“Buyers Market Buzz Nothing More Than A Prelude”
It’s Friday desk clearing time. “‘There’s a lot of inventory out there. There are some properties that have been sitting,’ said Gus Tsamouras, a Realtor in the Baltimore area. Tsamouras said the market has now shifted from a seller’s dream into a market where the buyers now have the power. ‘Prices are negotiable,’ he said.”
From Virginia. “Right now is a great time to buy a new home. New home prices are down and builders are trying to sell,’ said Eunice Waller, a Northridge spokeswoman.”
“‘There have been adjustments made in the prices here over the last nine months or so. They’ve been coming down some because the market was slowing down. With a larger inventory of things for sale, so you have to make that adjustment,’ Realtor Tim Kearney said.”
From Pennsylvania. “The number of homes listed on the market in York County in the first nine months of 2006 jumped 55 percent compared to the same period a year ago. Last year, there were 1,828 active listings for the first nine months of the year. This year there have been 2,826 active listings through September.”
“But even with the increase in homes available, local builders said they’re still building. ‘Any advantages you can get today in a competitive market is exactly what you need today,’ (builder) Greg Hill said. ‘And we’ve made a significant commitment to amenities and incentives for buyers.’”
“Illinois Association of Realtors President Robert Zoretich said 2006 is shaping up to be the third-best year for Illinois home sales. ‘This is the correction, the bump in the road, the blip on the screen, whatever you want to call it,’ (realtor) Al Suguitan said. ‘There was expectation that it was going to happen. We’re going to have an ad on cable TV that says things are OK. There is a lot of inventory out there, so jump in it.’”
From Missouri. “Lake of the Ozarks Real Estate Association President Helen Montgomery noted buyers have a wide selection of homes to choose from and there is still competition among sellers.”
“‘What is happening here is there are lots of homes on the market for sale, the competition is stiff, and there’s still a lot of buyers out there,’ Montgomery said. ‘And what those buyers are able to do is they’re just having a lot of property to choose from on the market.’”
“A year ago, the central Ohio real-estate industry was buzzing about record inventories creating a buyer’s market for single-family homes. That buzz was nothing more than a prelude.”
“‘With all the people panicking (at) not being able to sell homes, it’s not all that ominous,’ said Mark Simoff, a central Ohio agent. ‘Relatively, we’re still strong. We’ve got a better market than our sister cities (in Ohio).’”
“It’s also clear that it’s taking more time to sell homes. Real-estate agent Stephanie Walker thinks the actual number is longer. If a house is listed with another agent after a period of not selling, the days-on-the-market counter goes back to one. ‘The days are very inaccurate,’ Walker said.”
From Florida. “The Annie Lytle School in Brooklyn has been a development project waiting to happen since 1980. Spokesperson Lynn Fournier said the current adjustment in the real estate environment might work to their advantage.”
“‘The housing market is cooling off, so contractors are looking for work and we might find one that would consider a partnership. There are fewer opportunities for real estate investors right now and the amount of return they’re looking for is lower,’ she said.”
“Half of Canadians fear that they are only a paycheque or two away from poverty, according to a new survey. ‘These are the good days, man, they’re as good as it gets, and to have half of Canadians say they were one or two paycheques away from poverty, that was an astonishing number,’ said economist Armine Yalnizyan.”
Another great week and some big reports coming out next week. My thanks to those who support this blog. Please check back this weekend for news, your topics and market observations.
posted ” your topics and market observations”
The gangs taged, the big sign that said ” NEW HOMES IN THE LOW MILLIONS”…. Just what you would want a “low million” home in gangtown it must be great for sales this is located just below the 118 Freeway on Topanga Cyn road. in Chatsworth California.
Pleeeeeze get a picture of that to Ben for the bubble gallery…
i live in chatsworth its not too bad here but the valley is a waste dump.i dont want to be here 5 years from now as it will be like skid row.we are 1 police beating away from another rodney king riot.
AE - is this Stone Haven? I haven’t seen the sign tagged but will get a picture for gallery tomorrow.
