“Buyers Are Convinced Prices Will Decline Further”
A housing report from the Arizona Republic. “This is a good time for first-time homebuyers to get into the market, real estate agents say, but Gilbert may still be a tough place for new buyers. ‘Mesa has a little more variety, more options for first-time buyers,’ said Nelda McClaskey, a Realtor in Gilbert. ‘Queen Creek has some great opportunities. If people are willing to drive a little bit, you can get a newer, larger, nicer home in that area for a lot less than in Mesa, Chandler or Gilbert.’”
“‘I really don’t think people should wait too long, because I think things are going to change,’ she said. This month, Keller Williams Realty Southeast Valley in Gilbert hosted free seminars for first-time homebuyers, events they plan to offer again Jan. 3 and Jan. 6. No one showed up to the December seminars.”
“First-time buyers may not know how good the timing is, McClaskey said. ‘I do believe a lot of people are scared off by what they hear about the market,’ she said. ‘The average person that’s not deeply entrenched in it, they have no idea. They think everything’s come to a screeching halt, because that’s all they’ve heard.’”
“Jeff and Sarah Mashaw, a married couple attending Arizona State University, are looking to move out of their Tempe apartment and into a home in May, when Jeff will graduate. Before then, they have to save $2,000 for a down payment.”
“They already are learning about purchasing a home through the Mesa-based Housing our Communities program. ‘We’ve learned stuff we didn’t even know we didn’t know,’ Jeff Mashaw said.”
“The process of buying a home can be confusing, Sarah Mashaw said. She said she’s glad there’s someone there to guide them through it. ‘The most surprising thing, I think, is how much of a home we can actually afford,’ she said.”
“‘Prices, closing costs, amenities, all those are negotiable,’ said said Vic Rochelieux, a real estate agent in Gilbert. ‘The people that want to sell are willing to negotiate all the aforementioned, or contribute to closing costs.’”
“The Southeast Valley, like greater Phoenix, has about an eight-month inventory of available homes, Rochelieux said. Normally, a healthy inventory is three to four months, he said. Prices dropped this year, a trend Rochelieux thinks will continue.”
“Give us more time before raising development fees, builders are telling Avondale leaders. The plea to delay the vote and to consider a phased rollout of the new fees did not seem to have much council support.”
“‘I find your argument to be hypocritical and weak on this matter,’ Councilman Ken Weise told the home builders’ representatives.”
“He said builders were raising prices up to $5,000 every couple of weeks during the recent housing boom. And they looked the other way when investors bought several houses, despite rules that required owners to live in the house for a period of time, he said.”
“Now, he said, developers are dropping prices substantially, hurting buyers who paid more when the demand was high.”
The Arizona Daily News. “University of Arizona economists see slower growth ahead, but no recession in the local economy. The real-estate market and consumers are the keys to the economy’s health, said UA economic forecaster Marshall Vest.”
“Some weakness is apparent in consumer spending, he said, and that is likely tied to slowdowns in home-improvement centers and furniture outlets, both tied to the slowing housing sector.”
“A sharp fall in the number of houses sold, along with an increasing inventory of units, will lead to additional price declines, he predicted. Buyers are convinced prices will decline further, he said, and there is no longer any urgency to buy in the market.”
“The average price of homes sold through the Tucson Association of Realtors Multiple Listing Service has declined 5 percent since the end of 2005, Vest said.”
“The national economy is ‘in good shape,’ UA economics professor Gerald Swanson said, and no recession is likely. “Everybody is betting on a soft landing,’ he said.”
‘Prices dropped this year, a trend Rochelieux thinks will continue’
Then by all means, let shoe-horn in some young couples into Queen Creek houses with $2,000 down!
Here’s some news from Colorado Springs, where they just set a record for foreclosures:
‘Fewer people bought single-family homes in November: Sales dropped nearly 13 percent from the same time last year, according to the Pikes Peak Association of Realtors. Competition among sellers remained fierce. The number of homes for sale last month rose by almost 30 percent when compared with November 2005.’
