“Buyers Are Taking A Breather Nationwide”
It’s Friday desk clearing time for this blogger. New York, “After years of inflating, the Island’s housing bubble sprang a noisy leak; prices for homes, the largest investments for many Long Islanders, fell in Nassau and rose barely at all in Suffolk. Sensing the crest, more homeowners put their houses up for sale so that inventory backed up and there seemed hardly to be a street anywhere without for-sale signs.”
“Dede Gotthelf, owner of the Southampton Inn, said that the tony resort seemed to die in the fall. ‘We are dead as a dodo bird - the entire village,’ she said.”
“South Fork real estate brokers conceded that the market in general has slowed. (Broker) James McLauchlen said that 115 properties had changed hands in 2004. In 2005 the number reached 125 sales or trades. This year, only 65 properties were exchanged.”
“‘Those with money don’t want to be the last one who paid the most’ for a property here, (broker) Paul Brennan said. Even the very rich do not want to appear foolish.”
From New Jersey. “Having prices down from their high point is good news for consumers, said Dan Shiver, president of the Passaic County Board of Realtors. ‘More people can afford to get into the marketplace. The market has not crashed; it’s just softened,’ Shiver said. ‘For lack of a better word, it’s more normal.’”
“Maine real estate sales tumbled into the double digit range last month as decreases in prices and sales followed a national track downward, an industry group said Friday. Maine real estate agents emphasized the brighter side of the housing slump.”
“‘Buyers are in a better position than they were a year ago by not having to make an on-the-spot decision to buy a house,’ said John Hatcher in Portland.”
“The Massachusetts Association of Realtors reported yesterday that the 3,246 houses sold in November needed 130 days on average to attract buyers. That’s the longest period ever seen since MAR began keeping such data in April 2005, and association President David Wluka thinks it’s probably the longest period in history.”
“‘My gut is that it’s the highest (time-on-market figure) ever,’ Wluka said. The expert also said the 53,105 unsold houses and condos listed for sale last month probably represent the biggest November inventory ever, although MAR records only go back to 1997.”
From Wisconsin. “The stateline area’s real estate market may be ‘disinflating,’ said Russ Kashian, an author of the center’s Stateline Economic Report, but it’s never been a bubble in danger of bursting. ‘It can be argued that this is a correction,’ he said. ‘A decline in sales in the years following a record is not necessarily a failure. It is possible to view the slowdown as a reversion to the mean rather than a collapse.’”
“Sales of previously owned homes in Greater Cincinnati plunged 13.5 percent in November, the Cincinnati Area Board of Realtors said Thursday. It was the seventh straight monthly decline in year-to-year comparisons.”
“‘Some buyers are simply taking a breather from the housing market this year,’ said Dave Otto, president of the Cincinnati Area Board of Realtors. ‘It’s happening nationwide.’”
From Washington. “The Seattle-King County Association of Realtors has about 8,800 active members, up more than 80 percent from 1999. The state Department of Licensing reports there are 13,747 licensed real estate salespeople in King County.”
“A growing number of agents are trying to distinguish themselves. Dominic Canterbury, owner of (a) Seattle marketing and public relations firm, said niche real estate marketing can work, if done right. ‘Most agents are awful with their marketing,’ he said. ‘That’s why they’ve sort of become the used car salesmen of our time.’”
“An industry group said homeowners eager to unload their properties in a crowded market cut their prices. While recent signs have led some economists to speculate that the worst of the housing slump has passed, many are taking a wait-and-see approach, including those at the Realtors association.”
“‘Maybe we’ve hit bottom,’ said David Lereah, chief economist of the Realtors association. ‘I’ll need another month before I can get comfortable with that statement.’”
Another great week! My thanks to those who supported this blog in 2006. Please check back this weekend for news, your market observations and topics.
Thanks for all your hard work, Ben, and a happy New Year to you.
Let the tsunami of listings begin! Everyone make sure and head for higher ground.
Last year the big prediction was a post-Superbowl take off in inventory, but it actually started before we got there. I think once again the numbers will start jumpin’ right away. Give everyone a chance to shake off New Years and watch the weekend of the 6th & 7th. We’ll all be glued to the MLS again like a bunch of bad news junkies.
We’ll all be glued to the MLS again like a bunch of bad news junkies
______________________________________________
LMAO!
Good one, nnvmtgbrkr!
Let the “Spring Selling Season” begin!!!
“‘Maybe we’ve hit bottom,’ said David Lereah, chief economist of the Realtors association. ‘I’ll need another month before I can get comfortable with that statement.’”
==> WTF???
Just when I thought there was no other way to speak nonsense!
Somebody needs to plot a graph, putting in a data point every time somebody prominent claims we’ve hit bottom. For those like Lereah, we could assign colors and see if the lines make anything coherent.
imploder notice mistakes in statement:
“‘Maybe we’ve hit bottom,’ said David Lereah, chief economist of the Realtors association. ‘I’ll need another month before I can get comfortable with that statement.’”
Should read:
“‘Oh Lord, we’re about to take it in bottom,’ said David Lereah, chief economist of the Realtors association. ‘I’ll need another month before I can get comfortable with that statement.’”
Sounds like he’s hitting the sauce, if you know what I mean.
KY Sauce?
That too.
