‘Suffering From Too Much Inventory” In Arizona
Independent Newspapers reports from Arizona. “Real estate experts have a mixed view on the future of the real estate market in the Southeast Valley. However all agree it is definitely a buyer’s market.”
“(Realtor) Ron Wilczek said in Mesa, the November home sales rate was $156 per-square foot, which was the lowest of the year for Mesa homes. ‘Let’s wait for what happens over the next one to two months to see if this is a significant trend,’ Mr. Wilczek said. ‘Lower sales and higher inventory have created a seven-month supply of homes.’”
“According to Mr. Wilczek’s figures for homes under $1 million and larger than 1,000 square feet, in November, 3,246 homes were on the market (and) 450 sold.”
“‘Buyers get the best news in Chandler,’ Mr. Wilczek said. ‘A $5 per-square-foot drop in November makes the year-to-date total a $14 decline, plus the number of sales has dropped every month this year. And days on market jumped 18 to a record 101 days.’ In November there were 2,298 homes for sale in Chandler and 306 sold, Mr. Wilczek said. The average home sold was 2,045 square feet at $342,923.”
“He noted smaller cities like Chandler, Gilbert and Queen Creek are suffering from too much inventory.”
“‘What’s hurting them is new home buyers are trying to get rid of their excess inventories. When the housing boom was really happening in 2004 and 2005, developers built all these homes. People were on waiting lists,’ Mr. Wilczek said. ‘Then the market slowed down and interest rates hiked and people backed out of contracts. Developers started offering reductions up to $100,000.’”
“Mr. Wilczek said Gilbert is the fastest growing city in the United States and with the number of houses for sale rising, buyers have more choices.”
“‘November’s sales saw the continuation of a year-long drop in price per-square-foot,’ Mr. Wilczek said. ‘At $162, November’s price is $15 less than in March. Sales continue to decrease and the city has almost a ninth-month supply of homes on the market. The number of homes for sale is going down, perhaps signifying some seller’s dissatisfaction with long market times and dropping prices.’”
“Mr. Wilczek said a rise in Queen Creek home prices in October was probably a fluke. ‘November’s figures show another decline to $124 per-square foot. Queen Creek’s losses have totaled $27 February to October,’ Mr. Wilczek said. ‘This means homes lost about $56,700 in value. The resale market here is still getting beat by new home builders who are slashing prices and giving huge incentives to lower their inventories.’”
“According to Mr. Wilczek, in November there were 1,834 homes for sale in Queen Creek and 169 homes sold.”
“Mr. Wilczek said as far as projections are concerned, the market can generally go two ways this year. ‘A lot of it depends on whether sellers panic or hold firm. Once a seller decides to sell at a greatly reduced price and a few neighbors do the same, they set a trend and change the price of the community,’ Mr. Wilczek said.”
“Mr. Wilczek said he believes many people panicked and unnecessarily rushed to sell their houses when the market started changing last year, thinking they would get the best deal if they sold quickly, which contributed to high inventory. ‘When inventory is back down again, things will be fine,’ Mr. Wilczek said. ‘But if the opposite happens, they won’t.’”
The Lahontan Valley News from Nevada. “Average home prices in Churchill County are starting a downward trend while the numbers of homes sold this year is lower than those of last year.”
“Figures released by Bob Getto, local Realtor and trustee for the Northern Nevada region of the MLS, show the median sales price for homes have dropped from a high of $271,200 in January to $208,200 in November, a $63,000 decrease.”
“The data shows median sales price of local homes has rocketed from $128,000 in the first quarter of 2004 to $238,000 in the second quarter of 2006. While it’s hard to predict future homes prices, ‘my gut feeling is they’ll come down. It needs to come down,’ he said.”
“Broker Kim McCreary theorized that national builders who came to Northern Nevada, builders who ‘tear down a mountain and build houses,’ drove up the price of dirt and overfilled the market with houses.”
“‘The market is a little tougher, but it probably needed to happen,’ McCreary said.”
“Realtor Diane Lowery said developments with standing inventory are doing better than those without readily available homes. ‘We’re not seeing people come in who want to wait five months for a home to be built,’ she said, adding that the situation was different two years ago when people were clamoring to buy homes.”
“‘There’s very few new families,’ Getto said. ‘To meet the average sale price, you’ve gotta have a good job. Jobs are the key - we need good paying jobs.’”