‘The new-home market isn’t faring any better. Single-family building permits last month plunged nearly 61 percent over the same time last year, according to the Pikes Peak Regional Building Department.’
‘ Some real estate experts say they believe the slumping market is poised to turn around. Nancy Rusinak of Rusinak Real Estate in Colorado Springs said a meeting she attended Wednesday of the area’s 25 top-selling real estate agents was buzzing with talk that many agents have seen an increase in sales over the past two weeks.’
‘Many buyers now realize a huge supply of homes and mortgage rates that have fallen to their lowest levels since January — an average of 6 percent for a 30-year, fixed-rate loan — make it a good time to buy, Rusinak said. ‘If anybody is holding back and waiting to see the bottom, they’ll wake up one morning and the bottom will be gone,’ Rusinak said.’
‘ Salzman, however, warned that sellers must price their properties to reflect softer conditions. A house that’s overpriced when compared to similar properties in a neighborhood is likely to sit, he said.’
“Jeff and Sarah Mashaw, a married couple attending Arizona State University, are looking to move out of their Tempe apartment and into a home in May, when Jeff will graduate. Before then, they have to save $2,000 for a down payment.”
If you have to struggle to come up with $2000 you can’t afford a house. $2000 is what you keep in the cookie jar isn’t it?
I needed to put down 6K to move into the rental I am taking in a week.
Buying a house is 1/3 the cost of renting! Everyone buy now!!
2K for a downpayment? Come on, what is that supposed to prove?
No $hit! Try to rent an apartment in NYC with only $2,000 down. The thought is ridiculous. One renter in 2005 wanted nearly $10,000 from us, upfront, to rent a $2,400 per month apartment. But something tells me for $10,000 down I could buy almost any place I want. This is such crap.
And these realtors are such scum. I will never involve myself with another one of these parasites. How many future boycotters have these scumbags created in the last few years?
Just so you know in NYC they are only allowed to collect 1 month’s worth of security deposit. So for a $2,400 place legally they can only ask for $2,400 - I am pretty sure that is the law.
Many people that try and sublet try for first, last and security but you can tell them that is illegal.
I guess $2K is better than $0K or -$2K, right?
“How Do Zero Down Mortgage Loans Work?
There are many different types of mortgage lenders. Some lenders will only finance 80, 90, or 95 percent of the home price. Thus, homebuyers would need a down payment for the remaining percentage. With a zero down home loan, the lender offers 100% financing.
Zero down mortgage loans make the goal of purchasing a new home reachable. Even if a homebuyer cannot afford to pay their own closing fees, a mortgage broker should be able to locate zero down mortgage loans that offer 103% or 107 % loans. The majority of lenders require a high credit rating for the latter choices.”
http://www.bestsyndication.com/?q=112906_zero_down_mortgages.htm
No kidding. I was in for $3600 on the place I am renting now: $2050 deposit + $1550 first month’s rent. The housing market won’t truly bust until lending standards are such that you need mid-5 figures saved up to be able to afford a house again.
Do you think mid 5 figure deposits will really happen again? They opened up a can of worms by allowing homes with zero down. I have a feeling if they did start requireing large down payments they would really be screwing themselves by cutting off all their business.They will also be takeing back a sh@tload of bad loans as people go further into the whole as their property depreciates from the pool of buyers drying up.I really don’t think that will happen.
i hope they do require mid 5 figures and better for a downpayment again, it would slow the market just a wee bit. why should i i have to possibly bid on a property against someone who struggles to save 2k in what 6 months? i agree if you can’t do that you have no business buying a car let alone a home
because we are a couple of lowly renters we have to put all that money into our savings every month
It will happen, but not until “mid 5 figures” is the weekly salary of a Wal-Mart greeter. I estimate that will take about 2 more years. Maybe 3.
Do you think mid 5 figure deposits will really happen again?
I expect a minimum 20% down to become the standard again. Prices will just have to drop far enough for a sufficient number of people to come up with it.
I expect, after the mortgage default debacle we’re about to witness that we will indeed see 20% down payments.
