“Repenting For What They Did”
A housing report from the Arizona Republic. “Those mountain vistas, star-filled skies and expensive furnishings in Ahwatukee Foothills are coming at a steep price - sometimes of the home itself. Homeowners, many strapped with some of the highest credit-card debt in the Valley, are falling behind on their mortgage payments and facing foreclosure at nearly record rates.”
“‘Basically, it’s something we saw coming last summer, and even up to a year ago,’ said Rock Argabright, an agent in Ahwatukee. ‘Home buyers were signing up for no-money-down, adjustable-interest-rate mortgages, so they have no equity in their homes. They trapped themselves as the value of their homes started sliding. It really was written on the wall, it was going to happen.’”
“The problem is that most everyone’s largest investment is their home, and real estate values have fallen over the past year.”
“‘What they’ve done is gotten a second (mortgage) on their home and lived on the second. Then maybe the wife got pregnant, or someone lost their job, and now they have to refinance and their house value is slowly sliding,’ said Argabright. ‘One of the saving factors is that our home prices haven’t fallen as much in Ahwatukee as other parts of the Valley.’”
“Scott Nelson, a certified financial planner in Ahwatukee, believes many residents got into trouble by buying too much of a house.”
The Review Journal from Las Vegas. “In Las Vegas, local research firm SalesTraq reported 2,581 new home closings in October, down 22 percent from the same month a year ago. It was the fourth straight month of declining sales.”
“‘The future seems clear,’ said real estate consultant Steve Bottfeld. ‘October is not the end of the buyer’s market in Las Vegas. But October data does tell us that the Las Vegas housing market is much closer to the end of the buyer’s market than most people believe.’”
The Financial Times. “If you buy a house this month in Nevada’s bone-dry Las Vegas valley you can probably get a swimming pool and a Florida vacation thrown in for the price of a new home.”
“The perks are among the incentives being offered by property developers desperate to fill tens of thousands of homes that stand empty in the billowing dust after a whirlwind of speculative construction swept the southern and western states.”
“Anna Klinger, a Nevada real estate agent, says: ‘The developers are repenting for what they did. They built too much, too fast.’”
“The large builders admit that the slowdown has been more severe than they expected at the start of this year. David Rosenberg, chief US economist at Merrill Lynch, says: ‘I think the latest barrage of data told you that housing hasn’t bottomed. We’re not going to hit bottom for the entire sector until the tail-end of 2007.’”
The Nevada Appeal. “Housing market information isn’t cheery. A weakening national housing market will continue to be felt throughout the nation in 2007, said John Mitchell, western region economist with U.S. Bank.”
“Some local residential real estate agents are worried, but they’ve heard this prediction before. ‘It’s exactly what we know,’ said Chris Kallas, a Realtor in Minden, after the meeting. ‘I don’t want to be negative. We’re hoping for the correction to finish.’”
“The Carson City housing market hit a high in 2005 when the median price of a single-family home jumped 34 percent over a year to $348,500. It has inched down to $310,000 in September, according to the MLS.”
“Broker Mike Veatch said recent 10 percent to 15 percent price declines are eased by the huge gains seen in the last few years. ‘My view is we are returning to a normal real estate market in this area,’ he said. ‘As far as a slow down, we have hit the bottom of the trough.’”
A reader sent in this from a link at the Reno Gazette Journal:
‘You know what you paid for your home a decade ago, you watched as prices rose skyward in the past few years, and, recently, you’ve seen the market slow. Now, you’ve decided it’s time to sell, but you don’t have a clue what your home’s selling price should be. ‘It’s not an easy thing for homeowners to figure out,’ said Diane Cohn, a Realtor with Chase International.’
‘Maybe there are 70 listed with three pending,’ Cohn said. ‘That’s a very low absorption rate — which is how many homes a month the market can absorb. Now you know that there are 70 for sale, only three pending, and that next month will likely be the same, so you have to be one of the three best deals in the neighborhood to be considered by a buyer.’
‘Sometimes, an appraisal is not always as accurate as it should be, she said. ‘In the past couple of years, when the market was really hot, there were a lot of what I call ‘drive-by shootings’ — appraisals done by just driving by,’ she said.’
