Post Local Housing Market Observations Here!
What do you see in your housing market this weekend? Have a graph to share? Slower market? “In a climate of nervous buyers and frustrated sellers, the average Baltimore-area home sales fell by more than 22 percent. It was the weakest October since 2000.”
“‘This has everything to do with buyer psychology,’ said Anirban Basu, an economist in Baltimore. ‘They’re nervous about buying at the peak of the market.’”
Developer problems? “In what appears the biggest Madison real estate scandal in years, a prominent development firm has collapsed amid a market downturn - leaving a trail of creditors, tax bills and disgruntled investors from Green Bay to Dallas.”
“Interviews and a review of public records have put PRDC’s debts at more than $20 million. That includes some $11 million owed to two lenders that helped finance Richmond Terrace, an upscale condominium project in downtown Appleton. ‘The whole house of cards has crumbled,’ said one attorney familiar with the case.”
“British Columbia is experiencing the slowly approaching end to its real estate market cycle due to astronomically high prices in the most expensive regions, Credit Union Central B.C. reported Friday. Economist HelmutPastrick said that this cycle shift is unique. ‘There hasn’t been a phase like this,’ he added, ‘in the sense that the market adjustment is price-driven, affordability driven.’”
From Alabama. “The Birmingham/Hoover metro area had a total of 878 properties in some stage of foreclosure in the third quarter, an increase of more than 70 percent from the second quarter of this year.”
“San Antonio had 3,788 foreclosed homes during the third quarter 2006. That equates to one foreclosure per every 145 households or 2.5 times above the national average.”
Housing market in NY metro area is coming down in an orderly fashion. The type of environment we have in land-constrained urban areas such as NY/SF/DC/Boston, is conducive for a soft-landing, although conditions can change quite quickly should our nation’s lenders decide that their dollar investments are no longer a good bet.
It’s all about the jobs, jobs, jobs. The job market isn’t strong, but it isn’t weak right now. The forced sales will come once employment conditions change meaningfully.
Boston?? Are you sure about that? You might want to review the stories here on that area. As for DC the condo market is imploding as we type!
HedgeFund-Anal-yst is making so much money these days that he only has a few precious seconds each week to shower his wisdom on this blog. And no time (or need) to review any of the posts…
Ah yes, hedgefunds — today’s path to the promised land.
Just ask San Diego County, who lost a hundred million dollar bet on Amaranth, who well those are working out.
NY - from this mornings post:
“Along with decreasing prices, the housing inventory has increased, the data showed. It would take 12.4 months to sell the existing housing supply in Suffolk County last month. In Nassau, that figure was 10.6 months, and in Queens, it was 11.5 months.”
“Bethany Marten, a buyers agency in Baldwin, views the readjustment as a needed correction. ‘It’s no longer ‘My house is an endless source of cash for me, and every year I can expect my home to go up 10 to 20 percent.’We had a great party, and the party’s over.’”
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???? Lots of inventory means prices only go up.
SF-
Having worked in that city in the early 90’s the “lack of new land” didn’t prevent prices from dropping back then.
Anyone catch ‘ Cashin in ‘ on FOX? Wayne, Jonathan and all the guest were totally Bearish. Wayne has been basically honest ,but even Jonathan was relenting ,and all agreed that we won’t talk bottom until 2008. They said if Greenspan said this was the bottom, we had a long way to go!
“Anyone catch ‘ Cashin in ‘ on FOX?”
I did not see that, but happened to watch Nightline last night. They had a small segment on the slowing housing market and it’s declining prices, and increased incentives. It was a very limited piece which did not shed much light on the fundamental problems with the market as a whole, but they did ask the question “Why not just lower the price instead of offer incentives?” They featured the “cupcake lady” and apparently, she finally sold the house at a $100k discount. One thing that grabbed my attention was a featured property in Pacific Palisades near LA which started at around $2.4 million and had been dropped by $500k since. And that price is still more than the market will bear. It made me wonder… If a house in a highly desirable area in SoCal is having a hard time selling at a little less than $2 mil, who in the hell is going to buy the countless $1 mil + homes in Reno, NV?! It just blows my mind.
Is Jonathan, Jonathan Hoenig? If that’s the case, he was on local radio here in Chicago a few weeks ago putting up the police tape around the housing market saying, “Nothing to see here, please disperse. Everything’s fine.”
If he’s bearish now then he’s done an extreme about face.
Any comment?
http://www.dealbreaker.com/2006/11/eg_men_will_screw_anything_wit_1.php
txchick57, I think if they show the profit numbers no one would care one wit…It’s the bottom line ,and sure there would be a non ending line even if Alkaidah ran a profitable fund….not that I’m comparing the 2 mind you.
The older I get the more I beleive that maybe true.
I agree with the headline. But who in this day and age gives a $h!t about long term investment. We want our money right now!
txchick posts “Any comment? ”
Well, I do beleive some guys would screw a snake if they could get someone to hold it.
Friends stayed with us last weekend. She’s a real-litter in Bergen Co. Explained why “it’s different in NYC metro” (jobs, limited land, the usual). But her interesting observation was about FLA. Said that south Florida developers were offering 4% commissions to NY realtors simply for referring business to them - no need to formally be the buyer’s agent, or fly down there to do any work or anything. Just call the developer and say “I’ve got this New Yorker who’s interested in your property” and if a deal closes she gets 4%. She says a couple of agents in her firm have actually gotten paid doing deals like this.
Okay, I hear these types of comments all the time. And they just kill me. With all due respect, hedgefundanalyst, your comments are stupid. There is no other way to put it. Whatever horizontal limitations cities like New York might have they make up for it in the vertical realm. They are putting up condo skyscrapers all over the city. They are converting business skyscrapers to residential, either rental or condo. Please quit using the, “we’re running out of land” argument. It makes me want to punch something and it makes you look really dumb.
Please quit using the, “we’re running out of land” argument
_________________________________________________
Ask the Japanese about that!
With all due respect, hedgfundanalyst is just plain stupid. For someone who claims to be an analyst, his posts should contain a lot more analysis and a lot less bluster.
Well put.
There may be an “infinite” amount of vertical space somewhere like Manhattan or the five borroughs, but once you move out just a little bit into to the suburbs (e.g., north of White Plains or eastern Nassau county), people won’t put up with anything more than 2-3 stories.
“The housing market in NY metro area is coming down in an orderly fashion.” OF COURSE IT IS!
There are orderly declines at the end of every bubble. It always works that way. Always.
At some point, if history is any guide, panic will set in. And then all bets are off.
“Orderly declines” should not comfort anyone after what we’ve been through on the upside.
Employment will be changing meaningfully soon. I’m getting more and more of the “You got any work?” type of calls.
HedgeDude — You working for the NAR nowadays?
No soft landing in Phoenix. Funny a co-worker is planning to buy a super house in Ahwatukee for 700K BEFORE selling his exsisting home. reasoning being buy the biggest thing you can and all will work out after years of inflation. I wonder……..?
That dude has rehab in his future.
Ha! HFA snagged a couple more. He’s a troll. He just makes one post and moves on. He does’nt care what anybody else thinks. Ignore the troll. Don’t waste your time. He’s probably LHAO!