As of yesterday, 3,000 luxury condos in Montréal, Québec were totally empty and vacant. At 750,000$ to a million a pop, that’s makes 3 billion dollars of unsold units. It’s very funny reading what is happening in the US. The disease is GLOBAL and it is spreading worldwide. Stupid and greedy bankers.
“A growing number of agents are trying to distinguish themselves. Dominic Canterbury, owner of (a) Seattle marketing and public relations firm, said niche real estate marketing can work, if done right.”
=> Make a porn movie featuring the house to sell?
The greater Seattle market has crested the appreciation hill, and is now primed for a bigtime crash. Check out craigslist today. Over 350 listings for the Friday before New Years! And Seattle Eric, flipper extraordinaire, is today, acknowledging he will take a loss on both of his remaining flips. But he has a plan. He is taking his borrowed money to Texas folks. That should be a lot of fun. Carnage on the horizon.
Yeah, the Seattle Slew of Flippers said he’s SURE he’ll move the two flips sometime this Spring. One of the gems doesn’t have a garage…..how many days does it rain there?
Garage?…..we don’t need no stinkin’ garage!
I always laughed when I saw the cookie-cutter houses going up, including the patterns where there is no overhang to protect someone standing at the front door. Duh!
I just wrote, or tried to post to Seattle Eric’s blog. He has moderation on so I don’t know if he will let it through. I wasn’t a jerk, but I did warn him about the trouble he is now having months and months ago. Now, he wants to go out of state to buy, that could be another huge mistake.
Someone here posted the other day that things will literally have to crumble and hard times abound before people realize what is coming. I used to think people would wise up, now I am convinced that they won’t. Unfortunately, people will have to feel REAL pain before they realize that markets go in cycles, and real estate’s UP cycle is LOOOOONNNNGGGG gone….
A fool is easily parted from his money, not his ignorance.
So true NNV, at this point I will issue no more warnings to people. Friends and family yes, but that is where I will draw the line.
NNV - I like that statement. I am going to use that often this year…
If you get a chance ask Rick about his sweet land deal in Mexico and his Buffalo apt complex. I’m sure both paid off nicely to offset the two Seattle flips.
He was blowin’ and goin’ when the sky was the limit and everyone else was a fool for getting on the RE gravy train.
I remember him writing about those maneuvers. All I can think when I see someone doing things like this is: “How do they sleep at night with all the debt hanging over their heads and the possibility of not being able to unload?”
At least with stocks, you can always click the SELL button, with real estate, when you are stuck, you are simply STUCK!
“=> Make a porn movie featuring the house to sell?”
I wonder what it would cost to post an add on the star’s ass….I could just see it now, some cheesy realtors mug and phone number bouncin’ all over the screen.
You’re on fire tonight, nnvmtgbrkr!
“South Fork real estate brokers conceded that the market in general has slowed.”
that’s nice of them.
Stick a fork in it - they are DONE:
http://forum.brokeroutpost.com/loans/forum/topic.asp?TOPIC_ID=81847&whichpage=2
Too bad they issued this press release on Dec 8, 2006:
Statement from MLN President and CEO Mitch Heffernan
Date Released: 12/8/2006
——————————————————————————–
MLN continues to operate its national lending business, actively accepting loan submissions and funding and servicing loan production
The rest of the press release:
As we look to 2007 and beyond, MLN continues its growth and expansion with the contruction of our new corporate headquarters in….
And here’s a story from 11/28/06:
“On the plus side, Mortgage Lenders Network is expected to add 1,000 positions to its Wallingford facility.”
Amazing how fast their fortunes can turn.
One of the chicks in there, Tricia, has another recent post:
“need to prevent a foreclosure (by: tricia94382)
client is behind on 1st and second mortgage credit score is high 500s Trying to prevent foreclosure need to go no doc any suggestions? - Last Post by: tricia94382 on 12/23/2006 @ 11:50:35 AM”
2006 Projections
MLN’s production goal for 2006 is over $12.1 Billion. We anticipate our mix of business to include approximately 80% Alt-A/Non-Conforming product and 20% Conforming product. Loans are sold to a variety of investors with the expectation of selling 81% whole loans and 19% Conforming mortgage backed securities. MLN’s servicing portfolio is expected to grow to $15.6 Billion with over 127,000 accounts in 2006. The portfolio at year-end will consist of $1.2 Billion of sub-servicing for a national bank, $2.9 Billion of agency servicing, $9.4 Billion, which will be under a sub-servicing arrangement with Emax Financial Group, $39.2 Million from our private label securitizations and $2.0 Billion of warehouse loans.
Crispy,
how many more will end up like this?
Sure don’t look good.
Can someone list who has failed and their market rank at time of failure?
Ownit
Pinacle
Seabring
MLN
And I *know* I’m missing quite a few.
Neil
Did you *intend* that subliminal message?
All of’em, that’s how many!
C&C-
Man, I went and read the message thread…whew shades of FL boiler room penny sock pump and dump scammers…
It’s fookin’ unreal what a cesspool the L/O biz has become.
Bring on the Depression.
I spent some time reading the posts, too. They made me ill. Sub-prime purchases of over $1 million with 100% LTV, implied loan fraud, etc. etc. I feel sick to my stomach.
Good question from that forum.
