“Sellers Get It. Shoppers Helping That Process Along”
It’s Friday desk clearing time for this blogger. The Birmingham News, “Ginnie Mae President Rob Couch said Tuesday metro Birmingham’s housing market is holding up well. He said he doubts reports of a housing bubble. ‘There are declines in markets like California, Florida and the West Coast, but that was largely due to those areas being overpriced due to speculators’ buying homes to flip, Couch said.”
The New Haven Register, “Connecticut’s economy has been performing well, but is likely to tighten up next year in response to a national slowdown, economist Todd P. Martin said Wednesday. The state’s housing market has definitely entered a correctional phase, Martin said. ‘We’ve seen a seller’s market turn into a buyer’s market very quickly,’ he said.”
The Express Times. “The year 2007 should prove to be ‘far from stellar,’ a leading New Jersey economic analyst said Wednesday. James W. Hughes said the state should be able to withstand downturns and escape a recession — ‘unless housing really tanks.’”
The Journal Sentinel. “Fewer people purchased metro Milwaukee homes in November than a year earlier. ‘Sellers get it. They need to adjust their price. And they are,’ said Roger C. Rushman, VP of First Weber Group. Shoppers are helping that process along, broker Kathy Allison-Zimmermann said. ‘When buyers even make an offer, they make a lower offer,’ she said. ‘Sellers may be insulted, but we’re encouraging them to work with any offer.’”
“Canada’s housing sector, for the last few years a key pillar of the economy, is finally starting to show real cracks. ‘I think the numbers we have been seeing suggest that clearly the party is over,’ said Benjamin Tal.”
“The average price for a resale home in Canada’s major markets fell by almost $3,500 last month. In Greater Vancouver, home of the most expensive housing in Canada, the average price dropped by almost $29,000 to $519,294 in November. The number of sales dropped by 21 per cent.’”
The Advertiser from Australia. “While property experts say a glut of apartments is forcing prices down, one financial institution is even warning potential buyers to stay away. A search has revealed hundreds of apartments on the market in the beachside precinct. ‘There are a lot of empty ones, a lot in the market,’ said agent Phil McMahon.”
“‘At the moment, the Bay needs a rest from new apartments,’ agent Anthony Toop said. ‘It’s not ideal to have to sell immediately, because you’d be selling a bargain.’”
The Honolulu Advertiser. “The median single-family home price was $598,795 in November, down 18 percent from $734,500 a year earlier, according to the Realtors Association of Maui. ‘It’s gone up so much in the last few years,’ agent Jeremy Smith said. ‘The panic has stopped. The sellers are getting more realistic.’”
From Inman News. “Sales in Washington, D.C., last month declined 17 percent from a year ago, and the city’s median home price sank 6.8 percent during the period to $410,000. John McClain at George Mason University, notes that Loudoun and Fauquier counties have been particularly hard hit due to the fact that many more new units have been built there. ‘That creates competition, which leads to lower prices,’ he said.”
The Idaho Stateman. “Wayne Forrey has seen the Treasure Valley real estate market from about every conceivable angle. Why has the local residential market cooled so much? A: What has cooled are the overheated land prices. Out-of-state speculators started a land-buying frenzy that drove our land prices sky-high.”
“What was the biggest mistake the real estate industry made during the boom years? A: Undisciplined land speculation drove up housing costs, which hurt Idahoans. Too many local residents were closed out of the housing market. Fortunately, land costs are coming down.”
From CNN Money. “Amy Schuett’s already slashed so many little luxuries, that she’s fresh out of ideas. A big chunk of their income is eaten up by two rental properties. Brian hasyet to find tenants. Even when the properties are finally occupied, the area’s softening rental market probably won’t allow them to make enough to cover carrying costs.”
“But the Schuetts haven’t had a heart-to-heart about selling the properties yet because Brian has been so keen on making them work. ‘Our strategy has been to practice ‘avoidance,’ says Amy. ‘But you don’t have to be a psychiatrist to see that.’”