We could even go back to the 1970’s market where, except for “starter homes,” you were expected to pay 20% plus most of the previous year’s appreciation! Think about how that would have stopped this stupid bubble.
Sales are slowing. They’re going to slow a lot more. Nothing can stop prices from dropping nationally. The question is how far and how long will they drop?
Will the FED pump out money and give us a Japanese recession? That would be interesting… the Chinese would immediately demand we start buying imports with oil or gold!
Interesting times ahead…
Neil
I am not so sure about down payments ever coming back unless lenders get hurt really bad - which they should but who knows.
Remember 15 years ago you could not go into Circuit City and finance a TV for 18 months. Now that is common. At first it was 6 months, then 1 year and now I see 18 months. People must be loaded with debt, I can’t even imagine.
Wait a minute. Don’t you have to come up with 2K every month to keep up your mortgage?
Oh my gosh, that’s so true. $2000 these days is pocket change.
I wish I only had to come up with 2k to buy a house. Our current rental cost us $6k to move into. In NY, my closing costs are 5% of the value. The 1.25% mortgage recording tax is the one that i find most offensive.
I think that tax is higher now and it ultimately caused me too pass on an apartment in 2002. That tax is offensive.
Remind me again why anyone would ever live there?
The whole freaking place is offensive, and in so many ways…
I’ve been watching the CO Springs market with some interest. My husband’s family from there and most still live there. My MIL (who lives in FL) put almost all of her retirement savings into rental houses in the Springs. She did manage to buy most of her properties a cash flow positive basis (but just barely…).
She complained that the last time we talked that all of her tenants were late on their rent. (She was getting paid but on the 10th of the month, etc.) It’s not a huge surprise to me since houses in CO have actually remained affordable. Those left renting there are more likely to be military or those not able to manage cash well rather than the smart, stable money.
Since they are cash flow positive, the down turn shouldn’t affect her too much. From her personality, however, I’m guessing that she probably didn’t see the decrease in values coming.
It more unbelievable than you laid out Ben, our Son lives in Denver and works for one of the big government contractors.
He said Colorado Springs Gov contractors just got a contract that will be needing 10’s of thousands of workers there.
More info, please. My contact here says “No” to “10’s of thousands.” One contract has been renewed that will only maintain existing workers and one more in CS for 754M. Those figures do not add up to funding for “10’s of thousands” of workers. Another source states that defense jobs are actually being moved out of CO.
As usual, Realtors(TM) are trying to incite hysteria in the market to justify their greed.
~Misstrial
I will not say who he works for, but it is one of the major playas in the defense industry. He told us one of these guys got a big contract are moving jobs from CA to the springs area.
and the 10’s of thousands I stand behind from his telling.
My unbelievable part is compared to my home base of Detroit, [I'm working in San Jose Ca] were layoffs are a dally thing and it is a one horse economy. Foreclosed homes are expected.
Springs area with big government workers and contracts, the foreclosed market there it is mind blowing.
what in the hell to these people do with there dollars in CO that makes this happen?
Add, this occurred to me after I wrote, maybe our Gov’ment is not as stupid as they appear, maybe there is something else going on.
If North Korea and any other Joe or Jane Mohammed can get a nuke, maybe you would not want all of your best and brightest, your “skunk works” to be confined to a small area on the west coast.
but like they say, its different here.
>If North Korea and any other Joe or Jane Mohammed can get a nuke
The government has an official policy of moving defense jobs out of DC for this reason.
Has this contract been announced yet? Every contract is announced in the news media and would have been announced prior to the election as a re-election boost/”look good” for the candidates. Not to criticize, but your friend may have a misunderstanding of the situation. There is not a defense contractor left in CA who employs 10’s of thousands of defense workers anymore to transfer to CO or any other State. Lockheed is moving people out of CA. Boeing/Northrup hasn’t much presence in CA (other than Corporate) and neither have a prior foundation in CS to move to or to build upon. So, I (we) can’t imagine who he may be referring to. Lockheed has a small presence there but even so, engineers are/have been reassigned to another State. (Sorry, I cannot say where due to security reasons.)