Let the fun continue: (per the Shisters, er… Brokers Outpost)
MLN is dead as a door nail. We closed a purchase loan with them yesterday and they never sent the wire. Told everyone the wire would be here today. Of course it never came. They called while everyone was waiting around to say they went out of business and can’t send the funds. Borrowers left without a home.
The a-hole builder won’t even let the borrowers move in. So we have a lender who closes a loan, never sends the funds, and a builder who with no sympathy. The buyers must love real estate professionals right.
Fortunately, we were able to find another lender and fund it today.
Gotta love this business
And these POS mortgage sleazes have the nerve to call the builder an A-HOLE because he won’t let the buyer’s move in on “scouts honor”.
LMFAO!
hehehe…how fookin’ disfunctional is the loan biz these days.
Yeah, that’s what I thought about that post. It was the lender’s (or really MLN’s) screw-up, not the builder’s. I wonder if I can go to local grocery store, display my checkbook, and promise to write a check “at some point soon” while walking out the door with groceries? Apparently it’s supposed to work with buying houses..
Wow. Another lender shuts down. Ugly…
SCORE!!!!!
Add another point for our side.
Rich, I’ll need another month before I can get comfortable with that statement.
These lenders never had the money to lend. If they did, they wouldn’t need to shut down, they’d come up with the money.
They are lending hot air — their breath — they have no capital except a phone, desk, chair and pen.
What regulations?
Excellent news!
….said in your best Monte Burns, of course.
“‘Buyers are in a better position than they were a year ago by not having to make an on-the-spot decision to buy a house,’ said John Hatcher in Portland.”
Gee no more need to camp all night long to get a ticket to a Kevin Federline concert either? How nice!!!
Me and my husband have a name for John Hatcher’s agency
We nickname it “Killer Pricing”
“‘Those with money don’t want to be the last one who paid the most’ for a property here, (broker) Paul Brennan said. Even the very rich do not want to appear foolish.”
It must be really nice to live in the echelon of the US wealth distribution where losing money is all about appearances.
“ha ha you paid 500k for that diamond and me only 350k… LOOSER!!!!”
Looser than what? Tighter than what? Please learn to spell, so that you don’t become one. -
One what? Work on that grammer, too.
grammar
…and the punctiation.
GS let me ask something. How foolish will they look when the source of the wealth drys up? I’m reading in the rags that the DOW will continue to soar; housing is on the up-swing, and there’s a caviar for the rich. But, I’ve learned to look beyon the rag and government stats to get a clearer picture. So I went to Google news and typed in the search box “store closing” (several in my town closed recently and I wondered if there were others). Yup! For example Mervyn’s (California based department store) is closing 19 stores in OR and WA. There are 4000 recent news stories about stores closing. That’s this weeks news .. how many next week? How many of those people will not be able to make the mortgage payment? That isn’t appearances GS … that’s losing money for real even for the rich folks.
Stores close and businesses fail even in the best of times. Less than half of new businesses survive for even five years.
Here on Long Island, you are nothing if you can’t claim to have a house that appreciated some obscene amount. People are a lot more quiet about our lack of a house now. I am waiting for silence …. and will love the jealousy.
LLL-You will have the last laugh.
You need to take an exciting vacation soon, and then come back and talk it up to rub a little salt in the wound.
RENT = FREEDOM…Oh, the irony!!!!!!!!!!!!!
In many neighborhoods on Long Island, and in many other places across the U.S., a big house is not so much a home as a statement. And the intended statement is usually F_ck You. The same goes for the luxury cars, the Sub Zero refrigerators, the second homes and yes, the vacations.
What has happened to our society that we have strayed this far or have we always been this way? What is wrong with these people psychologically and spiritually?
Palisades Park,
Do you live in Palisades Park? If so, are you familiar with the insane amount of development going on along Route 505? I stumbled across it while taking a wrong term from Demarest, NJ, last week.
It all fits with the uncouth bumper stickers that read “My kid is cuter than yours” and other obnoxious like minded stickers.
“My JBR kid is going to kick the crap out of your FB honor student.”
“My dog is smarter than your honor student.”
“The hissing leak reduced homeowners’ ability to borrow on equity and might have diminished their willingness in general to spend money. But economist Pearl Kamer of the Long Island Association, a business group, says the summer’s $3-a-gallon-plus gasoline did a lot more damage to consumer confidence - evidenced by sales tax revenues, a barometer of consumer sentiment.”
Wow — even with home prices as high as they are on Lawn Guy Land, $3-a-gallon-plus gasoline was a bigger hindrance to consumer spending than the housing-ATM-machine shutdown. Amazing!
It never ceases to amuse me when all these economists cheer a drop in gas prices (from $3.00 to $2.50, for instance), but they think it’s a bad thing if a $500K house reverts to its true value of $250K.
Renters can live close to work, so the gas savings is rather insignificant. I’ll choose the drop in housing prices, please!
Another Gem from Tricia:
“tricia94382
299 Posts
Posted - 12/07/2006 : 10:18:51 AM
I like to put 83 year olds into stated programs and state $10k/month.
They’ll be calling me back in six months time, but I usually only work at a mortgage broker shop for a couple of months and then mvoe to another shop.
The best part is I call them back at the new shop and tell them what a bad deal deal they got at the other mortgage company.
heh, heh
I’ve made alot of $$$$$$$$ this way!”