‘Lita Scott, a certified residential appraiser who has been in the business for the past 20 years, laughed when asked about the ‘drive-by’ scenario. Then she got serious. ‘What it comes down to is the good and the bad,’ she said. ‘Standards continue to go up, but in the last year or two, when the market was going crazy, we had cases where people who had done their two years of internship and gotten their license, hired five or six interns themselves. It was almost like a sweatshop. ‘Now you can only have two interns, max,’ she said.’
‘Interns must have so many hours of continuing education, and go on property inspections with a licensed appraiser for at least 50 homes before they can go out on their own. After two years, they can be licensed, but can’t appraise anything more than $1 million without someone who has been certified — which takes another two years and more education — signing off. ‘Starting in 2008, you have to have an associates degree to be an intern and a bachelor’s degree to be certified,’ she said.’
“‘drive-by shootings’ — appraisals done by just driving by,’ she said.”
We used to have lots of drive-by shootings in the town where I grew up. Is this still against the law these days?
I just talked to a residential lender in my office building, discussing the 7 homes (up from 5 last week) in Lincoln (Sacramento) that were financed at $200,000 over the latest comp values. He asked for a list of the homes w/names and addresses. I asked him why and he said they had a loan application yesterday that was fraudulent. The appraised value was pegged at $620,000, but in researching the comps a bit, it was in a market dictating a $475,000 value.
I have a feeling this fraudulent loan gig is going to start turning big time on the criminals. Goodbye new house, hello crossbar hotel………..
Do the top economic policymakers on the East Coast have a clue about the magnitude of appraisal fraud which is reflected in their aggregate price statistics?
Get, when you factor in the actual fraud loans vs. total loans, it is probably less than 2% (but seems to be growing VERY rapidly). When you feather this into the overall portfolio, it does affect the overall returns (so 2% of loans fraud, lose 50% of value, so a 6% ROI drops to 5%, but does not go negative.) The loan pool secured by the property sold the first loss strip to a high risk investor. The borrower makes payments for 6-12 months and then bails out. In 2008, there is too much water under the bridge to solve the problem, except the first loss investor gets angry and starts pressing charges and refusing to buy new deals. It would be nice if the originating lender/broker had to pay the price, but I think they get off the hook after 3 or 6 months of on time loan payments.
Here is the real effect. In 2008, the high risk investors will be saying enough is enough. They will refuse to buy the first loss tranches unless they get 30% returns and bigger originator guarantees for longer periods. Then the originator has liability and fraud ends. Capital costs go up substantially for everyone and the “easy money” is gone. That is one reason why this housing correction is just getting started at a tepid rate.
There are so many Flippers in deep trouble in Sacramento right now and I bet 20% of them are getting “rescued” with fraudulent deals. When those over encumbered loans start defaulting and the secondary market starts losing their returns, then the housing bubble deflates completely. We are propped up with hot money right now. The pain has not even started.
JR posts “I have a feeling this fraudulent loan gig is going to start turning big time on the criminals. Goodbye new house, hello crossbar hotel………..
Hey, I really hope you are right! The thing that makes me feel bad about this un-folding mess are the young family that could be torn apart. In many cases not from “greed” but simple poor timeing.
That is the sad part sometimes one bad decsion leads nothing but choices of other bad decsions.
If loan originators had to fund and keep the notes themselves (like mine), they would do the drive-by appraising themselves (I have), and would turn down a certain number of requests.
I was interviewed over the phone by a reporter from the Nevada Appeal a couple of months ago about my opinion on the state of the housing market. My comments never made print. Too much doom-n-gloom I’m guessing. The big hype around here has been the big turnaround of 2007 which, of course, is based absolutely on nothing but wishful thinking.
Blood is in the water here in NNV. One thing I can report is builders (our small timers) trying to bail out on land holdings. Most of these guys took their profits over the last couple of years and put it into buying every buildable piece of property up here. So most are loaded with land, but no cash in the account to feed the kiddies. Luquidation time! A year ago you could barely find a piece of property to build on. Now the MLS is loaded. One guy has recently reduced his lots from 200K to 135K. Big haircut indeed.
