“Builders Know What Has To Happen”
The News Observer reports from North Carolina. “Weakness in the Triangle housing market probably will continue through the middle of next year, the region’s builders were told Monday. ‘We will see some real, negative numbers in both new and resale home transactions, as they compare to a year ago, during the next six months,’ Helm told members of home builder associations for Wake, Durham, Orange and Chatham counties.”
“‘We now have to wait for the market to find a way to absorb the excesses and imbalances, a large resale inventory and a fairly large new home inventory, in a market short on buyers,’ Helm said.”
“The Triangle’s housing market has felt the slowdown largely because many people moving to the area are having difficulty selling their homes in distressed markets.”
“Production builders have begun slashing prices and offering incentives. Homeowners, facing more competition, have begun reducing their selling prices.”
“In October, resales dropped for the first time in almost four years, 17 percent more homes had price reductions than a year ago and the inventory of homes for sale grew by 6.6 percent, with 14,538 homes on the market, according to the Triangle Multiple Listing Service.”
“Residential building permits were down 24 percent in the third quarter. The Triangle’s home building industry is one of the area’s most important economic drivers, with ancillary effects on a range of businesses from bankers to furniture retailers.”
The Sun News reports from South Carolina. “There were 147 bankruptcy filings in Horry and Georgetown counties during the first nine months of this year, compared with 647 filings the same period a year earlier, according to the U.S. Bankruptcy Court. Experts say that is because law changes that took effect in October 2005 made it more expensive and difficult for consumers to file for bankruptcy protection.”
“‘The debt problems are no different than they were before the new laws,’ said Michael Drose, whose law firm in Myrtle Beach specializes in bankruptcies. ‘The new laws didn’t change the fact that people are still drowning in debt.’”
“Foreclosure statistics, another indicator of individuals’ economic standing, also can be misleading, experts say. There has been a slight decrease in the number of home foreclosures in the Carolinas this year compared with 2005, according to RealtyTrac. The declining local numbers are the result of more real estate investors buying up distressed properties before they hit the foreclosure auction, according to Michelle Hallstrom, owner of (a) real estate agency in Myrtle Beach.”
“‘The number of people having problems is about the same as last year or before,’ Hallstrom said. ‘The numbers just make it look better because more homes are being bought before they go to auction.’”
“The higher delinquency rates are showing up at some Grand Strand banks, according to their U.S. Securities and Exchange Commission filings. For example, the amount of charged-off loans at Beach First National Bank nearly tripled during the first nine months of this year, compared with a year ago.”
“Non-performing loans more than doubled at Beach First, even though the total amount of all loans increased by 53.5 percent. Conway National Bank said in a Sept. 30 SEC filing that the ratio of charged-off loans to all outstanding loans increased to 0.06 percent during the first nine months of 2006, compared with 0.03 percent for the same period a year earlier.”
“Walt Standish, president and chief executive officer at Beach First, said loan delinquencies at that bank are largely the result of a slowing real estate market. Mortgages comprise 76.9 percent of the bank’s $404.1 million loan portfolio.”
“‘Some people have had the unrealistic expectation that if it took 30 to 60 days to sell real estate last year, it would take the same time this year,’ Standish said. ‘Now it’s taking 120 days to 180 days, and some people didn’t plan for that.’”
The News Press from Florida. “The slide in Lee County’s home-building industry continued in November as the number of permits for single-family homes fell to levels not seen in almost four years.”
“Builders in Cape Coral pulled 152 permits, the fewest since 81 in December 2002. In unincorporated Lee County, which includes Bonita Springs and Fort Myers Beach, 357 permits were issued, the fewest since 299 in March 2003, according to figures released Monday.”
“‘They’re pretty much in a situation of just waiting because there’s so much inventory, and you don’t want to add inventory’ with almost 14,000 existing homes already on the market, said said Michael Timmerman, managing director for Florida at Hanley Wood.”
“In Fort Myers, which typically has smaller numbers of homes being built, 32 permits were pulled in November. That’s down from October’s 51 but more than three times the 10 pulled in November 2005.”
“About 77 percent of the single-family home permits were for work in Lehigh Acres, valued at about $63.4 million. That’s up from October’s 74 percent. Even in Lehigh, said real estate broker John McWilliams, ‘builders are seeking ways to tweak their home/lot packages below $200,000 because they know that’s what has to happen for their building careers to continue.’”