The Rocky Mountain News. “At 17,782 through the first 11 months of 2006, the absolute number of foreclosures has hit a new high compared to the 17,122 in 1988 when Colorado’s oil industry went bust.”
“To defer gratification: to rent for a while longer, live within your means, forgo expensive vacations, squeeze a few more years out of your old car, and save money to put more down on a new home later on. That’s what the proverbial ant does. The grasshopper, conversely, isn’t big on deferred gratification. Modern-day Americans tend to be more like grasshoppers.”
“Had things worked out better, they’d have gotten to enjoy that house for years while the ‘ants’ were scrimping and saving. Ironically, ants may now be buying grasshoppers’ foreclosed homes at distressed prices.”
Another big week! My thanks to those who support this blog. Please check back this weekend for news, your market observations and topics.
Thanks to you Ben and to all the other ants in this blog. For me, it’s like group therapy…
For me it’s the newspaper, and the topics I’m interested in reading.
I saw a little blurb in someone’s post about us being at war in Iraq … is that true?
Please don’t mention Iraq. I really don’t feel like reading more “Islamofascist are coming to put Paris Hilton in a burqa” screeds.
I don’t know what I was thinking …..
Yeah …. I tend to shoot right past those lengthy discussions which are not really housing related, or at least closely linked to housing (lending, HB’s, etc). Immigration, and “The Country who’s name shall not be Spoken” topics are better left alone. Keep the focus where it belongs. Stay the course.
(crap, I think I did it again ….)
My god, you’re stupid.
Apparently humor is beyond John’s grasp…..
If only it were true…..
“Please don’t mention Iraq. I really don’t feel like reading more “Islamofascist are coming to put Paris Hilton in a burqa” screeds.”
Wow. The first thing I’ve read about Islamofascists doing that I could actually support!
Ants? I prefer “locust slayers.”
rotfl!!!
Please understand, I have a freind who is thinking of joining this forum… I’m going to suggest that name to him.
Neil
My thanks too. Wish I was rich .. would have sent you more in PayPal but hoping that little bit counts. Merry Christmas to a Great Blogger!
The New Haven Register link is for a speech given at “The New Haven Lawn Club?” Sounds like a bunch of old yalie geezers with monocles… “I say, ole chap. That real estate market is presenting us with a bit of a sticky wicket!”
“Quite right, Mortimer. Reminds me of the Great Depression when our Florida land went into a bit of a tailspin.”
Have a nice weekend Ben
“Had things worked out better, they’d have gotten to enjoy that house for years while the ‘ants’ were scrimping and saving. Ironically, ants may now be buying grasshoppers’ foreclosed homes at distressed prices.”
Nice parable. I would feel much better about anthood if our economic leaders were not trying so hard to rationalize away the problem of a negative national savings rate (for the first time since the 1930s) with explanations which blame an Asian savings glut. Why is it so hard to realize that an economy based on spending in excess of income is not sustainable?
Foreigners don’t vote, so it’s politically expedient to blame those darn Asian savers rather than domestic spendthrifts.
Dammit betamax, you must be for the turrrists! If you don’t like it here, move to Canada!
that’s blasphemy, what kind o’ merican are you anyways?
I’m the old fashioned kind that believes in saving for the future, not the newfangled kind who thinks it is more important to show off lots of new toys than to worry about tomorrow. It deeply bothers me that saving has become so unfashionable, but perhaps I am simply in denial about the prospects for future inflation.
The willingness of the US Treasury to issue some amount of inflation-indexed securities (starting when, about a decade ago?) seemed to indicate that our govt had a serious intention of keeping inflation under control. However, political considerations could certainly change that. I’m not a Gold Bug yet, but maybe I should try to learn something about it.
“… seemed to indicate that our govt had a serious intention of keeping inflation under control.”
Or that our govt had a serious incentive to change the definition of inflation in a direction that would lessen the liability of inflation-indexed securities…
All you need to do with your TIPS is:
1) Buy a computer as powerful as one ten years ago.
