Post Local Housing Market Observations Here!
What do you see in your housing market this weekend? Auctions or builder incentives? Editorial cartoons? Statistics? “Remember when you could count on condominiums to carry the housing market, even as sales of single-families began to languish? Not anymore.”
“The amount of time it takes to sell a condominium in Massachusetts has skyrocketed 46 percent in the past year, according to the Massachusetts Association of Realtors.”
From New York. “We raised a cautious question recently. We asked why, in a market where big time media like The New York Times are writing sad songs about the East End’s glutted homes for sale market, would east end real estate firms fill pages of full page ads saturated with all the houses for sale they could fit in the space?”
“Self defeating to my mind, implying that an inventory overflow may indeed be true! Buyers note: there are some wonderful homes out there, in that range, waiting to be picked off.”
From Ohio. “‘The number of sellers who entered the market outpaced the number of buyers, so while homes continued to sell, there were far more listings on the market,’ Akron Area Board of Realtors President Bill Askin said. ‘People’s perception was that the market was soft because there were so many signs up in neighborhoods.’”
From the topics thread. “I live in Santa Monica, I sold my home about a year ago and now I’m renting. My home did not appraise for the price the buyer offered, but they insisted on buying my house anyway even though it was valued 30k under their bid.”
“The value of the home I sold dropped and I received a letter from my buyer (via my real estate agent) stating that they believe they overpaid and they had the nerve to ask me for 30k, the value of the property today.”
“They gave me a long song and dance about how much money I made on the property and how it would only be fair for me to return the money. Of course I told them to take a hike. Would they have shared the $$ with me if the property increased in value? Buyers remorse is a bitch.”
can you say going down? yesterday to today.
mid may was 799,000
6/10/06 was 836,471
6/14/06 was 840,935
6/17/06 was 846,120
6/20/06 was 850,317
6/22/06 was 855,892
6/24/06 was 860,647
6/29/06 was 866,037
7/01/06 was 858,675
7/09/06 was 870,854
7/11/06 was 882,239
7/13/06 was 886,055
7/14/06 was 890,896
7/18/06 was 895,022
7/21/06 was 900,000
7/25/06 was 905,170
7/28/06 was 910,001
8/01/06 was 903,718
8/12/06 was 915,336
8/19/06 was 920,755
8/26/06 was 925,176
8/29/06 was 951,242
9/15/06 was 955,352
12/1/06 was 925,170
12/2/06 today 915,258
http://www.ziprealty.com/maps/index.jsp?usage=search&cKey=74rbwvlk
This is normal, supply dropped off all Dec.
Supply at this time is still double what it was last year. I cant wait to see all that inventory come back on Jan 1. Supply is going to be insane a month from now.
Correction, 2 months…..The Sooperbowl is always when the market picks up, ‘member?
2007 is going to be a great year for RE (you just gotta look at from the right angle).
True.
Whoops. Meant to say: “This is normal, supply dropped off all Dec 2005″. Few people want to try and show and sell their home during the holidays. Check out bubbletracking.blogspot dot com and you can see for yourself.” Supply came back on big time after Jan 1.
Inventory in Allegheny County (Pittsburgh, PA) is down roughly 6% from the summer peak. However, months of inventory continues to climb:
08/06 - 6.3
09/06 - 8.0
10/06 - 8.4
11/06 - 8.7
“…months of inventory continues to climb…”
Isn’t that really all you need to know about inventory?
Maybe that is it, Chip. Can anyone name a time when months inventory steadily climbed to levels well above 6 mos and the market was not going into a major meltdown?
That would be a ‘no’.
How about 48+ months of inventory (PB, FL)? When was the last time that EVER happened? What was the outcome that time?
Just read this article and now have even less (if possible) faith in the MSM.
Article title listed on the link from my homepage
http://dsl.sbc.yahoo.com/
is “Top 10 cities for Bargain Real Estate”
The article
http://promo.realestate.yahoo.com/
is titled “Top 10 Metro Foreclosure Rates”
The article list the 10 worst forclosure cities, it basically states that things are going to get worse. How the friging website gets from “Top 10 cities for Bargain Real Estate” to “Top 10 Metro Foreclosure Rates” is such blatant spin.
Nowhere in the article do they even hint that real estate is a bargain in any of these cities, quite the contrary is conveyed with a very high level of watch out here it comes and its bad sentiment.
How many poor dipshits have been screwed for a liftime by little spin like this. Im talking of the masses that just see that headline “Bargain Real Estate” on the way to their interest. Hahhaha, I know ethics is dead. The reader wants happy and the salesmen want SALE! Isn’t it funny how everyone gets what they want and everyone gets screwed?
Good points, it’s terrible.
I read that article after seeing the ‘bargains’ link, and didn’t even think twice, I’ve gotten so used to the spin of ‘ohmygod this place is going to hell in a handbasket’ being equated with ‘bargains to buy right now’! It’s to the point where I thought they were being somewhat responsible lol when they stipulated that those seeking ‘bargains’ in these top-foreclosure markets might indeed need to be committed to ‘buy & hold’ !
I was glad they included that little proviso, because even with all this stuff I’m feeding say, my spouse, about how this is not a good time to buy dear, he might say ‘hey, look, they say it’s a bargain!’ and want to plunge ahead…
I nailed a lying realtor this past week. I’ve been monitoring 2 communities where the builder has a make believe promotion of up to 65k off any home. Four weeks ago a home of interest was offered at 210k. Recently the price was bumped up to 230k but the promotion remains unchanged — apparently you can still save while prices increase.
