22:22:37

As much as these people are FB in process. All they did so far is a sign a pre-con contract. They are out of the deposit money at this point, and still have a chance to walk away.

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Comment by AZ_BubblePopper
2006-11-10 08:51:20

‘There’s a bursting of the agent bubble,’ says Duncan, who is glad to see the competition stiffen. Having real estate agents ‘who do the job as a hobby,’ says Duncan, ‘detracts from the professionalism.’”

Don’t these Realtors have professional credentials including formal grueling 1-Day Ethics Training Certifications? What could be a more convincing sign of professionalism than ethics certification?

How about the RE examinations themselves. These credentials alone should convince Realtors and their client of their value to society.

Comment by RenoNVGuy
2006-11-10 08:52:50

A limo ride, and horse divers! I guess this is the start of something new. Everyone has to be a “Big Shot”.

Comment by builderboy
2006-11-10 08:57:48

Friend of mine in Novi, Michigan told me last night that building permits for last year in this community were in the 400 range for the year.

Building permits for this year…… 20 pulled.

For those of us worried about the gov’ment throwing a bone to help out these FB…. Just remember how they are helping the Katrina Homeowners.
There is nothing to worry about.

Comment by Conrad
2006-11-10 09:08:30

Good point!

Comment by Steve
2006-11-10 09:16:08

The gov’ment bailout will be for the lenders, not the homeowners…

Comment by flatffplan
2006-11-10 09:22:23

110 billion for 120,000 people
that’s pretty genrous of us- the taxpayers

Comment by implosion
2006-11-10 13:16:13

That comes out to $916k per person.

Comment by Brian in Norfolk
2006-11-10 09:18:49

“The full effect of the downturn in home-building won’t be felt until next year, which would coincide with the closure of the Ford truck plant, said Vinod Agarwal, chairman of ODU’s economics department.”

Another moron economist, completely out of touch with the events around him, even though ODU is only 6 or 7 miles from the real bomb waiting to go off. His statement should say:

“The full effect of the downturn in home-building won’t be felt until 2008, or perhaps 2009, which would coincide with the reassignment of a Navy carrier group and its associated 9,000 or 10,000 jobs to another US port.”

Granted, I am personally inclined to believe that things may well drag out to 2011 or longer, but the reassignment of the carrier group will be the event that really smacks some people upside the head.

Comment by RJ
2006-11-10 09:28:08

Did he tell the folks it’s a “great time to buy OR sell” as the braintrust at NAR assures us? Or just “buy”?

“Buy” some potato chips, I’m hungry. “Sell” some Toll Brothers stock.

Comment by Housing Wizard
2006-11-10 09:37:47

Limo rides for everyone !

Comment by JKB
2006-11-10 09:40:36

Now that was some good bbq! I’ve had bbq that caused me to spend $50 on ribs to take home but $1.2 mil on a house? And the bbq place isn’t even located near the house.

Who new a large foyer was in such demand. I’ve always considered it wasted space.

Comment by vioviv
2006-11-10 09:41:22

A few weeks ago I checked out an open house in our area mainly because it advertised landscaping designed by Gregory Ain. The house was a cool 40s moderne and the gardens were indeed spectacular, and it had exactly the bedroom/bathroom count and square footage/lot size we are looking for. And technically in our price range. But the house was perched on an extreme hillside, and the driveway was separated from the front door by approximately 85 steps. Yes, I said 85. I mean, that’s like climbing a 5-story building (carrying groceries). The top floor of the house was easily a few hundred feet sheer drop to the street, so not suitable for kids or people suffering from vertigo.

There was a funicular (you know, like a lift for wheelchairs) next to the steps, but it was rusted out and inoperable. Also tiny - it would hold max two adults or one person and maybe 4 bags of groceries.

I’m the only one at the open house, the only one signed in. The very nice realtor follows me around like a curious poodle. “What do you think of the view?” There’s a 50-mile view over 280 degrees, but unfortunately the main feature of the view is a busy freeway interchange (the 5 and 2 fwy for any Angelenos who bothered to read this far). The freeway noise is muted but inescapable. “Well, you can soundproof pretty easily,” says the realtor when I mention the persistant buzz. “I think the sellers would be open to a credit for that.”