2) Buy hamburger instead of Filet Mignon.
3) Never consume energy.
And then voila… those silly government adjustments mean NOTHING.
I can half understand singles and young people being grasshoppers, partly because I was mostly a grasshopper through my 20s. But once you have kids, once you have children who are utterly dependent on your income and savings for their shelter, food, education, and clothing, I think you give up your right to be an irresponsible freewheeling grasshopper. I honestly don’t know how those people sleep at night.
saving is so last century
if that is the case i’m stuck in the stone age
Great post by Getstucco as always.
It’s the new American way, and it’s so sad. A nation of creators and producers turned into a bunch of zombie consumers who can’t do basic math. I just hope the coming jolt will wake people up. Many of them are young and will live to tell the cautionary tale. They will make the fable of the ant and the grasshopper a compulsory part of the school curriculum.
> Honolulu: median single-family home price was $598,795 in November, down 18 percent from $734,500 a year earlier
Wow, that’s finally a real correction of the bubble prices. Coming soon (2007?) to your neighbourhood, too
Man that is a scary number. The median off 18% this early in the cycle? If that is the start of a trend, some of the more dire predictions from posters on this blog might come to pass.
A reluctant BwahHaHa out to you there anachronist.
Dire is relative. There is gonna be a lot of pain here.The speculators will lose everything, but the ordinary Joes will not escape the carnage. Their pain will be used to justify the bailout. We are about to see market distortions that will make your worst nightmares seem mild.
We’ve maxed out our VISA card. No more money left to bail out anyone.
“‘It’s gone up so much in the last few years,’ agent Jeremy Smith said. ‘The panic has stopped. The sellers are getting more realistic.’”
Uh, pardon me Jeremy, but in the past, the term “panic” has been applied to periods when asset prices were dropping quickly, not rising. I guess you are suggesting that it is different this time?
I think he was mentioning Buyers Panic.
Now sellers Panic is going to start…ah..or as he means, realistic!
Projection.
He IS panicing and his unconcious mind can’t help but inject it (somehow) into his communication.
Stucco’s right, even idiots don’t use words like “panic” to describe an appreciating market….but it is a word routinely associated with “fear’ and rapidly declining markets, no? Language is a funny (sometimes unintentionally) revealing thing.
We still cannot afford those high prices. If mainland investors/FB and foreigners stop buying, it will put a downward pressure on prices. There are very few high-paying jobs in Maui.
Yeah, but the demon weed is cheap and you don’t have to invest in business suits, just a few pair of jams.
If Maui ever adjusts to a median that reflects local income affordibility; then buy with both hands and be ready to sell in five years.
“We still cannot afford those high prices.”
That is why the 18% YOY drop on Maui is the mere beginning of the correction.
An 18% slide is a decent start but there’s a long way to go before locals can buy their own house without taking on rediculous I/O loans or living with their mom, dad, grandparents and cousin’s family in one $600k house.
“”The real estate market has its up and down cycles and is already adjusting. Borrowers and lenders are both becoming more cautious. The current spate of foreclosures is unfortunate but not a public policy crisis. In fact, it’s the appropriate market remedy.”"
That sums it up quite nicely.
That quote needs to go in Ben’s “Idiotic Real Estate Platitude” time capsule so we can enjoy it next year.
You do have one of those Ben, right?
Mr_IS,
Of course I agree with you, but if some demagogue doesn’t manage to spin this as a public policy crisis, I’ll eat my figurative hat.
It’s funny, the biggest company parties in Tucson are developers and related real estate companies—– yet there is a foul mood amongst the escrow agents and companies — waiting for the next round of layoffs.
Merry Christmas
You can say that again, Rocket. If you want to meet unhappy Tucsonans, just seek out some members of our local REIC. And get ready for some LONG faces. (Bad pun there - it’s a play on the name of our largest local real estate company.)
