Post Local Housing Market Observations Here!
What do you see in your housing market this weekend? Price reductions? “In Somerville, just outside of Boston, a condominium developer trying to sell the last of 18 units slashed prices, dropping the price for the three-bedroom condo to $599,000, nearly 17 percent below what a comparable unit sold for three years in the same project.”
“In downtown Boston, the developer of a 14-story condo project held an auction. Bidders snapped up 31 luxury units at an average price of $778,000, about 20 percent below the average asking price before the auction.”
“The head of the firm that ran the event expects the market slump will lead to more such sales in Boston and elsewhere. ‘You’ve had some exuberance, you’ve had some overbuilding, and you’ve had some price declines, and people are going to need to move product quickly,’ said Jon Gollinger of Velocity Marketing.”
The Naperville Sun from Illinois. “This October, home sales in Naperville fell 28 percent, according to the Realtor Association of West/South Suburban Chicagoland. Year-to-date home sales experienced a 21 percent drop.”
“(Realtor) Chris Read said that the cooling housing market has hit Naperville homes priced over $800,000 the hardest, leaving a large inventory and increased competition to attract buyers. She said the sales are made when sellers drop their prices. ‘Sellers are being more realistic,’ Read said.”
From WLBT in Mississippi. “New homes are springing up daily in the metro- area. Each city has building codes. Official says things went awry in one Madison neighborhood, leaving several high-priced houses on the block. The City of Madison is dealing with mortgage fraud, foreclosures, and homes abandoned by builders in upscale neighborhoods.”
“One city inspector says some builders often change plans, cutting corners putting in less expensive doors and windows than original blueprints specified. We found something a little out of the ordinary. Construction been shut down on 11 house in Woods Crossing subdivision of Madison.”
The World Link from Oregon. “John W. Mitchell, an economist with U S Bancorp, dismissed talk of an impending recession at the national and state levels. He did concede 2007 would probably see slower economic growth as a result of a weakening real estate market.”
“‘People are borrowing against their house, which means, with housing prices going down, presumably it will have an impact on consumer spending,’ he said.”
i wish spring would hurry up and get here. I have lots of microwavible popcorn ready to go for the big show. Had a customer turn me down today on a loan that saves him $800/month by getting rid of his 50k in credit card debt. He was “insulted” by our banks interest rate offer of 11.75%. I had to inform him that the interest rate is congruent with risk. If you dont like the rate that you are being offered what do you think that says about the banks evaluation of your risk? Oh well, i ended it with “enjoy your payments sir”.
Bring some extra bowls for the popcorn!
crispy -
Just thought I’d enjoy the below again with you.
“I just don’t think we have what it takes to prick the bubble… I don’t think prices are going to fall, and I don’t think they’re even going to be flat. ” — Diane C. Swonk, chief economist at Mesirow Financial in Chicago, New York Times, “Trading Places: Real Estate Instead of Dot-Coms”, 3/25/05
***********
“Enjoy your payments, sir.”
LOL!
The next time some ungrateful customer comes in like that, I hope MDMORTGAGEGUY charges them 25%!
sf-
I have email Diane several times and she has not responded. I wonder why. LMAO
oh i go lots of bowls…….oh, you meant for the popcorn.
Montreal market.
Funny pseudo equilibrium fuelled by low interest rates, huge overbuilding of condos downtown, and big empty McManshion in the suburbs, exploding property taxes, exploding school taxes, exploding heating oil, gas and electricity bills, and sluggish or dissapearing manufacturing because of a too high canadian dollar.
Rental market is dying also. The American disease is well implanted in Canada and Québec.
Quebec is PART of Canada you damn Separatist! And when it comes to a bailout, you’ll be looking to the Federal Gov’t, not your Provincial Gov’t, for the money. Free-loaders like you make me sick.
Isn’t Quebec the island where Napleon defeated Crazy Horse?
please ignore the comments from the francophobes, and post more info about the montreal market
“The American disease is well implanted in Canada and Québec.”
That is a great example of an unsustainable equilibrium, MacAuthier, as the factors that underpin it are fragile and unsustainable.
Dumb, dumb, dumb. He can save 800 a month and he didn’t go for it?
Unbelieveable!!
Have people been so snowed by the recent REIC mantra of “low interest rate = Good/high interest = Bad” that it’s now trumping “low monthly payment (no matter the size of the mortgage) = Good” ?
Bizarre. Hopefully at some point in the coming year people will start pulling their pencils out and do a little figuring for themselves.
And he can also get an absolutely rock-solid no risk 11.75% return on that 800 a month by using it to pay down principal …
Sorry, but this is thinking that drives me crazy.
A foregone gain is not a loss.
A foregone loss is not a gain.
Let’s see if I can still post with my old Email address.
Yep, hmmmmmm, OK.
Anyway, this fool is also turning down the opportunity to get an absolutely rock-solid no risk 11.75% return on his 800 a month by paying down principal.
If he did that for a couple of years, I have no doubt MDMortgageGuy could get him a less “insulting” rate.
Hey, did you have any luck with Mr. “But the Option ARM’s only 2%!” or was it a wash?
no, now he is caught in the paralysis of analysis and wants to do nothing until February.
Holy smoke! I watch the Southern California housing market very closely and I see the local listings through Sandicor/MLS/Zip Realty and something happened in the last three days that I have NEVER seen before. Pardee Homes, who is the primary builder in a large area of North San Diego in the coastal area, just dumped 30-40 new contsruction homes onto the market using the MLS. This has not happened in the 15 years I have been watching the market. Typically new construction neighborhoods by Pardee and other builders have “phase releases” where one to five home are releases at a pre-selected date and there are always enough buyers to absorb the homes released. Well not anymore and Pardee is flooding the local market with them now. If you want to see them, go to ziprealty.com and then type in 92130 zip code and you will see 30+ of them in the last 3 days. This is the kind of thing that will further kill the San Diego housing market in 2007. Worst of all, there are still lots of builder incentives on these listings…which will further crush resale pricing in the area.
They are trying to beat the January rush. There will be a tsunami of listing come the first few weeks on Jan!
January Tsunami…
I like the sound of that. Very poetic way to describe what’s going to happen.
Neil
You may appreciate my prediction of the “April Ass-pounding” then?
April ass-poundings bring May… ???
April ass-poundings bring May flounders
April is the cruelest month …
I wish that were the case where I live(Studio City/N.Hollywood) IAll of the specuvestors seem to have come to my neighborhood! I took a bike ride the other day and counted at least 8 condo projects in various stages of completion within a 10 block radius. Along with that are at leat a dozen SFH beind torn up…mcmansionized and resold. I hope these guys get spanked hard.I’m sick of this! I may never buy a house in S Cali again!
“NEVER seen before. Pardee Homes, who is the primary builder in a large area of North San Diego in the coastal area, just dumped 30-40 new contsruction homes onto the market using the MLS”
Same thing in Vegas. There is a 2006 brand new 3 plus 2 single story with 2234 sq. ft. listed by a builder for $369,000. All the other 2200 sq. ft. houses listing from realtors are above $425,000.
When the sale hits the comps, probably in 60 days, watch out below. All the springtime relisters will have agents showing them the lower market price and agents will refuse to take overpriced listings that can’t sell. The builders are fighting for their survival, and giving away cars just can’t do it anymore.
This is why I won’t buy in a new neighborhood.
The sad thing is that Pardee (a division of Weyerhaeuser Company) can afford to cut prices. They come from deep pockets and am pretty sure that they have substantial profit margins to allow them to come out on top despite the soft pricing. Now compare this to the small builders or the resale market. The big guys will be leading the market down…expect “industry consolidation” before the end of the down cycle.
“They come from deep pockets and am pretty sure that they have substantial profit margins to allow them to come out on top despite the soft pricing.”
And I am guessing that Pardee is a debt-free company as well, so leverage plays no role?