Auburn CA (Sacramento area) very high end lots at a place called Darkhorse, were advertized on the radio this morning. The next 10 lots, you get 5% down and the developer makes your interest payment for 2 years. No mention of price, but still, that is a sign….and the going has not even gotten tough yet!
JR:… I think these lots were like 300K & up…
Check this out Hopper….
I mean nnvmtgbrkr comments above….
I owned a bit of property in northern Nevada for a week @ Burning Man…
The loss on one lot can pay for a 2 year stay at Harrah’s Reno + food + drinks. You would think these builders are smarter than that.
Reducing the price from 200k to 135k does not necessarily mean he’s taking a loss …. just yet anyway. I would like to know when and what he paid. Like a house flipper trying to get 500k for a home (they of course called their primary residence), and now opt to rent it instead for 1700/mo. If they only paid 300k in 2004, probably close to a positive cash flow. It just makes no sense for YOU to buy it at 500k. It doesn’t mean that the owner is losing their a$$. However, kind of hard to rent a lot …. campers generally won’t pay much for a nights stay.
On a side note, I bought a golf course lot in Chico, July 2002 for 150k, and was planning to build. After 10k+ in architectural and engineering plans, didn’t. Put the lot on the market for 235k in 2003. No takers. Reduced to 199k and took 190k. After taxes and RE commissions, I made a whopping 15-20k. The buyer just sold it this last summer for 325k. This is more along the lines of my RE success stories….
I have been driving all around the Reno area. There must be a lot of denial as I see builders and developers moving seemingly full steam ahead. I have no idea what they are thinking. I guess they aren’t. Apparently they’ll just keep going until there is no gas for the Caterpillar, no money for bills, no food on the table. I saw the graders out near Verdi, working some new land. All I could think was, “Isn’t it a little late to just be breaking ground??” Idiots.
Sorry Ben if you have seen this before, but I never saw it post:
What’s up with those thousands of homes proposed for the “Golden Valley” that was supposed to be a commute area for LV. The whole thing sounds insane when you look at the highway access to Bullhead City and LV.
“The large builders admit that the slowdown has been more severe than they expected at the start of this year. David Rosenberg, chief US economist at Merrill Lynch, says: ‘I think the latest barrage of data told you that housing hasn’t bottomed. We’re not going to hit bottom for the entire sector until the tail-end of 2007.’”
Good thing the homebuilder stocks always go up
P.S. If the sector bottoms out by the tail-end of 2007, that will be the shortest residential construction downturn on record, after the longest-ever boom (1991-2005). So I am wondering how David Rosenberg can pinpoint the timing of the bottom so confidently?
GetStucco, I disagree with your time frame. 1991 was a declining market in CA. I suggest the boom was 2001-2005, but the MAGNITUDE of the rise is unprecidented.
Maybe you ought to check out the statistic called “Residential Construction as a Share of GDP.” Because it steadily increased from 1991 through 2005, when it peaked out at the all-time high level (at least since 1960) of 6.3%; next highest peak was some time in the 1970s at 5.7%. By that measure, the residential construction boom started in 1991 and continued rising through most of 2005.
Well, right; a national boom persisted in the presence of local roller-coasters. Both coasts had declines in sales volume and in SFH prices in the early 90’s. But I’m not saying anything new to either of you. We can all agree that the decline this time will be national, and longer than a couple of years.
A family relation is a personal banker in Phoenix. During the holidays I asked him about the bubble - his observations match what we’ve all heard. Says every week there are more and more people coming in to try and refi out of their toxic loan, or to get 2nds and HELOCs to help with bills. In most cases they send them packing because they have no equity in their homes. Additionally, he’s amazed at how many people are subprime borrowers and somehow were allowed to buy WAY too much house for their income/credit quality. Not surprising to any of us, I’m sure. But what was surprising - according to him, the media is actually understating how bad all of this will be when it unravels.
2007 will be the year of the bull.
