“It’s Just Not The Pulse People Like”
The November numbers for Arizona are out. “The local single-family resale market has settled into a very stable pattern, from the hyper-activity of last year. ‘Even though mortgage interest rates have been declining for the last few months, limited home appreciation and household income continues to raise concern about the ability of some homeowners to maintain their homes,’ said Jay Butler, at ASU. ‘This may be especially evident for those that have used some of the more creative financing instruments, such as option payment plans and initially low interest rate adjustable mortgages.’”
The East Valley Tribune. “‘Right now it’s just sort of in a stable situation,’ said Butler. ‘There’s no real reason to see big upward swings or downward swings in the market,’ he said.”
“So far this year, there have been 62,415 sales compared with 104,360 during the same period in 2005.”
The Arizona Republic. “5,040 homes sold for the month of November. Last year, nearly 7,200 homes sold in November. The sales volume was the lowest for a November since 2002.”
“‘Instead of being overactive, or no pulse, it’s running at a normal pulse,’ said Butler. ‘It’s a good, strong pulse. It’s just not the pulse people like.’”
“Prices varied widely throughout the Valley. For example, the median price of a home sold in Scottsdale was $630,000, about 5.9 percent higher than the same time last year. Meanwhile, median prices in Goodyear dropped 11.9 percent to $252,000.”
The Albuquerque Tribune from New Mexico. “Will housing prices ever stop rising? The question becomes more acute when looking at the November home sales figures released Tuesday by the Albuquerque Metropolitan Board of Realtors.”
“The 935 units sold in November represent a 17.3 percent decrease compared to a year earlier. Meanwhile, the number of homes on the market as of Sunday, 4,363, is nearly 52 percent more than the 2,263 from the same day a year earlier.”
“Despite the saturation of homes on the market, the median sales price rose 7.3 percent from $178,900 in November 2005 to $192,000 last month. ‘It can’t continue like that,’ said Cathy Colvin, who leads the realtors board. ‘Not with the amount of homes people have to choose from.’”
The Rocky Mountain News From Colorado. “The rental vacancy rate for single-family homes in the third quarter for the Denver area fell to 6.4 percent, according to a report. A record number of home foreclosures and a soft housing market have increased the supply of rental homes, driving up the vacancy rate, said Gordon Von Stroh, a professor at the University of Denver.”
“The foreclosures also increase the supply of renters, he said. ‘Let’s say your home goes into foreclosure and you have three or four kids,’ Von Stroh said. ‘Chances are, you will be looking to rent a home.’”
“The difficulty in selling homes in today’s market is also increasing the rental pool of houses. Ryan McMaken, spokesman for the Division of Housing, has seen it in the northeast Denver neighborhood where he lives. Some of his neighbors who have been transferred from Denver can’t sell their homes, so they’re renting them out instead, he said.”
“But Von Stroh said that people often can’t rent homes for enough to cover their mortgages. The average monthly rental price for all homes was $957.28 per month, compared with $912.47 in 2005. However, average monthly rates are still slightly less than they were three years ago.”
The Denver Post. “At 7.4 percent, condos have the highest vacancy rate. In comparison, single-family houses had a 6.5 percent vacancy rate; townhouses, 5.2 percent; duplexes, 6.5 percent; triplexes, 6 percent; and fourplexes, 6.7 percent.”
“‘Condos seem to be sensitive when there are downturns,’ said McMaken. ‘If we end up (building) a lot of condos that aren’t in high demand, they’ll end up on the rental market.’”
“Last month, 5,051 homes in Colorado entered some stage of foreclosure, up 88 percent from November 2005. ‘It’s sort of the tip of the iceberg, and the problems are going to get worse before they will get better,’ U.S. Bank regional economist Tucker Hart Adams said.”
“‘I think we will see housing prices declining, sales down and new construction down for another year,’ Adams said.”
“Among the 200 large metropolitan areas tracked, Greeley had the highest foreclosure rate. In Weld County, 428 properties entered some stage of foreclosure last month, up 13 percent from the previous month. Weld County had one new filing for every 155 households, more than six times the national average.”