Weyerhaeuser is much less leveraged (and diversified) than most of their competitors. Plus, they bought much of the land they are developing generations ago. Although profits will slump, in the long run they will be just fine; unlike their smaller and/or more leveraged rivals.
i meant (and more diversified)
How many times and in how many threads is this “Holy Smoke” thing going to be posted?
“One city inspector says some builders often change plans, cutting corners putting in less expensive doors and windows than original blueprints specified. We found something a little out of the ordinary. Construction been shut down on 11 house in Woods Crossing subdivision of Madison.”
My city is very strict on code compliance. The biggest problem we’ve been having is getting work to pass on the first inspection. The profit margin is so low they doing as little as possible before calling for the inspections. One HVAC contractor told me his profit was less than $200 on a single family house. There’s no way he’s sending anyone back to do any work after the fact, so it slows the other trades and means multiple trips back for the inspectors.
“One city inspector says some builders often change plans, cutting corners putting in less expensive doors and windows than original blueprints specified. We found something a little out of the ordinary. Construction been shut down on 11 house in Woods Crossing subdivision of Madison.”
There has got to be more to this story than they are saying, Building inspectors could give a rats a** what kind of windows and doors are installed, there job, is to make sure the CODES are followed. This is were Jane and Joe Public think because a home is inspected, all there trims and joints will be Taj Mahal ly.
The Building inspector will check if you have enough “light” and if egress is needed in a room. They will check if a 30″ door is installed were a 36″ door was on the print.
BUT quality and checking if Pella windows were called out and not used is NOT the building inspectors job.
Yep, my experience is that as long as the window meets whatever wind / R factor requirements they have they could care less what the make the plans call for. In fact they don’t even look at the plans often. I always keep my job site super clean especially around inspection times and they seem more impressed with that than anything I built.
I do the same [clean] and also ask the inspector a few questions on things I already know the answer to…. they like to be the smartest in the room, make em feel good to help out the stupid builder.
Same here BB,
I always have one good question about something in the next phase that I ask them for advice on and that’s usually what we spend time talking about.
Of course I tend to overbuild and the only problem I ever run up against is some clown misinterpreting the rules or wanting to apply them against overwhelming common sense.
I have a ton of stories of guys trying to cut corners and getting caught.
waaaho, you must be in CA. Out here we don’t let builders blow smoke up our a$$es.
No. East Coast.
Not so much blowing smoke as giving your average, big headed, city level employee, something to focus their huge intellect on.
Most of them are nice enough guys but I haven’t meet one yet that didn’t have a chip on their shoulder. Just playing to my audience.
Fair enough. I guess both inspectors and builders represent a cross section of society.
I’m in the Inland Empire (So.Calif), but it seems the last few weekends, I’m seeing less home builder sign spinners. 2 months ago, I saw at least one person per signal intersection (near where I live) but yesterday I only saw one intersection with one person (where there used to be 2 or 3 sign spinners). Maybe it was because Friday (I haven’t been out yet today)….
DannyHSDad
Probably more to do with the time of year than anything else. There’s no point in paying some illegal $5 an hour to stand there with a spinner when everyone is rushing around spending the latest “draw” they had from their house ATM. Wait until spring. We could see “spinners” on every corner. According to the things I’m reading these days, the fb’s have ALL decided it’s best to re-list in the spring when prices go will take off.
I’ll bet “spring” will start in Feb. this year!
If relistings start in March (or Feb), does anybody have any scenario in their heads about how it should play out from there? A) How much should we expect inventories to increase? B) Do the price reduction wars wait until late August, or what else would that timing look like? C) When do we start to see the articles about the mess appearing in Newsweek, or at least when does it become obvious to the general public? Let your imaginations fly, I would like to read people’s ideas on this.
I’m going on record with a 15-20% withdrawal of listings until the 1st of the year. Then I’m calling for a 30-40% increase in listings from after superbowl into late April (which I’m now calling the April Ass-pounding) when I expect to see dramatic price cuts due to the bad economy finally getting press from the MSM (along with resets, etc, etc).
Why April? Why would that happen so early? Is it an effort to avoid being draggged through another season with your house unsold? Is it that by April people will have had their place listed for a couple of months with no action and they finally decide its time to get it moving? Or is it just that there will be so many listings going up after the Super Bowl that it will be undeniable what’s going on?
I am guessing the “hot spring dumping season” will start the day after the Sooper Bowl.
I’m thinking that some people will jump the gun, word will get around that you need to list NOW (March or so).
Ben,
A real test of market conditions would of course be the most extravagent “free” gift, with the purchase of any home, by the homebuilder of your choice.
I’m not talking 58 inch plasma tvs, granite countertops or subzero fridges here, I want something bigger and better, whadddya got?
Show me the incentive!
How about a reduction in price that reflects where the market is these days ,(that is better than any incentive ). I got a laugh out of your question however . How about no payments for 10 years at the builders cost .
Hey,
We could market houses like cars?
0% financing for 60 months
How about “Buy 1, Get 1 Free”?
greetings from nyc
same story here
tons of open house’s, tons of inventory, lower interest rates
and not much moving
but everyone wants to live here and it is different here as well
Almost like there are different places everywhere.
p.s.
In a totally unrelated matter, (well, maybe not that unrelated on 2nd thought) kudos to Stephen Colbert for winning the prestigious Meriam-Webster dictionary “Word Of The Year” for his discovery of the word “Truthiness”
Here’s a link:
http://www.cnn.com/2006/SHOWBIZ/TV/12/09/word.year.ap/index.html
Yay Steven Colbert!
Although, I believe, both “Lincolnish” and “Superstantial” could have made a run for the money, too.
All these economists who are talking about “soft landings” and “no recession” are offering a terrific example of truthiness in action. If you don’t believe me, then try to find a historical example when residential fixed investment dropped off a cliff and there was no accompanying recession. I think you will have to go back pretty far in time to find one…
My question is do they really believe this or are they so tied into the market that they are trying to get their last dime out before the sh!t hits the fan?
Probably an obvious answer to this question.
I believe this is exactly the kind of situation Stephen Colbert has in mind — one where “experts” quoted by the MSM equivocate their message to deliberately mislead the masses.
“In downtown Boston, the developer of a 14-story condo project held an auction. Bidders snapped up 31 luxury units at an average price of $778,000, about 20 percent below the average asking price before the auction.”
All is well….. people are “snapping up” over priced garbage still.
Yeah, it’s as if the bidders didn’t notice that they were bidding on Condos, not SFHs. They must have been hoping to flip whatever they purchased, unless they simply don’t understand the concepts of condo price behavior and HOAs.
It just goes to show you how people react to “sales.”
Playstation 3 stories, the mobs on Black Friday, talking elmo dolls, cabbage patch dolls, etc.
We’ve been conditioned to get satisfaction (endorphin release) from buying something on sale. Some people just can’t help themselves.
A friend of ours was so adicted to shopping that she filled her garage with stuff (crap) from all her shopping sprees. Most stuff was not even opened. Her husband finally acknowledged she had a problem when he couldn’t fit his purchases in the trunk of thier car. Her’s had already taken up all the space.
They were very much in debt. They sold thier house in the SF Bay Area and cashed out thier equity to get out of debt. They were lucky it was 2003 and not 2007. They are doing better now having learned thier lesson (I hope).
I beleive we have barely seen the start of what is coming. Next spring/summer selling season will be a watershed event.
Motto for our times:
He or she that dies with most cluttered garage, wins.
Ha ha! That’s NOTHING! A friend of mine, now done with the nasty divorce, had a wife who didn’t just fill up the garage. She filled up several expensive storage units as well!
She’d buy stuff at garage sales and try to sell it on eBay. She even would buy things at Wal-Mart and try to sell it on eBay! Amazingly, some people actually bought this retail stuff from her for more than she paid. Gawd. But that only gave her that gambler’s “rush”, encouraging her to buy more, and whatever didn’t sell went into storage, whereupon once a unit was full, she’d ignore it and start filling another. Were it not for his (foolish) family bailing him out, he’d have been bankrupted. Just incredible the junk they had.