Recognizing the absurd pricing gimmickry, I called the sales office and asked, ‘How do I save 65k on the home of interest?’ The realtor tried steering me to a laundry list of spec homes that were even more expensive than I expected but I rejected his pitch.
Anyway, after getting the price of the home of interest, I asked, ‘how can I save on this home if you just increased the price by 20k?’ The poor bastard was speechless; so, I ended the phone call promising to continue monitoring the price.
Used car salesman = Realtor
Someone posted here once, ‘used house salesman.’
“used house salesman” aka like used car salesman…
I beginning to hear that term in the media. Recently on CSPAN a consumer assistance group was discussing on rising debt in the US and how many people got into homes due to low monthly cost just like a car salesman. Then I heard it on CBNC and FOX. Totally unheard of tactic in the past. I am glad someone in the media is picking this up. Maybe they will crack the no-doc lending scam.
Right, Louie!
If the mortgage was fixed (like a car loan), and one wanted to live in the home, por invest based on positive cash flor, you might just be able to justify looking only at monthly payments.
The problem is that the I/O and Neg-am and ARM products make the monthly look much more attractive than it should or than renting. As stated here many times, this is a major factor in the obscene run up in prices.
Buyers do not do the risk/reward/future payment math. No wonder they are shocked when it comes time to pay the piper.
..or Used NAR salesman. David L. being the go-to man.
as an aside: If you have a brain at all ,of course they will spin this til the money is gone. US companies give a rip about allegiance, they will sell this country down a rat hole if there is profit to be made. Why do you think you can’t get bottled water through an airport checkin,but could carry a suitcase over the border loaded with plutonium without a check? As US consumers become tapped out,watch how loyal your Govt. ,and Business is to you ,…US citizen. Re; Recent extension of SS benefits to illegals..Letting illegals buy homes etc. ..Wherever the sale can be made, will be made.
Consume,comply,obey, remember you are the product.
Here’s a comment from a realtor in the Nevada Appeal regarding the 10% slump in sales in Carson City. I think he’s a logician in his spare time:
“There’s a lot of new construction going on, which is a sign the market is picking up,” said Jim Shirk, a Realtor with Realty Executives.
Hey - I think you can trust a used car salesman more than a realator. By the way if you get riped by a used car salesman the amount of beating is way less than getting ripped by a relator!
That’s a very interesting point about bumping the price and then offering reductions. In the UK that’s a criminal offence and the “20% off” sales technique after bumping up the price, cannot be used. I’m constantly amazed at how much that scam is used in the US. It applies to all kinds of things from funiture to autos and now property but very few seem to see through it. To say nothing of law makers bringing in legislation to ban the practise.
A frend of mine in the retail business had a saying - ” A discount is like a coat, it has to be put on before it can be taken off”.
NoDak,
Great saying. You have to be careful about “saving money,” it usually requires spending money first.
A tactic I used when I used to go Christmas shopping was to ask if the item ever went on sale, then how much, then OK, give it to me for that price now. Sometimes a manager would have to get involved, but I’d get the discount, and at least save the cost of sales tax, & maybe some lunch.
Paul
Actually, I believe this is a against the law in the US. Maybe not criminal, but it is fraud. 10 - 15 years ago Sears got busted because every thing in thier ads were reduced - “on sale”. The truth was they were on sale more days than they were full price.
I live in a McMansion community an hour outside of D.C. in Virginia, and we’ve had no sales since February. 11 homes have been on the market since then, and 8 remain on the market. (3 gave up trying to sell).
Foreclosures are mounting in Fairfax, Loudoun, and Prince William counties.
Yes, inventory is decreasing a little, but it is due to homes being pulled off of the market without being sold. In a few days the November statistics for the D.C. area will be available at http://www.mris.com.
“The value of the home I sold dropped and I received a letter from my buyer (via my real estate agent) stating that they believe they overpaid and they had the nerve to ask me for 30k, the value of the property today.”
Wow…I didn’t know you could do that…I’m firing off a letter to my Nissan dealer right away!!
Mmmm. That sounds like a nice new little niche the lawyers can get involved in as the market falls.
“Dear Mr. Smith,
I represent Mr. Jones who bought your house 8 months ago. Mr. Jones has discovered that similar properties in the area are now selling for as much as $100,000 lower than the price he paid. Therefore, my client demands that you reimburse him for the loss he has sustained. He feels that $80,000 should cover his claim.
We look forward to hearing from you concerning this matter.
Sincerely,
I. Shaftem (attorney)
P.S. Please also plan on hearing from us after the next $100,000 drop.
P.S.S. We are no longer feeding the squirrels.
Some bits from local classifieds:
‘Ranch-style home adjacent to Oak Creek. Priced below appraisal, $695,000.’
‘Unblockable Red Rock views 1+ acre 2,850 sq ft house + inlaw suite. Village of Oak Creek. Way under appraisal. $696,000.’
‘Owner says Submit All Offers! Finest private luxury living. $1,150,000. Les Springs.’
‘Immaculate Luxury Hardly lived in Premier West Sedona location. $690,000. Won’t last! Owner/agent.’
‘Lake Montezuma. Priced under appraisal. Home on top of mesa. $244,000.’
‘Flagstaff. Brand new 2 story in Ponderosa Trails. Priced to sell! Under cost at only $510,000 and a 4% co-broke!’
“Flagstaff. Large treed lot. Seller will consider all offers. Now asking $179,000.’