“Colorado should continue to see improvement relative to states such as Nevada, California, Arizona and Florida, said economist Jeff Thredgold.”
“‘Nevada, California, Arizona and, to some extent, Florida will continue to move up in the ranking because there were a substantial amount of flippers and home speculators involved,’ Thredgold said. ‘Many used interest-only mortgages to finance a property. As the market slows down, those speculators would be the first ones to really feel the pain.’”
“Adams said Colorado’s foreclosure problem, and the downturn in the housing market, is far from over. She warned that its impact will be felt throughout the rest of the economy. ‘Housing prices are continuing to go down, and even the people who hang on to their houses have to struggle to do it and cut back in other areas,’ Adams said.”
From the ASU report:
‘ Avondale fell from 190 to 115 sales, with the median price moving from $265,000 to $245,000 ($247,000 in October). El Mirage decreased from 105 to 70 sales, while the median home price decreased from $222,500 to $200,000 ($205,000 in October). Goodyear declined from 100 to 80 sales, with the median price decreasing from $286,500 to $252,000 ($275,000 in October). Surprise decreased from 350 to 200 sales, with the median price dropping from $263,590 to $246,000, ($237,000 in October).’
‘In comparison to a year ago, the Sun City resale market fell from 130 to 100 sales, the median sales price decreased to $190,000 from $225,000. As resale activity in Sun City West fell from 60 to 50 sales, the median sales price decreased from $242,500 to $220,000. # In Sun City West, activity fell from 40 to 20 sales and the median sales price decreased from $186,000 to $160,000.’
‘The resale market in Gilbert decreased from 425 to 285 sales, and the median sales price decreased from $324,500 to $308,000 ($328,000 in October). The townhouse/condominium market fell from 25 to 10 sales as the median sales price decreased from $229,950 to $218,000.’
After I read all of those numbers, only one word comes to mind: STABLE!
yes looks like a pretty stable freefall to me
‘the victim is in stable but critical condition at Regional Trauma Center’
The vet didn’t send the horse to the animal hospital because he thought he was in stable condition.
I’m sure the deck of the Titanic seemed pretty stable until she slid beneath the surface.
What about Queen Creek? It seems 1/2 the homes in Queen creek are for rent. Many 4 bd / 2 ba places NEVER been lived in renting for $800 / mo!
Question for those in the know: Obviously, many of these houses are owned by FBs. How do leases work if the FB is foreclosed upon. Is it possible to sue to get your deposit back if the landlord violates the lease?
This might be an interesting weekend topic! thanks!
“Is it possible to sue to get your deposit back if the landlord violates the lease?”
You can sue in small claims court and get a judgment. But good luck collecting it. This is a FB’er we’re talking about. They have larger problems than worrying about paying a renter’s deposit. What’s that saying about turnips and blood?
“Adams said Colorado’s foreclosure problem, and the downturn in the housing market, is far from over. She warned that its impact will be felt throughout the rest of the economy. ‘Housing prices are continuing to go down, and even the people who hang on to their houses have to struggle to do it and cut back in other areas,’ Adams said.”
The divergence of opinion on whether the downturn is far from over seems rather wide. Somebody is going to be spectacularly wrong on this point.
“Somebody is going to be spectacularly wrong on this point.”
That is what is so spectacularly interesting about all of this. It’s like watching a great mystery movie with all its twists and turns. Fortunately, we know how the movie will end, but it’s a lot of fun to watch.
Following Ben’s blog reminds me of my buddy who is on a different cable system and sees the football games five seconds ahead of me. My wife is amazed that I call so many plays right (when I just happen on the phone).
What about your bookie?
LOL — I thought about that. Like in “The Sting.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=asJz7UCxSIwI&refer=home
“Foreclosures on Adjustable Loans Reach 4-Year High on Rates
By Kathleen M. Howley
Dec. 13 (Bloomberg) — U.S. foreclosures begun on adjustable-rate mortgages rose to a four-year high in the third quarter as borrowers struggled to pay higher interest rates.
