“This Summer, It Crashed Down”
The Denver Business Journal reports from Colorado. “Affordable apartments are hard to find in the Denver metro area, according to a survey released Tuesday by the Colorado Division of Housing. Usually an improving economy is good news, but said Kathi Williams, director of the Colorado Division of Housing, said investors, especially from California, are driving up prices and rents.”
The Rocky Mountain. “The vacancy rate for rental units termed affordable in the Denver metro area was 3.8 percent in the third quarter, according to the inaugural report on government-subsidized rental units.”
“Because of softness in the market, some privately owned apartment markets actually offer lower monthly rents than subsidized ones, said Gordon Von Stroh, a professor and researcher at the University of Denver.”
The Missoulian from Montana. “The Bitterroot Valley appears to be keeping the national real estate slump at bay, at least for now. In 2000 through Dec. 14, the median price for a residence under one acre was roughly $93,000, according to the Board of Realtors. This year, that price increased to $169,500.”
“‘Quite a jump,’ said Layna Lyons, executive officer for the Bitterroot Valley Board of Realtors. Over the same time period, townhouses and condos increased from roughly $98,500 to $125,000.”
“While Bitterroot real estate doesn’t appear to be heading into the tank anytime soon, Lyons said she sensed the market cooling slightly over the summer. ‘I can’t say that it was anything real drastic,’ she said.”
“Some buyers sensed the market cooling, too, Lyons said. She expected some of them to wait until 2007 to buy. She doesn’t expect the Bitterroot to experience a crash, but she doesn’t believe the valley will escape unscathed from the national downward turn, either. ‘I don’t think we can sidestep it altogether,’ Lyons said.”
“(Realtor) Bill McDavid agreed. ‘I think we all feel like there’s going to be some kind of change,’ he said.”
“A Bitteroot Valley real estate broker said Wednesday that the housing market in the valley softened more than the Bitterroot Valley Board of Realtors suggested.”
“Bill Zader, broker and owner of Western Montana Realty Group, said the drop was much more dramatic. ‘This summer, it crashed down,’ Zader said.”
“In 2005, he counted 849 sales. This year, he put the sales at 680. Zader said he noticed sales were off in spring 2006. When summer rolled around, he noticed that the Bitterroot market was running 25 percent behind the previous year’s market. ‘That’s where we are now,’ he said.”
“Broker Sheri Jones agreed. Through the end of October, the Bitterroot sales dropped about 25 percent on individual units, she said.”
“Zader said he wants sellers in the Bitterroot to know that the market has cooled off. He doesn’t want them to have false expectations when they put their houses up for sale. He said real estate executives want to stay optimistic, but the Board of Realtors painted a picture of the market that was too rosy.”
“Lyons said Wednesday that a number of Realtors in the Bitterroot have told her they haven’t experienced a drop in business this year. ‘I don’t see any bubble bursting. I don’t even see a bubble,’ she said.”
“Total residential sales were at 983 this time last year, she said. This year they’re at 811. (Zader and Lyons provided different figures because sales statistics can be counted in a variety of ways.) ‘You don’t really see a big difference there,’ Lyons said.”
“Baby boomers created their wealth from real estate, Jones said: ‘They’re not going to stop.’”
‘In 2000 through Dec. 14, the median price for a residence under one acre was roughly $93,000, according to the Board of Realtors. This year, that price increased to $169,500.’
Just another coincidence, that prices in this town in Montana town took off just when so many other markets did, and started correcting at about the same time?
More Colorado news:
‘The Colorado attorney general’s office has subpoenaed the Denver Newspaper Agency for information about mortgage companies and their owners who previously had advertised in the Rocky Mountain News and Denver Post.’
‘A Pueblo grand jury has indicted five people who allegedly purchased homes at inflated values and let them fall into foreclosure, walking away with $2.5 million in profit. It was the latest in a string of cases involving alleged appraisal inflation in or near Pueblo. In October, the Colorado Board of Real Estate Appraisers accused two appraisers of inflating estimates of value on 20 homes in southern Colorado. The board is seeking fines of $80,500.’
The tide is going out to sea, and everyone is watching it go out.
Guess what coming next folks?
we see who is swimming naked.