Can your friend identify the initials of the company he is referring to? Thanks
~Misstrial
Must be big. Los Alamos is about $2.2B/yr with about 10-11k employees
Lockheed is opening another place in the Clear Lake City area of Houston. I know, my sister just got a job there.
My hunches:
1) Not many of even 10s of thousands of workers would be able to afford homes priced over $300K with no appreciation…
2) It is nice if you provide a news source (like Ben and most of his posters do); otherwise, you are simply spreading an unsubstantiated rumor.
My hunches:
1) Not many of even 10s of thousands of workers would be able to afford homes priced over $300K with no appreciation…
2) It is nice if you provide a news source (like Ben and most of his posters do); otherwise, you are simply spreading an unsubstantiated rumor.
Gee, Getstucco, please read number one and apply number two.
Sorry, I did not know the rules here, thank you.
More likely a great deal of the “10s of thousands of” jobs will be the cat’s meow for contract engineers such as myself (21 years in defense industry). Thanks for the information. I am seeing only a few open reqs on Dice in the Colorado area. But most are in places such as California, Florida, New Jersey, Washington state…My buddies and I have been making between $150k and $300k annually the last 3 years. All long time experienced softies (software engineers).
Last time I heard hype about big contracts was the JSF in Texas. Another consultant was saying he could retire on that one. However, it was all nothing but hype on a $200 billion program. On the other hand lots of ME and Aeronautical engineering positions there. Oh well.
The contractors don’t buy houses where they work, typically. Instead they live usually in some other state. I would not mind working in Colorado, but I always consider myself temporary and ready to pack up after a year (to keep the business tax break).
JSF in Houston. That’s the one I just mentioned. That’s true.
There are only two huge contracts that I know about. JSF in Houston and “Orion” (shuttle replacement). Gee, not many of the jobs are in California (yes, some JSF sub-assembly production in Palmdale and radios in Redondo Beach, but the bulk is out of state). Orion? Lockheed promised jobs by the thousands to Florida and Texas for that contract.
I’ve heard nothing about Colorado… and I usually make a point of keeping track of the big contracts.
Neil
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.
Good on-the-scene post. Thanks.
“No one showed up to the December seminars.”
BAHAHHA. Looks like they have run out of GF.
‘The average person that’s not deeply entrenched in it, they have no idea. They think everything’s come to a screeching halt, because that’s all they’ve heard.’”
“No one showed up to the December seminars”.
What part of ‘Screeching Halt’ don’t you understand Nelda?
Exactly!
I have a feeling that the stuff that they are “deeply entrenched in” does not smell too good.
Polite Question:
What does GF mean? Any explanations would be appreciated!
~Misstrial
GF = Greater Fool
OK! LOL!!! Thank you
Ooops! I always thought it meant Gullible F*ck. Ha ha.
Same difference
Greater Fool, or greater fools …. as in a Ponzi scheme, the person needed to buy you out or assist in your investment recovery.
Or maybe ‘Government Funded’, which most of the GF’s are now …
Very apt descriptor! Thank you (I’m still laughing here, lol)!
~Misstrial
BAHAHHA. Looks like they have run out of GF.
My faith in America is renued. Why, we ran out of GF’s before the majority of the population was priced out.
Oops, I mean we ran out of GF’s and speculators before we built a significant overhang of surplus housing.
Oh wait… We’ve simply run out of GF’s who don’t already own.
This is going to be ugly. Not so much a slowdown as a “oh my god, no one is buying!”
The step after denial is Fear.
Then desperation.
Only then is it panic (popcorn time).
But don’t buy until after Capitualation and we’re into despondency or Depression.
My old blog on investment emotions (my personal favorite of all my blogs) on my blog of zero readers.
http://recomments.blogspot.com/2006_10_01_archive.html
Neil
I know this area. It’s called Carmel Valley and while its nice, people have been dropping their home prices like crazy recently because they can’t compete with all the price incentives, special financing and price drops of the Pardee homes all over the place (thousands of homes)…I live a little to the north in Carlsbad and we are feeling the crush too. It’s like all of the sudden people are realizing that a stucco box on a postage stamp lot with 6 feet between you and your neighbors home isn’t really worth $700,000.