“What’s the story on that funicular,” I ask.

“It’ll be completely rebuilt at close of escrow,” she says. I mention, helpfully, that they should get it fixed now, so prospective buyers can get a sense of how it works.

“What about that gigantic pool table in the dining room,” I mention. The pool table looks like it’s been there since the house was built. It’s pretty obvious - there isn’t a moving company on the planet that would haul that thing down those steps.

“We’ll have it dismantled and moved out by close of escrow,” she says. I envision the seller wielding a chainsaw, which is the only way that thing is getting “dismantled.”

I also mention the kitchen. Hasn’t been renovated EVER. Once again, I envision contractors turning the job down because of the location. “Well,” says the realtor, “we could probably negotiate a redecorating allowance in escrow.”

I mention the issue of moving in. I had a friend once who had an 8th floor loft and the elevator broke, and he couldn’t get a single moving company to agree to move him, even at triple the price, so he had to abandon his furniture.

She says, “The seller would consider a credit on additional moving costs.”

So, so far, the seller will “consider” credits for moving costs, pool table demolition, kitchen renovation, and soundproofing, and will fix the funicular (which looks expensive - probably $5000-$10,000).

So here’s the punchline: when I ask if the asking price is firm, the realtor looks at me sternly and says “This is already a steal. The price is firm.”

The price was $1.2 million in a neighborhood of $500K-$600K houses (that’s bubble prices, FYI. 5 years ago, this is a $300K house tops).

A week later, this “steal” was reduced $100K to $1,099,000. I figure they have another $400K in reductions before anyone would ever contemplate buying this house (which my wife refers to as “Oh, that Mt. Everest house?”)

That was 2 months ago. Still on the market. I’ll never buy this house because we have kids and I don’t want them to die falling out of a window, but I’m watching carefully to see just how delusional these people really are. I’m serious: about 5 years ago, someone started adding crack to the LA water supply, and this listing is proof positive.

It’s MLS 06-129023 for anyone who wants to check it out online.

Comment by P'cola Popper
2006-11-10 09:51:15

Great story! Thanks.

Comment by jonaskinny
2006-11-10 10:25:46

jeez thats really funny.

Comment by skip
2006-11-10 10:42:42

Too funny!!

Comment by mrincomestream
2006-11-10 10:48:43

What’s even funnier is that the agent promising all the credits wasn’t even the listing agent and probably has no clue as to what the seller will or will not do. The things rookies say.

Comment by vioviv
2006-11-10 11:00:31

You’re exactly right about that, even though I wasn’t explicit on that point. The listing agent is a man, and she was a younger “apprentice” type of agent. I would bet that if I had complained about the ceiling height she would have said, “Well, the seller might consider a ceiling heightening credit.”

Comment by finnman
2006-11-10 11:17:48

it’s actually kind of a cool house with some potential. That stair climb would be a bitch however. Good example of how not to paint the rooms all different colors.

Comment by vioviv
2006-11-10 14:04:15

The house and yard are pretty sweet. Definitely a cool pad. The freeway noise alone would be reason for me not to buy it (because where there’s freeway noise there’s freeway pollution). But you add the five stories of steps, and it just becomes an impossible place to live. And, as this listing is currently proving, you’d have a very hard time selling it if you needed to.