Just last night I saw a slew of Countrywide commercials. It was the “refi and consolidate all your bills, 1st, 2nd mortgage, cc bills, car loan into one monthly payment.”
Guess that will free up the credit cards again for another round of spending - that is of course, if they aren’t underwater already and still have equity with which to refinance…
I get 2-3 calls a week from “Dorothy at the mortgage branch.” Some stupid recording cold-calling and selling the same thing. Ironically it’s from a 602 area code.
That’s the funny thing. Taking out a HELOC to pay off you credit card debt is sold as a brilliant financial move (much lower rate, tax-deductable). Problem is the credit card is going to be itching to get out and test that credit limit again….
When my loan demand went a little soft in 2003 (due to my reluctance to reduce interest rates), I started a word-of-mouth campaign to get people with wholly-owned trailer-park lots to come to me for credit-card consolidation. There were a few takers. These individuals have since treated me as if I were a credit-card issuer, calling all the time for increases. The spigot has shut off !!! Don’t know where they are getting it from now, but they are actually current w/ payments.
I dunno - it’s looking more and more like it will the the year of the Bear. Financially anyway.
I was being sarcastic. 2007 will be a year of reckoning for real estate. And loose credit is still largely here. If credit tightens on the corporate side as well, we’re definitely going into a recession.
SFer posts ” 2007 will be the year of the bull.”
Yea, Bullpuckie!
See my post above re: sarcasm.
But on the topic of bulls vs. bears:
Walmart predicting bad December, oil back @ $63/barrel, yield curve now even more inverted with the 10yr T at a 10 month low……and the $ at a 14 year low to the GBP.
Thanks — now I finally see why the stock market keeps going up and up and up!
“If you buy a house this month in Nevada’s bone-dry Las Vegas valley you can probably get a swimming pool and a Florida vacation thrown in for the price of a new home.”
You can also use a fraudulent appraisal to finance the swimming pool and Florida vacation on your home loan.
Whenever I see the words “facing forclosure” in juxtaposition I cringe. Casey the mortgage fraudster turned blog fraudster was on CNBC this morning, the PHLX up 6%, Standard Pacific up 10%. Unbelievable.
Keep a look out for flying pigs!
What’s behind the housing stock rally today? Just my opinion, but I’d say it’s what appears to be a technical breakout this week in Treasury prices/breakdown in yields. I put a brief note about it on my blog. Wall Street is likely making the leap that lower Treasury yields = falling mortgage rates = higher mortgage demand. Of course, the bond rally stemmed from crummy economic news and a big jump in jobless claims. But hey, the unemployed deserve to buy their piece of the American Dream too, right?
ttp://interestrateroundup.blogspot.com
“As far as a slow down, we have hit the bottom of the trough.’”
I love how every realtor is saying this about every market in the U.S. A ten year run-up followed by a six-month slowdown. What are they going to be saying next year?
“What are they going to be saying next year? ”
Would you like fries with that?
That is so funny. HAHAHAHAHAHA
They are calling the bottom, hoping to pull buyers back in. But it will prove futile, and everyone should remember their pathetic tactics in the future. I hope, after the whole market lies in ruin, that someone has compiled a timeline of quotes from these jackasses like some did during the great depression. They will serve as evidence as to why we should never listen to these industry shills.
We don’t have to go all the way back to the great depression, the real estate meltdown in the 90s was exactly the same thing- the realtors and real estate “experts” in SoCal called the bottom every month for 4 years. Why should anyone be surprised that they’re doing the same thing this time?
I’m hoping Ben’s next move a few years from now when the reasons for this blog go cold is to write a bubble chronology in book form. It would be nice if my kids did not have to relearn history’s lessons again first hand.
Memory sticks a little while. It might be your grandchildren’s old age when this happens again. NB it was my grandfather who made money wheeling-dealing bituminous coal in the GD. All I got from him was the spirit of thrift. GOOD ENOUGH, apparently.