Rotfl,
I love that Buffet quote.
Good to see the grand juries are getting in on this. But if they really do due dillegence, they’ll have to set up portables and deputize DA’s by the dozen to be judges. Most will get off easy…
But this is a start.
Neil
“and everyone is watching it go out.”
Indeed, there are still people wandering farther and father out onto the now dry land picking up beached fish and crustaceans…hmmm, what’s that rumbling sound?
“The tide is going out to sea, and everyone is watching it go out. Guess what coming next folks? ”
Beachfront property on the new land!
I am sure there are still many people out there who will readily put some downpayment.
tsunami
A baby boomer bust. From baby boomer to baby buster.
Calculatedrisk has a great column up on ARM’s, Hybrids, etc.
“Zader said he wants sellers in the Bitterroot to know that the market has cooled off. He doesn’t want them to have false expectations when they put their houses up for sale. He said real estate executives want to stay optimistic, but the Board of Realtors painted a picture of the market that was too rosy.”
How about the soft landing crowd on the national REIC stage? Won’t their overly rosy outlook for a shallow dip in 2007 followed by a resumption of historically spectacular growth encourage builders to keep piling inventory onto a market for which avalanche warnings should have already been issued?
Oh the irony! Bitterroot, soon to be just plain Bitterpill to swallow! Sorry, I forgot, it’s different here in freagin’ Montana. Everyone wants to move here!
The housing bubble is chewing on Bitterroot.
“Baby boomers created their wealth from real estate, Jones said: ‘They’re not going to stop.’”
What boomers won’t stop doing; retiring, dying, needing money. What they will stop doing; buying properties they don’t need, working, throwing good money after bad.
First big medical bill ought to wipe out all that wealth.
Agree. In the early 90’s, the Los Angeles Times did a 2-part article on retirees at Leisure World Laguna Hills and LW Seal Beach. The article was titled something like, “Tarnish on the Golden Years” or something similar.
Anyway, Leisure world stats at that time showed that most residents went bankrupt sometime in their 70’s due to medical bills. Leisure World had/has a number of residents who have the SS card for senior welfare benefits that they had to obtain due to these medical bills wiping them out financially. This news made an impression on me since the cost (at that time) to buy in to Leisure World was $45k in income per year (Leisure World will verify this income stream too-they don’t want anyone moving in who really can’t afford it). Can’t remember the senior slang for this particular SS card, but I think they call it the “green card” and this moniker holds the same stigma as a green card holder from another country.
~Misstrial
Locals used to call it Seizure World.
As a Green Card card holder, I don’t feel stigmatized at all in the US. Life is like a citizen’s, except voting and jury duty.
Come on in, Peter T, the water’s fine.
When are you going to be naturalized? It worked out pretty well for my mom and dad.
Right, yet another town counting on the boomers.
So who wins the boomers.. dramatic and remote mountain scenery, or year-round warm weather?
Tango,
Got any inside info on Bitteroot?
I’m afraid not, Ben. This is a big state! I think that western Montana saw more speculation, though. It has more classic Montana scenery.. mountain range after mountain range, lots of forest, sweeping valleys. Eastern Montana is pretty much just flat, dry plains.
People here claim that the Californication started with the release of “A River Runs Through It”. You all go ahead and move to the place where that movie was set (near Missoula), I’ll keep enjoying the places where it was filmed!
One more random Montana link. Here’s some wheat/barley land for sale on Craigslist. Just north of Bozeman.
A mere $25k/acre
Really random comment here, but I bought a hunting dog from a breeder in Missoula for my grandparents. Grandparents live about an hour or two away in ID.
Enjoy that wind in Livingston….especially in the winter.
Remote mountain scenery for this Boomer/Gen X cusp pair.
Hey, wait a minute:
Montana can’t have the Boomers! win jr reassigned them from FLA to that mega-sprawl town they’re creating in the AZ desert…remember?
Created their wealth? Hardly.
You are not creating wealth unless you are doing something productive. Baby Boomers bought and sold real estate and agitated for tax code changes that benefited them.
When you sell that old house and pocket hundreds of thousands of dollars in gains tax free at the same time the government is running a huge deficit it simply means that your wealth is stolen from future generations.