“Jack Bowles and his wife recently closed a deal with America’s First Homes on a three-bedroom, two-bath house in Lehigh for $240,000. They’ll move from Naples, where he works.”
“Bowles said he probably got twice the home for his money than in Collier County. ‘In Naples, I wasn’t able to buy a home for less than about $300,000 or $350,000,’ he said. ‘We spent a whole lot less than that and got a brand new home with a whole lot of amenities.’ Now, he said, he has a 90-mile commute but the lower price for his house will more than offset higher gas prices.”
“One factor that could cause a turnaround, Timmerman said, would be a continued drop in land prices. That’s beginning to happen, he said, as people who paid $40,000 to $50,000 for a lot in Lehigh are willing to sell for $30,000.”
“‘The debt problems are no different than they were before the new laws,’ said Michael Drose, whose law firm in Myrtle Beach specializes in bankruptcies. ‘The new laws didn’t change the fact that people are still drowning in debt.’”
This seems to be the problem everyone is missing. By increasing the costs of housing for the average consumer, the average consumer has less money to spend on other things. The only reason this hasn’t been the case for the last couple of years is because the rising values of homes has allowed large sums of money to be extracted in times of need. Now that the piggy bank is running out of money there is going to be less spending on things that drive our economy. I predict very ruff times ahead for anyone who has bought or refied in the last 3 years.
Blue Falcon and the FB’s,
It’s that very sentiment that drove me to wonder what exactly is it that lenders are thinking this new legislation will bring them? Seriously, you can’t get blood from a turnip and these folks lives (and debt) haven’t changed. Well certainly not for the better anyway.
That is a really great brief synopsis of the problem. Rough times for everyone actually, because America had become acclimated to the bubble. The greediest consumers will suffer the most. In the end, everyone gets what they deserve…
“Now, he said, he has a 90-mile commute but the lower price for his house will more than offset higher gas prices.”
90 mile commute? What a waste of time…
I wasn’t aware that 90 mile commutes are typical in a roaring economy.
You’ve got to figure that at some point the cost benefit of using 3 hours of your day for commuting just isn’t worth it. You could instead work a part-time job (or overtime let’s say) for $10/hour - that’s $750 per month right there - more than enough to make up the difference in the $60k-$110k the guy saved in mortgage costs. That doesn’t include income tax, but assumes probably a way lower paying job than his salary, and doesn’t include wear & tear on the car.
I just don’t get people who commute that far every day. Is their time just not valuable at all? I decided years ago that the *max* I would commute is 30 minutes, otherwise if I couldn’t live that close to my work, I just wouldn’t take the job.
I’m with you packman. I live on an island and if I have to leave it for work it feels like a trip to Mars. I canot imagine sitting in a car for a couple hours a day.
What’s funny too is that the serial commuters I question about it refuse to divide their salary by their commute time.
You’re making the assumption he’s driving 60MPH. odds are he drives 60MPH for 70 miles and then 15-25MPH for the last 20. He’s spending over 4 hours a day in a car easily.
I live 22 miles from work and it takes me 1 hr on a normal day.
“….and doesn’t include wear & tear on the car”.
Years ago, I worked with a woman who commuted this distance to work. Bought herself a new Camaro. 2 years later and 125k miles on the car, guess what? It was done. About 20k purchase price, and it was now junk. Add that 20k/24 months to the $750/mo. in lost productivity/income, and you get a better picture of how senseless these commuter plans are.
But, then again, how can you expect these people to think rationally about commute costs, when they are buying a house with no money down, I/O - pay option, and a 3.95% teaser rate for the first year?
And 3 hours is optimistic — I doubt his commute has an average speed of 60 mph. (Maybe some stretches at or above 60 mpg - but still). 90 miles = 2 hrs each way, I’ll bet.
Otherwise, I am in agreement with the rest of the reasoning in your post. Maybe he just likes his new in-car satellite radio a whole lot.
My perfect lifestyle does no permit a long commute to work.
You beat me to it. 90 miles for a f**ing house. I don’t think so.
The article said he was renting before, and almost certainly at a cheaper price than his mortgage. Another speculator, IMO, with a monster commute.
I had a 4 year project that I commuted 60 miles one way and everybody was doing the same commute. If one wasn’t in a fit of rage at any given moment, they were in tears.
I can’t even stand to drive 20 minutes in traffic with all the nuts and grannies driving around. Gotten to the point that I do all shopping online except for food.
And who wants an employee that shows up for work already exhausted and angry?