8+ months supply in Northern Virginia
33% drop in sales volume YOY
http://www.nvar.com/market/pressrelease/prgnvoct06.html
In my zip code in Fauquier County, there are 217 properties on the market. How many sold in October? 6.
http://www.mris.com/reports/stats/
That’s a nice round 3 years worth supply.
Casey Serin traffic curves. His site traffic has probably peaked out.
http://www.realmeme.com/roller/page/realmeme?entry=the_shape_of_memes_to
You can tell that his site is circling the drain, along with his life. He definitely thought he could either raise money through the site or find someone that would bail him out. Instead he got used by everyone he encountered. How funny is that?
Now the only people posting on there are as sad as he is.
Have you seen his latest videos (1, 2, &3)? He looks so beaten down and tired.
He’s got so many bad things happening to him, his head is spinning, imo.
I have tried to help him. Denial dies hard.
~Misstrial (Ben, I’m not going to copyright my posts here.
The best thing anyone could do to “help” him is to let him crash and burn. Then he’ll either figure out how to do things right or end up where I suspect he will - on skid row somewhere.
Could possibly wind up that way. He’s a young guy with a scary amount of optimism. Its like he’s a teenager who gets involved in playing ‘chicken” thinking that a crash will not happen to him because, after all, he’s *different* *invincible* whatever.
~Misstrial
“Scary amount of optimism” - lol
I think he mentioned something about working some of that”rich dad” magic recently. Maybe he meant working for his “sugar daddy.” That could be his ticket as he is not that far from the Castro you know…
Bubba would like to be cassy’s daddy.
Bubba will treat him real nice
Nice big cell for Bubba and Cassy to share.
Bubba like the pictures he’s seen of cassy.
Guards say “I bet we’ll hear Cassy’s noises down the hall, won’t we Bubba.”
Oh… that make Bubba smile. Come Cassy, Bubba take good care of you.
Bubba make you do all the right noises.
Don’t worry.
Bubba won’t flip you like last flipper. Why did guard’s say that? When bubba try it… Roomate go squish. Bubba learn. See?
Bubba want you for roomate long time Cassey.
Not to be taken seriously.
The bubble is not license to drop math and have fun with fantasy. That is what powered the bubble to begin with. From a math point of view this guy is young enough to crash and burn and recover, and hopefully move on to something better.
As far as the Rich Dad stuff goes, he probably got some insight into a totally different world based on a thing called “cash flow” which he obviously still does not understand.
Implying anything about him whoring himself out is being as tastless and awful as he is. Shame on you. In any case, the drowned rat look and pathetic simpering child routine have zero desirability so there is no way for him to take that route without a total make over. More likely that he will eventually, grudgingly, come to understand this “cash flow” thing as it relates to some thoroughly unremarkable form of business.
Oh relax and step off of your high horse Mole Man. This punk dug his own grave. I don’t envy him, but certainly don’t pity him. I feel for the countless families and children who lost their chance at reasonably priced housing because of lying, cheating, greedheads like him. While my joke might have been tasteless, I make no apologies. And no, a tasteless joke does not make me as “awful” as he is. I suppose stand up comedians are the dregs of society in your little world.
Westside of Los Angeles: Transaction volume has dropped, prices have remained stable.
Townhomes that we considered in 2001 as overpriced at $650K are now lingering on the market at $1.1M. Reductions have been miniscule — on the order of $10K to $50K — if any.
We’ve been renting for nearly 6 years now — wondering when the hell sanity was going to return. As much as I know the market is insane, it has been very difficult to see prices rise year-on-year like they did for most of the past 5 years.
It appears that the market is now slowing. I guess we now wait for Spring?
Ditto and renting for the past 16 years.
I have been bearish for the past 2 years but to be a renter like you for the past 16 years is truly like taking your belief as renter to the altar. If you can afford it, buy yourself a place in the next few years.
What’s that saying again? The market can stay irrational longer than you can stay solven?
Yeah — pretty funny.
The damn thing about all the financial engineering these days is that speculation in all asset classes is ridiculous.
Cheap financing is available to anyone with a heartbeat — whether you need $600K as a no-doc, neg-arm loan or whether you need $600M to speculate on Brazilian bonds or whether you need $6B to finance a LBO.
It sure appears that the further we get along in a liquidity driven environment, the more logical prices appear.
The $64K question is when and how does this liquidity tsunami recede?
“The damn thing about all the financial engineering these days is that speculation in all asset classes is ridiculous.”
True. But dollar cost averaging into them is usually the smart thing. It would be foolish to assume that no asset will increase in value anymore after this RE debacle reaches bottom. History shows that cycles will continue. That’s where dollar cost averaging reigns superior.
“Cheap financing is available to anyone with a heartbeat — whether you need $600K as a no-doc, neg-arm loan or whether you need $600M to speculate on Brazilian bonds or whether you need $6B to finance a LBO.”
And now you have the appearance of PIK (payment in kind) bonds from HCA to finance their LBO. The equivalent of neg am mortgages. Randall Forsyth in Barron’s says this reminds him of 1989 just before the junk market tanked.
I’m guessing it will take about a year for West L.A. to start really declining; maybe when more of those ARM’s start resetting next year.
Gawd I hope it’ll happen in a year… The “psychology” here is “prices will drop a ‘little’, then back to ‘normal’ appreciation next year or so.” WTF is wrong w/ people here?!?! A house down the street from me listed for 1.65 mil just went into escrow. maybe 1800 sq ft on a 6500 k lot. in f’ing sane! We need a nice quake or riot or something to knock some sense into people. Why is anyone buying at these prices? Anyone know? I sure don’t….
we might have another riot have you seen the latest LAPD beating video? I think the guy had it comming but they broke his nose real good.We are way overdue for another shaker,i was 1/4 mile of the epicenter of the northrige quake on the bottom floor of a 6 story apt building.Total red tag and my walls were bowing in the middle threw me 3 feet in the air.Scared the hily sh?t outa me.
Yeah, I was here for both those events too, and honestly, I don’t wish for either to reoccur. I just feel like people have lost their minds. Somethings gotta reestablish sanity. Or not…
As sure as the sun comes up tomorrow, racial unrest and earthquakes are guaranteed for So Cal.
Observing it doesn’t mean I applaud it.
I applaud it and encourage it. This corrupt collectivist society will go down in flames, eventually. I hope to be around long enough to see and enjoy it.
Mark,
You should probably qualify that and say you hope to be around long enough to enjoy it…at a distance! The riots kept me away from LA for ten years. They sure gave me a sour image of LA. Same with the O.J. verdict. Just as bad as the riots, and shows that California has politicized its justice system - which means there is no justice in that left wing state.
“we might have another riot have you seen the latest LAPD beating video? I think the guy had it comming but they broke his nose real good.We are way overdue”
I was thinking the same thing: AN LAPD beating caught on video, and instantly broadcast by the MSM all over the US/world. The only thing this irresponsible MSM broacasting of an inflammatory ‘police beating’ video does is stir up resentment and create tensions in the large LA Minority community,most of whom don’t draw the fine line between a necessary rough arrest of a crazed suspect violently resisting arrest, and what they(the minorities) perceive as racist white cops beating on a ‘poor minority victim’.
This is why LA residents can expect a major riot to occur at any time, because this city iS so PC’ed and idiotic when it comes to backing up the LAPD and law-abiding citizens as against the lawless gang elements which roam the city almost at will.