The share of the loans entering foreclosure, a legal process in which lenders try to seize property, climbed to 0.30 percent for so-called prime borrowers, or people with good credit ratings. The rate for sub-prime borrowers rose to 2.19 percent. Both are the highest since the second quarter of 2002, according to a report today from the Mortgage Bankers Association in Washington.
Surging home prices during the five-year real estate boom that ended last year spurred borrowers to choose riskier adjustable loans, many with rates that adjust annually, to afford real estate, said Doug Duncan, chief economist for the bankers group. The average rate for a 30-year adjustable-rate mortgage rose to a five-year high of 5.8 percent in the first week of July, according to Freddie Mac data.
“You’re seeing the early edges of the reset phenomenon in the adjustables, particularly in the sub-prime market,” Duncan said in an interview. In 2007, about $650 billion of U.S. home loans will reset at higher rates, he said.
For all loans, both adjustable and fixed-rate, the percentage entering foreclosure increased to 0.46, the highest since the fourth quarter of 2004, he said.
The total share of loans being foreclosed upon rose to 1.05 percent, the highest since the first quarter of 2005, from .99 percent in the second quarter, the report said.
Delinquencies or payments more than 30 days late on fixed and adjustable loans, rose to 4.67 percent, the highest of the year, from 4.39 percent in the second quarter. The last time it was higher was the fourth quarter of 2005 when it was 4.70 percent, the report said.”
http://www.bloomberg.com/apps/news?pid=20601068&sid=aR_4C61xGR.Q&refer=economy
“Dec. 11 (Bloomberg) — Ben S. Bernanke’s greatest inflation victory to date may be in deflating the aura of power and influence surrounding his job.”
“With his restraint, Bernanke is quietly engineering one of the most significant transitions at the U.S. central bank in the past 30 years, economists say. Rather than concentrating authority in the person of the chairman, he wants the Fed’s inflation-fighting credibility to reside in the institution, so the public will see that stable prices don’t depend on the views and abilities of one individual.”
Either that, or he knows there’s gonna be enough blame soon, so that he can be generous and share it with all the other bankers on the Fed.
OB Tom,
Well…..agreed. I do believe that it’s an important and necessary step toward the Fed regaining credibility though. I mean think about it. At one point had the President (I’ll let you pick) and AG gone down in the same plane crash it would have been chaos! In ways it was Greenspan (not the MSM) that politicized the office. But in the end I fear you’re right. They’ll be plenty of blame to go around!
Today’s Ben’s birthday. Have a little respect
Meanwhile, the number of homes on the market as of Sunday, 4,363, is nearly 52 percent more than the 2,263 from the same day a year earlier.”
Seems a little closer to 100% than 52% to me. Maybe there is a typo in one of the figures.
2263 is 52% of 4363. This must be “NAR new-math”?
LOL! Just when we think they’ve reached the pinnacle of deception, they out-do themselves.
I guess we shouldn’t be surprised that the journalist would simply accept the figures without any checking.
Oh this is soooo funny!!! Made my day.
and large cardboard boxes are FULL-up
yo
“It’s a good, strong pulse. It’s just not the pulse people like”.
O.K now that was stupid. People in a coma have “good, strong pulses” too! They’re just oblivious to their surroundings. Perma bulls were doing better with the cooking analogies. Yeah, that was better. Go back to that.
“It’s just not the pulse people like.”
Generally when I wake up in the morning I’m happy to feel any kind of pulse. WTF are these RE people talking about? I’m with you, DinOR, they need to go back to cooking analogies. As in,
“Stick a fork in the resale market”.
or
“The local housing market is toast”.
Those cliches seem to work.