And people wonder why we get some mad around here?
I bet she represents 90% of the business!
Crooks!
Whoa!
Can you say beeeeeeeeeeeeaaaiiiiiiiiiiitcccccchhhh!!!!!
I would love hear about this woman geting the “Reservoir Dogs” treatment from some of those blue hairs.
Let’s find her, and get her thrown in jail. She is admitting fraud.
Brokeroutpost, I created an account: login: bl pass:blblbl
I’m hunting for info on Tricia. Her profile says Grand Rapids, MI. The website she refers to which is a blog mentions a PO box in Vegas though.
By her zip code she is in Riverside, CA.
It’s elder abuse also.
LMAO you a$$hats don’t really think that was anything more than sarcasm did you. The naivety on this blog is sometimes astounding. Where does common sense come into play. Where do you think RESPA Laws originated from?. Have you even heard of or understand what Predatory Lending laws are?. Come on people put your thinking caps on. Just try a little bit and you’ll figure it out.
So… you don’t think this is true? LOL. I think it is! This industry needs a serious douche - you will at least agree with that??
Have you read the lawsuit against Ameriquest and the complaints filed against them? Someone posted the link some time back - the same kind of crap as this poster, only worse. A lot of these brokers are young and brash and think their are above the law - they will soon find out otherwise.
Industry needs a douche… no argument here. Young, brash, and thinking they are above the law… again no argument. Switching jobs every six months to grind the same 80 yr old or hell a group of them, and then posting it on a internet bulletin board considering the current laws on the books…. Nah, that’s not true thats tongue in cheek sarcasm. Crispy you’re a pretty astute guy don’t let the rants of the bubblheads make you just another blinded by the light sheeple.
I agree with mrincome (arrrg). The specific instance is probably fake and pumped up. But the attitude tells me that they would if they could. They’d bone an old lady up the a$$ for a lousy comission and laugh about it. (Though Tricia would need a strap-on, she’d do it to be one of the guys)
I tried posting a reply earlier, but apparently no go. My thoughts were this; you’re probably right, mrincomestream, the post was more than likely made up. But I think you’re being a little naive yourself. You assume that these fly-by-night originators even know what RESPA is, and if they did, would even care. Laws like RESPA aren’t any good if there not enforced. When’s the last time you’ve seen someone busted in violation of RESPA. Oh, you might scrounge up some account, but for every bust thousands go unnoticed. RESPA, ECOA, Predatory Lending Laws? PLEASE! Todays LO has been trained for deception and is a master at circumventing these weakly enforced laws. You can’t possibly think the system in place actually works, do you? If so, you’re a poster boy for naivety.
Again, the post was probably made up. But that kind of BS is going on bigtime, whether you choose to believe it or not.
Fraud in the industry, yea let’s not be naive it happens everyday, L.O.’s in Kinko’s in the middle of the day making w2’s and pay stubs?, yeah I’ve seen it, was real prevalent before fico scores and easy money became the order of the day, are laws bent and broken everyday? Sure they are… as they are in every industry everyday. But it takes a real special character to strip a senior. You don’t find them making jokes about it on internet bulletin boards and believe it or not they don’t like change so one changing jobs every six months is highly unlikely. It takes time to build a network of special characters to do that kind of fraud changing shops every six months is not in someone’s best interest who enjoys that kind of activity it makes it harder to hide what you are doing. That’s why I said apply some common sense and you’d figure it out. I’ve been in this game a long time seen a lot of things. Again it takes a real special character to strip seniors and talking about it in daylight is not one of their characteristics.
Drug manufacturing adn sales are agaisnt the law too.
Talk about naive .
When you find a internet bulletin board where the crack, meth, heroin and marijuana dealers are posting. Be sure to come back and let us know.
It might not be exactly what you’re looking for, but I’d venture to guess anyone selling or buying this stuff is doing drugs, MS. This search took just a few seconds. Guarantee I could find blogs of people who are posting about using drugs in, say…about 30 seconds.
http://www.drbongs.com/
BTW, I also thought that Tricia’s story had to be fake, but we’ve all witnessed Casey Serin. No doubt, there are plenty of idiots in this world (like the ones who are buying houses for retail prices right now).
LOL CA Renter there is a difference between “user” and “dealer”
long island oh boy!
actually i was out on long island today and the wife and i went to
macy’s and it was packed, but the one thing i noticed was that
everyone was paying with credit except me it seems, i was offered a macy’s card by every sales clerk in the place (i said no)
get a macy’s card and save 15% off your purchase blah blah blah
oh and btw it carries an apr of like 25% what a bargain
(btw i was buying work clothes and got some great deals in fact)
there was almost shock as i was paying for our purchases with cash (yes we do have some, lol) as for long island it is a traffic nightmare wherever you go with soccer moms’s with their suveees and enourmous tax bills not to mention a huge illegal population in some towns, i have said this before it reminds me of some west coast towns
alot of keeping up appearences and with the jones’
it will fall hard and has already a solid 10% or more in some areas
why anyone would want to live in some area’s is beyond me
it used to be you could go out to suffolk (which is the further out from nyc area of li) and buy a nice home for 200K or less
now these pos are going in the 400’s for a crappy town with a crappy school district and if you work in the city a long expensive commute. thanks but no thanks not for me
Make fun of it if you must, but the various 15-25% off sales targeted at Macy’s card users have saved me a bundle on clothes especially if when I buy stuff on seasonal mark downs. Paying the bill off right away makes the deal a lot like cash and doesn’t hurt the credit rating. My strategic Macy’s card usage is actually more frugal and sensible than your cash heavy judgementalism.