I always suspect it’s some realtor’s buddy bailing him or each other out. I don’t buy the “Sold!” signs for a minute.
Comment by chiphxla
You got it right about WLA. The funny money loans are the “wildcard” this time around, But for real hurt, yea one year.
yesterday I visited new housing development in Las Vegas area, was suprised to see they have not sold eve one house since last time I visited about 2-3 months ago. these houses are in 550,000-650,000 range. price could be a reason!
Seattle had a bit of a jump in price last month, even though inventory is still high and asking prices are still going up. I have not seen many if any at all sold signs on SFH, but townhomes and condos seem to be selling.
There are 4 flips in a mile radius of me all of which are empty, 2 are reducing 1 is sitting at more than 50 days now and the last just pulled off the market without selling. Plus many more just sitting for 40+ days, there is still talk of the spring recovery and steady but small appreciation. We were late to the party and will be the last to leave, the signs are all there for a bust.
Asking prices are not still going up. They are coming down. I am seeing more and more homes on the outskirts (Bothel, Lake Forest Park, etc.) coming on the market for low $300’s which of course is too high, but it is a start. It is going to take some time, but within a year, it is going to be ugly here too. The slight jump in median price is most definitely due to high priced homes skewing it. The market is practically devoid of first timers and middle income earners. This is unsustainable.
In my neighborhood Bothell/Kirkland 3/1 SFH ramblers are priced btween $360k and $400k most on the higher end. The last one sold went for $345k. During the summer were no more than $350k for asking. These are not selling of course but people are still asking more than even a few months ago. My neighbors bought in about May for the same type home in the same neighborhood for $320k.
Ditto Vancouver BC, 3 hours up the road. Both Vcr and Seattle are about 6 months behind the curve and will be among the last to fall. This will be painful for Vcr, as it is really, really, different.
British Columbia is experiencing the slowly approaching end to its real estate market cycle
Yeah slowing approaching up the I-5. The smart money has already gotten out, the barely sentient money is getting out now, and the dumb money is still in, or even worse getting in, and will be taken to the cleaners next year.
In my area (Eastside), under $500k are still moving. Over $500k things are sitting. You see some extreme differences at that price level for what you get for your money. Take a look at the following two lastings, within 1 mile from each other, in the same neighborhood.
House1: http://tinyurl.com/y7noj6 26126344 ($630k, 3200 sq ft, built in 2004)
House 2: http://tinyurl.com/y7ysdu MLS ID:26168400 ($530k, 2100 sq ft, built in 1990)
There’s a couple of other comparable pearls like that out there. Hint to sellers: If even the least overpriced homes in your area don’t sell, you may as well take your own overpriced home off the market, or considering l.o.w.e.r.i.n.g the price.
lowering the price I don’t understand is that english?
http://www.ocregister.com/ocregister/money/housing/article_1346962.php
Oh, this is funny
http://www.youtube.com/watch?v=lPnA1cnewLA&NR
that man should be subjected to waterboarding
With a toaster thrown in for good measure.
Sort of like Goldfinger.
thanks chick…funny stuff
Inventory in Allegheny County (Pittsburgh) is now at 8.8 months v. 8.2 the previous month.
A question I put to the collective wisdom of this board: When calculating months of inventory, is it fair to use the absolute closed sales in a given month (divided into total inventory)? On the one hand, October sales (for example) would be normally slow (vs. sales in June), suggesting that maybe the sales should be somehow seasonally adjusted. On the other hand, would it be fair to say that no seasonal adjustment is warranted, since seasonality is already reflected in the total inventory (which, for example, would be expected to be lower in October vs. June)?
Any thoughts?
Doesn’t matter in Pittsburgh. By all accounts, it’s got nowhere to go but up.
Here in southern New Mexico, sellers and realtors are just hanging on and are in denial. They are so used to Californians coming here and paying asking prices for residential properties. I live in the 88007 zip code and prices are NOT coming down! Instead, a few sellers are attempting to rent out but with not any success. Others are just refusing to lower their prices. Meanwhile, builders are still building custom homes in my neighborhood.
A NY flipper who bought 3 doors down has been unable to sell her investment. Sign has been up for about 1 month. A number of potentials have been by to view the property, but no takers. I guess its because she’s asking 100k more than what she bought it for. :/
Down the street and across the way, streets are loaded with For Sale signs. These homes are in the 300k to 700k range. (In CA, these would be 700k to 3M homes - but wait, you get what you pay for.)
Whatever you do, DO NOT buy here! Or in Albuquerque! There are NO storm drains (except around the court bldgs and even these flooded with recent rains) and the streets turn to *rivers* when it rains. No sand bags are set out for homeowners either. If you buy here you are gambling with flooding. Really, really bad government here in NM, imo. Whatever you have heard about Bill Richardson, forget it. Its all bogus. Our auto insurance INCREASED after moving here because so many drivers are not insured or are DUI (they call it DWI here - “driving while intoxicated”) The police cars have peeling paint, are dirty, and look like they have 1M miles on them.
The homes here should not go for more than 100k. You will need the extra money to pay for A/C in the summertime and to repair water damage when it rains (July & Aug).
~Misstrial
Where are you? Silver City?
LC. txchick57, I was in El Paso 2 days ago. If I need to go to the mall, I go to Cielo Vista or Sunland Park. Much better roads in TX. It’s like returning to civilization. (Sunland Park had terrible flooding this summer tho.)
~Misstrial
Las Cruces. Geesus, what makes people think that 300-700K houses are sellable there? I like New Mexico but that’s mindboggling.
Mistrail,
I’ve been tracking the Las Cruces market since the first of the year because it’s an area I’m considering……love the mountains and desert.
EVERYTHING decent I’ve been getting via realtor email is from $480k-$614k…..1800-2700 sq ft on 1-2 acre lots. Almost all are new construction but I’ve yet to see ONE sell! WTF is going on with that market. I’m about to write it off as nothing seems to be moving the needle in the direction I want.
Thanks for any insight
For that kind of money, you might as well expand your search to all of NM. That’s crazy talk for Las Cruces - too funny. For that kind of cash, you might look at buying an apt complex that flows positive. Coworker bought a rental house there last year in nice shape near NMSU that was cashflow positive.
Some of the poorest counties in the US are in NM. You can buy a house on the edge of a mesa with a 100 mi view in Los Alamos for $ in that range - and Los Alamos is the highest median per capita income county in the US. Yeah, the US.
http://www.lamonitor.com/articles/2005/11/30/headline_news/news01.txt
RE: Dan’s Post & Query
I agree with “implosion”, if you need to buy in NM, buy up in Alamos or maybe Santa Fe. I haven’t been to Santa Fe, it could be run as bad as Las Cruces (government), so you need to check it out in person. Bear in mind that the state legislature here works only about 2 months out of the year. Its pathetic. Their names are not listed in the phone directory so generally, unless you know for sure, whoever represents you is a mystery. Following this example, the state and county employees are incompetent. I was given WRONG information 3 times by the NM DMV re a new license plate for my car. I finally got it straightened out on my own before anything came of it (like a misdemeanor conviction).
We are looking forward to moving back to CA when it is all said & done.
Sounds like the area you are looking at is in my neighborhood.