There are dozens of these now.
Sedona is a neat place, I would not - nor could I afford these prices though. It would make more sense just to visit and stay in a hotel or rent an place for a few weeks.
Is it easy to evict a tenant in Tx? A buddy of mine is trying to evict a non-paying tenant in NY and wants to know.
Probably the same as any other place. You get an eviction notice but the occupant gets his day in court. By the time your friend gets them out it will probably take several months. They usually give up the property at the last moment when the baliffs appear.
It is much much easier to evict someone in TX than most states. You can lock out a tenant for non-payment after 3 days, and can usually complete an eviction in 2 weeks. You can even place a lien against the tenants property for non-payment (if that is a condition of the lease).
I assume Texas is fairly easy to evict for non payment. Just need to file the paperwork or hire a company that does it professsionally. I have been fortunate, I have never had to evict anyone.
My ex-stepfauther owns alot of rentals in Tulsa - he just hires an eviction service. He is a retired Pat. Atty. but due to the # of property he has it is esier and probably less expensinve than doing it himself.
South Shore, Hillsborough County, Florida: Lots of grafitti all over the walls of a KB Home development. Didn’t see any traffic, place is a ghost town, but the taggers are busy.
“The value of the home I sold dropped and I received a letter from my buyer (via my real estate agent) stating that they believe they overpaid and they had the nerve to ask me for 30k, the value of the property today.”
I SEE STUPID PEOPLE PLEASE MAKE THEM GO AWAY! LMAO
I would frame that letter and hang it on the wall for posterity for whenever you need a good laugh.
It sounds like the buyer was an ESTie of some sort. I think part of the training is to demand whatever crosses your mind, no matter how unreasonable, because someone dumber than you might just go for it.
Severals brokers in my former office were caught up in the Landmark cult, a modern day spin-off of EST.
Yeah, now starts the lawyer up time for fb’s who’ll start looking for any reason to extract money from the sellers. Watch, we’ll begin seeing lawsuits based on “undisclosed faults” for the homes. Thats the american way, its never your responsibility but rather everyone elses to insure that you don’t do anything stupid.
Thousand Oaks report. Lot of For Sale signs but places are still moving. The daughter of a neighbor had their rent raised about 3 months ago from $1,800 to $2,400. They are in their late twenties and decided to buy and found a (overpriced) property in Newbury Park for $650,000. (I bet THAT owner breathed a sigh of relief and slept better the night they signed on the dotted line!)
I didn’t want to get into the, “Are they crazy buying at the top!” scene so I just nodded and said, “I wish them luck.” I was loath to ask if they had used an exotic loan but my guess is they did. I’ve met the couple several times on a casual basis and they are not the sharpest knives in the drawer. Both make fairly good money. About $90,000 between them I figure.
However, rental prices are REALLY increasing around here. My wife figures that a lot of rentals which have increased in price are being shared by two families but I have no evidence of that.
How can you possibly afford a $650K house when your family combined income is $90K? It just astounds me that people just don’t get it, not even now.
Around South OC the rentals will rise. Many are using the line that there just aren’t enough rentals because everyone who doesn’t own or rent from the mortgage co. wants to rent. This could get tricky and make South OC a complete warzone if things continue.
I have been renting my 2 bedroom apt for almost 3 years, $1200. I thought it was a good deal 3 years ago. The landlord has not increased the rent in 3 years.
The inventory in my area has gone down ~15% in the last month, but still it is twice or three times what it was last year.
I see many FBs trying to bail out one or two years exact after they bought the house. Many are selling (trying to) at same price they boought. Some even below, although I cannot tell whether it is a loss or there was mortgage fraud.
Some REOs are at 2004 prices.
I cannot believe that a young Caltech PhD, probably up to his eyeballs in debt, can be stupid enough to try to buy a house in this market, simply because he thinks he “needs a place of his own”. I have 300K in cash and a couple of children and I will not go for financial suicide. People like my coworker and other no-skin-in-the-game types are making the situation so much more difficult.
2007 will be a very interesting year. I want to convince myself that the Fed will try to save the US$. We will get the verdict within 2 weeks. Although the market is toast no matter what, it would be so much easier and faster if the Fed acted responsibly.
“I want to convince myself that the Fed will try to save the US$.”
Hope for the best, but prepare for the worst. I am holding a potent little book in my hands, called “The Lessons of History” by Will and Ariel Durant. I quote from Ch VIII Economics and History:
“From the Medici of Florence and the Fuggers of Augsburg to the Rothschilds of Paris and London and the Morgans of New Yourk, bankers have sat in the councils of governments, financing wars and popes, and occasionally sparking a revolution. Perhaps it is one secret of their power that, having studied the fluctuations of prices, they know that history is inflationary, and that money is the last thing a wise man will hoard.”
But on the other hand, is it wise for individuals of modest means to hoard multiple houses? Or for central bankers to inflate away their currency’s hegemony?
An extroadinarily astute question, which begs the next question. It is clearly not wise for bankers to act thusly, therefore why are they acting so?
I believe the inflation of great wealth and the inflation of those of modest wealth have vastly different effects. When an individual’s life’s savings of, say $50,000.00 faces rampant inflation, it loses much of the power and effect which was carefully accumulated over time. It cannot be used in any rational manner to keep up, but is forced to speculate and engage in risky behavior just to break even or decrease the relative loss. This practically guarantees its loss over time either through the attrition of inflation or to a failed speculative venture.