“Half of Canadians fear that they are only a paycheque or two away from poverty, according to a new survey.
I wonder what the result of the same survey in the US would find? I fear many Americans are in the same boat, but I wonder how many people even realize it?
At least the same, if not more. But it’s not a problem. They can still refi and get cash. When this avenue is no longer available, things will get interesting.
But todays earlier articles indicated having that not having a paycheck was no impediment to getting a loan. All is well !
I’m begining to think that Douglas Adams idea of spending a year dead for tax purposes isn’t so far fetched after all.
“I wonder what the result of the same survey in the US would find?”
I was wondering the same thing. I’ve at least one sister here in the states like that. The other two sisters probably 3 or 4 paychecks from poverty.
When you think about it, if you only have at most $50,000 in tax-deferred savings, like 90% of the boomers, you are at most a year away from poverty. Add extra for the value of your house at 1997 prices plus annual appreciation of 3.7% per year up to now. That will be your cashout amount to use for expenses. Outside of tax deferral, I’m 6 years away from poverty. Most of that is in government securities. If you count tax deferral, I’m 12 years away from poverty. And I have no real estate except a $12,000 time share.
>And I have no real estate except a $12,000 time share.
what’s the story behind this???
Ha! The story is I did not listen to my parents’ advice and bought a timeshare (after watching the video about the amenities). I have yet to use it (too much work).
Fidelity seems to think the older boomers are doing a bit better than your “90% with 50K” in their 401Ks.
BOSTON, MA, January 25, 2006 - Fidelity Investments reports that Baby Boomers turning 60 years old this year, at a rate of nearly 8,000 per day, surpassed the $100,000 mark with an average balance of $112,000 in their 401k accounts at the end of 2005.
http://www.401khelpcenter.com/press_2006/pr_fidelity_012506.html
Some of us Boomers have rolled old 401Ks into IRAs, have Roth IRAs and … gasp… even taxable investment accounts. At least the ones I know.
Me too. All of my husband’s law school friends have high six, low seven figure accounts.
I have a faculty member who is a yr away from retiring and he’s begging for an above scale salary increase because he says he can’t afford to retire. his salary cuurently? 163k.
I make crap for a salary, below my areas median. And yet the beauty of renting has allowed me to max out my pre-tax retirement deductions as well as save 25% a month into CDs.
I have no clue what people my age (or stupid old farts) are thinking when they don’t save, have no 401k, and can barely afford their homes.
Simple. They don’t think anything will happen to them personally. They’ve never been fired or forced to retire. Lose this job? Just get another one. Not realizing just how tough it is in the business world today. Or how difficult it can be to get another job especially if you are in your 50s.
I know someone in this age group who says that he can not be fired (or retired) because he has been with his company too long (over 30 years), knows too much, etc. And is in something to do with computers. Not as a manager either. I’ve told him several times he is a prime candidate for dismissal particularly since his company is known for its periodic … ummm purges and at least prepare himself for the eventuality. But … in one ear, out the other. Big 2nd mortgage, maxed out on several credit cards, looking to trade up to another larger house, got every toy there is.
I have a hunch that there are many people like him.
txchick, your “husband’s law school classmates” certainly represent a limited population (!), compared to the 69% homeowners. My Harvard classmates are doing fine too, probably much better than I on the average, but most boomers are perhaps more like my trailer-park clientele. Even the TP people are relatively OK, at least not saddled with expenses straining their means.
“Fidelity seems to think the older boomers are doing a bit better than your “90% with 50K” in their 401Ks.”
I stand by what I heard advertised on ING radio commercials. But maybe they are wrong.
Folks turning 60 now are the oldest boomers. Presumably folks between 45-59 have less. God help anybody 5 years from retirement who only has $112k saved. Hope they aren’t relying on pensions to make up the rest. Oops, Fidelity says that’s exactly what they’re doing.
if you only have at most $50,000 in tax-deferred savings, like 90% of the boomers, you are at most a year away from poverty.