You forgot about the new BB Paradigm: Debt = Wealth.
The question is who will buy their real estate?
Answer: NOBODY.
‘I don’t see any bubble bursting. I don’t even see a bubble,’
Question: If you are IN a bubble, can you “see” it?
That is, if you are “invested” in the myths that expand a bubble (so much your fortune depends on it continuing) is it possible to attain enough perspective to ever recognize (or “see”) it’s existence?
I’d bet it’s virtually impossible. I’d bet most bubble dwellers can’t recognize a bubble until the moisture from the bursting remnants inundates them.
Maybe that is Lereah’s problem. Being a Florida condo flipper on the side makes it very difficult for him to see the bubble.
he’s got 500k? + free and clear in his fx va house- what about FL- it would help him write his next book
all you have to do is run the numbers. real state seems like the easiest investment. you’ve basically got two numbers, what’s the mortgage and what’s the rent? kick in a few bucks for repairs and that’s it. I’m not a RE guru and even I know that.
hilarious.
John Law, you sure you’re not a RE guru? I think you have potential. Please sign me up for your seminar when you start giving them.
Thanks!
“Lyons said Wednesday that a number of Realtors in the Bitterroot have told her they haven’t experienced a drop in business this year. ‘I don’t see any bubble bursting. I don’t even see a bubble,’ she said.”
Of course you don’t see a bubble because the real estate exam only tests you on grueling topics such as crown molding, granite countertops, tract lighting and shag carpeting. Realtors are salespeople……….PERIOD!! They should not be allowed to make any financial/economical comments unless qualified to do so and the media should know better than to ask them. It’s like a sports reporter asking a coach after a big win what he thinks of our country’s foreign policy. Good gracious, ask the proper people the proper questions.
Statements like this prove my point that high schools and colleges should be required to teach personal finance. That subject would arguably be the most practical class taught. Far more practical than comparative literature, psychology, sociology or art appreciation.
personal finance will be required study in my house, i’m going to skim my kids’ allowances (12b-1 marketing expense) and loan shark them (subprime) until they “get” it. the lessons you remember are the ones you learn the hard way.
personal finance was a required study in my house 10 years ago , it has really paid off . It wasnt easy dealing with the peer pressure applied on them by the pay later poor. The hardest part was practicing what you preach. Expect to be challenged . If you stray you had better be doing it like a preacher and dont do it in your neighbouhood. my kids now are finishing university in 4 months , both already have been recruited , have no university debt, paid for vehicles, and 6000 each in reserve cash. I did not pay for their university. Scholarships, partime jobs and co-op work terms enabled them to accomplish this. I taught them ” its not how much you earn …its what you do with what you earn” This may have been though dumb luck as they bought oil stocks before the boom. good luck teaching personal finance 101
bacon- 2 and 20 their bank account!
OMG you people are cracking me up tonite…
bacon’s going to shark his kids…
yes lots of creative solutions on THIS blog!
Shag carpeting. LOL. I think that’s what Learah may be wearing on his head.
No man whose livelihood is threatened by an idea would ever accept it.
jb
But it’s OK, because Colorado will have an excuse (blizzard) when December YOY sales are down big.
Take the number of days this blizzard lasts, add 1 or 2 for people to get on their feet, and subtract that many days of activity from last year’s sales. That’ll give an apples/apples comparison.
Oh wait, that’ll still show a decline…better stick to the blizzard story.
And the number of selling days is going to matter whether or not someone buys something as inconsequential as a house. It is not like you can reschedule a showing, those days must be lost forever.
I don’t think either way of spinning that makes me believe there is a difference.
By John Spence
Last Update: 2:39 PM ET Dec 21, 2006
BOSTON (MarketWatch) — Data coming out of the housing market suggests “we’re pretty close to the bottom,” the head economist for the National Association of Realtors said Thursday. David Lereah said he expects a shorter housing contraction than the two previous downturns the past 20 years. He said mortgage applications have come up a bit and existing-home sales are starting to show signs of bottoming out. “Builders have cut production, which you want to see and leads to a much healthier market going forward,” Lereah said during a conference call
“we’re pretty close to the bottom,”
Somebody nail that quote to the wall, I plan on e-mailing that right back to David every time we hit a new “Bottom”
Guess he hasn’t read this
http://www.itulip.com/forums/showthread.php?t=728
“David Lereah said he expects a shorter housing contraction than the two previous downturns the past 20 years.”