When compared to great wealth, say, $50 million, it’s a completely different story. That wealth can be split into a multitude of different investments, with some portion of it safely hedged, another portion used for extreme high-risk investments, another used for real investments in real estate, manufacturing technology, whatever. It is extremely likely that a high percentage of this kind of wealth will survive anything which occurs so long as some semblance of law and order prevails and property rights are not totally forfeited.
Based on the foregoing, some believe that the central bankers resent the rise of the commoner and their increasing financial independence. Some believe that the central bankers deliberately intend to destroy the middle class, to revert to a system of lords and servants.
I don’t know that this is a deliberate choice, but it may be an inevitable outcome over time.
“Some believe that the central bankers deliberately intend to destroy the middle class, to revert to a system of lords and servants.”
“Greenie, you did a heck of a job.”
“Some believe that the central bankers deliberately intend to destroy the middle class,”
You give them too much credit. They aren’t a very sharp or creative lot.
That’s why I stated I think they used an exotic loan. It’s incredible to think that people will take all kinds of precautions when the media states there is a flu epidemic on the way or happening yet after all the bad media publicity these exotic loans have been getting, buyers still sign up for them. Sheeesh.
My wife doesn’t get it. But if we ever reach the point where she gets pushy about wanting to buy a home, I will have to put pencil to paper to explain what affordability is and is not. The only way out for the FBs that I can see is a return to really high inflation, in which case the Asian creditors will get to help us continue overbuilding spec homes out in the middle of the Arizona desert.
“My wife doesn’t get it”. Maybe you better work harder and increase your income. She won’t wait around for a house forever…
Thanks for the suggestion, Mr. Realtor.
George,
Be sure to steer your Realtwhore buddies over to my post in the bits bucket today.
Toodles!
GS
I think my wife gave up. In addition, I show her every now and then some houses offered below last year purchase price (thanks ziprealty) to reinforce her retreat. In fact, I believe she is even in my camp by now.
GS, you very well know that hyperinflation is impossible, in the sense that salaries cannot be made to keep up. And it is ludicrous to expect that the US is going to become Zimbabwe or Argentina overnight. Why would the Fed allow that, just to save a few flippers and boneheads? A a la Volcker path is more likely.
My wife does not understand affordability, but she is duly impressed by the fact that my predictions of falling prices in SD (made back in the fall of 2004) have come to pass. I held on to these convictions despite the loud chorus of morons like Mr. George Campbell insisting that “real estate always goes up” and “buy now or your wife and children will desert you.”
Stucco, my husband has a friend at work who actually goes through listings and shows them to my husband because he really likes him and is afraid I will leave him if we don’t buy a house. I swear this is true!
Am I the only woman around here who’s dealing with a husband who will leave her (well, no, that would be merciful by comparison to the hell he puts me through instead) because wifey thinks it’s a really bad time to buy?!
Shel, I’ve observed this happening again and again. It’s as if couples paired this way so they can balance each other off. That isn’t so bad, because those who don’t end up buying more house than they can afford.
I was ready to buy in 95, but my husband was not at the time. We really missed that boat. But since then, we’ve been in agreement that prices are outrageous. We either find a house at the right price, or we don’t buy. But we did buy property abroad…
People keep on claiming that the Fed will start lowering rates at the first signal of economical slow down, in which case they should have started by now (unless they believe their own crap). Even Mish thinks so.
I just don’t get it. The US$ has taken a tremendous beating in one week, I believe mostly because it’s becoming clear that unless the Fed reverse their path, the rate differential with other FCBs will rapidly shrink. The US may be interested in a slow dipping of the US$, but after last week it is clear that lowering overnight rates in the US will be catastrophic. Can somebody seriously maintain that the Fed will lower or maintain rates in the near future?
My best guess is that Bernanke will chose a middle way between Volcker and G. William Miller (Volcker’s predecessor). He will not currently hike the FFR through the roof in response to a slide in the greenback, but he will also break with his predecessor by not pandering to Wall Streets’ and the REICs’ pleas for helicopter drops at the first confirmation of economic weakness (which has already occurred with last week’s ISM numbers). If I am wrong about this, then the Helicopter Ben label will be his forever, the punchbowl will be respiked, and America’s national wealth will continue to get sunk into building ghost McMansion tract home developments in the desert.
Thousand Oaks. Yes rents are high there and soon it will be like Santa Barbara. I used to live there. very nice place for all the old prop 13 folks or the new millionares. Amgen is the reason I was told RE prices would never go down there. well we will see?
“Both make fairly good money. About $90,000 between them I figure.”
I’m sorry but 90k/yr hardly qualifies as “good money”. Especially when it requires two slaves to earn it.
Then you must believe that the great majority of folks in northern Arizona are poor?
I didn’t say anyone earning less than 90k is poor. To me, good money means Joesixpack has the ability to buy a modest house and a 3 year old Chevy without handing over the family jewels. The 90k/650k ratio sure screams “poor” to me.
Seeing as the median household income in CA is $56k, $90k is good money, relatively speaking.
Actually, the previous post begs another question. If these exotic loans are still being used, that pushes the foreclosure scenario forward to 2010!
The damage is already done because of the vast quantity of people who have taken creative financing in the past few years and are already upside down. They can’t get a new exotic loan…at least under current cirumstances they can not and they can’t stop the payment from going up beyond their ability to pay either.
You’re right. Amgen pumps a lot of $ into the area. There are also several other corporations who pay good salaries in the area and a lot of small high tech companies who also pay good bucks.