I had the triple whammy come down on my head…A major illness followed by divorce with a subsequent business failure because of the stress and distraction of the marital meltdown.
I figure I lost about $400k in the 2/3 year span it took for everything to come unglued.
I am now one of those down to my last $50k.
Only my antique Harley keeps me sane.
I’ll never be able to retire. I now live simply for the day. It’s a bad feeling.
I always thought financial catastrophe happened to the “other guy”…I’m still astounded at how fast every unraveled and the scope of the financial loss.
How this country is standing up financially under a 50% divorce rate, totally escapes me.
I’m sorry about all that. A major illness you can probably do nothing about unless it’s one of those preventable ones (by regular exercise and avoiding obesity). Married people are now a minority in the U.S. One of my buddies from the navy was married 15 years to a gal who was a golddigger. I think they were divorced about 5 years ago. He told me he won’t ever get married again. He had enough of marriage. I remember also talkign with a colleague at work (an older boomer) about 6 years ago. He told me at the time (and without being sheepish) he’s on his third house and third wife. You are right. Marriage costs quite a bit. Double that for divorce.
Frankly I think Americans are too dumb right now to realize that…because they measure their well-being by how many possessions they are renting…they don’t even own them.
Humanity is going to get a real serving of reality in the next 50-100 years. It’s about time really.
Just think a’boot it… that’s 14 cases of Labatt’s Blue, 42 boxes of Kraft dinner, and 9 packs of smokes away… we’re in big trouble eh!
If this was posted earlier, apologies, but seems to outline the problem pretty good….
Hard lessons, Harder Landings
http://tinyurl.com/yjlh59
Good stuff.
Great, we know there is a huge debt problem from individuals to states and federal levels but what the hell can we do that is politically expedient ? The typical voter in California already showed they want services without paying for them so now what ? What politican do you see getting up and running on a platform of frugality, sacrifice, and tax increases ? God help us if we pull a Brazil and inflate our way out of this mess. The debt addicted will look smart in comparsion to us savers.
that’s why you have to buy foreign currencies, perhaps even that of brazil. at least they are making progress on energy independence. US dollar way down today relative to almost everybody. my broker says because of the divulging of yet another chinese document suggesting the ch. will “diversify” away from US bonds.
That’s why you have to buy foreign currencies, perhaps including that of Brazil. They are at least making progress on energy independence. US dollar way down today, as a poster on an earlier thread noted. My broker says because another supposedly secret Chinese document was divulged, repeating the suggestion that the Chinese will soon be “diversifying” away from USD.
(I keep trying to post this. W/ my luck it’ll suddenly show up in quadruplicate.) The risk of our govt doing just what you say, Mo Money, is why you have to buy foreign currencies, including maybe that of Brazil. At least they are making progress on energy independence. US dollar way down today, as noted by a poster on an earlier thread. My broker says because of the revelation of yet another Chinese document re plans to “diversify” away from US dollar.
So, AZ, what do you think we should do?
Lol — tacky, but funny.
I got my ass handed to me buying foreign CD’s, New Zealand burned me pretty badly and I think Everbank skims too much interest to make it worthwhile unless you guys have better places to work with.
Maybe CD’s are illiquid(?) — bonds are tradable. NZ currency has been rising against USD just now, and I think some NZ sovereign debt pays 6% in NZ currency. Personally I have bought a lot of Aust in the past few months, largely because it was easier to get AUD bonds bearing as much or more interest than US Treasuries, than to do the same in euro or yen. The supposed bullish story for Australia is that they have a good thing going exporting raw materials to China and India, so do not have our balance-of-payments problem. Thanks for the comment about Everbank, I had considered using them but thus far just buying bonds through full service broker.
AZ,
Australia has a huge balance-of-payments problem, and has had since the first oil shock. We even run a trade deficit with the US.
The Australian Current Account Deficit is a higher proportion of GDP the the US’s. (And for those of you in the US who are used to the Trade Deficit being the headline number, expect the CAD to figure more and more prominently as your net interest balance gets worse.)