We are renting in Carmel Valley…I like the area but won’t buy for a couple of years at least. Current home was bought as a rental back in Sept this year for $658K…2 bed 2.5 bath…nice home, but we rent it for $2400/month! So the price paid is about 275x gross monthly rent. We sold our house two years ago and put the cash in the bank. Oh the joys of being a happy renter watching the 92130 prices fall.
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.
‘I do believe a lot of people are scared off by what they hear about the market…’
I’m not sure they are scared, intelligent is more like it.
I think the realtors are getting too far ahead of the sellers in the Kubler-Ross model. Sellers are still in stage 1, and the agents are trying to move from stage 2 to 3. How about trying to bargain with you sellers, and leave the smart buyers alone.
http://en.wikipedia.org/wiki/Five_Stages_of_Grief
I would use the investment emotions.. but same idea.
Perhaps the realtors are “burning the candle at both ends?” Losing income due to slower transactions *and* the alligator is chomping away.
Neil
OT: for anyone interested in Florida bubble photos:
http://www.city-data.com/forum/florida/8703-real-estate-bubble-poll-35.html
Ben, feel free to use any if those in your HHB photo viewer. I have about 50 bubble photos and I haven’t even hit Clearwater Beach or Central St. Pete, South St. Pete, Shore Acres, Largo, Seminole, Dunedin.
Just grab whatever you want.
Muggy — Ben works longer hours, more intelligently, than anybody I’ve ever known for the relative pittance of guaranteed income he’s likely to have received to date. In short: if you have great photos, send them to photos@thehousingbubbleblog.com and if they are really good, he’ll post them there. It’s good that you wish to contribute (and thanks for that), but Ben is not lacking for input; what he lacks is time. Fortunately for all of us in Ben’s Army, he is blessed with an abundance of talent and apparently is a great speed-reader.
Chip,
While I agree with everything you’ve said, I’m still amazed at the relatively few good photos published vs. the relatively huge number of vivid descriptions posted here. IOW, methinks that Ben does lack for good photographic input.
Does anyone think that real estate agents holding seminars for first time buyers is a recipe for another crop of marginal low down buyers on sub=prime loans overextending themselves on inflated property ?
Seminars on getting the last of the GF’s into RE ….. they are stooping below timeshare condo pitching with this. Now if the keynote speaker was Casey Serin, I might go see that…..
This was a rhetorical question wasn’t it? These loans (that is if they could get anyone to the seminars) need to hurry before the credit noose begins to tighten. My vote is 1/3+ would be in foreclosure within 2 years, not the measly single digit percentage of sub-prime loans falling apart now.
I think that’s a relatively conservative projection.
Give the RE industry some time, They might find a why to get a local draft board going and anyone called up 18 or older without a home has to buy one.
“Give the RE industry some time, They might find a why to get a local draft board going and anyone called up 18 or older without a home has to buy one.”
lol
do it for the good of your country it is your patriotic duty
now go out and spend
Bottom line: fear is a stronger emotion than greed.
This show is only starting!
Sure right about that. #1 tool of realtors. I sure dont hear buy now or you will priced out forever.
I agree. Here is a snippet from an email conversation I had with a Realtor (TM) a few weeks ago, and I quote,
“The key is, there are several sellers who need to sell now. Do they want their home to sell now, or do they want to take a chance and chase the market. That makes my job a bit easier. I create that fear in their minds. They either sell it for less now and cut their losses, or they chase the market.”
Even with that said, I am not ready to engage because, as you said, this is only starting. As the prices fall the people who need to sell will become increasingly fearful and be less stubborn about “not giving it away”. As has been said numerous times on this blog it is going to take some time for prices to revert the mean and here in OC they are nowhere near that … yet.
Also, note that the agent said they create that fear in their minds. This makes me suspect of this agent for the simple reason that if this is a tool they use, then it would be used on me as well and why would I fascilitate anyone being compensated for manipulating me through fear. I’ll let the market create that fear in the sellers minds instead.