Things to consider:
1. Look for storm drains. If there are none in your neighborhood or surface streets, then forget buying there. The state/county here makes property owners depend on FEMA - *after* the damage is done. As I stated above, no sand bags are set out for homeowners - you are very much on your own.
I live in Picacho Hills and MANY of my neighbors got flooded this summer with desert mud (which has a very bad smell to it for desert soil, btw). One neighbor’s rock wall was completely washed out and 1/3 of his backyard disappeared due to NO storm drains. The “river” flowed past my home (Thank God) and gravity pulled the water down and flooded some new businesses and farmland.
For reasons (probably cheapskate reasons) unbeknownst to me, the government here really and truly believes in gravity and water collection basins. One big example of this phenom is the absolutely huge water catch-basin off of Lohman and Telshor right behind Alberton’s supermarket. Please do not live in that area.
If you have a nice car like me, plan on rust happening (driving thru rivers).
NMSU area has many For Rent signs up at the apt complexes. Not sure why since I am new here. But, investors may wish to take note. Lots of rentals off Solano. If you decide to look for cash positive rental units here, all I can say is “Be careful.”
Personally if you love the desert/mountains, I would rec St. George UT or Tucson, AZ over this place. Or Surprise, Chandler or Paradise Valley, AZ. Your property would maintain/grow in value as opposed to being washed down the street.
Sorry for all the bad news.
~Misstrial
Misstrail,
Not bad news….much needed info. I was there during the end of August when all that rain hit the area…..flash floods EVERYWHERE. I went to an area south of the Interstate, can’t remember the subdivision but was close to a golf course and saw sandbags everywhere, mud in homes and pretty bad erosion.
We were directed NORTH of town where the new consruction is going on. Here’s a link to an example:
http://lascruces.fnismls.com/publink/default.asp?GUID=e8a9e750-e198-4f98-bea7-808f0bad0999&Report=Yes
I’ll check into the other areas. We retired, cashed out of our house, and want to buy in a place we can enjoy the scenary, have a good quality of life, and reasonable cost of living. I’ve got a place in Louisiana so I can play hardball with sellers in any area we choose.
Appreciate the info; hang around, I’m sure I’ll need some add’l guidance on this.
Thanks again!
I am originally from Las Cruces and was really suprised when my rental house by zillow was listed at over $200,000. Sometimes I kick myself for not selling but that is neither here nor there. When I lived there I would shake my head in wonder at the houses in Picacho Hills and in back of the hilton could be selling for so much and who was buying. It finally dawned on me that it was folks from Cali. There is absolutely no industry and most jobs depend on NMSU, White Sands, State and Federal Government. I was extremely suprised when Dale Bellamah homes by Lynn Middle school were going for over $100,000. Hot tin boxes in the summer are what they are. I had to leave because the only thing to do is troll Wal Mart, go to the movies and the Enchilada Festival once a year.
But I still miss my home.
Sounds a lot like Bozeman, MT. Real Estate was driven 99% by money from the coast. Now everything just sits and sits and sits and no one knows where all the buyers have gone. Almost every one of the houses in my neighborhood that sold in the past 4 years are back on the market–flippers running for the exit. But with no greater fools left and snow on the ground we are in for a long winter.
I’ve been reporting on a colleague of mine who has had a vacant home on the market (bought a new one before selling the old) for 7 months now. Modest price reductions from starting price near $600k, but still asking $519k for a small home with no garage that would rent for $1300-1500/mo… at best. This in a town with a median income of $28k!
No garage?! In Montana!!! $519K?????? This is truly the craziest thing I have heard yet.
Not unbelievable, I lived in a house with a carport in Nebraska when I was a teenager.
Not unbelieveable, my buddy runs a business near Bozeman out f his garage and both he and his wife park their cars on the street all year. The climate is not that tough - not as tough as Chicago for instance.
As others have noted, the weather isn’t as bad as the upper midwest, but for half a million I would expect a garage.
My RE contacts in Albq tell me the $ from CA have been dwindling.
Having lived in NM for the past few years, I generally agree with Misstrial. There are some great things about living here, and some really crappy things about living here.
If anyone is looking to retire to NM (and that seems to be fairly common) - you might want to look at Rio Rancho just outside of Albuquerque. This is where I live now. If you live in northern Rio Rancho, you’re less than an hour from Santa Fe but housing is probably half the cost. There are a fair number of new master planned neighborhoods that have real drainage plans. My neighborhood had no problems with this last summer’s monsoon which was one of the wettest ever. Absolutely stay away from the “luxury” homes that are built on dirt roads. They had lots of problems with last summer’s rains. Not to mention I wouldn’t want to depend on a well out here where it can go 3 months with no rain.
I say all of this with the implied caveat that you should consider renting before buying. Like most southwest cities, the bubble is alive and well in Albuquerque. Listings have doubled from last year and the builders are starting to offer larger and larger incentives.
The big financial explosion will come when the derivatives created from the bundled packages of mortgages loose their value. Nationally, mortgage debt stands at record 47% of the value of all residential real estate. As the asset values (home values) fall below the outstanding mortgage balances, the blowup will intensify. The coming derivative implosion will make the LTCM collapse of 1998 look like a piker.
And Steve, what were the immediate macro-economic consequences of LTCM? Very little.
hfa, I wouldn’t say disaster is baked into the cake, but the subjective probability would certainly seem to be there. Somewhere between 10-40% maybe? Just because the system didn’t melt down with LTCM doesn’t mean there isn’t risk to the system, just like 3 mile island not being Chernobyl doesn’t mean it can’t happen here or that nuclear meltdowns are not to be feared.
If anything the hubris coming from a lot of the hedgies that nothing bad can happen increases risk taking. But maybe the link between risk and reward have been permanently repealed?
The immediate macro consequence was minor, but the long-term macro consequence was dire, as the behind-the-scenes mop-up operation unwittingly sent a message that hedge funds are too big to fail. This gave rise the the hedge fund bubble which now looms above the world economy like the Sword of Damacles. Small wonder Geithner is so worried about systemic risk…
Good point GS. Moral hazard.
Houston radios are running a peppy little jingle advertising “zero dinero” down payments. Today’s Chronicle has a big splashy advert for “Choice Homes’ is offering homebuyers No Payments for 3 Months. “A Gift Just For You” in time for the holidays. See a Sales Consultant today for details. ”
The builders are still building. Of course, they are like sharks, they have to keep moving or they die.
Apparently, the place my wife and I are renting is going to be going into foreclosure. Yay! (Not.) I just wish I knew exactly what to do. Drat.
“‘This has everything to do with buyer psychology,’ said Anirban Basu, an economist in Baltimore. ‘They’re nervous about buying at the peak of the market.’”
What the idiot this “economist”.
This has everything to do with prices.
I thought this was an idiotic statement, too, but I thought he was stating the obvious.
What makes this a bubble is that the psychology is the primary driver on the way up as well as on the way down (greed on the way up, fear on the way down). In my opinion, one of the shortfalls of most economic theory is that it is often based on some form of rational self-interest, which does not describe phenomena like bubbles very well.
Please keep us updated on how this proceeds for you. I am getting ready to rent a rather expensive home (well, with the psycho prices now) in S. FL, and I am very concerned about the owner going in the FC.