i have plenty of credit available the last thing i need is a macy’s card, if it works for you that is great but more inquiry on my credit is what i am trying to avoid at this time especially for a retail store card and the best part is no bill next month
good day
cash heavy judgementalism?
you got that right if i have the cash i can really afford what i am buying! have you ever been to li ny? very few of these trolls are in the pay it off at the end of the month camp my friend
Macy’s, like many other retail chains, makes offering those house credit cards a required part of the sales clerk’s job. Plus, for those who do not work on commission (which is most of them) the small bonus payment they get for successfully signing up a new cardholder is one of the few ways they have of increasing their paycheck.
So don’t blame the clerks. They can get written up or even fired if they don’t do what they’re told.
god knows if they get canned for dereliction of duty
finding a service sector job is almost as impossible as finding
an overpriced mcmansion on li
fine it is their duty
i never pay cash for anything. pay my full visa bill every month and get a nice accounting to boot…as well as free airline tickets and/or cash. So the card itself is not to blame for problems…just the irresponsible spender.
“‘Some buyers are simply taking a breather from the housing market this year,’ said Dave Otto, president of the Cincinnati Area Board of Realtors. ‘It’s happening nationwide.’”
A breather? More like most buyers are blown out of the market by absurdly high prices and are going to have to wait for either prices to drop substantially or wages to rise substantially. The latter seems to be out of the question at this point.
gh i agree 100%
i’m out of even conmsidering buying for awhile
i will be looking for a new apt in the next 6 months or so
and ride this thing out until it makes sense to take the plunge
we have no kids so there is no huge hurry
don’t get me wrong i would love to purchase a place but i wll not do something that will leave us with little to save or take a vacation every year
just yesterday my dog was under the weather and we had an unexpected trip to the vet and it cost $175 which is no big deal
but if you are on a shoestring budget a hit like that could cause
major budget crisis, who wants to live like that for the privilege? not this guy
You are right on the money mgnyc,
We bought a house four years ago, baby on the way and all. She has not worked since, and it has gone fine but four years with the water at the gunnels is not fun. I can assure you. You are very wise to give yourself a little margin.
She has not worked since = she has not worked outside of the house, though she works harder and longer hours since the baby was born.
There, fixed it for ya!
Just what I meant. Thanks for the fix!
News from DC:
http://www.washingtontimes.com/fhg/20061227-083657-2771r.htm
The housing industry shill Chris Sicks writes an update story about how federal spending is going to the save market and cites his shill friends at George Mason, who predict up to 5% increase for 2007. The same clowns were in denial about the downturn last year.
These ‘experts’ should be fired. Fed Govt. spending does not explain bubbles across the country and it doesn’t adequately explain the DC area bubble. Fed contracts do not pay that high across all industries–many young graduates get paid $40–50K, and they cannot afford even a 1 BR condo. And they ignore the fact that many many people who bought in 2005/2006 are already seeing negative equity. Two of my friends bought for $550K (2006), $900K (2005) and their properties are now worth $480K, $800K respectively.
“From 2002 to 2004, federal procurement spending in this region expanded by nearly $19 billion. Compare that with 1992 to 1994, when spending increased by just $3 billion. ”
The Washington Times claims to be a conservative voice. Why doesn’t it throw in some analysis - like ‘maybe we should transfer a lot of these jobs to smaller towns that are affordable?’ or ‘maybe we should encourage telecommuting’ or better yet ‘why the heck was there a 19 billion dollar increase under a Republican president and congress?
To be fair to the Times the “real” journalists like Patrice Hill investigate the housing bubble and has written excellent articles. This Friday housing supplement is a separate entity and full of articles by housing industry shills like RE agents and mortgage brokers. It is separate from the editorial supervision of the main paper. This supplement is even handed out for free in Giant if people don’t want to spend the 25 cents for the Friday paper.
“Will home prices come down or go up? Will homes be even harder to sell, or will sellers regain a bit of the advantage they lost so profoundly this year? John McClain gets paid to answer these kinds of questions. He’s deputy director of the Center for Regional Analysis at George Mason University. ”
And this brilliant forecaster, paid big bucks to intelligently answer these critical questions, reaches this conclusion:
“Second, home prices will rise 2 percent to 5 percent next year.
Third, the volume of home sales will drop back to 1998-99 levels.”
LOL! Bonus points to whoever is quickest to see it …
He’s saying that sales volume will drop to 1998-1999 levels, which means, of course, that the market will have seized up even worse than 2006, meaning that months-of-inventory will expand WELL beyond it’s current level, which means that prices will …. go UP 5%?!?!?