‘Tempe Town Lake area became one of the hottest areas for commercial construction in the Phoenix area. In 2006 the cranes and construction became especially obvious with the Tempe Center for the Arts, Tempe Marketplace, Hayden Ferry Lakeside, Edgewater and other condo complexes taking shape on or near the water’s edge. At least 40 projects, mostly condo complexes, are under way in downtown Tempe.’
‘Southern Nevada has become a mecca for those seeking a high-rise lifestyle. Chris Shelton, 24, a real estate developer and former contestant on the TV reality show ‘The Apprentice,’ says he became used to an urban downtown ambience while living in Manhattan. ‘The way it’s set up, there really are no walls,’ he says, although ‘I do have sliding room partitions that open and close.’
‘Robert Pittman has been living at SoHo Lofts for about five months.
About 1,600 of his loft’s 2,000 square feet make up pretty much one room, Pittman says. ‘There’s nothing separating any space. You do the laundry, the cooking, everything at one time, and it’s easily manageable.’
‘He, too, has opted for a minimalist decor. ‘No rugs. It’s just a concrete floor,’ he says. ‘Exposed ductwork. It really gives the impression of a kind of low-maintenance, bachelor lifestyle.’
‘Police shot and killed a man in north-central Las Vegas on Monday night. The shooting occurred about 9:45 p.m. in the parking lot of the Canyon Creek Villas apartment condominiums, area residents said. Marvin Lang, who said he bought a Canyon Creek Villas condo just a few days ago, said that after hearing shots he looked out in the parking lot and saw a man in a white jacket face down in the parking lot. Lang said paramedics and firefighters arrived, looked at the man and then left ‘without picking up the body.’
‘To meet the average sale price, you’ve gotta have a good job. Jobs are the key - we need good paying jobs.’”
———————————————————————————
Bingo! I know a couple of people who work at Whole Foods Market in Phoenix and was shocked to learn they only get paid around $ 14.00 an hour - and this was considered decent pay for the area.
That is good pay for Arizona. Benefits are very rare.
I know a couple of Whole Foods millionaires in Dallas. Store clerks who have been there a long time and had lots of options.
ah, selling a little more than baking soda eh?
$14/hr for a grocery store? Unless it’s something specialized (deli/management etc) I’m shocked to hear it’s that HIGH. Then again WFMI gets away with charging $5 for a box of spaghetti or whatever.
Well they can go work at Golman Sachs and other bubble makers.
Don’t get too excited about $14/hr being high anywhere. Consider that the wage translates into little more than 30K/year at 2080 hours per year. using 30K per year, the fundamentals say no more than a 90K house, ehich is still good, but deduct upkeep, and paying for your benes, and food, util. and you realize 30K is not going too far for one person, who wants to own even a modest home. How sad. There was a day in this country where 30K would have covered all that and left you with enough to go on a modest vacation once a year.
Consider that $30k per year is a good wage in a lot of these bubble markets, and one can see where home prices are headed. I don’t care what sort of crap realtwhores, economists, FB’s, etc. try to spin, prices are going to tank. They HAVE to. This thing was totally unsustainable.
That’s what I am talking about Bear. Either wages have to go way up to afford the McMansions or prices have to freefall along way. I am betting on the latter since even out mighty (ahem) economy cannot sustain $30/hr cashiers at Whole Foods.
You guys don’t understand. If they can keep the party going and the prices going up, then the store clerk can ride the wave and get rich: The american dream. See, realtwhores are good, not evil. They make dreams come true…
This dude is talking about Churchill County, Nevada. Good paying jobs? Riiiiiiiiiiight!
Shocked? $14 an hour? They get commissions of sorts on sales each month. But $14 an hour, shees no wonder groceries are screaming high. Stocking tuna on the shelves for $14 an hour.
At least it’s not as bad as IPS drivers getting $25+ for saying “sign here“
im not sure about arizona but ups drivers in nyc work damn hard and earn that money. years ago i worked for fedex and it was referred to as blood money (our paychecks)
Ah, but you can graze on all that organic produce during work hours!
‘A $5 per-square-foot drop in November makes the year-to-date total a $14 decline…’
You don’t often see a ‘per square foot’ comparison regarding price declines. We need more of this ‘apples to apples’ - type reporting I say.
And more of those square feet proportionally are covered in granite or marble or Pergamon or whatever than they were at the height of the bubububbbubbble
“Mr. Wilczek said he believes many people panicked and unnecessarily rushed to sell their houses when the market started changing last year, thinking they would get the best deal if they sold quickly, which contributed to high inventory. ‘When inventory is back down again, things will be fine,’ Mr. Wilczek said. ‘But if the opposite happens, they won’t.’”
