“No News Is Good News” In Illinois
The Herald News reports from Illinois. “Real estate agents in Danville have decided that, as far as the local housing market goes, no news is good news. The local Realtors group says it no longer will submit sales data to the National Association of Realtors, after the area’s median home prices were ranked lowest in the country in a couple of recent quarterly reports.”
“Lagging 147 other metropolitan areas tracked by the national group has generated bad publicity for Danville, some of it from national news organizations and much of it unfair, said Debbie Borgwald, executive officer of the Danville Area Board of Realtors. ‘We looked into it — all avenues of what we should do,’ Borgwald said.”
“Walter Molony, a spokesman for the NAR, said local prices were driven down by ‘bottom fishers,’ investors buying when they sense that a market is at rock bottom.”
The News Gazette. “‘To use a median was not a true reflection of the housing sales market from last year to this,’ said Danville Mayor Scott Eisenhauer. ‘The information as released also made it seem as though housing values were decreasing and that, too, is not the case.’”
The Daily Herald from Illinois. “Despite danger signs of overbuilding, a batch of new, luxury hotel-condos is sprouting across the city. But whether this will work in Chicago isn’t yet clear, partly because the field is getting crowded, even before the doors to the first hotel-condo open, leading some to wonder whether demand can sustain so many new developments.”
“‘It is unclear how much space Chicago, which is already overbuilt in the luxury condo market, can absorb,’ stated Diane Swonk of a Chicago-based financial services firm.”
“This may explain why some smaller hotel-condo developments have already thrown in the towel this year. The Hotel Blake in Printer’s Row recently reversed a decision to convert to hotel-condos, prompting a lawsuit from a Florida company that had put down deposits on several units.”
“Another planned conversion, the Aldens Hotel, went bankrupt after selling 50 percent of its units. The project has been abandoned and the building sold.”
“Chicagoan Ken Jungwirth recently bought one of Elysian’s units and is looking forward to testing the waters when it opens in 2008. ‘It’s a good excuse for us to get out of the house for the night,’ the he said.”
“This is Jungwirth’s first venture into the hotel-condo market and if this investment goes well, he said, he may consider buying a second unit, perhaps in a warmer climate.”
“Trump is already having success with buyers purchasing multiple units, according to sales director Tere Proctor. ‘I even have a doctor — a plastic surgeon — who bought three,’ she said.”
“In Illinois, the housing market continues to transition off the recent boom years for residential real estate. Statewide total home sales (including single-family and condominiums) were down 17.6 percent, compared to November 2005. Year-to-date home sales (were) down 16.3 percent.”
“‘The housing market is stabilizing and is shaping up to be the third best year for Illinois home sales. Conditions are ideal for buyers as we head into the home stretch for 2006 with more choices and room to negotiate with current inventory levels,’ said Robert Zoretich, president of the Illinois Association of REALTORS. ‘Sellers are offering competitive pricing in line with current market conditions.’”
From WBAY 2 in Wisconsin. “A growing number of people in Brown County aren’t paying their bills, putting them in danger of losing their homes. Court records show home foreclosures were up more than 30 percent in 2006, and 2007 is starting off much the same way.”
“With enticing offers like no-money-down loans, combined with falling home prices and affordable interest rates, it is easier than ever to get money for a home. But an increasing number of people, at least in Brown and other Wisconsin counties, aren’t paying for the homes they buy.”
“Financial planner Lloyd Leuthner says adjustable rate mortgages that have moved higher could be partly to blame. ‘If you were barely making it before, you’re not going to make it with a larger rate,’ says Leuthner.”
“Often, though, people are just buying big houses with big payments they just can’t afford, Leuthner says. ‘In some cases it’s just pure irresponsibility, where you bought too much home, you leveraged or borrowed more money than you should have. And in that case, those people should really go out and get an extra job and just find a way to make those payments.’”
“As 2007 rolls in, the foreclosure trend doesn’t show any signs of slowing. Tuesday there are a couple foreclosures in Brown County courts, and the sheriff’s department says it’s already scheduling property sales and auctions deep into March and April.”
“Walter Molony, a spokesman for the NAR, said local prices were driven down by ‘bottom fishers,’ investors buying when they sense that a market is at rock bottom.”
That doesn’t make sense. At all. How can this guy be in a position of either authority or appearance for any orginzation like this? Honestly, I thought the whole realtor profession was a little shady before, but this really makes me think, if a national organization is talking this way, that it’s even worse than I thought.