“Ginnie Mae President Rob Couch, back in his hometown for the first time since President Bush tapped him to head a federal agency that guarantees mortgages, said Tuesday metro Birmingham’s housing market is holding up well. … He said he doubts reports of a housing bubble and added that home ownership remains near a record high of 70 percent despite a slowdown in sales.”
Yo, Rob! Thank God — we needed some cheerleadin’, ’cause things been kinda’ slow. But what’s with the “remains near 70%” stuff? How long ya think it’s been there, ‘ol buddy? Maybe like just since your friends at the Fed turned on the faucet? Sure, everything’s cool in The Ham. Went there a year ago — lots of nice houses and lots of young families wanting to raise their kids in ‘em. Wonder how many of those kids have toxic loans, Rob? Those Yankees ‘been puttin’ some bad stuff into your head, Rob. ME, I think a lot of the Ham is cooked.
“Ginnie Mae President Rob Couch, back in his hometown for the first time since President Bush tapped him to head a federal agency that guarantees mortgages”
Thats all I need to know so to understand the insidious denial of this lunatic.
He said he doubts reports of a housing bubble and added that home ownership remains near a record high of 70 percent despite a slowdown in sales.”
It was 67.5% in 2000, 64% in 1990. There is no reason it couldn’t drop back to 64%… That’s a lot of homes for us “locust slayers”
Ironically, I got my numbers from a very “pro- buy it now” pdf
http://www.cbia.org/documents/public/FINAL%20Homeownership%20Report%20March%2022.pdf
The 70% is the most bearish number out there. Only a liar or a moron would think that’s bullish.
Yep… its a very bearish number. Think about this… about 25% of the US households do not have credit sufficient to purchase and I’ve read numbers slightly higher… I believe some of the latest batch of “homeowners” belonged to this group of non-credit worthy.
Neil
More, from http://tinyurl.com/y92xvp
“Couch was president and CEO of New South Federal Savings Bank in Birmingham, Ala., which operates 40 loan production offices in 13 states and a full-service deposit branch office in Birmingham. He has been an active member of MBA for more than 12 years and served as MBA chairman in 2003-2004, as well as on numerous committees and task forces.”
Oh… Chairman of the Mortgage Bankers Association. Yeah, guess he might be likely to cheerlead housing sales.
I live on smith lake about an hour NW of birmingham. I can tell you where i live there is no bubble. Not very many homes or land for sale. I would imagine birmingham has went up in value a little but nothing like florida where i got out of at the peak a little over a year ago. There will be no drop like other parts of the country. I spend more than 4 hours a day at least watching markets all over because i am a small RE investor. At least i was up to 2 years ago. Money is in the bank now, except for the house i own on the lake, which has went up 200k since i have owned it. (16months) I spent a year looking at lake property in GA, NC,SC, AL and TN. This lake was way undervalued and still is compared to other inferior lakes. This one is the third cleanest in the country. I lived in florida for 20 years, i know every major market there as good as anyone. It’s not going to get better there for years, because of the tax and ins scam.
My part of alabama off the lake was 13% undervalued when i moved here, i would honestly say it still is undervalued. The lake was probably 200% undervalued at the time i bought. I doubt very much if it goes down at all, in fact lakefront will probably start going up again in the spring. I would also say these are the nicest people in the whole country, by a huge margin. I thought i would buy here and move back to florida when the crash is over, i now realize i will never move back. The people here are superior, and the lake is awesome. The quality of life is also awesome compared to florida. I know but it’s AL, i want everyone to keep believing that crap. My neighbors across from me are 11 pilots and their families from miami, what a fun bunch of guys. And i will say it again the locals are absolutely the nicest people in the country. There are people from all over the country moving to this lake and they will screw it up like everywhere else but it isn’t that way yet.