I have no idea why I would add anything at this point (now that we’ve body slammed everyone that commutes more than 20 mins.) but my old commute didn’t start that way!
It was 33 miles (mostly on I-5) and abandoned country roads. So 33 miles @ 60mph was a little over 1/2 an hour. EACH successive year got worse. Portlanders “discovered” that no one was out on the road at that un-Godly hour and before long the 6:00am commute looked as bad as the 9:00am commute! In the 90’s our area placed a higher value on “acreage” than high-rise living (so my home appreciated nicely). That aside, I would NEVER do it again and I could have had master’s degree with the time I sat in traffic. The real answer though is to work from home as I do now and watch the bubble unravel in real time! Nice.
Agreed. I work about 1 mile from my apartment and have been known to walk on many an occasion.
Oh, btw it wasn’t “policed” in the slightest so stop signs on country roads meant “approach with caution”. There just wasn’t any revenue in it. Well once everybody and their long lost brother figures out it’s better to get a gym membership in town or beg your boss to adjust your hours, the cops are out in force!
When I started my “long distance” commute in the early 90’s the only people I saw on the road at that hour was the Franz Bread delivery guy! When the tech. bust took hold and all the nickel millionaires wives had to go get jobs again if they wanted to keep the Mercedes so it became unbearable. Oh and they all had custom plates too!
I’m thinking it’s a 90-mile commute ROUND TRIP. Lehigh is about 45 miles from Naples, where he works. You add in traffic, especailly during snowbird season and he’s looking at an hour at least each way.
“90 mile commute? What a waste of time…”
These are likely families who are looking for a stable environment for their children with a stay at home mom, which is tough to pull off these days. Energy costs are not as well understood as they were in the seventies, and given the “time” most will waste it one way or another.
We have lots of women in our office, but very few of them “want” to work, and those who are “career oriented” usually have functional college degrees, are physically fit, and generally pretty sharp regarding most topics.
rms,
The real problem with Portland’s commute was that the city had/has NO desire to make commuting easy! They figure, “screw ‘em”. They’re not paying taxes here and…. the minute you add lanes, etc. they immediately become obsolete anyway! Oh, and they don’t believe that providing parking of any sort is of benefit either!
When it’s all said and done, there were parts about it I did enjoy. It was the only two hours out of the day (more or less) that your boss, nor your family could mess with you and you could listen to “your” music at whatever volume YOU liked! Once out of the Terwilliger Curves (real mess) it went pretty smooth. I did notice though that most bad accidents happened on Thursdays when presumably people were tired of working and already daydreaming about the weekend?
3 months ago when I flew into Nashville, I had to drive to Knoxville, which is on the other side of the state. It took us 3 hours. Once we got out of the city, there was a huge freeway that had hardly anyone on it and few if any cities inbetween. It was bizzare. What’s more is that the freeway was freshly paved the entire way. I’ve grown accustomed to the almost pothole ridden streets in SF, so it was weird being able to ride without bracing myself for enormous holes for 3 hours.
You could easily live 50 miles outside of Nashville in be in the city in 30 minutes or less. That’s just pheonominal since it now takes me over an hour to commute just 23 miles.
jetsonboy,
Well exactly. I had so many co-workers brow beat me over the years and what’s funny is that many had commutes that were only slightly less distance. Everyone draws a line in the sand and says, “anyone that has a longer commute than me is an idiot”. O.K, whatever.
I’d also noticed that just going to my doctor’s appt’s in Portland were no bargain either! Depending on the bridge being up or crack house shoot out it could take (and I’m absolutely not kidding here) an HOUR from downtown to to S.E 82nd and Division! I am SO not kidding! I was never delusional about the length, cost or personal impact of my commute. The assumption on the part of Portlanders is that if it’s physically close than it only takes 10 minutes! BS! “Oh I can be anywhere in the city within 10 minutes!” NFS! Really? Because I’ve sat for 1/2 an hour waiting for the Burnside Bridge to come back down or CONSTANT contruction delays. So where is it you’re getting this 10 minute thing again? At least my kids (thank the Lord) didn’t have to pass through a metal detector on their way to class.
I had a long commute for years into Bev. Hills ,(which I couldn’t afford living there ). Many times I would stay in a hotel down the street if I had a busy day or needed to catch up . I did that for years and I will never do it again . I really feel I earned my retirement now because of all the BS I put up with just to work .