“‘Basically, it’s something we saw coming last summer, and even up to a year ago,’ said Rock Argabright, an agent in Ahwatukee. ‘Home buyers were signing up for no-money-down, adjustable-interest-rate mortgages, so they have no equity in their homes. They trapped themselves as the value of their homes started sliding. It really was written on the wall, it was going to happen.’”
Really - you saw it as well? Didn’t stop you from cashing in on it though, did it?
My sentiments exactly. Especially since Rock The Agent saw it written on the wall.
Agreed! When I read that I wanted to puke. Agrabright didn’t seem to mind that he gut his. Now he wants to play the hindsight game to look good. Not working on this blog, buddy. What a joke. And guys like this are the majority of the REIC.
As far as a slow down, we have hit the bottom of the trough.’”
Is this guy a clown….it is going lower….clown boy….go join the circus….
“‘Basically, it’s something we saw coming last summer, and even up to a year ago,’ said Rock Argabright, an agent in Ahwatukee…It really was written on the wall, it was going to happen.’”
What a two-faced richard-cranium!!
Here’s what he was saying last year: “Oooooh … this home will be PERFECT for you!”
Yeah. Dig the koi pond.
And, a year later, it’s time to wake up and smell the cupcakes.
Last year: “This house will be worth 30% more in 12 months, so buy now or be priced out forever!”
Now: “You can’t ask 2005 prices any more, and we all saw this coming.”
And the squirrels will feed themselves -
I had a deal made with a woman in Ahwatukee last winter to lease her house. I agreed to pay more than it was worth on the rental market because it was really very nice. It fell through when she wouldn’t give me a purchase option on it because she thought it would go up more this year and next. Oops.
LOL! You should send her a Christmas card. You know … just to remind her and put her in the holiday spirit.
If you’re feeling really nasty, a xmas card with a Mcdonald’s gift card in it … you know, for the good times.
Speaking of foreclosures, San Diego is now at 1307:
http://www.foreclosure.com/search.html?st=CA&cno=073&z=&tab=f
…up from 415 when I started tracking it in early July 2006. The graph is a nice exponential progression. If it continues, we should have 4-5000 by early May. At the moment it’s about 25% of the foreclosures that end badly, so that would be app. 1100 forced sales per moth during the market’s “spring rebound”…?
Does anyone know the peak in foreclosures for San Diego during the last California RE bust in the early 90’s? How’s our progress to date?
You can see notices of defaults and trustee deeds here:
http://www.foreclosureforum.com/stats.html
Looks like the peak was about 1100 notices of default, BUT about 50% of them ended up being sold! We’re in the low 20%’s right now.
The higher the percentage, the worse the market is.
Correct me if I’m wrong, but I believe that in order to start the foreclosure process the bank has to file the notice of default, so that tells us how may new foreclosures got started in a month. Since the process can take longer or shorter (?) than a month, the number of foreclosures will be different from the number of notices of defaults.
OB_Tom-
Wow. San Diego is already running at 1999 or 1991 levels as far as Trustee Deeds go. I would not be surprised if 2007 Trustee Deeds hit the 5,000 plus level that existed in 94/95.
OB Tom,
I followed your link on http://www.foreclosureforum.com and it showed the Phoenix/Maricopa Co area having 37,959 homes listed in foreclosure. Can that figure be right?
In Anthem and Desert Hills there were 255 homes listed.
Holy Cow, what are these numbers going to be in 2007 and 2008?
http://www.foreclosure.com/search/AZ_013.html
Try this link. Anyone believe these numbers in AZ?
LipnAZ, you have to choose the foreclosure tab. It shows 985 this morning. The number you quoted is everything, pre-foreclosures, bankruptcies, FSBO, tax liens…..
“Home buyers were signing up for no-money-down, adjustable-interest-rate mortgages, so they have no equity in their homes.”
“The problem is that most everyone’s largest investment is their home, and real estate values have fallen over the past year.”
I think these two sentences put together say it all. Everyone’s largest investment is in their home, yet they’ve put no money down.
Oh, the irony…
Does that mean “There is no home”?
How the hel can anyone who has no skin in the game even claim that it is an investment. The meaning should be self evident,
To commit (money or capital) in order to gain a financial return: invested their savings in stocks and bonds.