All Bidders at auctions go thru intense buyers remorse 2 seconds after they win the bid. The seller must seal the deal with a huge downpayment on the spot, because 50% of those “winners” will be calling within days to try and back out. Let me repeat for the nth time. The term SOLD in real estate is when the actual title is recorded. Up till then, the buyers are under contract, and the major homebuilders are reporting 30% cancellations. Please don’t repeat the mistake most MSM reports of mixing up Sold with Under Contract.
If you have to line up to buy something, you’re getting screwed.
Post bubble-collapse amended version: If you have to line up to sell something, you’re getting screwed.
The Winner’s Curse = “All Bidders at auctions go thru intense buyers remorse 2 seconds after they win the bid.”
http://en.wikipedia.org/wiki/Winner’s_curse
Post purchase dissidence I believe they call it.
I think it’s post purchase dissonance
I’m seeing very few price reductions on the existing 2+ bed SFRs I’m tracking on L.As Westside, on ZipRealty.
Instead, many places are simply coming off the MLS. Many dissapear, never to be seen again (although, I’m keeping a spreadhseet of them, and fully expect to see many of them again, come spring), but quite a few come off, only to come on again a few days later with a new MLS#, new DOM and a different price.
From this, I deduce that many many sellers here in LaLaLand are expecting the “Spring Bounce” to come and suddenly buyers will be lining up to buy thier houses…..at summer 2005 prices and up! (not).
I’m really starting to look forward to the weekend after Superbowl - it will be….interesting
Agreed. My landlord did the same here in Arcata, Ca. One house down the block decided to stay on the market instead of pulling it off, the owners are living in it. It’s been on the marrket for over 6 mos.
What they are not counting on is the huhe increase in invetory that will also occur.
Yeah, the LA market is looking like a tough nut to crack. Inventory has stabalized and gone down a little, but I too expect the phantom inventory to re-appear come spring, and in a big way. Be happy, you have a front row seat.
Does it ever occur to anyone that many RE brokers are also property owners……property owners who might want to dump their properties as much as (or more than) “normal” sellers?
Would it not serve these “professionals” to get as much competition off the market as possible by suggesting “wait until spring”?
I know I’d love it if I could talk my competition out of the market (at least for a while).
Went to about 6 open houses in LA Westside today (Westwood area). It’s been years since I have seen so many open houses this time of year, but nothing seems to be happening with prices. They are so wildly out of wack that it makes me wonder wether I am living in the same world as they are. In one of the houses I saw, though, I overheard the agent say that her clients are “very motivated”, although they don’t want to lower the asking price (1,899,000 for 2000 sqft on a 6100 lot). Oh, and I forgot to mention that I saw my dream home in Little Holmby for 3.2M (lol)
i see newer listings in ventura county-thousnad oaks in 600-700K range.
It is very unusual to list in december.
I even saw an open house flag/directional in near sunsethills area yesterday evening. I was not sure if it was a signage man doing his job early for saturday or it was a friday open house
Just drove by and checked out the massive 700 acre planned
community development called Riverpark just north of the 101 off vineyard ave in Oxnard(www.riverparklife.com).
looks like maybe 20 % of units completed, the rest will be phased in over next several years.
The lowest townhome units are featured at low $400,000:the highest SFH’s offered at upper $600,000’s.
Building this community so close to the Santa Clara River raises an issue:every decade or so there are massive flooding and overrunning of the Santa Clara due to unusual wet rainy seasons. They do incorporate a flood retention basin in the plans, but will this be enough to ward off that occasional rare massive flooding event.
Also, ventura and Santa Barbara seem to be feeling some fallout from the slowing down and price stagnation in their local RE Markets. Both Dwtn old sections of Ventura and SB light as far as shopping/retail activities, and in old twn ventura the busiest shopping venues are the local thrift stores, of which there are at least a dozen along Main st. What you see in Old twn Ventura are mostly well-heeled Senior citzens and aging Boomers. Very few yuppies and immigrants.
The buyers will have to buy Flood insurance I expect. Another expense in a expensive market.
Some quick data from cold, rainy Sacramento:
Sacrament County Listings: 10299
El Dorado County Listings: 1747
Placer County Listings: 3211
Yolo County Listings: 924
Sacramento County Open Houses: 200
“Some quick data from cold, rainy Sacramento”
If it’s raining then it’s not cold.
Due to the fact that I’m clinically insane, I left warm, sunny Phoneix for a trip to the midwest last weekend, where real estate craziness is in full swing.
First stop, Iowa City, IA. For those who don’t know, this is a quintessential college town, home of the University of Iowa. Dubuque street is the main drag into town from interstate 80, and is mostly lined with student rooming houses, apartments, and fraternities. One of the larger frat houses had a “Luxury Condos” sign in the window. Among the many other amenities afforded by a converted frat house, luxury in this case also includes a sloping gravel parking lot (or take your chance at on-street parking roulette). Imagine relaxing in your condo on weekends with a bunch of drunken frat kids from the house next door puking on your lawn and TPing your trees. The good life…
Next stop, Chicago. Approaching the city on the Eisenhower expressway, a building just west of the Loop between Ashland and Racine had a huge “Luxury Condos” banner hanging from it (are there ANY plain or ordinary condos anywhere?). Each condo had a small iron balcony overlooking the expressway–nothing like traffic noise and exhaust fumes to help relieve the cares of the day while you surround yourself in “luxury” on your 4′ x 6′ balcony. The only thing this place has going for it is its proximity to Rush University medical center, which is a few blocks away. This is a crummy neighborhood, to put it mildly, and I have no idea where you’d even go for groceries or entertainment (unless being in the middle of gang shootings is your idea of a good time).
A building on North Michigan Avenue near Water Tower Place–now we’re talking much better neighborhood–sported a sign that said (what else) “Luxury Condos–30% SOLD!!”. Well, that did it for me–I rushed in to sign up lest I miss out, but then my brain, no doubt addled by the -10 degree wind chill, made the obvious calculation and I decided that, with the building 70% UNsold, I could probably afford to wait.
Further north, at the intersection of Ridge and Petersen, yet another building with–well, you know the drill. This is an OK neighborhood, largely blue collar working-class. The developers of this building, however, are being really picky, because the sign urged me to “fill out an application to be placed on their waiting list.” Too bad–I didn’t have time for the paperwork, and was just planning on going in and plunking down a 10% deposit, which they no doubt would have refused since it wouldn’t have given them the opportunity to find out whether or not I was special enough to buy.
So I came back to Phoenix with some Christmas gifts and a few good meals under my belt, but, sadly, no real estate. Maybe next time…
Bubbles can gentrify neighborhoods.
I’m Chicagoian by birth and grew up in the city but I’ve been surprised at how many neighborhoods have changed. Racine and Ashland is near a major medical complex and U of I Chicago campus is growing. I suspect these condos are over-priced but the neighborhood assessment might be off if you haven’t been there recently. I know the area north of there (Belmont) gentrified in the 90’s.
When visiting recently, I took my LA born Wife to Greektown street fair on Halsted and we walked north to Cabrini and Green St. If I had doen that when growing up in the 70’s, I’d be dead.
I also saw the same gentrification effect in SF CA - money moved blue collar people out and fixed up homes. While the places are over priced, they are worth more then when they started just due to the gentrification that accompanied the bubble.
“Cabrini and Green St.”
That’s where we used to duck when driving by.
oops
try again
once more
Per the Scott Rivera show “The phone has stopped ringing. No one is buying.” LOL
This guy is the ulimate pimper of SFH. He produces a weekly cheerleader show on local TV and was very bearish, as the above comments show. I will post once the video is up.