HW,
I live in Alhambra and work in Beverly Hills. Where did you live? My commute is @1 hr 10 minutes in the AM, 34-40 minutes in the PM. I usually get to work between 9:00-9:30 and leave around 7:00-7:30.
My commute was hour &1/2 one way . I know some people had longer commutes but I still didn’t like it .
“‘We now have to wait for the market to find a way to absorb the excesses and imbalances, a large resale inventory and a fairly large new home inventory, in a market short on buyers,’ Helm said.”
I suggest helicopter drops in the amount of $500K-$1m right into the back yards of prospective buyers. Because there are simply not enough US households around that can actually afford a McMansion priced at $500K+.
“‘We now have to wait for the market to find a way to absorb the excesses and imbalances, a large resale inventory and a fairly large new home inventory, in a market short on buyers,’ Helm said.”
The real issue is how the excesses will be absorbed. Houses are not like cars or cokes or TV’s. This excess housing stock will take a LOOOONG time to absorb.
Roidy
“The real issue is how the excesses will be absorbed. Houses are not like cars or cokes or TV’s. This excess housing stock will take a LOOOONG time to absorb.”
Roidy, that is a good point. “Ownership” is at its all time high, percentage wise. Who do they think is going to buy all these? Families can have two cars or 3 TVs, but 95% of Americans cannot have two homes, at least at present values. If prices do not drop dramatically then LOOOONG might be an understatement.
The other way to absorb houses is to have firesales . For some reason the punks always seem to find out where the vacant houses are .
Hmm, before Stucco’s $1M helicopter drops occur, I’d better get ALL my US dollars into foreign-denominated instruments.
Raleigh-Durham and Austin have just about the best economies in the country, and they never had a bubble. If the housing market has a problem there, it has it everywhere.
You bet. The excess supply plagues the entire nation. The homebuilding sector was very profitable over the last 4 years. As a result and from the Florida article, “‘They’re pretty much in a situation of just waiting because there’s so much inventory, and you don’t want to add inventory’”
The builders will continue to build here in FL….It’s what they do…
The land prices will be the first to fall; and are plumetting as we type.
Material prices have already fallen due to decreased demand, and will continue their downward trend.
In a couple of years it will be economical to build your own modest home, fresh from new materials on cheaper land, than to assume the Ponzi-scheme debt of a home built, bought or refinanced during the bubble years.
The builders will continue to build all the way to the bottom and beyond….
It will end badly for many, but for those with cash and steady employment, the coming recession will be a great time to build. Especially if the interest rates stay below, say, 9 %.
Gimme 9%. I have a pile of cash looking for a good return.
I know 9% may seem high but I can remember mortgages in the early 80’s recession running 12%.
People were able to pay ‘em.
I remember that well. 9% long bond yield would do wonders economically, irrespective of what the moonbats say.
Yes but people who whad 12% mortgages in the 80’s *took out* mortgages at 12%, they didn’t take out adjustable rate mortgages which later climbed up to 12%. The problem isn’t the concept of a 12% mortgage, its the problem of consumers literally “gambling” with ARM’s.
Also, people with 12% mortgage in the 80s were probably getting 10% annual raises, or 14% over 2 years.
CincyDad: you’re not kidding! These days, even if a company is pulling in record profits, they aren’t dishing out annual raises. A good friend just got his annual evaluation and was denied a raise. Last year he got a whopping 2%. He has never had disciplinary actions or other issues that would warrant a flat out denial of a raise. Several other people were denied as well. It’s almost as if the company is giving managers X amount of dollars for raises, and it is so little that the manager has to deny half his staff. This is at a time when their company has near record profits and stock price. It just boggles my mind.
That steady employment thing could be an issue. I survived all the 80-90s downturns w/o a layoff or a break in employment but every time I watched another co-worker packing it up, I always felt that potential disaster poised & dangling over my head. Can’t say I was ever considering a purchase during any of those periods. If my landlord hadn’t come to us and say he felt we had outgrown the apt. (with a family of four) we’d probably still be there paying our $500/month for the whole bottom floor of a beautiful Victorian. (Nostalgic Sigh!)
The sword of Damocles was hanging over your head.
“In a couple of years it will be economical to build your own modest home, fresh from new materials on cheaper land…..”
Boy, I hope you are right. Merchant builders construct absolute crap boxes these days. Cheapest materials, poor use of interior space, cheesy unimaginative architecture, etc. I would absolutely love to just find an 8-10K sq ft lot and build my own. My dad designed and built the house I spent half my childhood in, and if you care at all about quality, and architecture/design then it really spoils you, makes you look at the mass produced stuff with disdain.