The only area where we can genuinely claim to be in better shape than the US is that our Federal/State governments are mostly running budget surpluses.
What do you expect?
Mass sums of tax dollars spent on society’s weakest links.
We’re totally fooked.
lars39, thanks for the post and link “Hard lessons, Harder Landings”.
When the beer taps run dry, when house values revert to their mean but ARM resets keep increasing, there could be a time when more beggars are on the street: “Help, I have a wife and three children, a mortgage on a 3,000 square foot house, and just had to sell my H1 for $12,000 to raise money…Brother, can you spare a dime?” The problem is that people like that are a huge voting bloc. I can see no tax reform on the horizon, at least not for FBs. They will continue to get their mortgage interest deductions. However, perhaps Congress will get rid of those deductions for new buyers of RE. This would make existing homeowners trapped in their homes and it would readjust the equation where it will be much longer before renting is costlier than buying.
With such severe government and personal debt and the sheer numbers of people who are slaves to their debt, there is a possibility that people such as ourselves (the minority who are not materialistic and have miniscule debt or no debt) will be preyed upon to fork over more tax money. Congress can do this by a combination of higher income tax rates and perhaps doubling the mortgage interest deduction amount. For instance, if you pay $40,000 yearly interest for mortgages, they could make it $80,000. This will be a combination of a massive subsidy to FBs and a massive tax hike for everyone, making it a net theft from renters.
To combat this possibility, municipal bonds are tax free and are not likely to lose their non-taxable status. Also you can defer federal taxes on savings bonds until you redeem them. That is my revenge against the new Democratic Congress - I’m not going to let them get their filthy hands on my Series I bond interest at least this term! I always look for tax loopholes. They are on the irs official web site under forms. I legally paid 9% combined federal and state tax in 2002. In tax year 2005 I was up to 40%, but it was my choice. I’m calling for my own defense to prepare for when the FBs raid my pocket book to punish me for being responsible.
Hoo, yeah. Come to Culpeper, 70 miles outside of D.C. and 35 miles West of Fredericksburg, where you can get 3 BR 2 BA for $350,000.00. What a load of dung. Work with me on the math for a moment. They’re talking roughly 2700 homes in this article, a few of which are built and most which are not. Assuming $350k each, they’re looking for $945,000,000.00, that’s right, 945 MILLION DOLLARS worth of buyers out in Culpeper. This only includes the big projects, not the dozens and dozens of smaller projects scattered around. Call is a cool billion when all is said and done.
Now what do people in Culpeper do that’s worth a billion dollars?
Believe me when I say I mean no disrespect to farmers and agricultural businesses in general, but you don’t get to buy houses of that size from the income of small farms. These are aimed at speculators, pure and simple.
In the Ottawa article it is interesting to me that despite all the “greatest this” and highest that” rhetoric, there was not a single word about taxes.
So, Chip, did you put the hex on the Teasips? That was embarrassing.
My suggestion is to buy gold and silver and forget other currencies. Here is an article on silver probably one of the best Ive read to date http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=16B7EA71-17A4-1130-F5A3E1371C72032E
What many people fail to understand is that many other countries have similar problems that we do. Even though Japan has rebounded, they still have massive debt and bank problems. The UK has a similar housing bubble, even though the euro groups all of europe together there is still a substantial amount of risk. At least inflation adjusted gold and silver should be trading much higher and probably will.
Agreed. In my opinion, the precious metals should be core to everyone’s portfolio. Paper money is just too hazardous to stake your future wellbeing on it.
“We’re going to have an ad on cable TV that says things are OK.”
good. now I feel better.
Beautiful double-wide for sale at $229K in Carlsbad. After the mortgage and insurance payments, you get another bill on top of that for $851/mo in HOA fees. Why rent when you can own?
http://dallas.craigslist.org/rfs/237349759.html
It’s too late or too early to buy gold: you should have bought it when it was under $300, or when it is once again under $300 in the future. But to buy gold now would be a big mistake.