However, I heard thast Amgen, like CountryWide Finance who also has a big workforce in Thousand Oaks, are moving to places like Plano, Texas. Added to that, still in the hopper as it were, a realtor in Las Vegas told me developers have started to build a lot of commercial properties on the outskirts of the masses of non-commercial property that has been built in the last few years. As we know a LOT of that property is vacant……..but if big corporations start to move in an occupy the commercial buildings - their workforce has to live somewhere.
“We asked why, in a market where big time media like The New York Times are writing sad songs about the East End’s glutted homes for sale market, would east end real estate firms fill pages of full page ads saturated with all the houses for sale they could fit in the space? Self defeating to my mind – implying that an inventory overflow may indeed be true!”
Sounds like this agent on Long Island’s east end is suggesting they cover up the huge inventory they have. Pathetic.
Oh, absolutely she is! The rest of that fascinating opinion piece included commenting that if the ads actually *show* all the houses for sale out there in the Hamptons, then the whole vibe is gone; who’d want to live there if soo many other people can do the same, ew! In no uncertain terms she advocates collusional marketing practices, urging her fellow usedhousesalesmen (I like that…)to consider the psychology of it all, highlighting the need to return people to the delusional beliefs and fantasies about houses that resulted in their paying whatever the realtor said they should, when they said they should. Especially in the high end market, where exclusivity is heavily worked into the price. Especially if the NYT is running rumors that you might be sweating it, you’d better look cool…
Pensacola, Florida
A reduction of $245,000 on a very nice 4,400 square foot waterfront house located near the Pensacola Country Club on 0.5 acres. List price after reduction is $1,450,000. Still has a ways to go but at least we are headed in the right direction. Also noticed a new listing in one of the more prestigous areas of P’cola coming on at $150 per square foot which although high seems to be headed in the right direction.
Headed to London tommorrow for a week on business and then to Austria for a week. I got a $100 round trip fare from London to Southern Germany on Ryan Air and combined with 50% pre-Christmas discounts at Hotels decided to head to the Austrian Alps for a week of skiing. At least the discounts take the sting out of the USD collapse. Hopefully there will be snow when I arrive!
Sounds like fun. Take some housing bubble photos if you get a chance.
Okay Ben. Thanks for the reminder about the camera! Gotta go–the car is here.
Popper : Enjoy it. I lived in Munich for 3 years and loved going down to the Tirrols. Word of caution about inter-European airlines such as Ryanair or EasyJet. Watch the luggage allowance as it is less than what you are allowed transatlantic. You may find yourself stuck with a nasty surcharge (Happened to me with EasyJet where surcharge was more than the cheapticket).
I hear there’s no snow in the Alps this year and Europeans are all heading towards Colorado.
I took a drive towards the coast today along Camino Del Norte (92127 zip code), starting near I-15. The road now goes through from 4S Ranch to Rancho Santa Fe. I highly recommend this experience for any San Diegans who want an eye-popping view of the amount of recent and ongoing new construction in the area, not to mention a staggering supply of buildable land. Among my perceptions were the following:
1) There is maybe 25 sq miles of land out that direction, of which perhaps 25% is built; the rest is open space.
2) The built portion of this area appears to all be bubble-era construction (2000-present), with a fair amount of ground broken in anticipation of continued building.
3) There was no shortage of For Sale signs around, either for land parcels or for built homes.
4) There was a considerable amount of construction equipment sitting around, suggesting the building continues apace.
5) Any illusions that San Diego suffers either a housing shortage or a land shortage are severely challenged by the visible evidence offered in taking this excursion.
The homes in 4S Ranch were selling for $800K on up in 2005, but I recently saw ads for homes “selling” for $700K, but with $50K in “incentives”, which in my book means the market value has fallen to somewhere near $650K, but the drop is masked by getting the buyer to finance a new car and/or vacation on his mortgage loan.
Getstucco,
I know the area pretty good. I have a housecleaning business, and I give tons of free estimates, but get little work in the area. It seems that nobody can afford to pay my rates after the cost of the overly huge house & incidentals.
There is one lady who is trying to sell a 7000 sq. ft. spec home in Santa Luz. It only has 3-4 bedrooms, but 6 baths. Really crappy layout. She originally had it priced above 4 Mil, but recently her flyer says 3.5 mil, lowered from 3.7 mil. She staged it, then got rid of the staging. She dropped our cleaning (after really nickle & diming us) and was cleaning herself until she broke her knee.
She asked us to clean again, and to clean her own house. 2900 sq ft, 3 bed/4 bath monster on a 3000 sq ft lot.
Anyone buying in Santa Luz has too much money & not enough sense.
Paul
Paul — that story was sad, but useful.
Paul,
Thanks for the insightful comment. As I was driving around yesterday, I was thinking to myself, “I bet this is a great area for folks in the lawncare or housecleaning businesses to find opportunities to sell their services.” I am sorry to hear from your comment that after feeding their alligators, many folks around this area don’t have enough left to purchase your services.
In my next life, I plan to be born rich so I can buy one of these homes:
http://www.santaluzrealty.com/
I know SD has a glut of millionaires, but given the size of this development and the number of new $1m+ homes and large, freshly-bulldozed lots, I am having a hard time envisioning enough millionaires to buy all of these beautiful places…
Four of my photos of the Phildelephia bubble are now posted on this site’s photo gallery.
Nice pics TL
Question: I don’t see the photo gallery, where is it?
On the main page there is a link on the left middle that goes to the housing bubble blog photo gallery.