Never had a bubble? Prices have gone up considerably in the Raleigh area over the last 3 years. Homes that were $350K are now priced at $500K+.
My thoughts exactly. If Raleigh-Durham is having a housing bubble the US is really in trouble. I have friends in the housing industry and at the being of the year they were talking about how many construction workers were going to Tennessee and North Carolina cause the maket was still booming. Apparently is not booming as much as they thought. The reason I think this is such a big issue for construction workers was these areas were consider the fall back position when you lost your job in Florida.
Like all the construction workers in Arizona, who say they’ll go to Las Vegas when it gets slow.
Ben,
LOL! My brother in Tucson fortunately was a little bit ahead of that curve and got a job w/mega retailer setting up their new displays and doing re-models! When he asked about LV (which I frequent) I said, why? So you can go to dealer school?
I saw a blip on one of the network news shows that said Wyoming was actively recruiting in the rustbelt states and was starving for employees due to energy industry growth. They interviewed a construction worker who was not in his 20s and had a family to drag along who talked about moving forward to a new “adventure” instead of facing a decline in Michingan (?maybe?)
Anybody care to comment on Wyoming and any growth there?
w fl screwed NC seems to be the # 1 east coast destination
and still soft
Ya.. no kidding. There are STILL homes outside of Austin for 75k… and less. I cannot tell you how many people I know from California who are moving to Austin, yet there simply seems to be a never-ending sea of cheap homes there. They can just build more and more and more because there’s tons of open land in every direction. Of course the inner parts of Austin are expensive, but not in most of the burbs. In California, it doesn’t matter if it is in SF, Berkeley, Oakland, or any of the surrounding burbs even 100 miles out. Here EVERYTHING is overpriced and unaffordable. In places like Austin, Raleigh, etc etc, at least you have a chance as a first time buyer with the possibility of moving up later.
jetsonboy: I’m in the east bay as well, and prices here are just stupid high. So out of line with incomes it isn’t funny. Of course, you wouldn’t know it judging by all the people driving around in MB and Lexus. At least one line of my family has lived continuously in CA for close to 120 years, but I am seriously considering raising anchor and heading to someplace like Austin. From what I have heard, the salary differential there is not extremely high. Good luck to you going forward from here! I’d love to stay for the weather and my family, but….
caguy,
Just be aware that indeed- these ‘other’ places are not going to be like CA. I’m sure you are aware of that. I can attest to this difference because I am from one of those “red” states.
You give and take in both instances. In many of the cheaper areas, you will not find the culinary variety that exists in SF. The geography is also not as diverse, meaning you can’t usually take off for a weekend in the mountains desert, beach, or wine country all within an hour from the Bay. Admittedly, some of these areas might not be as open to alternative lifestyles.
I say this because I know several californians who moved to other regions without carefully researching where they went. They just looked at the price of the houses. If you are going to do this, then make sure you know exactly what the area is like. Some placed like Austin, Asheville, Nashville, and Montgomery AL and many others are actually very nice places. But some of these have local economy issues that will mean a 150k house might as well be a 500k house in CA if you don’t have cash on hand to overide the local cost equation. Some of these areas are in a sea of rural wilderness. I actually prefer extreme rural areas over Metropolitan ones.That’s how I grew up. But For those that crave the city life, be prepared for getting accustomed to buying clothes at the local farmers’ Co-op, or Tractor Supply Company, neighbors shooting fireworks for large swaths of the summer, and lots of cheap Miller lite being consumed as the premium beer at the bars.
I am very well aware of what the differences are between California and the minted wealthy, exotic lifestyle it comes with versus the “rest” of the country. I grew up in flyover country so I am used to the notion of not having a great deal of access to the perks CA offers thus given the choice, I probably wouldn’t miss it while sitting on a lawn tractor mowing my 5 acres of land drinking a few beers. But just be forewarned that if you do move to one of these places, you are then in their territory and need accept the culture. Otherwise you might be a very unhappy person.
Other then that,from my personal experiences and direct comparison I do honestly believe that some of these places offer a higher standard of living for the average family. Only time will tell if they stay that way.
Wonder what those NoCal transplants will be thinking after the first time they mow the lawn at 0500 to beat the 100 degree August Austin heat.
If I had gotten $5 for every Cali family that moved into (and out of) Austin in less than one year 1995-2001 I would’ve had a nice chunk o’ change!