Why doesn’t anybody call him on this?? Why do you think so Mr. Lereah? What about this downturn makes it less severe than the others? Why should we hold onto sky-high returns this time when we gave back moderate increases last time? How do you breathe with your head up there?
huh ? looks like it stopped and backed up to 2004 in many places
“Baby boomers created their wealth from real estate, Jones said: ‘They’re not going to stop.’”
‘They’re not going to stop.’”
They’re not going to stop what…what’s the rest of the sentence?
I know they’re not going to stop being Baby Boomers. I’ll agree with that much.
I am renting in Missoula at the moment. My girlfriend, who is local, is constantly commenting that she is amazed by the number of ‘For Sale’ signs furnishing the city. She earns a good living by local standards as a senior member of the county sheriff’s department and she cannot afford to buy any property that would better her rented, two bed apartment. That is without shackling herself to a toxic loan. I can afford to buy but I will not buy in this blatant bubble. I asked a realtor if prices had doubled in the last five years and he replied, ‘yes’. I then inquired if wages had also double and he replied, ‘No, but there is a shortage of land so it is a case of supply and demand – prices will continue to rise’. I have serious doubts regarding the truth of that statement; please correct me if my doubts are unfounded. Wages here are derisory and the working populous is priced out of the market. I think that the entire tier of first time buyers have in recent years been replaced by ‘investors’. From those that I have spoken to, the investors are a combination of Californians and locals who have refinanced their own properties and purchased property for the purposes of flipping. It is now impossible to buy a property in Missoula and rent it out at a rate that will cover the mortgage. In light of this, stagnant prices and high property taxes I think that the investors will withdraw from the market leaving the local, almost peasantry, to retake the role of the first time buyer. The problem for the move-up market is that the locals cannot afford to retake that role unless prices return figures that match local wages. Does anybody have any stats on the YOY supply of housing to the Missoula market? Of course the ‘reason’ for the derisory sales this winter will be that it was 2 degrees colder than last winter
Montana State University is actually lobbying the state government to fund a “faculty housing subsidy” to help faculty buy into the local market. This has little chance of being funded but indicates the huge gap between housing costs and wages. And as poorly as faculty are paid here, they are generally the best paid people in the valley.
No, but there is a shortage of land
In Montana? That realtor gets an absolute “F” for creativity. If you’re gonna make up stuff, at least make it good…
Actually, due to surrounding federal lands, zoning, etc… available land in the Bitterroot valley is a bit tight (at least at the northern end). The Gallatin Valley (Bozeman), on the other hand, is a huge flat valley that could easily hold a 500k to 1 million population in subdivision lots. (Current valley population around 70k.)
It’s California’s fault that they aren’t making any more land in Montana, don’tcha know?
If you are doubting the shortage of land comment, look at a global imaging view of the build-able land on Google Earth. You will see an over-abundance of build-able land. Probably a 10,000 year supply, or more.
For example, look at Lehigh Acres in SW Florida. You will see with your own eyes, Using Google Earth satellite imaging, that there are still about 120,000 build-able vacant lots. Roads and infrastructure all in place since the early 70’s. Yes Victoria,there is still an over-supply of land.
Check this out…
Landlord faces 34 criminal charges
http://tinyurl.com/vv2em
And George W. faces none.
more witlessness….zzzzzzzzzzzzzzzz
This article is kind of sad. The landlord is a Korean immigrant, not some rich slumlord with dozens of tenement buildgs. He probably was in a position similar to that of his tenants not so long ago, but he busted his tail and bought the building. Now he wants to renovate it and chage higher rents.
And the rent control regulations he is complaining about do sound communistic.
This whole thing is pretty ugly and sad.
Tenants complained that the landlord ripped out pipes, forcing them to put buckets under the sink.