From the bits bucket thread:
November Baltimore area numbers out…sale plunge double digits for the thirteenth consecutive month, prices flat or falling in all surrounding counties, DOM piling up.
http://tinyurl.com/pp5gm
Obviously, a good time to buy! LOL
Interesting, wonder how the spin will be next Nov 2007? will they celebrate a one percent gained from this November or will it still be going lower than this November?
In November 2007 the spin will be…”Now is a good time to buy!”
I don’t understand. House down the street I’ve been watching for a while: (it’s a flip)
Bought last December for 659k.
Listed around March or April for 849k.
After many price reductions and one relisting, the last two months it’s been listed at 719k.
Now it’s sold, and I got one of those neighborhood fliers that says it sold for 759k.
Could that be true? Why would someone pay $40k more than asking, for a home that’s been languishing on the market for 8-9 months? For those who can check it out, MLS number is P540322.
Honestly how much is this going on? I keep reading about this blatant fraud but I cannot imagine it is THAT common, if so this market is in for serious pain in the next few years.
We are in the end game of cheating, plain and simple…
Be it in sports (streroided out freaks)
Be it in business (too numerous to mention)
Be it in politics (way too numerous to mention)
be it real estate (as the messages above imply)
It looks like a cash back at closing deal (ie fraud)
Can anyone confirm (via looking up the MLS or otherwise) that it sold for 759k? I’m just having a hard time believing it. It’s either fraud or the realtor is lying on the flier.
It smells like big time fraud. Someone ought to report it. Here is what I found: (sold for $800k)
List Date 09/27/2006 Date Added 09/28/2006 DOM 28 Exp Dt 03/27/2007 LP/SqFt $400.33 Org Price $719,000 Cur List Prc $719,000 Comp 2.00% Prev Price $719,000 Off market 12/01/2006 Pending/ Sold Information List Price $719,000 Sold Price $800,000 Cont Price 800000 Closed 12/01/2006
Financing
Damn, so what’s the deal?
It was listed for 719k (after continuously dropping since March, from an initial 849k).
The flier I got from a realtor said it sold for 759k.
Now your info says it sold for 800k.
Note that it was a flip, purchased for 659k in December 05. I don’t remember the name of the realtor on the flier, but the for-sale sign out front of the place said the realtor was “Robert Castaneda”.
I think there’s some funny business going on here.
zipost, how did you find the information you got?
I have access to IMRMLS. I think it’s a kick back from seller to buyer. I think this house would be foreclosed in a year if the intent all along is to dupe the lender.
Sounds like a possible mortgage scam. At the moment, mortgage scam artists are having trouble finding suckers OR getting dead beats approved so they are cooking the numbers.
However, never under estimate the stupidity of the “Greater Fool”. When the tech bubble went bust, there were plenty of GF’s buying all the way down thinking the boom would come back. It didn’t. Many so-called “experts” (Example: David Learah at the moment) back then, like stock market guru Bob Brinker who has thousands of followers, said to buy the QQQQ’s at $85 after they had dropped from $120.
“The bottom is in, folks! Now is a great time to buy!!”
So, following an “experts” advice, Bob Brinker’s followers poured in at $85. After all, from a high of $120 to $85 MUST mean the bottom is in or at least nearly in! Then they watched as their jaws dropped and the QQQQ’s fell slowly to $65. Then $55. Then $45. Then $35. Then $25. Finally they came to rest at $20. A LOT of people got hurt……but not Brinker of course.
BTW, that experience is a great example of just how useless these “expert” guru’s are when a bubble bursts. I’m sure if you could get examples from, say, the Tulip Mania Boom and Bust, there would be plenty of GF’s who kept on buying Tulip Bulbs.
Expert Bob Brinker was obviously in denial (as are many in this property bust) because he didn’t even tell his followers to get out and admit he was wrong. He even went as far as to remove his “chat website” because many of his followers were starting to question his advice and he didn’t want to deal with it.
How do I know about GF’s? Because I was one of those who listened to Bob Brinker but I was lucky (if you can call it that!) because I was away when he gave the call at $85. When I got back the QQQQ’s were down to $60. “Wow!” I thought, “If a great expert like Brinker said to buy at $85 and they are now at $60 - how can I go wrong!!” I bought with both hands like a drunken sailor. When they reached $40, I got cold feet and sold. My total loss was over $200,000. There are probably a couple of mortgage type or realtor scam artists (who were then in the tech boom promotion business) driving around in Ferrari’s which I bought them.
So, y’see, I know a lot about Greater Fools. There’s nothing like a financial slap across the side of the head to turn you into a non-greater fool in the future but it also enables you to recognize a GF when you see one!
And there are plenty of them still out there.
“I thought, “If a great expert like Brinker said to buy at $85 and they are now at $60 - how can I go wrong!”
It seems like every Brinker follower has hit “critical mass” and never have to work again. I guess they missed his buy signal on QQQQ or are they just not telling the truth?
I’m still buying tulips. They will come back in the spring.
So, my yard will look pretty.
: )
Planted my tulips in October…
Hope one of em’ is a black one, so I can time travel back to Holland, circa 1633 and sell it for the equivelent of around $200,000 or whatever nutty number they reached in the bubble of it’s time.
The NASDAQ partial rebound over the last 3 years is now at an end. Buy PSQ to short the NASDAQ.
In Brinker’s defense, that call on the QQQ(Q) was for “mad money”, not investment money. However, many people got greedy and got burned. Oh well.
He did pretty well for his exit point just before the tech burst, and his entry point for the latest run-up was pretty spot on, so people can’t complain *too* much.
I bet they built in seller concessions and borrowed more money then the asking price. The bank still needs it to appraise for the amount borrowed. Folks, think when they see the priced closed on that it was the price for the house. Most folks do not know that the buyer just borrowed sometimes up to 6% for closing cost or just money they pocketed.
$599,000 for SOMERVILLE Ma condos?
Anyone who knows the Boston area knows this idea pretty much encapsulates how stupid the market has become. Somerville is a very blue collar town, by no means anything special (not that there’s anything wrong with that). But even asking $600k for ANYTHING there is stupendously absurd much less for a condo.
I lived in Somerville a few years ago and it was a fun place, but jag is absolutely right: the very finest home in all of Somerville would not be worth $600K even if they dipped it in gold.
But now we have 3-bedroom condos there going for $600K - and that’s the discounted “crash” price! What a joke!
It’s especially hilarious when you realize that a typical 3-bedroom apartment in Somerville rents for about $2,000 per month. It would cost you EASILY 50% more than that to “own” it with the wacky prices people are asking for.
Anyone who buys a place around here these days is a fool.
Where “around here” = “in America and most of the rest of the world.”
“blue collar town” - so much so, that when I took a part-time summer job at Johnny’s Foodmaster on Beacon St Somerville, I had to do a pretty good job of imitating the local accent in order not to be shunned as a Harvard a$$h0L3. That was before the rent control demo where I was arrested in front of Camb police station and got my pic on the front of the Record American. Then the supermarket employees thought I was terrific no matter how I spoke. Of course we did a lot of harm w/ rent control That was then, this is now…!
In east Boca Raton/Delray Beach, I see a plethora of for sale signs, some on the same houses for many months, one “contract pending” sign on a SFH, apparently stagnant or slightly declining prices but still beyond affordability, and even new construction of luxury townhouses (one recently finished project right along the railroad tracks): there are still vacant lots here and there, so, in principle, room for even more new construction.
Mortgage rates are low and I still see advertisements for suicide-type loans.
Can the powers that be engineer a inflation-camouflaged, numbers-manipulated soft landing?
More time is necessary to know how this will turn out, at least through the spring, perhaps well into 2008.
No matter how far you drop rates you still need buyers…and probably (for the first time in a looooong while) actually qualified buyers for a change.
No speculators, no flippers, no marginally qualified buyers… just “real” buyers (and they’re probably VERY picky) or a handful of the remaining GFs….and they’re getting mighty slim to find.