Its true the very few buyers out there are the ones driving the market down. Its just not fair. People should overpay or not buy at all.
I have a headache
I too read this and went huh? How can more buyers be lowering prices?
This hasn’t started. 2007 will prove to be interestings.
Neil
My answer to these REIC shills is simple: put your money where mouth is and buy the damn houses yourself and save the market.
Used car salesmen are now officially below the Realtwh*res in my list of the top unethical hustlers. Atleast the car salesmen don’t have a national cartel, faux-experts and the MSM as their mouthpiece.
I am confident that one of the good things to come out of this mess would be the loss of control by these crooks over the residential RE market. The combination of the internet and the public backlash to their recent charades will do them in.
“Walter Molony, a spokesman for the NAR, said local prices were driven down by ‘bottom fishers,’ investors buying when they sense that a market is at rock bottom.”
The bottomfisherman cometh in 2008.
How is it possible to drive prices “down” by making the only acceptible bid on them?
Would the sellers who took the “bottom fishers” offer have been better off not selling at all?
What happened to the BIG (40 mil) Ad campaign by Nar. Did it go like phiss in the toilet??? Huh Huh Huh ?
rolfow
buy high !
–
This is hilarious. I am sorry, but this reinforces my observation that we are breeding dupes and Crooks.
Jas
Yes you are particularly good at it.
“There is sucker born every minute.” Barnum once said.
You can console yourself. The whole globe is full of arab, african, chineese, russian, german, english, french, jewish, italian, malgache, haitian crooks and dupes. Americans are just more sophisticated and nice when they do the stealing. Smooth operators.
Hey , you left out others, like the Indians. Is it fair to others? (I am sure indians are happy being left out though! );-)
Hehehe… India is one of the most corrupt societies of present day.
BTW, there is even crazier things going in some cities there in India, The rental return being less than 1% of purchase price. Banks I think pay close to 7% or so.
I wonder how this things became golbal. For example it is almost impossible for forrighners to invest in Residential Real Estate in india.
Have a friend, he claimed his house is worth $110,000 , the rent he can expect $110.
(the owner pays property tax..)
In general third world markets are 3-10x more volatile than developed countries’ markets. Just look at their stock market indices over the last few years. Crazy, maniacal insanity is quite recurrent in these countries. They don’t work their thoughts out even half as well as the flippers here, once they get into the mob mode.
Right. In third world countries, It boils down to the system, Rule of Law.
People think they can get away with other persons life and money.
Truly it is there the sheeple are shorn every day. I will not say that about here is USA.
Those who participiated, knew what they were doing, (or whould have knon that money does not come from thin air, 500K mortage CAN NOT have 1200 monthly payment.)
It is just that the last batch have no one to pass the bag to….
Yes it does for certain particularly well connected individuals. You should ask that to Paulson and Rubin from Golman Sachs.
They know the system is a fu-ken joke and a criminal system. Money litterally grows on trees and pours out the printing presses from Moscow to Zanzibar to Tokyo. For a select group however, Santa-Claus really exist.
That’s with what they pay the other suckers. Perpetually depreciating pieces of worthless paper.What saves you ? It’s just that your paper is a “reserve” currency. How funny! “Reserve” currency of a thing that has lost 97% of its buying power the last 100 years. Ah well there is a 3% left somewhere. Don’t know where it is, but there is a 3% lying somewhere.
It’s certainly a stretch to compare the RE industry to the Nazi propaganda machine under Goebbels, but, as an historical lesson, you wonder if telling lies is the smart way to go for the long run. Early on in the war Churchill made the decision to tell the British population the truth; the good, bad and the ugly. I think history has shown quite clearly that he made a prudent choice. He treated his people with respect and they returned that respect in kind. Goebbels of course lied continually until the Nazis completely lost all credibility with his people.
Churchill was a rare statesman. So was Sadat. Very
The spinning going on now, from Greenspan (past) to Bernake, to Bush, to the RE top dogs to the CEO’s of major corps to the platinum parachutes of hundreds of millions to massive injection of fiat liquidity all add up to DECEIT and loss of credibility in the USA and in the dollar.
The RE is toast. It was driven by spec havens and the GF’s are pretty much locked up in their upside down mcmansions.
This is quite a show.
You also can also include FORD motors and probably GM in the list.