“Then workers tore the siding off the façade and ripped out windows, bringing drafts of cold air, they said. Lead paint dust filled the air, and cockroaches ran wild…”
The landlord is a thug,nothing less. And “he probably was in a position similar to his tenants..”if he was, he should have called the cops. Brutalizing and intimidating legal tenants is criminal and I hope this scumbag gets nailed and sent to jail. Since immigrants who commit felonies can be stripped of their citizenship, assuming that he is legal himself, after his jail stretch, he ought to be deported. How about a little respect for the law. Don’t like the law in question…then organize and make an effort to have it changed. Or do you prefer the business methods of gangsters?
Home loans down as refinancing plunges
From Reuters
December 21, 2006
U.S. mortgage applications slumped last week, pulled down by a plunge in home refinancing loan demand as interest rates climbed from recent lows.
The Mortgage Bankers Assn. said its seasonally adjusted index of mortgage application activity, which includes both refinancing and purchasing loans, for the week ended Dec. 15 tumbled 10.2% to 647.6 from the previous week’s 721.2, its highest level in more than a year.
Demand for home purchase loans also weakened as the association’s seasonally adjusted purchase index, widely considered a timely gauge of U.S. home sales, fell 5.9% to 436.5. The index was also 3.7% below its year-earlier level of 453.1.
Acquisition aids CB Richard Ellis’ global plans
http://tinyurl.com/y7ex2c
I noticed the agents in BitterRoot didn’t exactly say the news was “bittersweet”. But they shouldn’t be ‘bitter’ if their Bubble bursts also. The weather and their market is bittercold now it appears.
Lender sees ‘mini-refi boom’
http://tinyurl.com/vtna7
A quote from the article:
“We are, however, seeing that due to payment shock on a fixed rate, these customers are looking at three- to five-year fixed interest-only loans as an alternative.”
lol, no shit sherlock
Don’t worry:
http://www.marketwatch.com/news/story/housing-close-bottom-realtor-group-economist/story.aspx?guid=%7B965346C8-93C8-420D-AFF6-5E942E577ECD%7D
“Housing ‘close to bottom,’ realtor-group economist says
Last Update: 2:39 PM ET Dec 21, 2006
BOSTON (MarketWatch) — Data coming out of the housing market suggests “we’re pretty close to the bottom,” the head economist for the National Association of Realtors said Thursday. David Lereah said he expects a shorter housing contraction than the two previous downturns the past 20 years. He said mortgage applications have come up a bit and existing-home sales are starting to show signs of bottoming out. “Builders have cut production, which you want to see and leads to a much healthier market going forward,” Lereah said during a conference call.”
Notice how Lie-rah feels no need to address the subprime meltdown currently underway that is sinking the prospect of sufficient demand for drawing down the McMansion inventory glut at prices that don’t totally screw up the comps?
Let’s have a holiday competition:
Who can guess what Lie-rah was talking about when he said “we’re pretty close to the bottom”?
My entries:
(1) NAR credibility
(2) calender months
(3) He’s trying to find something with both hands
http://www.smh.com.au/news/Business/Weak-housing-slows-US-GDP-growth/2006/12/22/1166290711537.html
“The US economy grew at a tepid two per cent annual rate in the third quarter, slowed by the sharpest slump in housing activity in more than 15 years, the Commerce Department said.”
“The rate of increase in so-called core prices, which exclude food and energy items, slowed to 2.2 per cent in the third quarter from 2.7 per cent in the second quarter.”
So official growth in Q3 was 2% and official inflation 2.2%. Doesn’t that mean we were officially in a recession in Q3?
Nope. Need a decline in GDP for two consecutive qtrs.
Who can guess what Lie-rah was talking about when he said “we’re pretty close to the bottom”?
———————————————————————————-
Maybe he was witnessing Rosie and “The Donald’s” fued lately! You know, the one where Trump called Rosie an “animal” and she called him a bankrupt loser!
That’s an insult to animals. The Donald should be sued by animal-rights groups
I watched The View yesterday - a rare event for me - and Rosie ripped into DT. It was very, very funny as she repeated much of what has been said here - multiple bankruptcies, daddy bail outs, creditors getting screwed over by him and he comes out of it with no punishment. You may not like Rosie, but I swear it sounded like she read this blog.
The only “bottom” we are close to is the bottoms of the bubble owners upended as we grease up and prepare to “take advantage” of their foreclosures.