Anyway, please let me know what you intend to do (stop paying rent/etc) and how this proceedes for you. Thx!!
What I see in local housing market of Arcadia area in Phoenix. Well I was gone on business at the Los Angeles corporate office for two weeks and returned to the Phoenix office on Tuesday the 7th. A house north of the Phoenix office has had a “for rent” sign for more than four months. On Tuesday I noticed its next door neighbor immediately to its south has a For Sale sign. The Neighboring house has weeds all over the front yard and is tagged with graffiti. Very charming! How can someone expect to sell a place that’s sloppy? When I was caught in the last bubble and every other home was for sale on my street, I made my place salable by putting in a xeriscape (professionally done). That was the spring of 1996. I had my carpets steam cleaned. The new buyers said the house looked brand new and never lived in, although it was a 1990 model. The 20% loss on my $96,600 (plus $2300 for landscape) house is no big deal from today’s perspective. My company paid the realtor fees and paid for my move to Tucson from California. And I got an $8,000 hiring bonus from the Tucson company anyway.
Report from Boise,
• More of the same around here—the market has definitely cooled off.
• CBH Homes (http://www.coreybartonhomes.com), the largest builder in the area has about 450 new homes in inventory.
• Meridian, a bubbly town of 60,000 people, has over 1300 homes listed on the MLS; 550 of these homes are listed as “new, and never occupied.”
• The subdivision I live in has nine “new, never occupied” homes that have been on the market for six months now.
Building Credibility, a local housing website, just released their 3rd quarter Treasure Valley Real Estate Barometer: http://www.buildingcredibility.com/Documents%20and%20Settings/54/Site%20Documents/November%205.pdf
A few highlights for Ada County (Boise, Meridian, Eagle):
• Third quarter 2006 survey included 220 active new subdivisions
• Third quarter 2006 vacant lots increased 61 percent from the second quarter 2006.
• Third quarter 2006 unoccupied spec homes increased 104 percent from the second quarter 2006
• 306 preliminarily approved subdivisions, a 52 percent increase since the second quarter
• 7,740 lots added to the housing pipeline in the second quarter
One house in Sunnyvale, California:
-Bought a year ago at 750K
-Listed at 850K for 2 months, no offer
-Reduced to 800K, no offer
-Started to re-rent again
-Now get an offer of 880K, zero down, buyer wants 80K cash back.
This bubble is full of frauds !
The FBI has a whole group tracking the fraudulent loan buyers. Sellers will get some free rent in Folsom, CA (prison) for that stuff. Unfortunately, the restitution and fines outweigh the room and board offer. The lenders are forcing the crackdowns, cause they are having to buy back the loans from the bundled packages of bonds. The perps run with the cash, but the honest sellers have to pick up the costs, cause they’re the only targets available when the dust settles. I know of five deals in Lincoln, CA (Sacramento) where the sellers are going to pay big time. The DRE and State Office of Appraisors are tagging right along on the whole deal. They want to make examples to put an end to it. People here in CA talk about it like it is legal, ethical and normal. Surprise! If they think being and overencumbered flipper is bad, wait until they face the feds.
Glad to hear that they are cracking down on the fraud . The thing that alot of sellers don’t realize is that if they allow their property to be inflated so as to give a undisclosed cash kickback to the crook buyer/and agent ,they risk going down with the crooks .
Don’t ever buy the line that the property needs to be inflated because the new buyer needs to make improvements on the property so will need the extra cash kickback . If you are going to do something for the buyer ,be above board and state it in the contract and disclose to the lender ,so they can approve it .The Feds/lenders will investigate the sellers as well as the buyers and real estate agents/loan agent on the deal the appraiser ,escrow company etc.
I saw one of these down the street from me in Seattle a little over a month ago. Listed @ $615K, lingered for a few months, then suddenly sold for $50K over ask. Seemed a little late for a bidding war.
I half-way expected that no one would move in, and instead they would disappear with the $50K. But sure enough, they moved in immediately after closing.
With some real estate agents they figure they can get some greater fools to buy by promising them some big cash back money at the lenders expense/risk . This is still fraud to a lender even if the buyer moves in and pays on the note . It screws up the neighborhood comps ,taxes , the real risk of the lender etc. A simple rule is that if it’s not disclosed to the lender there might be something wrong with it .
With this big housing boom you had alot of crooks getting into the business and the sooner they are weeded out the better for all . I’m sure some sellers were told that “everybody is doing it “.
You are assuming that they are paying the note.
Sometimes, they move in, make the first month’s payment, live there a few more months, wait to be evicted, spend the 50k having a party, and then move on.
The papers submitted for the application were all “stated income” anyway and completely made up.
They had a good time for 6 months and are no worse off than they were when the moved in.
The LENDER is stuck. But then, he sold the loan to a hedge fund. The MBS buyers are stuck, but the hedges and derivatives are so hashed, that no one really knows who got stuck, but we will all find out in another year or 2.
If the buyer goes into foreclosure they still have the IRS to deal with along with possible fraud charges from the results of lender investigations . But this sort of buyer is a little different from the idenity thief buyer who takes the money and runs and you don’t even know who the person really was .
Houses in NY are clearing at about 25% overvaluation rather than the 40% overvaluation we saw last year. I suspect they will continue the slow depreciation so long as the interest rate and job market environment remains favorable.
Yes, 15% is a “big drop” compared to insane prices, but it’s not a big deal for a lot of people because very few monetized the entire value of their house. Mortgage equity remains at high levels for many, though the market is bifurcated between rich and poor.
I hate to break it to some of you permabears, but what you are seeing is the defintion of a soft-landing.
However, I am in no way advocating buying a house. Quite the opposite, actually. I think the global policies being advocated today are highly inflationary and will ultimately lead to a clamp down in credit. But we seem to be far off from that point so the environment can conceivably continue for a lot longer than you might think. It’s going to be a battle royale of buyers vs. reluctant sellers for some time to come.
IMO.
Yeah, let em eat cake.
One day you’ll look back at some of the things you’ve written and just cringe.
“I hate to break it to some of you permabears, but what you are seeing is the defintion of a soft-landing.”
So you’re confident there will be no recession next year?
True, if it the downward trend suddenly stops.
I agree with HFA in that if this is truly the bottom and homes begin appreciating at 3-5% a year by mid-2007, then it was indeed a soft landing. I just don’t see how that’s a realistic possibility.
The problem, and tons of people have touched on this before, that this type of tacit assumption rests is that the precipitous collapse of RE will have a negligible impact on the economy as a whole. And that is a ridiculous assumption.
If the value of the dollar, employment, consumer spending, etc. were all insulated from a massive downturn in the RE market, then housing could bounce back fairly fast after a single 10% correction over 6-8 months. I don’t see how that could be possible. There’s very little that the Fed can do without introducing a cure that will ultimately prove worse than the disease. Likewise, tax cuts (or some type of broad-based homeowner bailout) is equally as cost prohibitive given the already massive budget deficit. There isn’t a Keynesian or monetarist solution to prevent an asset bubble from bursting.
Ultimately, all debts have to be paid. Its only a question of when and how.