Conversation with a realtor in Crown Point (San Diego.) Nice guy was selling the house for his father in law. He acknowledged that things had been tough since last spring, but didn’t know if things were going to pick up. I gave him piggington.com, told him how badly the NAR had lied, and maybe did him a favor. He seemed genuinely open to hearing about where things were heading. It could have been him, or a hint of capitulation, only time will tell.
Link to listing on CL
Josh
I saw a 1 cent home offer along Interstate 95 coming back from South Florida.
I’m one of those rare people who actually wants to buy now. I want to buy for life style reasons. As long as the payment is reasonable, I don’t really care if I can’t sell it for another 10 years.
That said, I still have not found a home that I would consider reasonably priced. I’m looking a subdivision with 22 empty homes. With no sales, not even one, in the last four months. I made an offer at $15,000 under the current asking price, it was rejected. This is on a home that has been on the market since March.
With all the empty homes, the agent called me up and said I needed to buy this week-end because they are “pulling their incentives”. What do they think that increasing the price will help home sales?
Maybe they want to up the price in December so they can lower it again in the Spring.
I honestly think the builders are trying to manipulate the market by holding back price reductions. Like if they keep prices up long enough people will just accept the inflated cost.
The agent just keeps telling me how horrible it would be for people who already bought if the price dropped below last year’s price. I told him, “it’s horrible for me, paying this price”.
Are you a screwdriver or a wrench, tool?
He is A_realtor.
I’m one of those rare people who actually wants to buy now. I want to buy for life style reasons. As long as the payment is reasonable, I don’t really care if I can’t sell it for another 10 years.
My inital thought was that this had to be a Housing Bubble Bear (HBB) who’s masquerading as a Greater Fool just to wind us up. Then on further reflection I realized this might actually be a bona fide GF who somehow stumbled unto this blog, but is too much of a sheep or lemming to actually process the information presented here.
“I want to buy for lifestyle reasons.” Baaaaaaaaaaaaaaaa! Can someone enlighten me as to just what the hell that actually means? When I buy (circa late 2007 at the earliest) my idea of “lifestyle reasons” - as distinct from this twit’s - is to have a nice place to call home, where we can raise our children in a loving, healthy, secure, responsible environment free from the stress and regrets that come from taking on unsound levels of debt to buy near the apex of the housing bubble. I want my neighborhood to be stable, established, and desireable, with longtime residents, not cookie-cutter tract housing or McMansions lousy with clueless FBs up to their eyeballs in debt so they can live out the superficial, consumerist “lifestyles” Madison Avenue has brainwashed them into craving.
Hey, what is with the uncontrolled invective? I would like to buy a house now as well, and I can assure you I am not affiliated with the real estate industry in any way. Just like this poster, I *want* to buy, but will not until prices are affordable when compared with rents. You guys seriously need to calm down.
In Costa Mesa, CA Richmond American Homes is now offerring incentives on their $800k+ McMansions.
http://tinyurl.com/y5tqz9
If you browse the house images note that they depict them with lots of green space around them when in fact they are near zero lot line properties.
Here’s where Houston’s *price* bubble is:
http://houston.craigslist.org/rfs/243302065.html
http://houston.craigslist.org/rfs/243275837.html
The Inner Loop is bloated with townhomes and new condo construction. I never understood the “tin shed” look popular with New Urbanites. I suspect within 5 years they’ll lose their visual appeal to the NUs and they’ll look at such places the way everyone else does: “Hey, that townhouse looks like an auto repair shop!”
New Urbanites = taste Nazis
that does tend to be true, doesn’t it…
it’s annoying as hell…
Just figure in the 3% property taxes, windstorm insurance and maintenance fees and you have a highly unaffordable dump.
the TH is the first link are actually pretty attractive. The industrial corrugated metal THs are just awful, and in 5 years will be especially worthless when their style is out. At least the classic looking THs in the first link have that goping for them.
Those “lofts” are like some insane parody built by a well-intentioned Texan who was inspired by magazines and maybe even a trip to a coastal megalopolis. Surely a student architect could have been found to draw up a superior design for a modest fee. What was built is developer hubris given form.
D R Horton had a full page ad in the RE section of the Az Republic a couple of days ago that listed prices for a community close to the house we rent in Surprise. I have been watching the construction of this development for several months and am amazed at its size. Hundreds of houses are in the final phase of construction with the entrance street still a dirt path. The community is very well located near the White Tank Mountains 1 mile from the 303 Loop and less than two miles from the proposed regional mall. A new high end Fulton Homes Lake community is slated for a nearby property.
The ad lists home sales prices under $100 per sq foot. Examples are: 2105 sq ft, 4bd 2bth interiors included $200,824
3481 sq ft 4 bd 2.5 bth loft den 3 car g.$326,147.
Trails, parks and basketball courts etc are being built. I have not been in the houses but from the exterior they look very nice. I see Sold signs on a few of the houses (probably less than 10%).
These prices have to have a chilling effect on resale homes in this area. I have a neighbor who has had his 1600 sq ft 3bd 2bth house on the market for months. He started at 315K and is now holding firm at $279K. The homes I mention above make his house as much as $100k over priced. I think 2007 is going to be interesting.
Sounds like that builder “gets it” and is marketing closer to the demographics of the area. If he continues down this path, maybe in 2008 he’ll be building some 3 BR 1.5 BA homes for around $140,000.
http://www.twincities.com/mld/twincities/business/16146129.htm
Foreclosure threat reaches the burbs
BY JENNIFER BJORHUS
Pioneer Press
The problem isn’t confined to urban areas — families in well-off communities are finding that a risky mortgage and some bad luck can put a home at risk.