My prediction for 2007 is that John McClain will eat HIS prediction and Die Hard.
i was out in the hamptons back in the early summer for the first time and it seemed like the whole place was for sale or rent. literally signs everywhere. it was surreal and i don’t know if it’s an annual thing
i was out drinking with people from work last night. mix of people who live in NYC and NJ. Property tax assesments coming in NJ and for the first time in decades they want to see inside the house. Some people’s taxes are going up 20% - 30% and this makes selling very hard. I heard on Long Island they are also reassessing in case values fall. Got to pay for union benefits
Inside the f– house? WTH? As a Georgist I’m a great believer in property taxation, but it should be assessed on site value *only*, and the assessors only need a map to do that.
We’re so retarded in this country.
Tax assessor want to come inside the house? What is that all about?
first time in decades they want to see inside the house.
Cities and towns are gettin’ desperate for revenue.
All those big $$$ 40 year public employee pensions comin’ due.
The squeeze is just beginnin’
Stick another obsolescence (tax) fork into the McMansion crowd.
They’re toast.
They want to find all the expanded attics and finished basements!
“i was out in the hamptons back in the early summer for the first time and it seemed like the whole place was for sale or rent. literally signs everywhere. it was surreal and i don’t know if it’s an annual thing”
2006 was a particularly strong rental year because nobody was buying. A lot of the most attractive rentals out there are gone very early - like January.
When you saw rental signs up everywhere early in the summer you were seeing the evidence of many cash strapped second home owners and investors in deep doodoo.
The smart money has been getting out of the Hamptons since 2005, maybe 2004. The last thing the investment bankers and Wall Street deal moguls want is their acumen tarnished by stupid RE losses.
What you have in the Hamptons and other supposedly tony communities on the east end is mostly pretenders. Many of these people are in big trouble with their investments right now. And weather the4y inhabited their weekend homes or not is irrelevant as to whether they can be classified as investors. They virtually all are investors and now their investments are about to set them back years financially.
it’s funny people want to brag about the super inflated value of their homes and with these inflated values come inflated tax-bills
karma is a bitch
not in Prop-13 land. My mom’s place, bought in 1981 is assessed at $110K. . .
Troy
Your mom is okay but the buyers of these new properties (like the ones in the 101 corridor from Calabasas to Ventura which are priced at $500,000 to over $1 million) are going to pay full whack on $700,000 properties.
I’ve been wondering for some time now if, as this bust bites, if the property owners who bought in the boom and paid top dollar, are going to start complaining that Prop 13 discriminates between new home owners and old home owners and that they, the new owners who bought in the boom, want the Prop 13 old owners to start paying a bigger share.
Seems to me that if they took it to court, they might have a case. Thus, Prop 13 could be classified as discriminatory. I’m not a lawyer but if the State of California decides it can cream off some more tax money by getting rid of Prop 13 that way and increase revenues to pay off California’s big debt you can be sure the courts will go along with it.
Not going to happen! Getting rid of prop 13 isnt going to help. And many dont want prop 13 to go way. Only the dumb fools paid for $1M shacks.. prices will take a nice swing down by 50% and will take a long time to recoup.
Best the fools can do is petition the state to drop the assessed value down to market. Thats it !!
California’s already started a population drain. Such a maneuver would kick it into high gear— because there’s very little ELSE that California doesn’t tax, and it all adds up to one hell of a chunk of change.
I live here and there’s no population drain.
Millions of illegals here. More coming daily to replace the few on the books who leave.
Ruth, your post generates so many questions. How about just one:
how many ‘illegals’ does it take to replace the tax revenue generated by a ‘legal’?
I still have to ask the question - with precedent set by other states of 1.5%, 2%, 2.5% and higher, what is to stop California from putting property taxes above the 1.1% currently set by Prop 13? We have one of the highest income taxes (up to 10.3%) and one of the highest sales taxes (over 8% where I live.) It seems the only thing keeping California from matching Texas property taxes is this limitation.
People keep arguing about the excessive taxation of Prop 13 on a new vs. an existing owner. And yes, it is difficult to think that a new owner of a $700k home is paying almost $8k/year while someone who bought the exact same home ten years ago is only paying $3k/year. But my guess is the elimination of Prop 13 would mean that both owners pay $8k/year. Can anyone give me a counter argument?
> Prop 13 could be classified as discriminatory.
As far as I recall, Prop 13 went to the US Supreme Court and was uphold. It can only be changed politically, and the chances for that seem slim now.
I’m sick of people hijacking threads with pointless arguments about Prop 13. Don’t care about it one way or the other, doesn’t affect most of us, please STFU.
“please STFU.”
Thanks self proclaimed Moderator….and Uh… No thank you…
Prop 13 is a real estate issue. So how is people writing about it highjacking a thread? People obviously find interest in discussing it. I guess you could plead with Ben to remove all their comments, that would get everyone to STFU.
Prop 13 is another cog in the RE Ponzi scheme. Screw the new buyers with a disproportionate level of property taxes, but they don’t mind because property values keep going up and the next buyers get screwed even more. Until the music stops.
Prop 13 is just another dagger in the corpse of the California economy. You’re going to get a free preview in Florida, which instituted this foolishness later and will get screwed sooner.
And no, I have no desire to live in either place. I’ve never owned in any place that doesn’t have market value assessment and never will. And before I get any smart-assed replies, MVA does not result in automatic tax increases where I come from.
Prop 13 is another cog in the RE Ponzi scheme. Screw the new buyers with a disproportionate level of property taxes, but they don’t mind because property values keep going up and the next buyers get screwed even more.