To spend or devote for future advantage or benefit: invested much time and energy in getting a good education.
Alas, in this world of get millions for nothing, should we be surprised that people think you can actually call this an investment, in the truest sense of the word. Once again for the slow, “There is no free lunch in the universe.”
Exactly what I was thinking earlier…you CAN’T call it an investment if you aren’t investing anything. That is why the whole Ponzi scheme of nothing down lending, neg ams, etc. was bound to collapse…you simply can’t make money for doing nothing (unless you are the first people in on the big Ponzi scheme). Why can’t the average dolt simply understand the simple concept of risk vs reward? Someone ALWAYs gets left holding the bag.
I live in Ahwatukee (85048) and have been watching the market pretty closely for about a year and a half now. I have tons of data on the Ahwatukee zip codes (85044, 45, and 48). The market has most definitely slowed down significantly, but houses are still moving. Inventory in the $400K~$600K range increased from a low of ~40 in Q2′05 to a peak of ~270 about 6 months ago to about 240 or so today. One coworker walked away from a $50K deposit on a new McMansion because he could not sell his old house. My wife and I walked away from a signed contract on a 2700 s.f. house @ $529K last July. Shortly thereafter, it sold for $525K. This summer (1 year later), it was back up for sale at $599K. After several months, it was reduced to $575K and then $550K, where it was sold. Assuming a low 5% commission and ignoring holding costs & other purchase costs (loan fees etc.), this FB lost money on the deal. It did appear, however, that the house was lived in during this year. One flipper house in my neighborhood has been on the market for 9 months or so now. On his 2nd agent and several price reductions, but house sits empty. Pricing is ballpark per Zillow, for whatever that’s worth (maybe not much in declining market, seems Zillow follow the market by several months, at least). Another house in my hood is empty (purchased by out-of-state investor several years ago) and was recently pulled from MLS. Still sitting empty, so I assume he took it off the market to relist it as “new” in the spring. He has another house in Ahwatukee, too, same story on that one. He’s held these long enough that he could still make a very healthy profit, but it appears greed has gotten the best of his good judgement. I have other data as well but did not want to make this post too lengthy. Just wanted to give you the birdseye view here from bubble central, AZ…
Thanks!
Oh the irony of the fact that current buyers are being paid to buy the homes by kickbacks and incentives ,never mind making a investment of even closing costs . Go see Cal Go see Cal Go see Cal
Is Cal still around? I haven’t watched TV in LA since about 1977.
“The southern region of the U.S. is North America’s fastest growing market for wood products, currently representing approximately 40 per cent of all North American housing starts.”
http://www.cbc.ca/money/story/2006/11/29/fraser.html
that’s noteworthy.
Check out this article, where the writer tells us why the recently upgraded homebuilder stocks are a great buy. It made my head spin.
http://www.fool.com/news/commentary/2006/commentary06113031.htm?source=eptyholnk303100&logvisit=y&npu=y
Mike Norman is a fuuking idiot. They have that moron on the Saturday Fox News Channel shows. He wears more makeup than a hooker and knows as much about finance as one. He should shut his pie hole. There’s a reason I stopped watching the Saturday morning lineup of FNC. He is a big reason for that.
He says something in that article that makes no sense at all. He claims that refinancing current mortgages will put more money in people’s hands allowing them to buy a new, larger, more expensive home. Huh? When you cash-out refinance you get some money but you owe (at best) the same amount of money back to the loan company. Refinancing certainly doesn’t increase your net wealth.
Advice to west coast realtors. Those in Nevada, Arizona and Florida. Get a job. Now! Advice to realtors in Oregon and Washington. Start sending out your resumes now for something other than real estate and hope to hell you’re not applying for a job where the boss is a FB because he listened to one of your “profession”.
“Broker Mike Veatch said recent 10 percent to 15 percent price declines are eased by the huge gains seen in the last few years. ‘My view is we are returning to a normal real estate market in this area,’ he said. ‘As far as a slow down, we have hit the bottom of the trough.’”
Another psychic! I tell ya, there’s a bigger concentration of seers in the RE market than a Vegas convention of remote viewers.