DC Bubble Where are you?:
From Inman News. “Sales in Washington, D.C., last month declined 17 percent from a year ago, and the city’s median home price sank 6.8 percent during the period to $410,000. John McClain at George Mason University, notes that Loudoun and Fauquier counties have been particularly hard hit due to the fact that many more new units have been built there. ‘That creates competition, which leads to lower prices,’ he said.”
mclain and fuller said it wouldn’t go down- imagine if congress does paygo-dc would lob off 20% in a week- never happen
Ack! Sorry to constantly re-post this link, but I can’t stand the spin:
http://www.cra-gmu.org/capabilities.htm
It lists the “clients” of George Mason University’s Center for Regional Analysis - tons of homebuilder/developers, who are paying the bills, for God’s sake. “Everythings rosy, buyers’ market, the bottom of this wee hiccup correction is in.” Right.
Check out homesdatabase.com Lots of NoVa and DC homes with “reduced”, “bring all offers”, etc.
‘Sellers may be insulted, but we’re encouraging them to work with any offer.’”
I’m simple. Does this mean either take it or leave it?
I think they mean, “stop the, I’m insulted by that offer, crap”, and negotiate with any potential buyer.
After just a few years people have forgotten that selling a property has always been a negotiation process.
I imagine “offended” sellers will get a lot more accomadating when NO offers come forward at all.
“The grasshopper, conversely, isn’t big on deferred gratification. Modern-day Americans tend to be more like grasshoppers.”
Incidently modern-day French tend to be like stink bugs. Stink bugs aren’t big on personal hygiene.
Huh? That quote came from the Rocky Mountain News, not Le Monde.
Je ne comprende pas. Que?
Maybe JimmyB is thinking that the ant and grasshopper thing originated with LaFontaine (”La cigale, ayant chante/ Tout l’ete/ Se trouva fort depourvue/ Quand la bise fut venue”). Nope, it came from Aesop (and I don’t know any Greek).
JimmyB,
Do you work for Fox News or the White House Press Office? Being a French, cheese-eating, America-hating surrender monkey I just had to ask
.
I guess you noticed JimmyB isn’t really French when he said “Que?” instead of “Quoi?” I suspect he lives in California.
LOL
French-Mexican
Cajun.
pidgin
The Rocky Mountain News is written for people who can’t read without moving their lips.
love this one
Having the French as an ally is like going on a hunting trip with an accordion.
LOL
One great quote deserves a couple more…
“I would rather have a German division in front of me than a French one behind me.” George S. Patton
“One thing you can say about the French is they’re always there when they need us” (forgot who said this)
This is pretty far off the housing track, but since you troll it is worth keeping in mind that the French invented conscription, dominated Europe for quite a while, and their barbaric domination of Spain inspired some of the greatest works of art from the Romantic period.
If you want a house cheap you can still get a farm house in Normandy for almost nothing because even the French don’t want to live in their foggy north. And there are LOTS of castles–real ones–for people who are into that kind of thing.
True, and having the US as an ally is like going on a hunting trip with Dick Cheney.
canada 2006 = USA 2005. The party is just beginning to end, but most people, especially the media are in denial. Everyone is guaranteeing us a “soft landing”, so nothing to worry about.
50%+ price increases in one year. I guess Canada is running out of land…
No they are just running out of GH (Greater Hosers).
And will shortly have a surplus of HBers (Hosed Borrowers).
A new term is coined! Huzzah!
‘It’s gone up so much in the last few years,’ agent Jeremy Smith said. ‘The panic has stopped. The sellers are getting more realistic.’”
Au contraire, Realtor Boy. The panic hasn’t even begun.
Bingo Sammy. The upside “hysteria” has stopped. The panic will set in shortly…look out below!
‘Our strategy has been to practice ‘avoidance,’ says Amy. ‘But you don’t have to be a psychiatrist to see that.’”
Um, yeah. And pretty soon Amy will be avoiding a mounting volume of nasty-grams and phone calls from creditors.
“Brian has been so keen on making them work”
I guess using a calculator BEFORE buying those rentals was too much for good old Brian who now refuses to admit he made a big friggen mistake.
“area’s softening rental market probably won’t allow them to make enough to cover carrying costs.”