The surge of foreclosures is still so new that experts have not formed an opinion about the suburban trend, other than that foreclosures are now cutting across income groups. Allen Fishbein, director of housing policy for the Consumer Federation of America, said that the higher home prices in suburban and exurban areas could play a part.
“People on the whole were probably stretched further and on thinner ice to buy these suburban homes than you would see in the inner cities,” Fishbein said.
To get the Weisels into a $278,000 house, their mortgage broker steered them to a zero-down-payment, interest-only adjustable-rate home loan — a type of loan heavily marketed during the housing boom as a way to make expensive homes affordable. The Weisels avoided the extra cost of private mortgage insurance by getting a so-called 80/20 loan — two different loans that equal 100 percent financing.
Pam acknowledged she didn’t carefully read all the documents and hadn’t fully realized that for the first two years, they would pay just the interest on the loan, and that the interest rate would reset this coming spring. They placed far too much trust in the broker, she said.
“As an accountant, I feel kind of stupid at this point,” Pam said. “If you kind of place all your trust in somebody, and you think they’re doing everything they can to help you and are looking out for your best interest, you’re not sitting there picking it apart.”
Disaster struck almost immediately.
The Weisels’ mortgage is like many she’s seen, said Setterquist, a no-nonsense counselor with Carver County’s Community Development Agency. Most of Setterquist’s clients have mortgages of $200,000 to $300,000. Most are adjustable-rate mortgages, and most are subprime, the higher-interest loans made to people with blemished credit.
Setterquist wants to see the Weisels’ big financial picture before she advises them.
“I want pay stubs and a budget to see if there’s even a discussion (about avoiding foreclosure) here, or I’m going to tell you to sell,” Setterquist said.
Sounds like they will have a hard time Weiseling their way out of that suicide loan
“The surge of foreclosures is still so new that experts have not formed an opinion about the suburban trend, other than that foreclosures are now cutting across income groups.”
I guess stupid ignores socioeconomic class boundaries.
A part of the article omitted from the above post is truly sad, but also a cautionary tale that shows why it is not a good idea for a buyer to assume they will always have the option to sell later if they don’t like the current market value of their home:
‘Within months, Nate lost his job and Pam learned she had a large tumor lodged between her heart and her lungs on her thymus gland. The tumor had grown to the size of a softball by the time surgeons opened her chest last year to remove it. Against all expectations, it turned out to be benign.
“The doctor said, ‘I don’t know who you prayed to, but he really likes you,’ ” Pam said.
The financial gods were not so generous.’
Don’t miss the Twin Cities foreclosure map which accompanies this article. No bubble here, folks — move along…
http://maps.kricar.com/maps/stpaul/foreclosures/
BTW, is there a foreclosure map for SD yet that anyone is aware of?
They bought a $278K house on a $55K income. That’s roughly double the 2.5 debt to income rule of thumb. No surprise they had problems.
fiat –
What does that say about SD, where the median income is in the neighborhood of $65K and the median home price (including condos!) was last reported at $485K? That would be a multiple of 7.5 (triple your 2.5 debt to income rule of thumb)…
News of a mortgage lender’s comeuppance: http://seattletimes.nwsource.com/html/businesstechnology/2003459108_merit03.html
One complaint came from Lynnzel Hernandez Valdez-Nabua. A first-time homebuyer from Everett, she complained that Merit forged her sister’s signature, originally provided as a reference, to say it was her employer’s.
The company that bought Valdez-Nabua’s loan from Merit apparently discovered the forgery when it contacted her employer for verification. She was fired because she could not conclusively prove she didn’t commit the deed.
Valdez-Nabua said she called Merit repeatedly to complain and got no response.
May he rot in the hell that is the market he helped to create. “Greed is good”: soooo ’80s.
“She was fired because she could not conclusively prove she didn’t commit the deed.”…
What happened to innocent until proven guilty? Wouldn’t she be able to sue her former employers?
Builder Fishing For Fool in Arkansas
Here’s my most recent experience:
Builder advertises house in Sept for $327k
Builder gets no offers (I expressed interest but did not make offer)
Builder lists w/realtor and raises price to $339k
Builder gets no offers
Builder pulls house from market
Realtor contacts me and says builder is “motivated”
“Motivated” builder says will relist in Jan. if offer not accepted
I sent realtor an email and asked what the “new” asking price was going to be since it didn’t sell at $327k. Unless the starting price is well below, don’t waste my time.
No response from realtor
“Dear Santa,
Please, please, please deliver a GF to my doorstep on or soon after January 1, 2007, so I can unload this overpriced stucco box.
Sincerely,
Mr. Motivated Builder”
” you browse the house images note that they depict them with lots of green space around them when in fact they are near zero lot line properties”
Agree! there is virtually no open space anywhere in the densely built-up Costa Mesa community. Also, and this is a little known fact about CM, there is an emerging immigrant population and growth of an immigrant apt section. CM housing development would necessarily be squeezed-in and compacted(zero-lot)or stacked condos/apts due to high population densities intermixed with ample commercial/office/retail zones. Not to say that CM is becoming another Santa Ana:there are some well-kept up residential sections throughout the city,but it is a bit below Newport or irvine as far as Posh hi-end residential districts. AS a matter of fact, CM may be considered the multi-unit housing zone for S OC.