Ahwatukee was full of itself when I lived in Phoenix in 1995. I hope the vortex of the Arizona RE dust bowl settles right on top of it!
Why the animosity? Ahwatukee’s a great place to live, as far as Phoenix suburbia is concerned. Great schools, proximity to hiking/biking in South Mountain park, close to employment centers in Chandler & Tempe. I bought in ‘98 and my house is now worth ~ 2.5X what I paid for it. I’m not necessarily happy about that, since the craziness priced my wife and I out of a larger, nicer home last summer (like others on this board, we could not believe what we were seeing and chose to stay in our smaller, but ridiculously affordable home rather than hop on board the suicide-loan-powered Bubble Express), but that’s reality. As for Ahwatukee being “full of itself,” I think the people who live here, like my wife and I, enjoy living here and think it’s a great place to live. If that makes us “full of ourselves,” so be it. But I don’t think people move here just to say they live in Ahwatukee, as may be the case with Scottsdale, Paradise Valley, or other such areas.
Ahwatukee is one of the cleanest places in Phoenix and has far fewer trashy areas than other part of Phoenix. I lived in North Phoenix near North Pointe resort in another Equity apartment complex, which was nice, but the next neighborhood area had trashy homes. There are a lot of little parks in Ahwatukee. Plus short jogging/walking/biking/blading trails. I only wish there was a serious greenbelt like Scottsdale’s. All sorts of places to eat in the Ray/I-10 area of Ahwatukee. Plus Barnes & Nobel on the west side of I/10 and Borders on the east side! Also two LA Fitness gyms in Ahwatukee - which is what I like. We chose are apartment carefully among on-line apartment reviews and moved in a year and a half ago from North Phoenix. The apartment complex is in the top 2 out of several hundred ranked in Phoenix proper. That is why we chose Ahwatukee. We did not expect all these conveniences to be so packed together.
There are a few downsides that I posted previously. There is a serial assualter in the area - the main downside. Police have done little about it.
A sign of the times I suppose but…….every second radio commercial seems to be aimed at distressed credit card debt holders, REFI and HELOC potential GF’s and debt reduction firms that will reduce by 50% what you ooooooowe!!
The most obnoxious ad is the one that promises enhanced interest from the opposite sex once you purchase a condo via their financial management program.
Haven’t heard the “biggest no brainer in the history of man kind” idiot for a while though.
he’s around lennox financial
You guys might have already read this but I found it interesting how these groups indexes track housing prices…
• DataQuick: A private company from La Jolla that tracks median price of all publicly recorded sales transaction involving all types of homes in O.C. including single-family, condos, new constructions and apartments sold as condos. Reports weekly.
• Realtors: The California Association of Realtors trade group tracks median sales price of existing single-family homes sold through brokers’ Multiple Listing Services. Reports monthly.
• OFHEO: A U.S. mortgage regulator, the Office of Federal Housing Enterprise Oversight tracks price change through “paired sales.” This analysis compares gains or losses in values for existing single-family homes involved in transactions in a given period. OFHEO uses both sales and loan refinance data from mortgage applications. Reports quarterly.
• Case-Shiller: Housing trackers from Massachusetts created another paired-sales index, this one for L.A. and O.C., using publicly recorded sales data for existing single-family homes. Reports monthly. Used as basis for house-price trading in commodity markets and marketed under S&P brand.
“Another important factor — interest rates — is working in the homebuilders’ favor, too. Rates are falling, and that means affordability is rising. The benchmark 10-year Treasury is currently at the lowest level in 10 months and trending lower. Mortgage applications (purchases) have risen 20% in the past five months, while refinancing applications have climbed nearly 50%. The latter will put money in current homeowners’ pockets, making it possible for them to “trade up” to larger, more expensive, or even newly constructed homes if they desire.
As I said, the stage is set. Homebuilders reacted well to the market downturn, and their numbers look good. More importantly, the economy is on decent footing. Sentiment also looks very supportive, notwithstanding some isolated upgrades, as in the case of the Bank of America analyst. (Anyway, his upgrade was still cautious at best.) I think the forecast for “choppiness” is wrong. Smooth sailing is more like it.”