To me, the definition of “LANDING” is that we actually reached our destination. When my plane over LAX is at 40,000 feet and starts descending, in goes from 40 to 30 to 20 to 10 and finally hits the ground, hopefully soft but sometimes bumpoy and hard, but it lands. I can accept “softening prices” for the real estate market at this point, but the landing went occur for many more months, if not years. Will in be soft or hard, nobody is quite sure.
But I am 100% sure we have not landed yet. And I keep repeating my mantra “the trend is your friend”. Can anyone, anywhere argue the trend is heading lower.
Hey,bring on more of those $500,000 houses renting for $1500/month. Owning a home has never been a wrong time for everyone. I have gone from ridiculed renter to incredulous head -scratcher to disinterested would-be homebuyer to annoyed pessimist to worried money market funds holder. I hope you are right about the real estate market HFA. I saw 1998 to 2000 and thereafter an example of excesses that should not of been. You will be OK. If real estate gets a macro soft landing, well that is like all those mutual funds getting the same back in 2001,2002? I really hope real estate does not f%^k all and leave all other markets feelin’ the bruising.
You’re smoking crack, hedgefundanalyst.
I live next to the old “Apple Bank” building. Converted into condos roughly 4 months ago, and went on sale last month or so.
You get 2 bedrooms for $2M and upwards.
In the building I live in, you can rent 2 bedrooms (of the same size, and much better layout) for the cash-flow equivalent of $650K.
Try 300% rather than 25% overvaluation, and you’re closer to the mark.
Who the f**k is going to buy for $2M when you can get it for $650K in cash-flow?
Let me be the first to put it in the record that I have no respect for Hedgefundanalyst’s opinions. He has 3 in this string that I have seen. They are all pure bull$hit. Is there any way to put this guy on ignore? He doesn’t deserve to be taken seriously when every point he’s made is some cliche or hollow opinion.
I know I’ll get flamed for this, but HFA has actually been very correct on a number of points. I believe it was HFA who was recommending sugar a year or more ago.
http://futures.tradingcharts.com/chart/SU/M
He’s also recommended getting into stocks when many of us (including myself) were loading up on bearish positions. He also said HB stocks would rise & shorting them would not be the wisest decision right now (so far, so true).
I’m going on memory here, so someone correct me if I’m wrong on what HFA has said.
Just trying to keep things neutral around here.
I think his views are a great reality check for us all here. We don’t want to become an echo chamber inverse to the one in the REIC. Questioning your premises is never a bad idea, along with considering that the other guy may just be right.
Ironically, hedge funds are not what they used to be. Most of them don’t even ‘hedge’. They are just private funds, either long or short, and there are thousands of them. Hardly an exclusive club. Most of them move herd-like in the same trades, trying to match returns of their competitors. After all, with 8000 funds, how many new strategies can there be? They have to believe in the merit and continuation of the credit bubble because without the credit bubble hedge funds will become extinct, or revert to the relatively small club they used to be.
The herd behavior and a sudden adverse market move is one of my main concerns, too. But none of that goes on, right? Just ask them and they’ll tell you they’re much smarter, more experienced, and manage their risk better than LTCM did.
This was the PR Amaranth had put out before they blew up. And those LTCM guys were about as smart as they come. Unless hedge fund world is like Lake Wobegon, all the children can’t be above average, can they?
I will check my premises against the MSM, thank you. They have a reputation to protect, while anyone who posts here (including hedgefundanalyst and Hopeful) could just be the product of someone’s active imagination.
johnfromia posts “I think his views are a great reality check for us all here. We don’t want to become an echo chamber inverse to the one in the REIC. Questioning your premises is never a bad idea, along with considering that the other guy may just be right.
John the “other guys” think the world is flat. This alone and in the resent past might not prevent them from getting to where they want to go. Yet it dose not make them or their premis right.
In the end fact and reality will win out. As it is deflating one false thought after another. I could go on but will spare you and the Board.
I don’t agree with the Hedge dude but it is good to hear another take. I have to stop and think a bit before discounting the post.
I think you’re right. HFA is OK.
Let me be the first to put it in the record that I have no respect for Hedgefundanalyst’s opinions.
IMHO he gives us an accurate read on the way Wall Street is thinking. The day he turns bearish you’ll know the SHTF big-time.
“IMHO he gives us an accurate read on the way Wall Street is thinking.”
IMHO he is a fifteen-year-old kid with a high IQ who is a fantastic BS artist.
“I hate to break it to some of you permabears, but what you are seeing is the defintion of a soft-landing.”
Yeah? Would you still be of that opinion if 4th Qtr. GDP comes in at under 1%?
What’s a defintion?
Quoted from the Madison Wisconsin article -
“The city of Kenosha is also wondering about the future of the Upper Brass Center, a mixed-use project aimed at revitalizing a former industrial site downtown. The city spent two years and $5 million cleaning up the site that had been home to the American Brass Foundry.
PRDC was one of two developers who responded to a request for proposals to redevelop the site, eventually buying the land for $317,500 in 2005. The anchor of that project, a Pick ‘n Save grocery store, is already complete and open for business.”
I’m familiar with this area. PRDC got that land for an absolute *STEAL*. This was a huge parcel of land. Residents should be angry. I wonder what sort of kick-backs PRDC gave to the city officials who sold it for that price.
i’m near santa rosa,.ca.we have a new blitz of ads from centennial,zero down,no payments til 2008,”easy qualifying for first time buyers” a girl on the add talks about all the things she could buy with no house payment for a year with her “girlfriend” they sound about 18.these are poorly built,in a marginal area and priced 550k to 650k.also a lovely ad for a refi loan with .25% payment rate…and a 7.89% APR,up to a million $!!! oooh baby,i hurt myself laughing.
I was wondering where misstrial lives so I googled 88007, her zip. That’s how I found out that the first hit is a google earth map, which can be switched to satellite or hybrid. Too cool by far!!
Earlier today I stopped in to a FSBO open house — no intention of buying, I hasten to add. Anyway, the seller was a flinty-eyed Korean lady, somewhere between 60 and 900, who clearly hadn’t spent much time on this planet. She had some fliers written in “Engrish” printed up — chintzy black and white copies — and had all the charm of a urinal paddy. Her house was nice and well-maintained, but her asking price was at least $25K above the recent comps in the area. Noticing my incredulous expression, she declared “I price to sell — no go lower!” (wagging head vigorously).
I should’ve just smiled, said, “Have a nice day,” and left, but couldn’t resist taking the low road. I laughed out loud and told her, “Lady, this house is priced at least $50,000 too high, and by the time you realize that, you’ll have to drop it another $50,000 just to catch up with the comps. And another ten grand after that if you really intend to sell it.”
As that point mama-san started making guttural noises like she was getting ready to cough up a fur ball. I once had a Korean friend tell me the worst thing a Korean can call you was “Number Ten” — he was in error. She started spewing obscenities, some of which were quite creative. She worked her way down through various unsavory creatures, calling me a rat and a snake, then started making up life forms of her own since the existing ones weren’t vile enough to adequately describe me. She weighed about 90 pounds, but I swear she was getting ready to beat me like a dozen eggs. Needless to say I beat a hasty retreat.
I love going to open houses these days.
Oops, forgot to say the above local observation is from Colorado Springs, CO.
I love Colorado Springs. How is Manitou Springs doing?