Anyone who has spent time in Costa Mesa schools knows about the immigrant population. Right next to brand new homes going for 800,000 dollars in Costa Mesa (along 55 freeway) is an elementary school that is basically 100% Hispanic, most of the children coming from Spanish Speaking only families. So you pay this high price for housing, but you really don’t want your kids going to the local schools because they are too busy trying to teach the children English. I see Costa Mesa becoming just like Santa Ana, Anaheim, and Garden Grove. These school disctricts primarily have children of low education immigrants. The rest of Orange County is quickly becoming like that except Irvine. Irvine also has some children of immigrant parents but they tend to be high achievers from educated parents.
Parts of Irvine, Tustin and Lake Forest were becoming rental areas full of immigrants, even when I lived in OC six years ago. I doubt that trend has reversed.
OC is not the middle class Americana it was in the 1970s. It’s maturing, and becoming more like older cities, with aging apartments full of the poor.
Basically the entire northwest half of orange county( north of the 55 fwy) is becoming indistinguishable from LA county as far as being heavily immigrant. East/central Anaheim, garden Grove,Westminister, La Palma, Buena park, Orange, Santa Ana, Fullerton, and La Habra are in varying degrees becoming inundated with indochinese/Hispanic immigrants. Not that these areas are as rundown as the LA innor city slumzones, but the demographic changes are evident. The immigrants in NW OC seem to be more industrious and a bit more skilled than what you see in LA inner city.
The effect on the RE housing market is to create demand in NW OC for apts and more affordable multi=housing units. Large parts of NW OC still feature the standard 3/2 1500/2000 sq ft on 7000 ft lot as the typical housing unit, but who will buy these homes for $600,000 in areas changing over to immigrant communities. What may happen is the these areas will be downzoned to r-2 to allow for multi-unit housing, which usually happens in declining older Burgs
heavily inundated with immigrants.
This Demographic/ housing shift appears to be unfolding in a similar way in Large sections of the San fernando valley, especially areas east of the 405 fwy such as Van nuys, panorama city,burbank, ect.
http://themartys.springssearch.com/browse/IDX1_Final.asp?MyNo=443441
This Victorian, in Colorado Spring’s Old North End, has been on the market for well over a year. They started off at $585, then after many months, cut the price to $569K (yawn). I went and checked it out, and was unimpressed — it sits on a busy avenue (Nevada) and from a casual visual inspection it looks like care and maintenance would eat you alive. It was converted back, I believe, from student apartments to a single family home. They seem to have taken it off the market at least once, and relisted it when it didn’t sell. I still think it’s priced at least $50K too high, even at current (inflated, soon to plunge) market prices.
OK, here’s what I’ve noticed in the LA Westside today.
1. There are A LOT of open houses. I haven’t seen this amount of supply in years. You see at least two signs in most major corners. For some of you this might be old news, but for those of us who have been moaning that nothing was happening, it is a major development.
2. Prices are still outrageous.
3. There is some traffic in open houses, but nowhere near what you saw even less than a year ago.
4. Realtors have suddenly become nice and accomodating.
I was driving around with the kids, so I only got to see two houses in the 90064 Zip.
House #1: A FB in deep trouble selling with HelpUSell. Man, when I got home and saw the house in Zillow it suddenly dawned on me how much some people are going to suffer. It turned my stomach, because these people are living there with their kids. There were bycicles, board games, kids beds…This family is going to be in bad shape.
3bd/1bath 1,004 square feet
Pros: one of the cheaper houses in a good area/remodeled kitchen/nice lot for the area.
Cons: facing the huge mall Westside Pavilion/small house/little closet space/very small rooms
ASKING PRICE: $895,000
Sold last time in 6/05 for $855,000
House #2:
3bed 2bath, 1,770 sqft
Pros: Trad house on nice quiet street, very bright, comfortably sized house. Good updates. Master bath is brand new and nice.
Cons: Tiny backyard (no room for a dog), odd floor plan (one kid’s room opens into Master bedroom)
ASKING PRICE:1,095,000
Sold last in 2000 for $569,000
As you can see, prices still have a way to go in this part of LA, but I think I can safely report that something is in the air. I swear I am not being swayed by all the bubble talk. I’m too much of a veteran of this area to fall for that…
Most LA county sellers still have not adjusted to realistic pricing to move homes. See this all over, not just the westside. Saw a home in Long Beach listed for 590,000 in a crappy declining burg, an unpretentious 3/2 50=yr old stucco on 5800 lot. LA sellers are still in fairyland as far as RE price adjustments.
Peter M. said “LA sellers are still in fairyland as far as RE price adjustments”
You’re right, and one of the reasons I stumbled upon this blog was because I didn’t understand why the new reality is taking so long to sink in here. One of the bloggers pointed out that sellers really need that kind of money for their house in order to stay afloat, since the alternative would be to come up with some money to close the deal and they don’t have it (all their purported “savings” have been sunk into the house itself). In other words, this blogger was suggesting that they simply can’t afford to lower the prices. That made me understand the kind of “standoff” that we have come to. Sales have dropped more than 20%, but prices have not, or very little. Anyway, that was the only explanation that made any sense to me…
The Honolulu Board of Realtors has NOT updated the median price of homes in Hawaii on their web site. Usually, they update the median price on the first or second day. I bet there are some bad news coming out this week. Maybe a huge drop in prices? I think so. Keep watching.
Atlanta - of two houses on my street on sale since spring 2006, one has sold.
At least two more popped up “for sale”, however.
This appears to be the general trend around the neighborhood.