You obviously did’t live in Austin during the oil crash of the 80’s-90’s or when the dot.bomb crash happened and 300K houses were for sale everywhere at 200K. Some of those houses didn’t get sold for 1-2 years. I lived there and tracked them through all of it.
No crash indeed. The bubble that’s building now will make the other 2 busts look pint sized.
“In October, resales dropped for the first time in almost four years, 17 percent more homes had price reductions than a year ago and the inventory of homes for sale grew by 6.6 percent, with 14,538 homes on the market, according to the Triangle Multiple Listing Service.”
Price reductions are a natural second act to masses of people buying stuff they can’t afford.
Get Stucco,
I’m going to take the high road on this one and once and for all dispell the mean spirited myth that “southerners are slow”. Pffft! On the contrary! I’d say they’re 17% more intelligent than the rest of the country that still hasn’t managed to figure out “it’s the price stupid”!
“The Triangle’s home building industry is one of the area’s most important economic drivers…”
Which cities can’t say this?
New York City
lol
Then who (economic sectors not significantly proportional to housing) is driving “Miss New York Daisy”?
Ah. I live 4 hours north of Raleigh in Southeastern Virginia. The company I was working for (computer storage software developer) downsized, and I took a new job in the Northern part of the region. So my commute went from 10mindrive/15minwalk to 45 minutes on non-accident days. While I should be happy at the new job, I’m not. It’s at a world known science lab, and seems like it should be perfect. But the salary won’t buy anything in terms of housing, even though it’s above the median household income of the region. It wasn’t an advance over my last job at all. They immediately said they were having lots of problems because they can’t pay what people want, but to be honest, they are paying better than many of the other jobs, but it isn’t much better than 2001 wages. It’s just the cost of living in Hampton Roads has gone thru the roof (driven by housing costs). Houses have doubled in 3 years in some parts, and there is an influx of people cashing out of other markets.
I’ve got my eye on Raleigh, NC as a possible place to go. I always bring it up when I’m debating people “Why would I want to buy here at these prices when Raleigh has better technology companies, isn’t totally relying on the Gov’t for good jobs, and has more affordable housing?” Our local newspaper runs these huge rosy everything is great in the jobs articles, followed by a 40 person cut at NASA Langley. Oh, and they didn’t mention the 200 jobs cut the other day at one of the poster children labs considered to be the high paying future of our area (Modeling and Simulation of warfare).
Oh well.
VB — what are rental prices like in Hampton Roads, compared to the cost of owning?
Chip - It depends, it appears to be all over the map. Right now I rent an apartment for $1150, that a similiar condo would go for $230-300K. I recently saw a new condo ($300K) offered for rent for $1000/mo! That has to hurt. I email the higher end properties I see on craigslist and many of them are still availible. Renters can’t get I/O rent or ARM rent… so the investors expectations are silly.
There are lots of new investors flooding the rental market with $2000-3000/mo homes that they just bought, so it’s hard to tell what actually rents and what doesn’t. For the most part, townhomes that now go for $200K rent for $1100 it seems… The townhomes would have been $110K 3 years ago. 3 years ago, we rented a 2600sqft home for $1350/month… but then owner wanted to increase to $1900/mo. Was $180K, sold for $345K in October this year.
Median household income I believe is around $60K. Median home for sale is $340-350K. LOTS of condos, generally $300K entry. One project just announced, $300K for 700sqft lofts.
Lots of military in this area, so it’s transient. They also get a housing allowance. Lots of military people now buy homes to live there for a year or two, then sell when transferred for high profits. Or they try to rent them. I’m seeing a few of those squirming on craigslist, one had a $550-600K property. Amazing. Ford plant closing down, taking lots of high paying union jobs. Another big base may be closed in the future.
Inventory on market is up 300% in a year according to housingtracker.net
“Ford plant closing down, taking lots of high paying union jobs. Another big base may be closed in the future. Inventory on market is up 300% in a year according to housingtracker.net”
Whoa — clue meter went up on those! Might be a long time before buying there is better than, or even close to as good a deal as, renting.
“Why would I want to buy here at these prices when Raleigh has better technology companies, isn’t totally relying on the Gov’t for good jobs, and has more affordable housing?”
Hate to say it, but all the areas of strongest growth are getting it from government. In the case of Raleigh-Durham, it is the state capital and has lots of state universities and federal facilities (ie. a big EPA lab).