“Last month, 5,051 homes in Colorado entered some stage of foreclosure, up 88 percent from November 2005. ”
i’m pretty good with numbers. last year’s numbers put 18,000 foreclosures out on the open market. monthly foreclosure filings are up 88% from last year, and the financing market is imploding, but i’ll be conservative and say thay the same number of foreclosures will go to the court house steps as last year. that would put yearly foreclosures at 33,000, more than the current inventory on the mls for the denver metro market. forget the financing pinch above, a softening jobs market and declining values (all of which might help make more of that 5,000 per month number stick), these are some serious numbers my friends.
Yes, but aren’t all of the foreclosures in Colorado confined to three insignificant neighborhoods, so it’s really no big deal? That’s what my buddy David L. told me.
I have a friend whose brother lives in Denver. He has told her the same thing. Nothing bad going on in the ‘nicer areas’.
About 3 Sundays ago the Denver Post published a map of Denver with a little black dot everywhere there was a foreclosure. Yes, 3 neighborhoods are particularly bad, but there were dots in EVERY neighborhood. The article stated that the foreclosure problem was spreading, even into better more stable neighborhoods.
I think it’s more serious than just three insignificant neighborhoods; however, I agree that nicer communities appear to be holding steady, albeit with longer DOMs. What I see is that the drive-till-you-can-buy communities are suffering. Weld and Adams counties, certainly, but also Douglas to some extent.
What I’ve seen in my little corner of Douglas is that the houses are, in fact, going to auction, and the Public Notice pages in the local paper (where foreclosures are listed) are getting longer every week.
An REO two doors up was recently pulled from the market without sale after more than 9 months. Of course, this is in a brand-new neighborhood with a ton of spec houses, open lots, and significant builder incentives. I’m not sure what the thinking is on that one. Maybe the bank is planning to re-list in the spring?
HUD houses around here are going fast once they’re available to investors, but they’re selling low. I’ve seen several go 20% below “assumed” market value to bargain-hunters. It’s hard for a traditional seller to compete with those kinds of discounts, so lots of houses are sitting for months on end.
The southwestern suburbs, including Highlands Ranch and Littleton don’t seem to be in the same kind of trouble. And, the nicer areas of the city (Highlands, Cherry Creek, and Wash Park) look to be fine, too. I suppose time will tell.
Thanks for the on-the-ground info Bo.
Is the credit tightening (if it is even significant yet) limited to any area of the country or spread throughout?
a lot of the alt-a, subprime and i/o arm money is lent by “master brokers”, large mortgage banking firms like westamerica mortage, equifirst, national city, etc. they fund the loans to the brokers and then intend to sell them upstream to the likes of freemont, argent, novastar, aurora loan servicing, indymac etc. what i’m seeing is that it is nearly impossible to get a loan through these master brokers, as they are under the gun from the investors who are under the gun from the securitizers. when a buy back occurs, it rolls downhill like a turd, and everybody is trying not to get in it’s way. no one can make a decision, sending in 7 conditions to an underwriter brings a request for 8 more, the silence, then more conditions. a tell tale for me is that i have had three wholesale reps call me this week call to see if i have any job openings.
I wonder if that is helping pump up the number of new-mortgage applications — bottom feeders going from one broker to the next in search of a subprime that ain’t gonna happen this week.
That is a good point. If at first you do not suceed try try try again.
Very interesting — thanks for the “inside view.”
Thanks. I will be meeting with family member’s over the holidays (one is with Indymac the other is with WaMu ) and I am going to get some updates from them.
The family member that is with WaMu (over Thanksgiving) claimed that the buybacks were becoming a serious problem and that the big wigs were getting nervous about sticking their necks out too far and started ratching up the various terms. I am curious if the 30 days between holidays will show any changes.
thanks / danke from germany
“when a buy back occurs, it rolls downhill like a turd,”
BoulderBo:
When these turds roll back to their
mother-funding a-hole, they require a
non-performing mortgage reserve of
2-5l times the non-performing balance.
Keep us updated on the crappy conditions.