Comment by phillygal
2006-11-10 13:18:06

“but I’m watching carefully to see just how delusional these people really are. I’m serious: about 5 years ago, someone started adding crack to the LA water supply, and this listing is proof positive”.
Your open house story rings true for my area also. I went to an open house that was an absolute insult to the prospective buyer. Sellers talk about being insulted by getting lowball offers? I was really offended by having to walk through a house that was about 35% overpriced, given its condition. It looked like no attempt was made to even clean it up. The one bedroom looked like the dorm room from hell. The door leading to the basement had a little hole cut in the bottom, for, let’s see I wonder what it could be…? (proceed down stairs to basement).
Oh I get it, the hole in bottom of door was so that pet guinea pig could have access to the basement, where evidently it used the carpet as its litter box. Yes, guinea pig poo stains all over the rug.
I went back upstairs, and diplomatically as possible, said to RE agent: This house needs a lot of work.
Her reply, “Yes, but you definitely will get the money back after you fixed it up…”
Me: I don’t know if you can use the word “definitely”…
she started to contradict me, but then another looker came in and I got out of there quickly.
That house was just taken off the market so it can be relisted in time guessed it: The Spring Bounce of 2007.
Note to (clueless) selling homeowner…
Four other townhomes in this development, in much better condition, have also de-listed in time for the much hoped for Spring Bounce. Your guinea pig palace was listed for $195K when I visited…you will be lucky, and I mean c*** in your pants lucky, if you get $130K for it.

LA is not the only place with crack-laced water.

Comment by vioviv
2006-11-10 13:55:27

I looked at house last summer that had a hole cut into the basement as well. With a locked hatch however. On the wall were two steel rings bolted into the wall and a very grimy mattress. I mean, it looked like a scene out of SILENCE OF THE LAMBS. The realtor saw the look on my face, and she just shrugged and said, “Well, the sellers are a bit strange.”

Comment by Housing Wizard
2006-11-10 15:38:35

phillygal and vioviv …So funny , thanks for the laughs .

(Comments wont nest below this level)
Comment by crispy&cole
2006-11-10 10:21:45


New-home sales will probably fall 8.7% next year to 975,000 after plunging about 17% this year, the realtors said.
Existing-home sales will probably fall 0.6% to 6.43 million next year after sinking 8.6% this year, he said, adding that sellers are becoming more realistic.
“We now have the most favorable market for home buyers in several years,” Lereah said

Comment by crispy&cole
2006-11-10 10:23:04

So what about all the buyers you told last year - “its a great time to buy” or “buy now or be priced out forever” or…..

So they are basically screwed and now UNDERWATER!! Nice job NAR!

Comment by Backstage
2006-11-10 10:54:18

And the best is yet to come

Comment by VaBeyatch
2006-11-10 11:10:02

Here in VaPilot land (Southeastern Virginia), I managed to get on a local AM radio station call in 1 hour advertisement for a local realtor. This isn’t the first time. They were pushing some crap condos very hard. It was fun. Caller #1 had moved up to what sounded like a really nice place, but they couldn’t afford the upkeep on the 100 year old house on their $80k income. Realtor appeared to be salaviating at the mouth. Then I landed on there. First line was about the inventory being up 290% since 1 year ago, could he verify. They walked around it, they really spin it hard. Said stats can be manipulated. I replied that I plan to wait 2 years or so to buy a place, cause prices are too high. They reply that they can set me up with a 2 bedroom 1 bath condo, 1 year with no mortgage payments at all. I reply that I already rent an apartment, and don’t want to buy one…. I have no interest in the condo. I also managed to slip in there that a few years ago I could easily afford a nice house, but now I can’t. The host had to explain the comment to the realtor/mortgage people. I figure the comments help give uncertainty to listeners, and help make them question. On Va Pilot’s comments, yesterday I got accused of being a crybaby and making pointless comments when I said housing is likely to decrease 40% in price in our region. The person also said that my baseless comments could bring down the market. I was shocked, they get it. So now I’m going to whip them with facts.

Comment by VaBeyatch
2006-11-10 11:26:41

Oh yea, I forgot the closing comments from the huckster where his recommendation was me buying a condo from him, living there 9 months rent free, then reselling it for profit to roll into a house. I didn’t get in the “What about the 6% realtor transaction costs.”

Comment by graspeer
2006-11-10 11:39:33

“The person also said that my baseless comments could bring down the market.”

It could. Just like when the kid said that the Emperor had no clothes destroyed the entire invisible clothes market.

Comment by goirishgohoosiers
2006-11-10 12:00:07

MIL has lived in VABch since ‘93 and we go down there at least 1X per year to visit. The development that has taken place near her (Lynnhaven/Shore Drive) is astounding. At first I thought that there were a lot of retirees/golden parachute types moving there from NY to escape the high taxes, but the entire state would have to move there at once in order to fill up all of those condos.