Of course, the author owns stock in TOL.
Sounds like it’s time to buy puts on HB stocks!
“Mortgage applications (purchases) have risen 20% in the past five months, while refinancing applications have climbed nearly 50%. The latter will put money in current homeowners’ pockets, making it possible for them to “trade up” to larger, more expensive, or even newly constructed homes if they desire.”
So, the FB who just re-fi’d his toxic loan to a relatively decent fixed rate now, if he’s lucky has a few hundred dollars extra in his pocket every month. Gee, what should I do? I know, “trade up to a larger, more expensive, or even newly constructed home”. Any idiot who does this, deserves to crash and burn.
“The benchmark 10-year Treasury is currently at the lowest level in 10 months and trending lower.”
The Treasury yield curve inversion is screaming RECESSION DEAD AHEAD to anyone who is bothering to listen. A recession is just what is needed to get demand for Toll McMansions back up to normalcy…
“Broker Mike Veatch
Make that Mike Beyatch
“Homeowners, many strapped with some of the highest credit-card debt in the Valley, are falling behind on their mortgage payments and facing foreclosure at nearly record rates.”
This is why I have little to zero sympathy for the FBs. Not only did they go out and “buy” a house way outside of their means, but they also run around recklessly using credit cards. The sad thing is that 95% of them are probably using the CCs for toys rather than necessities. EBay should see some screaming business over the next several years as these folks start trying to off load whatever they can.
Sorry to report this, but eBay has turned into a real yard sale. How do I know this? From personal experience, that’s how.
A few weeks ago, I was trying to pare down my inventory of stuff. So I took it over to a nearby eBay dropoff to see if they’d list it for sale. They said that they weren’t touching anything that wouldn’t sell for at least $50. And, wouldn’t you know it, nothing in my little stash even came close to that amount.
I remember telling the lady behind the counter that in 2000, I saw used bicycle gear selling for above retail on eBay. Well, that was 2000, she said. Not only is the bike stuff going for yard sale prices, so is a lot of other stuff.
So, scratch the eBay ideas, folks.
I’ve been selling on eBay for almost 10 years now and it has slowed down somewhat, the past 3 months or so…
Still a good vehicle to sell stuff, i’d guess that 85% of my customers come from small town America and if anybody has been rather unaffected by the housing bubble, it would be this group of folks~
Yeah I live in Ahwatukee. It’s an apartment, thank goodness, and I just wrote a check to my roommate for $498.52 for my half of the rent. Not bad when you are among overinflated houses, desperate FBs with mortgage payment resets causing them to foreclose and sell off their Hummers. The same type of people laughed at me two years ago when they found I was renting. Who’s laughing now?
BTW: I wrote in other threads that I may be losing my job in January. Well I have several months more on the way. I have 3 months worth of T-bills for living expenses and 4 years worth of other government securities for living expenses. I’m going to add another 3 months worth of T-bills during my next 7 months working.
What? Me buy a house because I have 7 more months of a job? Ha! I’m laughing now. I can jump to the east coast within a week of a new job offer anyway. I’m going to buy a well-constructed house for 50% of its current price in a few years and do a 15 year mortgage.
Bill, hope you don’t live in the one off Ray that lost H20 last week
AZ_bubble_sitter,
Thanks. No, it was not our complex - not that I know of. I am working overtime so maybe I missed the episode! Great cold weather we are having here temperatures in low 30s but NO ICE!
“There is a consensus among economists that the emergence of a supply gap has brought the economy to a tipping point. But there is heated debate about whether builders have acted quickly enough to prevent a further downward lurch that would choke off economic growth.”
Have the participants in said debate taken into consideration a record inventory of vacant new homes for sale in the US? Or the juxtaposition of the kind of housing that gets built during a period of record housing price inflation (1998-2005), which tends to be too large on average for the fundamental housing needs of the typical US household, against the leading edge of baby-boom households morphing into empty nests?
Or was it just another media battle of vapid sound bites?