“Buyers are convinced prices will decline further, he said, and there is no longer any urgency to buy in the market.”
This is called deflationary psychology. Not all is lost — at least this kind of thinking should help reverse the negative savings rate…
“at least this kind of thinking should help reverse the negative savings rate…”
God forbid people should actually start saving!
I’ve always stated that the quickest route to a depression would be for everyone (including the government) to start acting fiscally responsible. Scary, no?
I am a renter… I am convinced rents will go down even further!!!
Let’s face it… “owning” a home is part of a charade of Enronesque proportions, pitched by politicians and economists and anyone who gets fees for a 401k or who makes you invest for long term goals that will never be achieved. Ever heard of what happened to the german retirement plans started in the 1930s??? If you’re still not convinced I have plots on the Moon I can sell to you.
Once the $US drops like a discarded space shuttle fuel tank and we are in a war/housing triggered recession with an impotent governement, someone is bound to pay a disproportionate amount for it, and it ain’t gonna be the banks or the well to do.
At least for a little while, until their heads end up on stakes after a revolution….
“Owning” a home. What a joke. Try to miss a few payments to the homeowner’s ass-ociation or the friendly county and see how much you own it.
In Cuba the average smuck has more ownership of his place than in the people’s republic of California…
And just wait until people try to retire on the equity in their house. A mortgage broker will be there to sell them a reverse mortgage and collect huge interest on their declining equity, if any is left. A lot of people have some very bad news coming if their house is their biggest investment… which it is for the vast majority of people in the USA.
Don’t forget that the Fed can do something the BOJ would not - keep printing more and more money.
Don’t forget that the Fed can do something the BOJ would not - keep printing more and more money.
————————————–
They can and at some point will. However, they can’t print fast enough to save many of these jokers. The faster printing will result in higher rates which won’t those with variable rate financing. A dilemma?
“The faster printing will result in higher rates which won’t [help] those with variable rate financing. A dilemma?”
I don’t think so. Many or most of those folks will lose “their” properties. Most of them never had any financially-viable reason to “own” the first place. Reversion to the mean might seem cruel to the tender-hearted, but we also should consider how these FBs got into their predicament in the first place. Not every person in today’s society is destined or able to own their place of abode. Only in the pre-big-government days of the 1800s was that plausible, and that might’ve meant a mud hut, heaven forbid.
What are you talking about? Japan is famous for infrastructure projects to nowhere. It makes our multi-million dollar bridge in Alaska look like a bargain.
Bu Bu Bu But Rusinak said!
One day I may wake up and the bottom will be gone!!!
I better run out and buy right now!!!!!!
THE BOTTOM HAS YET TO ARRIVE! and for some “RE” it will be like the second coming of Christ! HA HAH HAHAHAHAHAHaHAHHAHAHAHAHa
We’re in the top of the second inning. This thing has long way
D
O
W
N
to go!!
Yes ,but the next RE sales ploy will be ,’Buy now before the sub-prime lenders go under “…… You heard it first here by the old Housing Wizard .
I’m not overly religious, however it will be most interesting to see how many of the “RE” people will start to find GOD or whomever they look toward for spiritual guidance.
Lefantome,
Agree with 1/3+ defaulting on the Sub-Prime mtges. I think the 8% dflt rate is on Mortgages made in 06. Imagine, most of those were probably done in the March to May period (buying season), so if 8% are already up to 3 months late in payments, the borrowers probably made between 3 and 5 payments before they stopped. That’s scary! and its probably only an indication of the fraus stuff out there. The tsunami hits in Feb for the overleveraqed by my guess and sellers begin the panic n’ puke dance in May IMO.
I agree with that….. probably don’t need any new sub-prime borrowers for the defaults to head into the double digit range, there are enough in the pipeline now.
(The “panic n’ puke dance” …… I like that one!)
“Everybody is betting on a soft landing,’ he said.”
Exactly! I can only imagine what happens to the stock market when we don’t get a soft landing.
Everybody was betting on being able to refinance or sell when the mortgage reset too.
Soft Landing is just the latest delusion.