No, rates can’t fall that much from here. Besides, fixed long term rates won’t drop so the only “cheap” money would be in variable rates and you’d have to have a whole new crop of fools to take a variable rate at this point given the recent history of the 03-05 experience. Not that it couldn’t possibly happen but it seems very unlikely (IMOH).
An update from our land buying travesty this past summer…
We were looking to buy an approved lot last Aug. We found “the one” - seller wanted 350K. We offered a very generous 250K. After the biggest RE mess ever experienced (listing expired, our offer not presented, private negotiations, and threat to seller by RE agent of lawsuit) we walk away. Both seller and her agent in desparate need of therapy. They couldn’t get past the fact that we were not going to overpay past 280K which I made clear was the absolute best offer.
Fast-forward to this past Thurs. - get a call from our Realtor(tm) and a really sharp guy: the lots are back up for sale. Asking price now? 289K. He wanted to know if we wanted to go back at it. I told him we’d wait just a little longer since I think we’ll be able to get it for 225K come spring, and we’re now in no rush as prices are dropping. Hell, the 289K would only net the seller 260K at a full offer at this time.
Homes in our areas (north phila. suburbs) continue to sit - many on for more than 6 months. Spec home to sell? Good luck with that - sitting empty for months on end with no buyers. The only problem I see (and it’s a BIG one) will be whether we can sell our home first. Don’t want to be one of those lottery winners who have 2 mortgages and only one residence.
As for the seller and her “clever by half” agent - what’s that saying about “a bird in hand”?
dd
Hold out for 150K, let the idiot stew for a couple more years.
Keep holding out. A friend let someone like this come back to him at least 3 times, each time telling the seller the market had changed and his offer was x-10-15% less! This was in 1990 and it worked because he was the ONLY ONE MAKING ANY OFFER.
Put your offers (waaay low) out there on stuff you really like and wait. If this plays out anywhere near the 1990 experience you might have a really good deal by next September being THROWN at you.
Thanks guys - that is my absolute intention: keep lowering the bar. I love bidding against myself at times (hahaha).
dd
[What do you see in your housing market this weekend? Price reductions? “In Somerville, just outside of Boston, a condominium developer trying to sell the last of 18 units slashed prices, dropping the price for the three-bedroom condo to $599,000, nearly 17 percent below what a comparable unit sold for three years in the same project.”]
That better be in the West Somerville. I couldn’t imagine anyone asking that much in the eastern half. I used to live in the eastern
half on Winter Hill. I only found out about the
organized crime stuff after I moved away.
I live in Somerville, and my guess is that it is in West Somerville, near Davis Square. Everyday, as I walk to the T (subway) to go to work, I pass a home that has been under construction for well over a year. If there were ever a symbolic image of the housing crash, it’s this place. Clearly, the owner of the property has not sold the home, has instructed his contractor to proceed at a snail’s pace, and is waiting for the rebound that will never happen before he sells it.
I might be moving to the Boston area (Burlington.) I knew the market was high but the rents in the area are truly shocking. Rivals NYC with not nearly the consistency of salaries or opportunities.
Things in Boston might be very ugly.
Southern NH is within commuting distance
of Burlington and the traffic isn’t that bad
after they widened Route 3. There are
places where rents are cheaper but you
might not want to live in those places.
Keep looking. I live in Boston and have never seen so much development nor so many “for rent” signs in 30 years.
My bet is you’ll find something pretty reasonable soon.
“2006 is shaping up to be the year the region turned into a buyer’s market, with a housing slump hitting New England harder than most of the rest of the country, and predicted to stay that way through the decade’s end”.
http://tinyurl.com/y4wbhn
Eastern Mass. Past few weeks actually saw a spike in low end property, $300-$350 range going under agreement. Mostly small capes, ranchs, 1000-1300 Sf. must be the low rates.
Anyone have advice on how to tell if a property has gone pending or has just been pulled? I’m tracking a few dozen houses. Sometimes they’ll come up as “contingency”. Others just disappear. Aside from getting MLS access or asking a Realtor, is there any public way to know if a property is under contract? Thanks.
Rent Control Strikes Again.
Instead of improving, these units will most likely now remain eyesores until the current owners are forced out by the city. And people wonder why there is a shortage of rental housing in the LA area.
“John W. Mitchell, an economist with U S Bancorp, dismissed talk of an impending recession at the national and state levels. He did concede 2007 would probably see slower economic growth as a result of a weakening real estate market.”
There is lots of dismissive talk about the prospect of recession from US economists these days. Such unsubstantiated conjecture has a hollow ring when The Economist is talking openly about the effect of the “housing bust” on the rest of the US economy:
“The main reason for the dollar’s jitters was evidence that the housing bust may be infecting the broader economy. Consumer confidence, as measured by the Conference Board, fell further than expected this month. Wal-Mart, America’s biggest retailer, has had a dismal November. And judging by their orders of durable goods, businesses may be scaling back spending. Orders for capital goods, excluding aircraft and defence, fell by 5.1% in October, the first drop in six months.”
http://economist.com/opinion/displaystory.cfm?story_id=8361260
“Wal-Mart, America’s biggest retailer, has had a dismal November.”
When Walmart sneezes everyone catches a cold.
Agreed. And perhaps this is too obvious to say, but Walmart would be among the first retail-sector victims of the home equity ATM machine shut-down.
Verdict against Lehman is upheld.
“An appeals court backs a jury’s decision that the Wall Street giant is liable for aiding fraud by an O.C. lender, but damages will be recalculated.”
More reason for the MBS peddlers to cut off the oxygen supply to the scamster mortgage firms. The snowball is picking up speed and mass.
This is really important .
‘Verdict against Lehman is upheld .”
“At the time of the jury’s verdict legal experts said it was the first time a financial backer of an abusive lender had been held liable in federal Court ”
This is going to send shock-waves to the secondary market .
Local market observation: Upstate South Carolina (Greenville, Greer, Simpsonville, SC), has one of the most thriving local economies in the U.S. Good jobs are plentiful, stores are packed with Christmas shoppers, restaraunts have waits to be seated. I am by nature a cynic and believe there are severe property bubbles around US in the coastal areas and old rust belt towns, but our housing here is fairly priced, (nice neighborhoods, great schools, 2500 sq ft for $250,000) Biggest problem is traffic gridlock due to huge inflows of new people from CA, Fla, Ohio, Mich, Ill., Atlanta, Charlotte. Just FYI.
How much did the house sell for in 2003? Half? Wages not up an equal amount. Then you too have a bubble.
Houses like this actually sold for about $225K in 2003, continuing a steady 3-4%/yr appreciation going back to when we moved here in 1998. And wages have certainly increased by at least 3-4%/yr.
We also just passed a voter initiative capping tax reassesment increases at 15% every 5 years. Fixed rate, money down mortgages have historically been the way people finace homes in this part of the U.S.
Here is a jumble of an article about the Chicago-area new home market. This is in the “New Homes” section of the Tribune, which is ostensibly a news section, but is really a cheerleader for the now home industry. The message seems to be: although the market is down 25% from last year, buyers, those bargains are disappearing fast and you’d better buy now before the prices go up.
http://www.chicagotribune.com/classified/realestate/newhomes/chi-0612090215dec09,0,2461664.story?coll=chi-classifiednewhomes-hed
I read that yesterday - it was nauseating. No opposing view point to the “buy now or the incentives will be gone and prices will go up” message of the article.
Also from the article:
“Cutbacks in new production, plus the departure from the market of investors, or so-called flippers, are positive indicators for a housing turnaround”
Okay, so when all the demand from the specuvestors is gone, prices will go up and more houses will sell??
A year ago they were telling us that investors didn’t come to the Chicago market. Now they’re saying they are gone. Which is it?