“prices were driven down by ‘bottom fishers,’”
Hmmm, take out the “bottom feeders” THEN see what happens to prices.
Idiots.
How does buying drive prices down?
Of course, prices weren’t driven down by desperate flipping sellers, just buyers who bought against the seller’s will.
Molony rhymes with BALONEY….enough said! LOL
This is funny. These realtor associations act more like crime families every day.
After 11 years living in Chicago, I’m convinced every lifetime Illinoisian has some sort of mob and/or political connection.
The local Realtors group says it no longer will submit sales data to the National Association of Realtors
Good. This will be the opportunity for another organization to provide that data. Hopefully somebody with less conflict of interest.
Ooooh, they really showed us, didn’t they. Now we’ll have to get transaction records from the county.
Plastic surgeons, lol. Been looking at too many Dow Cornings and his brain has become siliconed.
Doctors have terribly bad business & investment sense so this doesn’t surprise me at all.
I never believed this statement when it was first uttered on this board, but I’m a believer now. Doctors should stick to fixing people, not “trying to make money.”
I too was always impressed at how doctors knew so much about investing when I worked in asset management. They knew all the answers. Funny thing was, I don’t think they took too many finance courses in med school.
Lawyers were almost as bad.
I’m a lawyer and one of my former bosses called Doctors ‘idiots with pens’ which is pretty much what they are. They sign perscriptions, checks, lab reports, mortgage notes, whatever you put in front of them, they will sign.
Re: doctors, lawyers, and others…..I think the problem is that some people in high level professions (or are considered uber-smart in their field) convince themselves that they are as smart about *most* things. They would be hard-pressed to think or behave otherwise, or their images would be tarnished.
BayQT~
Most lawyers are actually pretty good with money contrary to popular belief. Our job is primarily dealing with other people’s problems, usually money problems, and we learn a ton from other people’s mistakes. Moreover, we deal with other people’s money so often that we have to be responsible with it or else we lose our law licenses.
Of course, there will always be the idiot who overextends himself and shows off the lawyer bling, but, those exist in every profession.
Huh?
As was said above…
doctors, lawyers, and others…..I think the problem is that some people in high level professions (or are considered uber-smart in their field) convince themselves that they are as smart about *most* things.
Doctors deal with the human body and healing all day. I shouldn’t expect them to be experts at handling money.
I, on the other hand, deal with other people’s money all day long. I help people fix their money problems, or handle the legal (financial/legal) aspects of their investment and money making schemes. Trust me when I say that lawyers, in generaly, do well when it comes to handling, investing and dealing in the finances.
As a money manager over 25 years I found that lawyers and doctors in general were not good investor. The reason is probably due to ego. The market does not care if you win or loose. The best investors were businessmen sometimes the “awh shucks” sh.t kickers with little education but street smarts. Dentist were also pretty good. Doctor’s wives were the worse.
Just one more example of the Realtors trying to manipulate the data. They don’t like what the numbers say, so they just refuse to report it, as if that will somehow magically make the numbers more to their liking.
And I don’t understand why they would be upset to see that their homes are the lowest cost. For a buyer, that means that it’s much more affordable to live there. You would think that a low cost of living would be a good thing, but apparently not for the Realtors.
But if people find out we have lower prices they might want to move here and that would drive prices up and that would be bad for our comissions ! Er, wait….why are we protesting having the lowest prices again ?
The trend continues! Santa Barbara County Realtors (CA) stopped reporting last year among others. Censorship does not sit well with me.
I don’t know, I think we can learn a thing or two from the realtors. The next time my wife wants to know how much something that I bought costs, my response will be: “honey, that data is not available at this time.”
That’s the comment I was looking for! Bingo! Glad “somebody” remembered. For NAR to have ANY credibility they have to do one of two things:
1. Up and sh@t the data or……..
2. Suspend and or revoke their membership!
To do otherwise shows them for what they are. A cartel with a crime boss back east but truly run by “local families”.
Oh and that goes wether your local realtwhore organization is in Santa Barbara, CA or Danville, IL.
They (Santa Barbara Realtors) will shoot themselves in the foot. Increased uncertainty (especially when it is related to the possible reasons for Realtors to stop reporting) leads to increased buyer precaution, lower buyer demand and lower prices.