Yes, and how many sub-prime lenders will still be in business in six months when the next batch of resets kicks in? Once the competition is BK, you can bet that the “traditional” lenders will not be so anxious to lend to bad risks.
Oops, we just lost another DiTech.com !
“The national economy is ‘in good shape,’ UA economics professor Gerald Swanson said, and no recession is likely. “Everybody is betting on a soft landing,’ he said.”
Not everybody. The bond market is betting on a recession…
http://www.bloomberg.com/markets/rates/
How are you reading reccession from the graphs, or is there an article I’m missing?
Inverted yield curve of treasuries, apparently.
I’m getting 5% on the 3-mo t-bills I’m buying (I owe the man bigtime in April), while 5 year bonds are at 4.5%. I’m no economist, but this apparently means the buyers are expecting fed funds to go lower than 5% in the 2-3 year period, and are content to lock in that 4.5% rate through 2011.
thanks
“I’m getting 5% on the 3-mo t-bills I’m buying (I owe the man bigtime in April), while 5 year bonds are at 4.5%. ”
I got lucky by buying a humble $1,000 10 year note in June at 5.125% interest. I didn’t want to go headlong into it, but cautious, since I expected long time rates to slowly edge up to 7.25% by the end of 2007. Now with intermediate and longer term notes dropping rates, the signs point to more money printing to save the FBs, hence oil stocks and PMs should do very well in 2007.
‘Queen Creek has some great opportunities.
Ho ho ho. Come on, Ben, you made this one up, right?
Queen Creek is so far out there, but they have a Super Walmart.
$250k for a 2,800 square foot house.
I had to MapQuest Queen Creek to see where it is ….. I’m sure it’s really desolate (I mean, it is Arizona …) but does this qualify as “so far out there”? It only looks like about 20 miles to Phoenix, and in the SF Bay Area 20 miles is considered right in the “hub”!
Funny that anyone I know who bought an oversized house has no choice but to shop at Wal-Mart.
Diary Farms. Think they smell bad? At 120F its out of this world.
>>>but does this qualify as “so far out there”?
Some areas that are referred to as Queen Creek are further out than the actual Town of QC, which is probably your Mapquest result. I believe that most of the new subdivisions are in unincorporated areas of Pinal County that are infrastructure-deficient.
Phoenix must be fun. Although it’s very likely someone has posted this link before, today is the first time I visited and it was very entertaining (not for health-food nazis or those few of us devoid of a sense of humor):
http://www.heartattackgrill.com/
One of their competitors offers a “Big-Ass” burger that looks worth trying.
It’s not really as bad for you as they make it out to be, just your typical burger.
But the waitresses are worth it
Next time im in Pheonix, I will have to stop by - and like mjh said see the waitresses! NURSE! NURSE!
This article reminds me of something I would read on the http://www.onion.com. Sarcasim at its finest. Seminar to buy homes and nobody shows! What the hell did the REALTORS do with the cupcakes. And don’t get me started on $2k for a down payment. It’s freaking 20%. And if you don’t have 20% you probably should not be buying a home.
Now, Now , if it wasn’t for types like Jeff and Sarah Mashaw who are “amazed” by how much home they can “afford” (wink wink, how much debt they can qualify for) who would I buy my foreclosures from ?
The Arizona Daily News. “University of Arizona economists see slower growth ahead, but no recession in the local economy. The real-estate market and consumers are the keys to the economy’s health, said UA economic forecaster Marshall Vest.”
“Some weakness is apparent in consumer spending, he said, and that is likely tied to slowdowns in home-improvement centers and furniture outlets, both tied to the slowing housing sector.”
“A sharp fall in the number of houses sold, along with an increasing inventory of units, will lead to additional price declines, he predicted. Buyers are convinced prices will decline further, he said, and there is no longer any urgency to buy in the market.”
So let me get this right. He believes there is no recession coming for the local market because the “…real-estate market and consumers are the keys to the economy’s health.” Yet some weakness is apparent in consumer spending and there is a sharp fall in number of houses sold. Which by his own definition would lead to a recession.
How on earth could he keep a straight face and make these statements? I am just amazed at this stuff.