PREPOSTEROUS!!!!! The two rentals they bought with %100 voodoo financing don’t pay for themselves! CALL YOUD GOVMENT FO HEP NOW!
‘Our strategy has been to practice ‘avoidance,’ says Amy. ‘But you don’t have to be a psychiatrist to see that.’”
Can you spell DENIAL?
Give me a hint on the spelling… is it that river in Egypt?
Rich, I just got a startled look from both my girlfriend and cat when I read your post. Thanks for the laugh.
You want to route your request to the FEMA office that handles New Orleans assistance.
Not sure if this has been posted, but take a look at this……
http://www.subprime.aegiswholesale.com
not sure how to post a link… but it sure looks like subprime is melting down.
I screwed up the address..
https://subprime.aegiswholesale.com
I hope this works.
Good find!!
thanks, they sure have a mickey mouse web site….which probably parallels the company. Perhaps their next note in the similar tiny font will be ” We are ceasing operations….”
Having problems selling your Nightmare Shack for your Fantasy Price..Call 1 800 Dial A Prayer… our REPOMAN is standing by !
“He said he doubts reports of a housing bubble. ‘There are declines in markets like California, Florida and the West Coast,”
Wow, that’s only about a third of the population. Nothing major.
And if we add in the losses in New England, Long Island, various midwest markets, Las Vegas, Phoenix and Denver, we still aren’t yet in a housing downturn affecting more than half the friggin population of the country.
“Amy Schuett’s already slashed so many little luxuries, that she’s fresh out of ideas. A big chunk of their income is eaten up by two rental properties. Brian hasyet to find tenants. Even when the properties are finally occupied, the area’s softening rental market probably won’t allow them to make enough to cover carrying costs.”
Who gives a sh**? I mean, does the report imply that I am supposed to feel sorry for them? Amy and Brian can go pound sand.
HALF. That’s a four-letter word that will be in vogue over the next few years. As in, “I am offering half of what you are asking.” In California, HALF will be generous.
“The average price for a resale home in Canada’s major markets fell by almost $3,500 last month. In Greater Vancouver, home of the most expensive housing in Canada, the average price dropped by almost $29,000 to $519,294 in November. The number of sales dropped by 21 per cent.’”
Wow! Vancouver’s bubble has popped big time. That was one of the frothiest bubble zones on the planet…
According to those stats, the Vancouver bubble has popped; and yet, no one has even noticed. According to everyone here, it’s just a ’seasonal slowdown’ and no one is the least bit concerned. Even the bears are too gun-shy to proclaim that we’ve turned a corner.
Beliefs are self-perpetuating. Once a fundamental belief is accepted and expected as a given fact, people tend to ignore evidence which refutes that belief. People don’t notice contrary info, and they don’t notice that they don’t notice. Eventually, the vast preponderance of evidence to the contrary will force them to re-evaluate that belief…but that build-up of evidence will take time.
Economic fundamentalism is a tough religion to overturn, especially when the faithful are benefiting so much from it.
Gee, and no matter how hard I try to get 2+2 to equal 22, it just always comes out to be 4. Go for it Brian, tell me how you will get 22. May In the Bag Gary can help you out. He knows voodoo math to the tune of 15%
Multi-Million Dollar Flip or Flop: Update
http://bakersfieldbubble.blogspot.com
AZ Slim, have you checked out those new condos on Bwdy just west of El Con? Prices for the 4 units are $535-585k for 1900sf. WTF are they thinking (drinking)?
A search has revealed hundreds of apartments on the market in the beachside precinct. ‘There are a lot of empty ones, a lot in the market,’
Apartments on the market? Is “apartment” the Australian word for “condo?” I’m not being snarky, just curious.
I too am one of the “ants.” But I admit, it becomes frustrating at times. We were all taught — at when I was in school — that hard work and saving will always win. But the debt system is so FUBAR that saving has no chance. What good is putting away a small stash, when you can borrow a large stash and live high on the hog, kicking the can down the road until you finally kick the bucket? If only Karma could give us a hint that he exists…