The funniest part is that the construction on those things is for sh*t. MIL’s complex was only ~10 yrs old and they had to replace all the exterior proches (wood had rotted), the roof (too many shingles blew off during the last two hurricane near misses) and the dry-vit (Visqueen?) on the outside had cracked or somesuch. All in just 10 years.

But hey, I hear it every time I go there from residents, the paper, on TV: everyone wants to live here.

BTW, VA Beach must have more 7-11s and Waffle Houses per capita than anyplace else in the country. No one can explain why.

Comment by graspeer
2006-11-10 12:41:21

“The development that has taken place near her (Lynnhaven/Shore Drive) is astounding. “

They have also gone on to Ocean View Avenue in Norfolk where because they have height limits built a lot of three and four story 4 and 5 bed houses. A lot of these are now up for sale or rent but I don’t see a lot of people who need 4 and 5 bedrooms in the area who have the money that they are asking. They might be able to rent them out for the summer at their asking prices but during the winter there is no way.

Comment by UtterDisaster
2006-11-10 13:29:33

Yeah and the sad thing is they’re going to put up even MORE condos there now that the Duck Inn is gone. The Lesner Bridge area used to be so beautiful, what a shame.

Comment by stcamp
2006-11-10 17:21:16

No, Williamsburg, VA has more Waffle House and pancake resturants.

No. VA.

from the Washington Post

Greenvest is one of several developers poised to build homes in Dulles South. The developer hopes to put up roughly 15,000 homes in four planned communities with parks, schools, trails and major road improvements. Greenvest has crafted a far-reaching 4,200-acre master plan that calls for a mix of housing that would include thousands of “workforce” residences — condominiums and townhouses designed for affordability.

Greenvest also has proposed spending about $200 million in road improvements to alleviate traffic generated by the homes. One of the most significant pieces of that plan is a four-lane parkway — Route 659 — to run north and south between Route 50 and the campus.

It is already gridlock now

Comment by Tom
2006-11-10 22:20:41

what happened to goboilers? GO BOILERS!!! :) Sorry, way OT.

Comment by packman
2006-11-10 13:03:27

DC MRIS stats out now for October - Median resale for Washington DC is down 11.76%! Down 4.7% for Northern VA (Fairfax Arlington etc.). Down 10.84% for Loudoun County.


IMO we have official confirmation of NO SOFT LANDING, at least in the DC area. How hard it will end up being remains to be seen, but we’re already beyond soft.

Comment by packman
2006-11-10 13:08:32

As a side note, I expect that DC-area / NoVa prices will fall harder than everyone thought, with the changing of the guard in congress, since a large portion of the recent increases have been due to greatly increased military and security spending in the area.

Sad for me, since I own a home there. Oh well. No plans (or need) to sell anytime soon at least.

Comment by Taxpayers
2017-08-31 10:14:37

Still perky in my hood 22151
Buyers don’t appear to be man holders

Comment by mugsy
2006-11-10 16:39:14

So happy that I left NoVa without buying some over priced TH or condo at Reston Center. I’da been bankrupt at this point.

Comment by Rally
2006-11-10 15:00:48

“But after seeing the spacious lots in Ellicott City, and attending a barbecue at the property off Route 108, the couple signed a contract on a $1.2 million luxury home with four bedrooms, two-story great room and a big foyer.”

We haven’t run out of greater fools yet. Not even close. This thing is going to take a long time to bottom out. Some people say 2008-2010. Might be more like 2025.

Comment by M.B.A.
2006-11-10 15:01:54

Having real estate agents ‘who do the job as a hobby,’ says Duncan, ‘detracts from the professionalism.’”

LOL, thanks, I needed that today!!!! :)

Comment by Taxpayers
2017-08-31 10:12:02

To generate interest in its homes, Toll Bros. has held weekend- long events in which it features special offers, such as making specific options available for $1.

I thought Till raised prices every Monday

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