Manitou Springs is way overpriced, still. There’s a lot of issues with building in the mountains, and of course during the 60s and 70s, and up to the present day, places like Manitou Springs attracted a lot of old hippies and stoners who supported themselves through — you guessed it — working as builders or in construction. The quality of their houses leaves a lot to be desired, let’s say.
http://www.manitousprings.org/coffin_races.htm
Manitou Springs just had the 12th annual Emma Crawford Coffin Races. Very irreverent, like the town itself.
Great stuff Sammy! I would like to propose a “Sammy Fund.” The proceeds will be used to charter you around the country for the next few years, allowing you to visit countless overpriced POS’s in all bubble markets. Each evening, from the comforts of your luxury hotel room (paid for by the fund), you will share your most entertaining experiences with the housing bubble blog.
LOL. I’d be up for it. Though as I’ve said in here before, I’d rather do a version of what Jay and Silent Bob did in JAY AND SILENT BOB strike back, where they flew around the country to find and beat up all the little pukes who bad-mouthed them on the Internet. Only I’d have a red-hot “FB” brand in my hand to apply to all the idiots quoted in here who watched their homes go up substantially in recent years, but have the gall so whine that “I’m not going to GIVE it away!” when nobody will pay their ridiculous selling price. That would be MUCH more gratifying.
Very funny Sammy .
Sammy, appreciate the little things. Just think of how much psychic energy that woman wasted on you. More than likely still cursing at you she’s so pissed. Probably tormenting her husband as well, if she has one.
hahahaha… thats great.
I did some math using the Zip Data on Merced, CA.
There are 28.8 homes for for every 1000 people in the city compared to Modesto, CA with 6.0 homes for every 1000 people.
Bozeman, MT
While individuals give up and pull their houses off the market, the inventory has crawled up to 988. A majority of listings are for new construction. Sales are significantly down year over year and prices have been dropping Month over Month since May. At this point almost nothing is selling. For the first time that I can recall, there wasn’t an article in the paper this month with last month’s real estate statistics–so I’m guessing that we are finally down YoY. Getting good data here is virtually impossible.
THe mood in town is a mix of confusion and denial with a touch of anger. There has been almost no press coverage so most folks–other than those trying to sell–have no idea how bad things have gotten.
Given all of the vacant new construction sitting around with nary a buyer in sight, I would guess that developers and builders will start facing BK by next summer if not sooner.
Adding insult to injury, MT Sen. Conrad Burns–Chief sugar daddy for Montana State University in Bozeman–lost his seat in last Tuesday’s election. MSU stands to lose ~$20 million/year which means that hundreds of soft money researchers and staff will lose their jobs.
Finally it is worth noting that most of the economic growth in Montana over the past 5 years has come from the real estate sector, so we are likely looking at a loss of state government revenue as this bubble winds down.
Put all of these factors together and Bozeman is in for a very rough time over the next couple of years.
My younger brother moved to Bozeman last August. He moved from Portland, OR - sad thing is that the rent is not much different and he was making more money in Portland?
Crazy! just Crazy!
There are only about 20K people in Bozeman - other than the college, the prices are out of balance in Bozeman.
Modesto, CA
“No reason to panic, real estate pro says”
http://tinyurl.com/ygwzxd
So people shouldn’t panic about a decline in the value of their homes?
Well there could be. If you have to sell, and it could be in a down market here this winter, and you bought it a year ago, you might have to lose a few bucks on that. (Bob Endsley, founder of Endsley & Associates Real Estate in Turlock)
Prices declined YOY 5.71% in Modesto. So, if you bought in 2005, here’s the “few bucks”.
$500,000 = $28K
$300,000 = $17K
North County San Diego:
There is no denying the slowdown now in San Diego. Even the most ignorant buyers have to know that prices are down (and going down?). I’m seeing houses listed for late 2003/early 2004 prices and they are still sitting. Some of these even I thought would fly off the market as they are truly well-priced **for the bubble market**. They still have a good $100K+ (at least) to go, but it’s a start.
Inventory is steadily declining. There are a few sales, but from what I see, it looks like people are pulling their homes from the market so the can list them “when the market improves” (guess they don’t mind waiting 20 years or so).
Slow but steady deterioration in prices and sales. I expect lots of REIC spin in the next 6+ months as this season will now be compared with Q4 of 2005 — after things had dropped off quite a bit. The YOY numbers will start to look better (only because we are leaving the go-go days of 2004/early 2005 behind). If we were to compare numbers to the market peaks, the deterioration would look very grim, indeed.
Just MHO.
“I expect lots of REIC spin in the next 6+ months…”
I expect lots of REIC spin in the next 5+ years.
It is the final battle of out time. Spring 2007 realtor whores versus middle America.
The banks are starting to catch on…
Fresh off the press:
My real-estate investor buddy in Dallas, who started his career in late 2005, is now running into financing issues. To avoid Jane-flip-John-flip-to-Jack-then-default-and-split-the-money fraud, banks won’t allow a mortgage for shorter than 3 months. I.e. he is not allowed to sell or refinance within 3 months. This puts a major strain on his business.
Apparently, the “tightening” has officially started. Good luck, America.
Glad to see this change in underwriting loans but they could make it longer than 3 months even .
I also would love to see the lenders not give a cash out refinance until the borrower has a longer proven track record of paying on the adjusted up payment from a teaser rate .
Fannie already has it in place where they won’t loan on anything thats been sold within 12 mo’s. The others are just now catching up.
I took my boys on a field trip to the Mt. Palomar Observatory today (NE San Diego County). There were “For Sale” signs prominently displayed along the way at every major outlet from Hwy 76 (the main route to Palomar Mountain). In Temecula, we saw a huge sign painted on the ground advertising “New Homes for Sale” (a really classy supersized ad that made me want to stop and buy on the spot…).
When we visited the gift shop at the observatory, the checkout clerk was talking to a customer about real estate. The customer was explaining how she had already lost $100K or so in value of the home she owns in the SD area since last year, but that she was OK with it as she purchased long-enough ago so the current value was still above what she paid. This made me wonder how folks who bought in the SD area since 2004 must be feeling about now, and also brought into my mind a recurrent question: Who on Earth would buy a San Diego County home at this point?
My sentiments exactly: Who would be dumb enough to bail someone out of their bad loan?!
I live in Sherman Oaks, CA. Our apartment building is just sold to developer for $26.5M. It has 104 units. They are planning to convert this into condominium. I think it is really a bad timing.
I spoke with my apartment manager and they are planning to sell each unit in the price range of $450K - $550K (basically twice as much as what the developer paid). It’s too high. I am renting 2B2B for $1,800 (appro 1,300 sq ft).
I am really happy about this as it will increase supply in Sherman Oaks. So far, prices are not falling as much as I have seen in other areas. However, I did see $50K drop in a condo (built in 2005) across our building as it was in the marker to more than six months.
Sherman Oaks Renter….Have you noticed that conversion on Woodman/Addison? I love the huge banner that says “now selling”….i bet they aren’t.
Yes, I saw the sign and agree with you. I see new condominiums units for sale on Burbank Blvd and Magnolia Blvd (between Supelveda and 170 Freeway). The number of units remaining for sales in these building has been same for quite some time. Plus, the new construction have really picked up within past month or so. I am sure they are all sensing the windfall but does not want to admit it.