Hilarious. So, these sellers “unnessarily rushed” and dang it, if they’d just pull off their home off the market, and inventory is reduced, things will be “fine”.
Seems like of those 1800+ homes for sale (in Queen Creek alone), some of those listings are…necessary, dude. Like, spent-all-the-HELOC-money-and-I’m-4-months-late-with-the-mortgage necessary.
This comment lacks any sensibility whatsoever. The fact is when a spec buyer orders a new home the plan is to sell to a GF when its ready. Well my home is ready to sell where is my GF. Look in the mirror.
ouch, my head is spinning make it stop.
I think he’s nailed it perfectly.
“When inventory is back down again, things will be fine,” Mr. Wilczek said. “But if the opposite happens, they won’t.”
Should a guy named “Ghetto” be in the real estate business?
He probably sells more than just house’s in his hood!
From the neighborhbood he hails as home, I say he’s definately sold a meth house or two.
Sung to the tune of “In the Ghetto” by Elvis:
On a cold and gray Tem-pe morn,
Economic nonsense speak is spawned
By Bob Getto
Thank you. Thank you very much
“Figures released by Bob Getto , local Realtor and trustee for the Northern Nevada region of the MLS, show the median sales price for homes have dropped from a high of $271,200 in January to $208,200 in November, a $63,000 decrease.”
I love the names of these people - Getto. Eric’s Cartman’s version came into my mind:-
————
As the snow flies,
On a cold and grey Chicago mornin’
A poor little baby child is born in the ghetto
And his mama cries
‘Cause if there’s one thing that she don’t need
It’s another hungry mouth to feed in the ghetto
Ouchh! It’s a bust.
One last set of potential FL lottery winners, and a few don’t want to take the money and run. A delusional deep pocket builder wanting to build an additional white elephant. A few folks like the old Japanese farmer in Anaheim that refused to sell his land to Disney for megamillions about 10 yrs ago. Was selling strawberries out of an old pickup till he passed away. Children sold and took money and ran. Now, new Disneyland park. What will this hurricane alley turn into.
By BRIAN SKOLOFF, Associated Press Writer
2 hours, 31 minutes ago
BRINY BREEZES, Fla. - The owners of nearly 500 mobile homes in one of the last waterfront trailer-park towns in South Florida stand to become instant millionaires if they agree to sell to a developer. But some are holding out, saying there are things more important than money.
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“You just can’t buy a way of life,” said Tom Byrne, a 68-year-old retired sales executive from New York who doesn’t want to sell even though he would make a little over $1 million on the trailer and site he bought two years ago for $150,000. “This is my home.”
Briny Breezes is a down-market relic of old Florida, surrounded by glamorous multimillion-dollar homes and splashy high-rise condos.
The Briny Breezes brochure calls it a “self-governed mobile home community of kindred souls.” Residents of the Palm Beach County town cruise the narrow streets on golf carts, passing palm trees and tiny, neatly manicured yards. They wave to each other and chat about the next neighborhood outing — water aerobics at the community pool, shuffleboard near the clubhouse, bowling night.
With 600 feet of oceanfront property and an additional 1,100 feet along the Intracoastal Waterway, real estate like this in southeastern Florida is pure gold.
Boca Raton-based Ocean Land Investments has big plans for the property if the deal goes through, as many residents are certain will happen. The company envisions about 900 low-rise multimillion-dollar condo units, a high-end marina and a 300-room luxury hotel.
“There really is no other piece of property like this in Florida,” said Logan Pierson, the company’s vice president of acquisitions.
The 43-acre town sprouted from a strawberry farm in the 1920s, back when Florida’s charm was its subtropical weather and quiet, coastal bliss — long before the days of Art Deco, “Miami Vice” and Walt Disney World.
So-called “tin-can tourists” came down yearly with their trailers to escape the Northern cold. A group of regular visitors bought the property in 1958, and it became a town in 1963. It is run as a corporation by a board of directors, and residents own shares based on the size and location of their lots.
“This is pretty much it for an affordable community along the coast,” said Debbi Murray of the Historical Society of Palm Beach County. “It’s just another piece of Floridiana that is going to disappear.”
Briny Breezes’ board recently approved the sale for $510 million. The owners of the 488 trailers have until Jan. 10 to ratify or reject the deal. A two-thirds majority is needed to sell. The amount each person would get depends on how many shares the resident owns. Each share is worth roughly $32,000 under the developer’s offer. Owners would not get any money — and wouldn’t have to move out — until 2009.