—————————
Actually, the new buyers **SCREWED THEMSELVES** by agreeing to pay the high prices on which they will be taxed.
Only idiots would consider buying without taking the FULL PITI + HOA + Mello-Roos, + maintenance costs into consideration.
If the market were full of **thinking** buyers, they price hikes would have been halted a long time ago by folks who were unwilling to shoulder the previous owner’s burdens.
Prop 13 is the very best thing that happened to CA. It keeps the smart people from being affected by the naive morons who bid prices up because they believe we are “running out of land”.
Just wait. When prices drop, and the patient bubble-sitters finally opt to buy a *reasonably-priced* house, the new buyers will kiss the feet of all the intelligent folks who voted for Prop 13.
Said it before: CA is very volatile. Prices go up, and they go down.
Shoud we let the 125% LTV, no-doc, NINA buyers determine what property taxes should be???? I think not.
california is a great place to visit but to buy re there
is crazy
i love california but after a week or so i need to come back to the east coast
Could someone please explain to me why anyone would start a business in California with the high taxes and cost of living?
bikinis?
LOL
At this point in time, not many are.
The entepeneurs in the methamphetamine business is booming.
For those who don’t think Prop 13 is worth hearing about or the CA economy is teetering on the brink of collapse, try these:
- 1 of every 8 Americans is a Californian
- CA has the 10th largest economy in the world at $1.5 trillion (World Fact Book, 2005)
- CA puts more into the US government coffers than it takes out.
So why would anyone want to open in business in, say, France or China? Because there is money to be made in a very large economy and where there are a lot of people.
it is definatley not for the raiders
lets go jets!!!!
Port of LA is the offload point for most imports. Most Chinese importers are based there, skimmed-off-money accounts are kept there. Chinese like to keep close tabs on their money and move to LA.
“It’s all over but the shouting…uh I mean Repossessing”. LOL.
It is possible to view the slowdown as a reversion to the mean rather than a collapse.
It is also possible to believe in God, Santa Claus, and the Tooth Fairy.
And the existence of good violists…
Owing to the inflated prices, a reversion to the mean *is* a collapse.
“‘Most agents are awful with their marketing,’ he said. ‘That’s why they’ve sort of become the used car salesmen of our time.’”
Wow, how did this get past the proofreader?
I’m selling a car and I’m probably going to take a hit of about $1,000. And I lost sleep over it. I woke up and tried to imagine what that feels like multiplied by 100. And I couldn’t.
I’m hoping and praying that something keeps the economy going in the midst of this collapse, but I can’t imagine what.
Hello all, just started reading this blog over the last week and I love it. We moved to the SF bay area 5 years ago and have taken a LOT of heat from friends and family (incl a brother in law in RE) for not buying. We could do it but at 46 I refused to plunk a huge chunk down on a 1400sf $650K townhome way down toward San Jose. So we’ve been saving a ton every month since…maybe missed some equity but all-told not that high a percentage.
So I’m sitting on some decent $$ but the 10% local price reduction doesn’t do it for me. ..even at $585K I’m not comfortable jumping in. I’ve been thinking all along that townhome needs to drop below 500K before I would even consider it. That would be about -24% from the peak. Everyone says (incl RE b-i-l) that’ll never happen…too many high tech foreigners coming in (esp. asians with families) who will buy regardless. They may be right. With the reduction, the townhomes in the newer, nicer complexes w/good schools are all moving pretty quickly. Others are languishing.
Any thoughts out there?
I’m willing to wait. I’ve owned a great condo elsewhere for 10 years so have write-off. I’d love to buy in SF but prices for decent condos in good neighborhoods in the city do not seem to be coming down much. Thanks, Zack
Keep in mind that real estate bubbles do not pop - they deflate slowly. The last one (in CA) was 1991 -1996 where prices went down 20%. This time the deviation from the mean is much greater and the subsequent fail will also (probably - no crystal ball here) be much greater. The longer you can wait the lower prices will be.
I don’t know much about the SF market - it hasn’t bubbled like the SD market, but it is still over-priced. Your best bet is to keep reading this blog and determine which posters are in your area so you can get the most critical information from them.
Hope this helps and welcome aboard!
Zack,
Welcome aboard. I can only imagine that the heat you have been getting has been from folks who work in RE or folks who only listen to RE blather. I am glad you found Ben’s blog because it will balance out the RE position nicely for you. And from what you said I am guessing that you found a like minded community here.
San Diego Bear’s advice is on target. This market peaked in the 3rd quarter of this year and is on the downslope now. The RE folks are working overtime and spending a ton of money to try to prop up prices and sales. That’s their job, but they have a habit of stretching the truth to help you rationalize buying. (Chime in here txchick with a more forceful description of what these lying sacks of merde do with the truth if you so care to ). As this thing plays out and down you can expect to see more than one false bottom. Beware of jumping in too early for you will surely catch a falling knife. The expectation is that this market will revert to the mean to get back in line with the economic fundamentals that support prices. In plain english this translates into prices that are 150 to 250 * rents. GetStucco (I hope I am citing you right here GS) is using 1997 prices + 3.5% per year as a target. Others have mentioned using price per sq foot, but I do not have that number. One tool to use is http://www.domainia.com which has a decent price history for locations/houses. I find Zillow to be interesting, but off on the high side on valuation.