Great graphic chart for the NYC market showing past recessions, Y-O-Y price increases and interest rates. Chart is quarterly back to 1990
CPI adjusted median sales price (% change y-o-y quarterly over prior year) vs. mortgage rates Manhattan coops/condos
http://www.millersamuel.com/charts/gallery-view.php?ViewNode=1165521880TbUkV&Record=42
Repost from the Santa Clarita, CA thread:
In Valencia, CA (part of Santa Clarita, CA, zip 91355) there is a home (3bd/2ba, 1400+ sf) listed in the MLS for $490K. It last sold in August 2006 for $525K. That’s a 6.7% drop in four months!
I still think that prices will be sticky in a downturn (like in the 1990s), but perhaps not so much for motivated sellers.
The housing market in southern NH is very strong. You’re all wrong to say a “national housing” crash will happen. elling prices are still high and sales are decent. If you bought a home in the 1990’s in New england you still have made alot if you sell it(which is not too hard still) for a good price.
I looked again at Zillow in my old neighborhood in Fresno where there were lots of drug deals in the 80s / early 90s. It’s an industrial area. My parents who lived there both died from rare forms of cancer (in 1994 and 2000. of course, the big C was not detectable by standard means). And we think it was from the groundwater and pollution. But I digress. I sold the house in 2000 for $79,000. It’s zillowed at $252,000, down from $272,000 a few months ago at its peak. I posted this stuff before. The new thing that boggles me is that I noticed on zillow there are actually houses in that neighborhood that have been sold in that industrial sludge heap for the $200,000 range. I guess they count proximity to the 180 freeway and the “Fresno-Yosemite International” (yep they call it that) airport. Just 4 years ago the prices could scarcely touch $95,000 in that same neighborhood. I doubt if the drug dealings, shootings, and stabbings stopped since 2000. There are welfare apartments across the street from my folks’ house. The welfare hotel was built in 1978 and the neighborhood went downhill. On the good side, most homeowners are older and tend to keep up with their yards (they hire gardeners - illegal aliens, no doubt). My dad had a gardener.
Keep an eye on Crisy&Cole’s blog. I also lived in Fresno during those times and I know what you’re talking about. The Central Valley is like a piece of Oklahoma strung through the middle of CA. Wages there cannot support this bubble.
Take your Clownifornian ASS back to the Crack house you live or live in. Since you know soooo much about everywere. I will bet you “money” The worst shit hole in Oklahoma is like a Castle in Clownifornia!!
(sigh). I have nothing against Oklahomans. And I know you were not offended by my post, but the post of Mozo Mag. I don’t think that was written as an insult. The Oklahoma Dust Bowl resulted in many Oklahomans moving to the San Joaquin Valley (the farm belt of California). Hence Mozo’s reference to Oklahoma. My folks’ next door neighbor had Cherokee blood (white woman) and was from Oklahoma. My childhood friend who lived down the street - his mom was from Oklahoma. They were nice people. So don’t take your emotions out on Mozo or Californians. Mozo was not being a generalizer. Your triple posts show that you are more prejudiced against Californians than Mozo is against Oklahomans. There are very good down-to-earth Californians and many of them are descended from Oklahomans, and midwesterners. The San Joaquin Valley farm area can easily fit Los Angeles, San Diego, and San Fransisco combined in one corner. California is NOT Los Angeles. California is NOT Hollywood. California is NOT San Francisco. End of rant from a native Californian who still loves California but also loves Arizona.
F you and Your Clownifornian statement!!!
I can’t wait for prices to keep droping out ther in Clownifornia. Because once they drop far engough. And when all of the pathetic FB, GF and Forclosures hit the market there. I plan on buying up as much of that pathetic cheap realestate inventory as possible. Then I will rent to all the pathetic egotistical persons such as yourself. Enjoy your ghetto!
There was an interesting statistic that I saw in the last two weeks that indicated that the population in Hillsborough County was steady which goes against the prevailing wisdom that hordes of Mass refugees are coming over the border to live here.
A coworker has been trying to sell his house
since June and is getting some traffic but noone near close to making an offer. He’s hoping for an improvement in the spring. I
have told him of the scenario where everyone puts their houses on the market in the spring at the same time.
I think that the market here has definitely
softened. But I wouldn’t call it “very strong”.
Unless it was in relation to MA or some other
big bubble states.
One looming problem of course is school costs
and our state pension problems. We’re going to have to start kicking in quite a bit more money into the state pension fund.
NH — Are you a builder or someone with an investment home they are trying to unload?
You are looking through a rear view mirror. The crash is coming to your town soon.
http://www.washingtonpost.com/wp-dyn/content/article/2006/12/08/AR2006120800022_pf.html
Locked In, No Exit in Sight
Many Rueful Buyers Try to Escape Builders’ Ironclad Contracts
By Tomoeh Murakami Tse
Washington Post Staff Writer
Saturday, December 9, 2006; F01
Lisa and Reggie Starr thought they were getting a good deal when they signed a contract to buy a new six-bedroom house in Woodbridgealmost a year ago. But after they had trouble selling their own house and wanted to get out of the deal, the fine print in their contract became a very big obstacle.
“There’s no contingency for the sale of your home. There’s no contingency for financing. ‘No refund will be due to you’ — it’s clearly written in the contract,” said Lisa Starr, who admits that she did not fully understand the document when she signed it. “You get all excited. You’re about to build your dream house. I wasn’t looking for anything to go wrong.”
Now, after rereading the contracts and consulting lawyers, the Starrs and many other would-be new-home buyers are finding that the sales agreements they so enthusiastically signed just a year or two ago have left them little wiggle room as settlement day approaches. Indeed, some consumer advocates and real estate lawyers who have been fielding calls from remorseful buyers in recent months say few contracts are as rigid and one-sided as those for new home sales.
Prepared by builders’ attorneys, the contracts are “written in a way to give every possible edge to the home builder,” said Allen J. Fishbein, director of credit and housing policy at the Consumer Federation of America. Some developers have added certain provisions that further strengthen the contracts, bit by bit, over the past decade, some attorneys said. As a result, contracts became more prevalent during the frenzied real estate boom that block consumers from getting any “remedy” beyond reimbursement of their earnest money, or that prevent them from taking the dispute to court but instead force them into arbitration, when differences of opinion arise.
Builders, on the other hand, say the contract provisions protect them against buyers frivolously trying to extricate themselves from completing purchases. They say that buyers weren’t complaining about the contracts during the boom, when values jumped by tens of thousands of dollars, with buyers earning a profit even before they went to settlement.
Of course, every home sales contract is different. Some are more consumer-friendly, and an increasing number of builders are willing to work with buyers to keep the deal alive, especially since new buyers aren’t exactly knocking down their doors these days.
But some buyers are trying to get back their deposits just the same, and at times are finding that persistence can prevail. After initial protests from the builder, one would-be buyer was released from her contract after arguing that a job transfer from Rockville to Baltimore met, albeit barely, a “change of circumstance” clause in her contract that gave her an out if her new job was more than 50 miles away, said Harvey S. Jacobs, a real estate attorney in Rockville who represented her.
And some buyers have been striking back at what they perceive as an imbalance in power between builders and buyers. In a recent round of lawsuits filed in several local jurisdictions, attorneys have challenged the validity of certain builder contracts because they lack “mutuality of obligation” on the part of the builder and fail to give the buyer any “remedy” — other than return of the deposit — even if the builder breaches the agreement. Put in plain language, the attorneys contend that the builder doesn’t have to build or sell the house to the buyer and that the buyer can’t do anything about it, even if the buyer lost money on the sale of a house or got stuck renting an apartment.
There have not yet been judgments or verdicts in these cases, but some would-be buyers are getting settlements instead. In one case settled recently in Fairfax County Circuit Court, 16 home buyers in a McLean subdivision sued to get back deposits on homes contracted for a collective $20 million.