Sorry, I don’t agree. Other than in a deflationary depression, it is very unlikely that gold will ever be under $300 again, at least in the same “dollars” we are using today.
I’m with you, technovelist. The commodities boom started 5 years ago. Typically commodities cycles last 20 years. More and more Chinese and Indians are buying cars. They will bid up oil prices. Inflation times are only beginning. Still, I don’t put all my wealth into PMs. I like to diversify. Only 5% of my net worth is in bullion, but I’m trying to get to 10%! About 10% of my net worth is into inflation protected (series I savings) bonds though.
“Right now is a great time to buy a new home. New home prices are down and builders are trying to sell,’ said Eunice Waller, a Northridge spokeswoman.”
Great Lereahspeak. Let’s see, last year it was, “Right now is a great time to buy, because prices are just going to keep going up”.
Should we really save for retirement? What’s going to happen is the communists in the House and Senate will pass laws that remove Social Security benefits for those “who have the means”. So, if you’ve saved a nest egg, it will mean you don’t need SS and they’ll give yours to the losers who didn’t save.
Communists in the House and Senate? Oh my goodness. Not even Joe McCarthy claimed that.
And just what facts do you have to back this up? FYI, it was the Democrats who created SS in the first place, and Dubya who has been trying to get rid of (”privatise”) it.
bozonian does have a bit of a point, however.
In Australia, the Old Age Pension used to be an absolute entitlement. When the Superannuation system was reworked in the mid-1980’s, both an income test and an assets test was introduced.
They are both quite generous, but at the time there were sob stories about poor little old ladies being forced out of their (million dollar Sydney waterfront) lifetime homes because they couldn’t afford to live in them and lose their pensions.
The (left wing) government was able to tough it out, mostly because the Australian system is non-contributory so the counter-argument that these “little old ladies” were in fact rich resonated with the supporter base. I imagine it would be far, far harder to deny SS payments to someone who could point to the contributions made on their behalf over the years.
ss agew went to 67 w/o the sheople stirring
when there’s no $ it will conitinue on as welfare only
The dollar is weakening. China is indeed diversifying out of the greenback. Interestingly, the day after the US congressional elections, they anounced that they would be getting rid of 30% of their dollar reserves.
It is interesting that Milton Friedman died 2 days after this anouncement as this move by the Chinese may be one of the biggest monetary moves of all time.
The Chinese are not stupid, they currently are feeling increasingly financialy robust. Their economic engine is humming along with vast areas domesticaly and abroad in Asia for growth. America was and is a “value” play for them. A good source of relatively stable income flow. Now, their economic house is increasingly in order-we’ll see of course- and we are not as vital to them as we were even 2 years ago when US consumers were filling up their McManssions with Chinese manufactured goods.
They won’t diversify over night. They don’t want to shoot themselves in the foot. But the intersting question is whether the smaller countries in Asia may try to beat the Chinese to the punch and sell their dollars before the big red dragon moves the markets and makes the reserves of Singapore, Taiwan, and S. Korea worth considerably less.
If you hear of one of these guys selling their dollars- serious things are afoot and I would be pay very close attention to my portfolio.
In another generation or two, China will realize that they have to establish a system of justice, at least in the civil law, to protect businesses from counterfeited products and bootlegs. I listened to a radio talk show interview about this - an interview with an expert on China. China has no choice but to keep its economy roaring. They understand a free economy requires a stable arena to trade. In fact, they are probably going to be increasingly impatient with North Korea’s madman. China could, in a generation or two, be the equivalent of American free enterprise at the level it had in the 1800s, and with an eastern Confucian twist. How ironic it will be when Americans opt for the Nanny state while ex-red China treats its own people as adults - talk about trading places!
This Real Estate Debt Nightmare is going to be a Neutron Bomb that destroys American Lives, but leaves their Moneypits intact. Light up the LAST CIGARETTE SUZANNE…I THINK I CAN HEAR …THE BOMBERS COMING !