From a NYC point of view, it’s a great place to follow your tax dollars.
90 miles x .48 cents x 22 days
= $ 900 +
yo dude, you’re screwed
They are about to have a feature on CNBC on RE foreclosures. It is now 7:20 AM Pacific Time. It should air in the next 15-20 minutes. The teaser was “RE Foreclosures Rising at an alarming rate” they will be interviewing a banking official-should be good.
Crazy - assuming I’ve missed it (11AM EST), did you catch anything worth passing on?
F-that! Isn’t it so obvious that CNBC has been instructed by some higher power to ’spin-up’ any and all RE related news. CNBC has never been known to let reality interfere with their reporting.
Why would you not want to read the opposing team’s play book?
crazy: I saw a similar headline on Marketwatch today. Of course it was spun. Foreclosures surging at a time when unemployment is extremely low? The “experts” don’t forecast significant collateral damage though! What is not alarming about spikes in foreclosures when the economy is supposedly doing fairly well? Gosh, could it be all the toxic loans, extreme price levels, and stagnant wages? I damn all these “experts”!!!!
Yesterday I spoke to a friend who was high up in the world of builders and worked for 2 nationals. She states that they had a margin of 9-10% in days of normalcy but that as money got freed up they began to increase prices to increase profits.
She said that in the last few meetings in 04 and early 05 they were shooting for 50% margin and using the press to justify the supposed increases by using such bogus concepts as the dam in China causing concrete prices to escalate. The whole industry was in on it and ran constant press releases to support their increases.
The idiots in the financial markets bought into it and there ya go. Hyperinflation going directly into the builders pockets.
She is now talking to the FBI about the collusion and fraud in the industry to include the builder/lender coincidence. Builders being lenders as well. Could be that some of these big guys will do some time for fraud. Hope so!
I suspect a good lawyer could make a case in a class action suit against the builders.
On behalf of stock investors as well as buyers if that were true and could be proved. That sounds like Enron and the grannies in California.
Here is a true story TC- I am an appraiser and have been for 30 years. I specialized in foreclosures(also commercial work) as I saw it as an area where integrity was never challenged. They want the REAL value to unload it and if you suck at it the market will quickly find you out.
Any way I had a friend from Texas call me to get me to work on KB homes as it was his best client and he could guarantee a ton of mortgage work. I saw this big choochoo hauling azz through the world and it was the mortgage express. Why not I said, how bad could it be?
I said, “ok, give me 5 and I will try it.” I got 5 houses to appraise all on the same street and basically the same model. So off i go.
When I got to the job I found each house was at a different stage of completion. They ranged from walls up no roof to one that was 90% complete. I checked the plans and found that there were different houses on 2 of the lots than those shown on the plans.
Off to the Kb sales office. Noone home and I leave a card. No call back for two days and my friend is asking where the reports are as KB is calling him. I said :hell, tell them to call me and I will ask my questions. He says, they won’t call you, just complete the assignments. I say, can’t as there are too many descrepancies.
That night I take the contracts and the plans and compare them. Amazingly Lot 1 sold for $239,000 and lot 5 sold for $389,000. These homes could be taken for twins.
I called my buddy and told him the situation. He said, well you better find someone to ask the questions. I finally ran from KB to KB site until I found their regional office.
I corner a guy, Al, and I said, Al I need some help here to understand what is going on. He said, can we step outside? Sure.
Al explained to me that this business is alot like selling cars. There are peoople who really understand cars and then there are those who don’t. He said, ” we start out at the highest price with every bell and whistle and if they go for it we sign them up. If they buck we start reducing the price until we get a deal. The deposit is the big thing as we get a sale at that point.
Then he said, “besides most of them are foreign and will never see the house.” This is a fact here in central Florida.
I said, “Al, if these neighbors ever get together you are gonna get sued up the ying yang.’ He said, ” Hell, by that time we will be long gone and the flippers will create their own market.”
So you see the scam was always about the market covering all the evidence up over short period of time, and it did well for awhile.
Clearly, there is only one way to perpetuate the lie. Easy money and that anvil falls on the lenders and the Feds. Look no further as they are the ones who enabled the crooks. With good underwriting practices this could never have happened and that is why this is a new model not seen before.
Never in history have people been given free credit to do as they wish. Oh wait, 1927-29.