Alexandria-based real estate attorney Beau Brincefield Jr., who filed the lawsuit on behalf of the buyers, argued in court filings that the contracts allowed Reston-based NVR to walk away without recourse because the terms of the contract didn’t set a date by which NVR had to go to settlement; freed NVR from liability for any damages; provided no remedy to the buyer if the builder didn’t hold up his end of the bargain; and required the buyer to waive any right to “specific performance” of the contract, which meant that the buyers couldn’t compel NVR to build and sell them the house.
“Unless both parties are bound, neither party is bound,” Brincefield said in an interview, quoting from a decision in a contract dispute case rendered by the Virginia Supreme Court in the early 1900s.
NVR disagreed with Brincefield’s assessment, saying that limitations on remedies do not undermine a contract’s validity. NVR’s attorneys argued that the contract did not lack mutuality, and that even if it did, mutuality was established after the company built the homes with upgrades and features as specified by buyers in their contracts.
The case was settled on the heels of NVR’s announcement in October that it had seen four out of 10 home buyers cancel contracts during the third quarter and that it was revising its profit expectations for the rest of the year. Terms of the settlement were not disclosed.
An NVR spokesman declined to comment on the case. In court papers, however, the builder said: “While plaintiffs argue that NVR foisted a contract on them that somehow gave discretion to NVR as to its performance, the evidence will show that the plaintiffs entered into contracts in order to invest in a ‘hot’ real estate market, let NVR undertake performance, and then waited to see whether they would perform based on market conditions at the time of closing.”
These legal arguments could have broad implications for how future sales contracts are drafted as well.
Robert M. Diamond, a real estate lawyer in Falls Church, said that one of his clients, a local builder, recently eliminated the clause in the contract that took away the buyer’s right to “specific performance.” The firm did it, at least in part, because Fairfax County Circuit Court Judge Arthur B. Vieregg Jr. ruled in June that a home sales agreement — this one between the seller of a foreclosed condominium and the highest bidder — was unenforceable because it lacked mutuality of obligation.
Many builders are having to fend off an array of legal attacks from consumers who have changed their minds. Notifications of the slightest changes to a home or a community have triggered attempts to back out of deals, said Diamond, who added that since July, he has handled about three dozen letters from attorneys representing reluctant buyers.
Diamond said some buyers are grabbing at straws, even protesting changes favorable to them, such as when the developer added extra parking in a condominium complex. Buyers and their attorneys have alleged that these adjustments are “material adverse changes,” even though the contracts clearly permit developers to make certain changes as needed to their projects.
“It didn’t matter what the change was . . . these are excuses,” said Diamond, adding that many of the buyers who want out are speculators who decided their investments had turned sour or buyers worried that they had overpaid.
But many contracts allow builders to make far bigger changes, such as flip-flopping the layout of the home or moving its footprint within a lot. David Jaffe, a lawyer with the National Association of Home Builders, said contracts must account for a multitude of unforeseen roadblocks that builders may face in developing a subdivision — for example, underground rock formations where a community pool or someone’s basement was planned. The trade group, Jaffe said, has long advocated that a contract should be a “communication tool” fair to both parties. And a contract is fair, he said, as long as the terms were known to the buyers, who had the option of walking away.
The Starrs said they are hardly trying to slither out of the deal just because they were having second thoughts. They say their backs are against the wall: They couldn’t get good enough financing terms, and the builder had lowered the price of nearby homes. The Starrs finally got a contract on the home they were selling, but at a price that is $150,000 less than they expected when they bought the new house.
Reggie Starr marveled at just how quickly the real estate market had turned. “It was not even like a slight decline,” he said. “It was like a big curve.”
They are still in talks with their builder but say they have already learned from the experience. “You need to have legal representation, and you need a real estate agent,” Lisa Starr said.
Fishbein, of the Consumer Federation, wholeheartedly agrees.
No matter how reputable the builder may be, buyers should seek out a lawyer before signing the deal because new-home sales agreements can be “loaded with all sorts of hidden land mines,” Fishbein said. “We tell them to request a copy of their sales contracts to review . . . which unfortunately some buyers do not do, even though the stakes could be so great for them.”
During the boom, however, many builders refused to pay sales commissions to real estate agents representing buyers because builders could sell the houses without any help. And buyers risked losing out on a coveted contract if they took it to a lawyer rather than signing right then and there.
Now, with the frenzied market behind them, those on the prowl for new homes have the luxury of time to consider the terms of the contracts they sign — before they sign them. Some are even inserting their own language or striking out certain passages.
Jeffrey Silverstein, a real estate lawyer based in Burke, said he recently had two buyers bring him their contracts before signing.
He successfully inserted contingencies in both contracts that outlined when construction would begin on the new home, what price the sellers would ask for their homes and how low they could be forced to go on the sales price, and what would have to happen for the buyers to get their deposits back.
“When the real estate market was hot, everybody thought they had to sign right now or they’d lose the place. And that was probably true. Lawyers just weren’t in the loop anymore,” Silverstein said. “Now, it’s coming back a little. They [builders] listen now. If you have reasonable changes to make the contracts more equal-handed, they’re willing to listen.”
Wow! Small wonder there are so many new home order cancellations as of late, and such a big drop in new home orders…
‘Reggie Starr marveled at just how quickly the real estate market had turned. “It was not even like a slight decline,” he said. “It was like a big curve.”’
When I play tennis with my sons, they always want me to hit balls high up in the air (just for fun). If you watch a tennis ball hit 75 feet straight up in the air, you will notice a “big curve” right at the parabolic apex just before the ball starts plummeting back to the ground…
Get Stucco, I’m praying for that ball to start plummeting back to earth. My neck is sore from looking up…
The captions above the homes for sale ads are getting really creative here in Whatcom Cty., WA. Guess the old standbys like “Charmer!” and “Price Reduced!” aren’t doing the trick anymore. Here’s some that caught my eye:
“AIRPLANE HANGER YARD!!”
Does that mean “huge yard”? They don’t explain.
“PIZZA DELIVERY AREA!!”
I did not realize that it is so difficult to get a pizza delivered in Bellingham that this is now considered as a possible selling point.
“HOT BUTTERED NIGHTS!!”
I couldn’t imagine what this meant but, thankfully, the text underneath explains their meaning: A romantic picture of hot buttered rums in front of the fireplace.
Here’s the best one. It turns the “feeding the squirrels” thing on it’s head. The photo is of one house in Blaine, near the border. The ad says there’s 2 houses but for the life of me I can’t see the second one. I include the full text:
“TELL ME WHY?”
“Call me and tell me why these two homes for the price of one haven’t sold and if you have the best answer you will win a $50 gift certificate to a local restaurant”.
The above ads are from the local Remax Agency.
What is the price range of these houses?
Another development as far as the phrase “price reduction/reduced” goes.
Apparently, realtors are searching for a new phrase that means the same thing. They’ve recently trotted out “New Price!” and now today for the first time, “Price Adjustment”, no exclamation point.
I’m noticing what seem to be a lot of houses in my ‘hood up for sale that I can remember changing hands in the past two or three years. It’s rather odd, being there haven’t been job layoffs, nor do we live in a place where there are a lot of transfers. I hate to (forgive me) speculate as to why people are selling
I also notice that new sellers continue to ask for peak prices. Prices are falling yet they tack 10% or so onto the most recent comp and expect to get it. Ain’t happenin.’
I’m watching an advertisement for “WHITE BLUFF TEXAS”" WWWHHHOOO. I’m not knocking TX, I was borne in Houston. But I live in Richmond, VA. I’m not sure how many people plan to move from Richmond to Texas, I could be wrong, but they must have got some really good advertizing rates.
Also, I know it get pretty hot in that part of Texas in the Summer. One of the persons on the comercal stated “the weather is pleasant year round” sure as long as you stay in the AC during summer.
I’m from Oklahoma so I know what the weather is like.
HHAHAAHHA — Just stated on the commercial - They are giving away free trips and hotel. And they just said “Call us now before prices go up!!”