Kevin Dwyer, 47, is all for the deal. Dwyer, who paid just $37,500 for his trailer nine years ago, would make about $800,000.
“See these pockets? They’re empty,” Dwyer said, a stack of unpaid bills sitting on a table in his single-wide trailer less than 100 yards from the ocean. “I’ve nickeled and dimed my whole life. I hit the lottery.”
Pierson acknowledged that the loss of Briny Breezes means a piece of old Florida will be gone forever. But he said that because of the town’s location on a barrier island, a hurricane could eventually wipe out Briny Breezes.
“At some point Briny is going to face a bad storm,” he said. “There are other potential threats out there other than development.”
Palm Beach County Commissioner Mary McCarty is not so sure it’s a done deal because of constraints on zoning, water, sewage and traffic. “I find the developers extremely optimistic to the point of being delusional,” she said.
For one thing, the community is in a hurricane evacuation zone and has few ways in or out. Developers will have to clear their plans through the state before any dirt is moved, and neighboring communities will have a chance to weigh in.
“This would be extremely complicated and extremely unpopular,” McCarty said. “But people see dollar signs and it sparks the imagination.”
John and Gay Sideris, retired teachers from New York who bought their home in 2001, are conflicted.
“It will be good for us because we’ll be able to help our family, but this is an amazing place to live. You know all your neighbors. You can walk your dog in your pajamas,” said Gay Sideris, 70.
“If you sneeze, a neighbor hands you a napkin,” added John Sideris, 71.
The couple paid just $155,000 for their home and now stand to make close to $1.5 million.
“We’ve been living a beautiful life,” John Sideris said, sitting in a chair, staring out his window at his boat tied up to a dock just feet away.
Asked how he would vote, he crossed his arms and breathed a heavy sigh.
“The money is great, but you can’t get another place like this to live,” he said. “It’s like Club Med.”
___
On the Net:
http://www.brinybreezes.com
http://www.oceanland.com
Unfortunately, these wonderful older personable communities are being stripped from the landscape. Instead are vacuous, sterile, unfriendly, soulless high rise ghetto hutches. Good article.
Ben keeps us so well informed with the roll over in RE.
What is a GF?
Does anyone have any stats on Hawaii? Maui?
Just got a call from someone I helped many years ago, almost a decade.
I haven’t heard from him since that time. He’s now in — drum roll — RE and trying for his license. OMG. No, I didn’t say anything. I have told people and if someone is going to make it their business, it’s up to them to do a little research. Who knows, maybe he can make a bundle listing properties. Don’t they get about 3% just for the listing?
With the news rolling in, that Ben collects for us, it is clear the roll over is complete, yet we are still at the top. With the new FannieMae guidelines, it’s going to kill RE — quickly. An acceleration factor on the downside.
And the Insurance news of Allstate, refusing to insure properties. Big news. People paid so much for the house and they have two inches of land on either side of the free standing subdivisions, it’s all vinyl and glue and no yard. What a disaster.
What are the new Fannie Mae guidelines? Didn’t know anything had been set in stone and made public….
That in order to qualify for the loan backing by Fannie Mae the RE residential buyer must qualify to fully amortize the loan over a 30 year period.
“Fannie Overhauls Core Servicing Requirements”, by P. Jackson, HousingWire, December 29, 2006.
http://preview.tinyurl.com/yxloh5
GF = Greater Fool
thanks.
$14/hr pay in Phoenix. They can handle that $400K mortgage. I reviewed the mortgage for some folks in San Jose CA that earned $13/hr, and they had an $850K supersized neg am, ultra toxic, and completely uneducated about loan. They were in heaven, till I came along and shed a little insight. Truly there, ignorance was bliss.
$13 an hour 850k house? holy sh**!
i make quite a bit more than that and would not even consider a home half that price, people are real stupid and that bank that did a loan like that should be prosecuted
“‘There’s very few new families,’ Getto said. ‘To meet the average sale price, you’ve gotta have a good job. Jobs are the key - we need good paying jobs.’”
Reminds me of Lake Wobegon, where all the children are above average. Hard to maintain high home prices if the jobs to afford them must all be above average.