Oh PS……..Kb fired me and I have no appraisals outstanding in mortgage work. NHUCK NHUCK NHUCK
dimedropped: I hope what you report is true, about your friend reporting the fraud and collusion. Personally, I get a dirty feeling whenever I have visited a builder’s sales office out of curiosity. Kind of like when dealing with car salesmen. Something is not right with those guys and I would not doubt for one minute that they used excuses like China to justify their prices. Personally I cannot prove anything, it’s just my gut feeling. That being said, it’s hard to say what will happen whenever a government takes its currency into hyper-print mode.
Also, since construction seems to be a feast or famine industry many will take clients to the cleaners if they can. If there are any contractors here, please know I understand there are many who are honest and hardworking as well!
I met a woman the other day who commutes 288 miles to work every day to her govt. job! In South Dakota. She is a physical wreck. Has to be helped out of her pickup truck, and walking 75 yards up a slight hill exhausted her.
What a way to “live”.
I have a neighbor who commutes to Fort Worth from our suburb NW of Waco. It’s about 75 miles, not 90 and takes about 1.5 hours each way. In her case it wasn’t lifestyle or housing cost issues that drive the commute. Housing is just as cheap in Fort Worth. It’s family. Her husband teaches at Baylor which is what brought them to Wac. And she would rather commute back to her old job in Fort Worth 4 times/week than find something different to do in new field here in Waco.
But that’s nowhere near the wildest commute I’ve seen. When I lived and and worked in DC I had co-workers who commuted from as far as West Virginia and in Seattle I had co-workers with some pretty incredibly long drive to the ferry/ride the ferry/walk to the bus/ride the bus to work commutes that lasted over 2 hours each way.
I knew a lady that commuted from Ranger, TX into Dallas and back 5 days a week. Sometimes 4 hours each way. Of course, that didn’t work out.
Seriously, people have lost their minds.
Either one should rent near work if they can’t afford to buy or they should work at a lower-paying job near home. I’ll bet they would be better of financially, not to mention physically, mentally & emotionally, if they didn’t have to commute so far.
I once knew someone who commuted from San Clemente (very southern part of OC County) to Woodland Hills (very northern part of LA County), every day. Drove to the train station in OC, took the train to Union Station in LA, then drove ANOTHER car from Union Station to Woodland Hills (a long commute, in itself). Took around 3-4 hours EACH WAY, IIRC.
Crazy…
Then there are the execs living on Cape Cod who fly in and out for their commute.
I know a guy that commutes from Hillsboro to Grand Prairie. He enjoys living out in the ‘country’.
A few of my co-workers commutes from Sherman to Richardson. Some come in from Ellis County. They have to leave at 6am to get to work at 8am and that’s if the weather is good andthere’s no traffic accidents along the way.
I live less than a mile from work. I can’t imagine wasting 3-4 hours a day wasting away in a car.
How about a little help- What is the fastest/best source of data for the decline in building permits and housing starts in various FL counties? Has someone else already collected this or know if this is readily available?
“One factor that could cause a turnaround, Timmerman said, would be a continued drop in land prices. That’s beginning to happen, he said, as people who paid $40,000 to $50,000 for a lot in Lehigh are willing to sell for $30,000.”
What kind of lots do you get for $30,000, i.e. size, location, etc.? Are there many waterfront lots left in Florida? If so, where are they located?
Suzie — For $30K you might get an acre in redneck country or a tiny not-so-nice parcel in a major metro area. Lehigh Acres, the area he presumably is describing, is not high-end stuff.
There is still a lot of waterfront property available, but much of it is on small lakes in lesser-developed areas, or very expensive. If anyone talks to you about “waterfront” here, other than river or ocean, ask them the name of the lake, then look for that on a map. I’m surprised at how many pilgrims live on retention ponds and think they’re real (natural) lakes.
Here’s a $34K lot in what’s considered to be an area of good schools and future growth:
http://tinyurl.com/y2ddj8
“Beautiful lot in new Lake Arthur Estates, a new subdivision in north Crestview. Facilities will include picnic area, tennis and fishing. There is a homeowner’s association with dues of $200/yr. Most lots require a minimum of 1,800 square foot home. Subdivision will have curbs, gutters, sidewalks and underground utilities. Roads have been paved.”
The problem is that it’s still Crestview, which is still just a little close to Alabama. (both physically and philosophically)
If you’re looking for real Florida inland waterfront (ie not a retention pond), they’re still charging a pretty significant premium for it.
It is swampland.
Dry lots in Cape Coral, FL are now 29K. Thats down from 75k, 18 months ago.