AAHAHAHHAAHAHAHAHAHHHAH LMFAO!!! AAHAHHAHHAHAHAHHAHAHAAHAHAHAHAHAHHAHAHHA
AHHAHAHHAHAHA - Still LMFAO!
I am still puzzling over the newfangled CAR affordability statistics (see the 2006 Q3 news release here:
http://www.car.org/index.php?id=MzY3OTE= ).
I am trying to get my brain around this related blurb in my Sunday SD Union Tribune Homes section:
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Better, but not great
Real estate prices may no longer be soaring, but you still need deep pockets to achieve first-time homeownership in California.
During the third quarter of this year, 24 percent of first-time buyers could afford a median-priced home in California, compared with 8 percent during the same period in 2005, according to a recent report by the California Association of Realtors. In the San Diego region, 21 percent of first-time buyers had the means to purchase a home in the third quarter, compared to 22 percent a year earlier.
The Realtors group says first-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The statewide minimum annual income needed to purchase such a home in the third quarter was found to be $98,890. The sum was based on an adjustable loan interest rate of 6.58 percent and assumed a 10 percent down payment. The sum was based on an adjustable loan interest rate of 6.58 percent and assumed a 10 percent downpayment. The minimum household income needed in the San Diego region was $105,680 for a home priced at $511,590, the report said. More information is available online at http://www.car.org.
- EMMET PRICE
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How many ways do Realtors lie? Let me count the ways…
1) Last time I checked (just now
), the median household income of San Diego County in 2005 was $64,273 (SANDAG statistic — see here:
http://en.wikipedia.org/wiki/San_Diego_County,_California ). Thus it appears the 21 percent of “first-time buyers” who can afford to buy a home has been incorrectly calculated as the percent of *all* San Diego households that can “afford” a home priced at $511,590. Obviously, the vast majority of San Diego households earning over $105,680 are already homeowners, and hence not representative of “first-time buyers.”
2) The redefinition of affordability works to make the statistic spontaneously jump up from what is probably a single-digit percentage under the old definition (the percentage of households that can afford a median-priced home assuming a fixed-rate mortgage and 10 percent downpayment) up to a level north of 20 percent. Lowering the bar from the median-priced home to 15 percent below the median and changing from a fixed-rate to an adjustable-rate loan both work to increase the reported percent who can afford a home.
3) What percent of “first-time buyers” are bringing a downpayment of $51,159 to closing? My guess: The percentage is vanishingly small.
Good points, but is these are your words:
“Obviously, the vast majority of San Diego households earning over $105,680 are already homeowners, and hence not representative of “first-time buyers.”
Then I’m not sure I agree. Moderately above-median income does not imply homeowership.
“Moderately above-median income does not imply homeowership.”
$105,680 / $64,273 = 1.64 (64 percent above the median). Does 64 percent above the median meet your definition of “moderately above?” Maybe you should work for the CAR statistics department.
Is that median household income or median individual income?
In any case, my point was that even at a household income of $105K, it’s not “obvious” to me that that the “vast majority” of those households own (or owe on) homes. I have single tenants that make that much money living in one-bedroom apartments.
‘… even at a household income of $105K, it’s not “obvious” to me that that the “vast majority” of those households own (or owe on) homes.’
A couple of my points need further clarification, then:
1) I am also guessing that the percent of San Diego households who own is monotonically increasing in household income — admittedly an assumption, but one that I am 99.9% sure would be supported by the data. Similarly, I am guessing that at least 90% of households earning above $105K already own their own homes - probably more — as the all the women of San Diego households with income of $105K whom I have ever met would be far too proud to endure the shame of renting.
3) I am guessing that only a very small percentage of “first-time buyer” households in San Diego have household incomes north of $105K — 64 percent above the median (household) income. By definition, first-time buyers are not already homeowners. If you believe 24 percent of first-time buyers in a town with a median income of $65K are have HH incomes above $105K, then I have to conclude that you are statistically illiterate.
Oops — 3) s/b 2)…
stucco-
my wife and i are one of those vanishing types you speak of
we have saved alot of cash in the last few years while renting out a coop in nyc that my in-laws own which keeps our expenses low, so much to wife’s chagrin we wait it out and keep saving.
my father in-law is very old school retired nyc fireman
who is insistant that we only buy with a 20% dp and 30yr fixed
and i am in agreement with that philosophy
it is funny because we own a 4 year old economy car(bought and paid for already) and live in this small apt. so from outward eyes people think we are poor and cannot afford a home
who cares what they think i tell my wife!
just look at our credit scores, well over 700
our credit card debt, currently at 0!
and our other savings, maxed out 401ks
ira’s, and our always growing money market
scmucks. i could care less what people think anyway
and when i do decide to buy it will be done correctly
and not where we are one transmission problem or
expensive vet bill away from disaster
“scmucks. i could care less what people think anyway”
But you might not get invited to dinner parties.
But you might not get invited to dinner parties.
lmfao
actually we do maybe they feel sorry for us poor renter’s
Most recent homebuyers are too cash-strapped to be able to afford the time or expense of a dinner party, anyway…
I’m cheering you on brother.
Shepoles mentality to belive that there is something wrong with you if you don’t own a home.
But how are they throwing the party unless they are are cashing out on their “equity” what a load.
So many Realtors (TM) lies, and so precious little time to refute them all…
The SD Union Tribune sdhomes BUYING GUIDE has another whopper-filled Realtor (TM) ad this weekend. As with last week’s refutation of Realtor (TM) truthiness, I again insert my comments in parentheses.
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Don’t believe the negative hype
By Brian Stewart, Broker/Owner
RE/MAX Hometown Realtors, Coronado
Despite the onslaught of negative media surrounding the housing market (the only onslaught I have seen has come from blogs), the real story is that now is a great time for buyers to fulfill their dreams of owning a home (and by the way, it is always a great time to buy!). And with a large selection of inventory (I believe it has recently been at a record high level, and high inventory levels have historically preceded falling prices), low-mortgage rates and tax advantages for buyers, there is no time like the present to purchase a home. (But aren’t prices falling, and doesn’t that pose the risk of catching a falling knife?)
Many potential buyers have been scared off by the hyperbole about a falling market (do you mean talk about the risk of catching a falling knife, for instance?). Put plainly, stories about “bubbles bursting” are exaggerated and lack historical perspective (like this one in The Economist magazine? http://economist.com/finance/displaystory.cfm?story_id=8381960 ).
Historically, real estate has been a cyclical market (but I thought that real estate always went up?). Throughout these cycles, prices fluctuate (but always to the upside, right?); but as history has proven, real estate will increase in value, establishing it to be one of the best — if not the best — investment the average person will ever make (but what about all those media stories about rising foreclosure rates among recent buyers who used high risk loans to purchase otherwise-unaffordable homes — would that be an example of all the media hype you were mentioning?).
A real estate investment (I just want a home to live in, not an investment!) is the only one where the principle of leverage — 20 percent down for an appreciation on 100 percent — is applicable (what about other “safe” leveraged investments, like buying stock options with an underlying asset value of ten times my annual household income? And if I put 5 percent downpayment on a home with a depreciation of 10 percent — wouldn’t that be a 200% investment loss?) Renters — who have seen their rents increase as the housing market has cooled — would be hard-pressed to find these types of returns with any other investment (I agree — it is hard to imagine other investments with 200% losses of the initial investment over just one year’s time). And what other investment allows you to reap tax advantages and a good return on your investment (treasury bonds?).
Undsoweiter…
LOL!!!
A foreclosure in Pomona, CA: 650K. 100% financing. The first of 350K foreclosed, the second took the loss of 92K.
Investors are a scared bunch these days. They have a walk thru and they lie about where they are going to put the furniture and how they can’t wait to be a neighbor, as soon as the house closes up goes the sign you never see them again. I wonder every first of the month when the checks fly out what they are thinking?
I can tell you one thing, they better think about getting their investment house sold at any price and forget about how they almost beat the system and didn’t have to work anymore.