Uh Oh, The OC Register just reported that November 2006 homes sales compared to 2005 were flat. This is going to throw a bit of a crimp into Gary (15% - It’s In the Bag”) Watts projections for year end.
http://blogs.ocregister.com/lansner/
Normally I’d agree with you, but come on, it’s in the bag man.
“The rental vacancy rate for single-family homes in the third quarter for the Denver area fell to 6.4 percent, according to a report. A record number of home foreclosures and a soft housing market have increased the supply of rental homes, driving up the vacancy rate, said Gordon Von Stroh, a professor at the University of Denver.”
Does anyone proofread this sh*t or do they just throw it out there in hopes that it confuses everyone? What are they trying to say here? Are vacancy rates up or down? Why would they combine two opposing points in the same paragraph without clarification?
yeah…I read that paragraph about 5 times, thinking my coffee just hadn’t woke me up yet..lol; indeed that sentence says vacancies are BOTH up AND down….yikes
Meant to say that The OC Register just reported that home PRICES for November 2006 (compared to 2005) did not increase for the first time in 9 years. That fact alone is going to be interesting to trot out during open houses.
dataquick has november numbers out for all of so cal (larger y-o-y decreases in SD and Ventura than before):
http://dqnews.com/RRSCA1206.shtm
It’s time for Mr. Watts to reappear and tell us that we’ll see 15% appreciation in the month of December.
check out the above article.. about garden grove,ca
“‘Nevada, California, Arizona and, to some extent, Florida will continue to move up in the ranking because there were a substantial amount of flippers and home speculators involved,’ Thredgold said. ‘Many used interest-only mortgages to finance a property. As the market slows down, those speculators would be the first ones to really feel the pain.’”
Loads of pain on the horizon for northern NV (Reno, Sparks, Carson City, Fernley). 4 FB’s on my moms street alone. Watching listings, countless sellers remain stubborn in their pricing, as realistic newcomers to the mls bring their properties on board at much cheaper prices. I am now seeing houses in the 89509 zip code coming on at under $400k which would have been asking well over $500k last year. These are going to destroy the flippers once they sell. The prices are still too high, but drastically less than some of the FB’s are wishing for. A couple of these sales, and the FB’s will probably just walk. I see Reno imploding next year. Some developer threw up some (garbage) townhomes (ugly as sin) on the corner of Moana and Plumas and is asking from the high $300ks to the low $600ks, and they are on .08 of an acre lots shoulder to shoulder (one could walk from roof to roof). I don’t know who in their right mind would buy these things but the mls is loaded with them. I don’t think they are selling. After this whole thing crashes, I anticipate they will sell at around $200k. Drove through Somersett, good luck up there. Way too expensive. Seeing more and more stalled projects (nobody working on weekdays). There are easily a dozen new gated communities in the great Reno area over the past few years. The top end is just way too overbuilt. Top shelf entertainment coming this spring.
Hey Bear I have a NV question.
Its my understanding that NV re-asses prop tax every 5 years from purchase. Soooo the big run up was 04. That means the 1/5th of the state is getting tax sticker shock every year since 04 ending in 09 when whole state will be paying post bubble tax rate. Is that right?
So each year more and more and more people getting the 3x higher tax bill and listing house for sale. Anyone still owning in 2010 is probably ok with higher tax rate.
I was under the impression that it was every year. I know that longtime owners have already been up in arms over large increases. Subsequently, in 2005 there was a bill passed which provided tax relief to many people.
I am speaking only of Washoe County of course (the greater Reno area).
Albuquerque: Maybe I said so yesterday, but I spent Monday night w/ Santa Fe friends whose landlord’s asking price is 34x the annual rent. What a joke. Tells me the Santa Fe market must dive.
Arizona: I have been perfectly astonished these past 24 hours to learn that at the extreme low end(”park models” in condo-ized trailer parks), AZ prices are still rising rapidly. None of these transactions would be MLS listed, the people don’t use realtors TM, they use “finders”. Nevertheless, some of my clientele confide they can see the crash coming. They notice a bunch of vacant lots in nearby parks where lots can be rented very cheaply.