Today a Calif woman called me, wanting to borrow $120K towards the purchase of a $160K property in a condo-ized RV park in Pinal Cty, AZ. I told her the most anybody owed me on a comparable property was $77K, and that the $160K price was ludicrous. She kept focusing on her ability to make the monthly payments, and the fact that she has been “pre-approved” by a bank. The bank has “too many questions about the property.” I told her I had NO questions, I just knew the property wasn’t worth $160K or even $120K and I would not make the loan.
“a condo-ized RV park” ?!?!
Ugh.
In the Sacramento Bee Real Estate Section on 11-11-06, JMC home builder has dropped prices from $20,000 up to $100,000 in their new Roseville development. Mira Bella Community. I think that is the biggest price cut i have seen thus far. They are smart for trying to sell before it’s too late. Since rates are still so low, they will probably do ok on sales.
What you all think?
Las Vegas neighbor over the past 1 year has gone from 599,000 to 589,000 to 520,000 to 499,000 then pulled it off the market. Things are getting very ugly here.
House for rent $1,650, eight years old, has 2788 sq ft 3 bed, 3 bath on lake. Owner tried to sell for around $500,000 (not sure exact price).
Link: http://www.journalstar.com/topads/rentals/more/
property in lower right, click on for details. Probably won’t rent it for enough either.
Starting to see more houses going to rental, not a good sign.
From the San Fernando Valley:
I currently rent in Sherman Oaks. I’ve been watching the valley for over a year now. This time last year, I first went to open houses in Northridge and Granada Hills. I was shocked at what I saw..empty open houses….realtors barking that their clients “just want to see an offer.” meanwhile, in studio city and sherman oaks, houses were going out quickly at a premium. Cut to November 2006…alot of empty open houses in Studio City and Sherman Oaks complete with “barking realtors.” As for areas further out like Northridge and Granada Hills….just yesterday i noticed 6 foreclosures just since the end of October….granite countertops and all. Just like in the early ’90’s, this thing is spreading like a title wave starting away from downtown l.a. and hollywood and moving inward. I think massive offerings by banks of granite countertops and travertine baths will be the norm here in Studio City and Sherman Oaks in a few short months…..IMHO
agentjmf posts “From the San Fernando Valley”
I was raised there and know all of the areas very well. In the past two dumps late 70’s early 80′ then in around 1990 capped off by the big Northridge EQ……… Look for 40% to 50% declines in my view. This is without the benifit of the “toxic loan, funny money loan” deal….I have no history of this new equation…. but doubt if will turn out good for anybody but bloodthirsty buyers.
” Barking realtors” will be mute even the rabit female type…. no strike that…. just whishful thinking on my part.
There is a new loft development that is just about ready for occupancy near where I live in central Orange County, Calif. Earlier this year, as the development was still under construction, there were huge banners advertising “Now selling!.” I believe the asking prices were in the low $300K range.
I drove by last week, and now the banners advertise, “Now leasing.”
Where is this development?
In Oakland, CA: I rent in what has traditionally been a working/middle class neighborhood–nice, but fairly humble bungalows, mostly around 1200 to 1500 sq. ft.. Houses around here are priced in the 500-700K range. Funny thing is, much larger homes in the much posher area just up the hill, Montclair, can be had for just 100K more than the tiny places down here. The sellers in the more middle-of-the-road neighborhoods seem to really be hanging on to their “wish prices”.
That is because they can’t afford to go lower. They will probably owe the bank even after they sell it. That just happened up here to my best buddy, and she is a RE agent
Yogurt,
Comapring Vancouver to Seattle is like comparing apples to oranges. Their market is NOT ours. Never will be. There are big differences between the two places.
Foreclosures double in New Hampshire
By NANCY FOSTER
Union Leader Correspondent
The number of mortgage foreclosures has doubled in the last year in New Hampshire.
People are scrambling to find help holding onto their homes and one group is offering free advice to help them do just that.
There were 653 foreclosures from January through September, up from 332 for the same period in 2005, according to Real Data Corporation, a firm that publishes The Registry Review, a real estate and financial periodical. In 2004, there were 299 foreclosures from January through September.
http://www.unionleader.com/article.aspx?headline=Foreclosures+double+in+New+Hampshire&articleId=b6d3fe4a-244d-4936-aead-0875397a89f7
Interesting that another article in the same paper says that
NH is going to lead New England in growth for the next five
years. Not really a stretch as it’s led for quite some time.
http://www.unionleader.com/article.aspx?headline=New+Hampshire+expected+to+lead+New+England%27s+performance&articleId=02f4ab84-3827-4dc9-a22b-5ec5b86d4b8b
And one interesting thing on Granite Countertops. I would
have expected a lot of the granite to come from New
Hampshire, the Granite State. But it appears that 90% of
the granite used for monuments, landscape pieces and
countertops is imported from Brazil, Italy, India and China.
http://www.unionleader.com/article.aspx?headline=NH+not+the+granite+state+it+once+was&articleId=7a241476-28d5-4702-b30c-90a704533e11
NH not the granite state it once was
From this Seattle Flipper’s Blog: http://seattlerei.blogspot.com/
This has GOT to be a record for listing/pricing/changes
“On June 30, 2005, an entity (LLP, LLC, trust or the like) purchased this property for $664,000. At that point, the roller coaster ride started:
6/30/05 - Purchased for $664K
6/25/05 - Listed by new owners (even before it was closed) for $795K, marketed as a “pre-remodel” sale. They thought the market was so hot, someone would buy it for $130K more on the promise that it would be remodeled.
7/16/05 - Price increased to $895K (obviously, the house wasn’t done being remodeled yet).
11/3/05 - Listing Cancelled
12/20/05 - Relisted using a new Listing number and same agent at $998,500 (”It must be priced too low! That’s why no one is buying!”)
2/6/06 - Price dropped to $989,500
2/23/06 - Price dropped to $989,500
3/9/06 - Price dropped to $979,500
3/20/06 - Price dropped to $978,500
3/23/06 - Price dropped to $977,500
3/24/06 - Price dropped to $976,500 (these drops are ridiculous…a $1000 drop isn’t going to change the demand on this property. Clearly, it’s at this price range where the investors break even, since they refuse to drop lower, faster).
3/26/06 - Price dropped to $975,500
3/28/06 - Price dropped to $974,500 (you can almost sense the desperation…drops almost daily)
3/29/06 - Price dropped to $973,500
4/1/06 - Price dropped to $972,500
4/3/06 - Price dropped to $971,500
4/6/06 - Price dropped to $958,000 (reality is starting to set in)
4/12/06 - Listing cancelled
4/13/06 - New Listing Number priced at $958,000
4/28/06 - Cancelled
4/29/06 - New Listing Number priced at $899,000
6/14/06 - Cancelled
7/3/06 - New Listing Number priced at $895,000
7/26/06 - Price dropped to $889,234
8/4/06 - Price dropped to $849,999
8/4/06 (yes, same day) - Price dropped to $849,500
8/30/06 - Price dropped to $799,000
10/4/06 - Listing Expired
10/4/06 - New Listing Number priced at $799,900
10/5/06 - Price dropped to $749,900
11/7/06 - Listing Expired
11/8/06 - New Listing Number priced at $700,000″
Thanks for posting that, it’s amazing!!
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