Why are you so down on realtors? All they are doing is enabling people to dig their own financial graves. I consider it everyone’s duty to take advantage of the stupid. It’s natural selection. They husband who screws up the finances doesn’t screw the wife and make more offspring because the wife leaves. It’s perfect!
“He said builders were raising prices up to $5,000 every couple of weeks during the recent housing boom. And they looked the other way when investors bought several houses, despite rules that required owners to live in the house for a period of time, he said.”
It was more like $10K increase for every new “phase” they opened and they openly admitted to me that they had investors buying 5 houses at a time. Avondale was nothing but cotton feilds as far as the eye could see and some very large developments (now flipper hells) were thrown up to take advantage of all the investors. I invite anyone to hunt through the listings for Avondale and count the amount of times a particular development is on the listing. It’ll make your head spin.
More housing info
http://www.safehaven.com/article-6472.htm
I was in Tucson and drove into a tract of homes off Thornydale by DR horton. Thought I was back in Cali by the way thoses big two stories were cramed together. Cortaro Crossing it was called. Its so beautiful out there and these builders have to cram a bunch of stucco monsters together like that Blocking the view of the Santa Catalinas of most of their homes by building that dense.
Rusinak said. ‘If anybody is holding back and waiting to see the bottom, they’ll wake up one morning and the bottom will be gone,’ Rusinak said.’
They have been saying that for eight months now. No the market is far from this so called bottom. I think they should look at this as not a bottom, but from a top view of how high the foreclosure sells will increase, when foreclosures hits an all time high and almost all the sub primes go the way of dot.com with a few exceptions, probably CountryWide, but even they will be hurting, we will see the so called bottom of the market. When we do hit that bottom in about four years we will not call it a bottom anymore, we will call it a normal market in line with debt to income ratios. For this is the only way we can explain to people who lost years of hard work scratching up enough income to hold a debt for a few years before they were foreclosed on, that the really are just fools and they will need to come to terms with that.
We will then need to start a donative campaign to buid a remebrance museum for all the GF’s and FB’s and there will be a huge saying on the front that paying more than 28% of one months income on housing payment is a fools road to financial ruin and that fully amortizing fixed rate mortgages is the logical way to buy a home.
We will have a place for Bens Blogs as a future beacon to warn future generations of corrupt greed our nation went through and that we were saved from this turmoil only when the days of light came back from the darkness that befell us from REIC.
If this monument is built we will know that as a people we have become wiser and that America is built by winners and we can go back to being the best and sticking it to the rest of the world, and out sourcing of good jobs will be seen as a hinderance that we have somehow failed ourselves, for our business model will return to revenue growth versus cost cutting inhabition. We will make made in America whether it be manufacturing, research development, or intellectual property rights something of true greatness that will envied by the rest of the world.
I can only hope.
David said:
“If this monument is built we will know that as a people we have become wiser”
You’re right, one can only hope. I truly think that people have become stupider because they have replaced the small nuggets of everyday wisdom contained in folk tales, fairy tales and legends with mind numbing entertainment. It used to be that when your parents saw you becoming part of the herd, they told you the story of the emperor who had no clothes. When you were being alarmist they told you the story of the boy who cried wolf, and when you were being lazy they told you about the three little pigs. That is truly the wisdom of generations of mankind but as a culture we have decided that they are worthless. Of course, we do it at our own peril.
Well said!
I wonder if there is a folk tale about the danger of disregarding folk tales? It used to be that our entertainment included such wisdom, but there is scant evidence of that today.
“‘I find your argument to be hypocritical and weak on this matter,’ Councilman Ken Weise told the home builders’ representatives earlier this week.”
For a few seconds, Councilman Weise was my hero.
“Now, he said, developers are dropping prices substantially, hurting buyers who paid more when the demand was high.”
Then, I reconsidered. Does this guy think that he can prop up Avondale prices with an increase in municipal fees?
why not send these kids a little “tough love” message? Even if they *are* dumb enough to go to ASU? (Go Cats!)
jeffrey.mashaw@asu.edu