Hey turnoutthelights … there are more reminders of Lake Wobegon cropping up. Have you heard how one town in Illinois is going to solve their real estate problems? They announced bad news about real estate hurts their sales, so they just aren’t going to report any more housing data! See quote below from Danville newspaper:
“So now, the Danville Area Board of Realtors says it will no longer submit its sales data. Board director Debbie Borgwald says reports of low home prices generate bad publicity across the country for Danville, much of it unfair.”
There problem solved in typical Lake Wobegon fashion. Suspect they think they have out smarted the negative bloggers!
Just when I thought I’d heard everything ….
This is over the top.
Reality of market prices is “unfair”.
‘What’s hurting them is new home buyers are trying to get rid of their excess inventories. When the housing boom was really happening in 2004 and 2005, developers built all these homes. People were on waiting lists,’ Mr. Wilczek said.
The underlined word had better be a misprint. It looks to me like it should read “builders”. If he really meant “buyers”, then it’s a tacit admission that the “buyers” the last three years weren’t interested in owning a place to live, but were really traders who were adding to inventory.
Mr. Wilczek said he believes many people panicked and unnecessarily rushed to sell their houses when the market started changing last year, thinking they would get the best deal if they sold quickly, which contributed to high inventory. ‘When inventory is back down again, things will be fine,’ Mr. Wilczek said. ‘But if the opposite happens, they won’t.’
Pardon me for the previous comment. It appears I may have given Mr. Wilczek too much credit. He’s either a master of the obvious or a compleat idiot.
where’s the guy who used to post inventory in phoenix?
http://www.housingtracker.net/old_housingtracker/location/Arizona/Phoenix/
mo,
What stats would you like?
It would be interesting to see the sales volume vs. declining inventory. Inventory is down to the July levels according to housingtracker.net, but the sales numbers just aren’t there. I know a lot of people have just taken their home off the market, but this would confirm.
ocrenter has the monthly sales numbers on his site. For each month, it’s listed as: inventory (sales)
http://bubbletracking.blogspot.com/2007/01/tracking-phoenixmaricopa-pinal-counties.html
Maricopa County Notice of Trustee’s Sales for December
Jul 05 748
Aug 05 795
Sep 05 669
Oct 05 728
Nov 05 704
Dec 05 749
Jan 06 726
Feb 06 687
Mar 06 790
Apr 06 638
May 06 764
Jun 06 797
Jul 06 851
Aug 06 1019
Sep 06 1114
Oct 06 1238
Nov 06 1493
Dec 06 1407
The numbers speak for themselves.
Nice progression! And it’s just the beginning.
That must be the “rebound” the liars and sociopaths at Bloomberg were talking about yesterday ? The US media stinks!
Boatloads of new home inventory in Chandler area and Gilbert and Queen Creek…. Several new subs getting started in Chandler area too (no houses yet, just grading, etc going on). New builders are offering incentives or just dropping prices AND offering incentives. Went to TW LEWIS sub ($500+ and up) a few weeks ago just to check it out. They were offering $10k off price + 6 months PITI payments (and if I bought they’d through in the lot for free, lol). Nice housings but 1/2M $ just chokes me. Fulton Homes has a big new sub going up in Chandler and sales are laggy, to say the least. Fulton Home Quick inventory available on their web site lists tons of completed and nearly completed homes at, some with $30-90k off listed price. Elite Communitys has been hurting this year. They started out in 2005, I think, at “mid200s” then jumped to “low 300s” and are now down to “low 200s” starting prices on their sign next to subdivision. Resale homes are dropping…and dropping in price. In my hood I’ve seen $50k price drops, or more, on houses originally listed around $380s. Can’t complete with all the new inventory. Should get interesting in ‘07.
FLOYD NORRIS
Published: December 27, 2006
The Securities and Exchange Commission, in a move announced late on the last business day before Christmas, reversed a decision it had made in July and adopted a rule that would allow many companies to report significantly lower total compensation for top executives.
The change in the way grants of stock options are to be explained to investors is a victory for corporations that had opposed the rule when it was issued in July, and a defeat for institutional investors that had backed the S.E.C.’s original rule.
“It was a holiday present to corporate America,” Ann Yerger, the executive director of the Council of Institutional Investors, said yesterday. “It will certainly make the numbers look smaller in 2007 than they would otherwise have looked.”
These fine S.O.B. don’t have any problem. If you think bubbles are going to die ? Think again. Anyways that was a nice Christmas present for the poor poor poor corporate managers. Stinking and rotten politicians from both sides that allow that abuse and that sh-t to go on. It’s not even free entreprise. It’s just plain robbery and you can bet I won’t be investing one nickle again in the US stock racket.