The Bay Area has for some time had prices that were higher than other areas, but I do not believe it is completely insulated from this downturn.
I am doing this, saving as much as I can (Like you), getting very clear on what I can afford using a traditional 30 yr fixed rate mortgage and keeping tabs on my area and this blog. We are only in the first innings of this one so be patient and diplomatically avoid debates with folks who have been drinking the REIC koolaid as it will only lead to indigestion.
Crispy - Great Work. Here is a link on the rankings table. These guys were the 13th biggest sub-prime in the US. Down big!
https://www.newcentury.com/resources/other/origNews06.pdf
Nice find, BPLI!
Notice these lenders always go down at the END of the month? Why is this? MBS distribution day is the 25th (give or take holiday/weekend/etc). If the paying agent doesn’t distribute enough cash, the trustee serves the lender an immediate bill if the loan is under “warranty” or new enough that the lender has to buy it back. The lender is required to buy it back at the full original price, as insurance for the MBS investor against an immediate fraud. The owner of the lender’s warehouse line is likely privy to the notice as well……rumor is the warehouse line got yanked here just like at Ownit. Odds are decent there was a “Credit Event” on one of the issuances….Haven’t seen anything from Markit Partners yet though.
” It is possible to view the slowdown as a reversion to the mean rather than a collapse.’”
Needless to say “reversion to the mean” would equal 50% decline in “hot RE market”. (easy there dont get burned)….
Are Realtors dumb or what!
““‘Some buyers are simply taking a breather from the housing market this year,’ said Dave Otto, president of the Cincinnati Area Board of Realtors. ‘It’s happening nationwide.’”
But there is no such thing as a nationwide real estate market. Have not the realtor been telling us that. What scum bags !!! LOL!!!
Hey Realtors !!! ‹^› ‹(•¿•)› ‹^› Chew on this!!!
“Buyers Are Taking A Breather Nationwide”
Did Rip Van Winkle start with a “breather?”
“Buyers are in a better position than they were a year ago by not having to make an on-the-spot decision to buy a house,” said John Hatcher of the Keller William Realty in Portland. “With increased inventory, buyers can take more time to decide.”
Within Maine, 12 of the 16 counties recorded decreases in home sales between the three months ending Nov. 30, 2005 and the same period this year. Only Aroostook, Franklin, Piscataquis and Washington counties recorded increases.
Meanwhile, permits to build new homes are expected to decline in all New England states through 2010, as builders reduce their investments in response to the soft market, the regional forecasting group said.
Everyday I check the MLS listings for four counties in Maine and yesterday I saw a total of 105 houses for sale . Today it was down to 74 … Looks like there was alot of withdrawns. Maybe they are waiting for the Spring.
Yup, there’s no doubt homes have been removed from the inventory supply. A lot will be back on by the end of February I would guess. Here’s how the pattern has looked for SFH inventory for some time in Portland, Yarmouth, North Yarmouth, Cumberland and Falmouth:
9/6/2005 352
9/19/2005 394
9/29/2005 400
11/3/2005 425
12/5/2005 406
1/3/2006 352
2/2/2006 344
3/3/2006 345
4/4/2006 351
6/4/2006 409
7/22/2006 477
9/9/2006 467
11/5/2006 437
12/15/2006 355
This is all in the Portland area - a very different market than the interior where it can take years to sell a house even in good times.
It will be interesting to watch what happens in February. I can’t wait to see the surge of inventory as I have seen several withdrawns since August. I found it very unusual that 30 houses were pulled off so suddenly. What is the purpose of that ? No buyers in winter? Still waiting my time and renting for now.
Looking to buy land and build but even that is risky. Raw land is overpriced as well, with a huge markup. So even if we build ourselves we have to look forward to the depreciation of value within the next couple of years within this market. I am anxious to move into a bigger place and buying does not make sense as I see comparable houses to rent considerably less than the mortgage payment, taxes, insurance.
When price of buying is only 10% more than the monthy mortgage payment with 20% down I will consider to buy.
This rent vs owning calculator link always help me with the buying equation. This also explains why not to many people want to buy a depreciating asset when the monthly cost to own is higher than renting.
http://www.cepr.net/calculators/hb/hcc.html
To bad the sellers don’t realize that buyers can’t afford the monthly mortgage. The houses are not priced to sell and remain empty or withdrawn. I have not seen any substantial declines in prices cuts since April of 2006. Time will only tell by next summer.
The RE market is going down like Saddam on a rope. Happy New Year!
My gut is that Mr. Wluka doesn’t know anything about the historical range of the “days on market” figure.
What buyers … oh yea the ones that are breathing … as opposed to the ones who are not ??? Oh Them yea …
I got news for you … there are no more buyers … any one that ever knew what a house is has one or 8 … whichever. Unlike I dunno, say pencils … people tend to buy just one per household.
I am real tired of people saying buyers are not there … or they are taking a break … guess what morons … then they are not buyers.
Cool.
Cow_tipping.
Like the 3,000 unsold luxury condos in Montréal ?
No morons and suckers left to buy the junk.
this mess has taken buyers from the future
24 years old without a condo or 4? you are such a loser!
i agree no more buyer and without the 1st timers no move ups
and thus the market stalls