Investment death null - when people in the medical field get in. That’s always a clear sign to get out.
absolutely true, physicians are notoriously bad with money, the other death knell is when your barber/waiter is investing, I had my favorite bartender talking about flipping houses last year, that is when I knew… (the orginal quote came from peter lynch on the barber thing)
Actually barbers are some of the best investors. They get to hear all the inside info from the CEOs whose hair they cut. Not all of them, but this is NOT apocryphal.
“Often, though, people are just buying big houses with big payments they just can’t afford, Leuthner says.”
Yup, neighbor’s down the road been trying to sell since March 06′. No buyers so they’re renting it out. Where did they go? Oh that’s right, a supersized McMansion in Oconomowoc, WI.
Now they’re bitching about utility bills, the property taxes, insurance… You try to warn them but they dont listen. geez
waaa…waaaa…waaaa…
Your neighbors now live near the best skiing area in the state! HaHa.
Oconomowoc… one of my favorite place names. I have this little song I sing the name to, oconomowoc, oconomowoc, oconomowoc… now it’s going to be in my head all afternoon.
Oconomowoc can’t hold a candle to Ashwaubenon!
From a guy who grew up in Oconomowoc, WI. I can say unequivocally that it has the best snow skiing in the state …. on a landfill.
Now if you’re talking about waterskiing it’s the place to be with a wide variety of lakes to choose from for your boating/skiing pleasure.
Was your friend buying one of the new houses in Pabst Farms or one of the other developments in the area?
That’s what I need to get out of the house more… buy a condo and visit it. Maybe two or three.
It pisses me off the way they HIDE valuable data. I have started a blog showing flopped flippers in Los Angeles / Ventura County this data is hard to find!
I’m trying to list homes where people lost big $$$$ on homes, there are many many out there everywhere we must document this ourselves fellow bloggers to show RE does go down. You can start a blog for free in 10 minutes.
http://realestatehaircuts.blogspot.com/
Here is a condo for sale thats lender owned for 604,900. It was purchesed in 9-08-05 for 799,990. Same area purchased 9-02-05 for 700,000 and sold again in 6-22-06 for 412,474. Both condos are 5 minute walking distance from water.
Cool blog. I’ve bookmarked it for future visits. This show is going to be quite interesting….I’m bringing popcorn next time.
BayQT~
Crash Landers,
Very funny stuff! Good to see they’re getting their turn in the barrel too! I couldn’t post a comment though. Keep it up!
Only recently did we start seeing this situation where flippers lose big $.
OTOH most sellers have a mountain of cash(100’s of thousands) in equity due to Los Angeles generally being a very old town (compared to AZ/NV) so overwhelming most people bought years ago. It would seem this situation can drive prices lower since they ‘can’ lower thier price and the casey serin’s cannot.
O-M-G
LOL
“Trump is already having success with buyers purchasing multiple units, according to sales director Tere Proctor. ‘I even have a doctor — a plastic surgeon — who bought three,’ she said.”
Isn’t there a saying that goes “A doctor and his money are easily parted.”?
Totally off topic-
Ben, you once mentioned there was a link on your money & metals page to a bank where one could invest in CDs in foreign currencies. I haven’t been able to find it, though. Could you provide an URL? Thanks.
Sure, the Everbank icon is on the sidebar.
But everbank’s rates seem low to me. If you could invest in foreign bonds directly, interest would be much higher.
Everbank skims a few points of yeild, I’m not a big fan of investing through them.
Ok, so it will no be ” you just have to trust us, we are professionals” .. ummm, yeah, right…funny the realtors loved reporting the numbers in 2005 I guess back then they were representative of what was really happening, and the realtors used those numbers to encourage people to buy now or be priced out forever… I need a drink…
They’re handing out coolaid for free at open houses.
Kool-aid? I think coolaid was a telethon to benefit Snoop Dog.
“Another planned conversion, the Aldens Hotel, went bankrupt after selling 50 percent of its units. The project has been abandoned and the building sold.”
There is that word again, BANKRUPT ! In a real estate transaction. Hmmm…. maybe this isn’t such a sure thing after all. The stakes seem to be pretty high.
HEADLINE of article in today’s MSN MONEY:
2007 warning: Avoid Housing
“No news is good news” : Illionois.
Withholding information in deperate effort to keep prices high surely shows shortage of thinking.
GS: what do call those who does not see the elephant under the rug.
DO we have any new name for them other tham sheeple and FB.
Remember Mr. Magoo?
http://en.wikipedia.org/wiki/Mr._Magoo
Perhaps they could be called Magoos or MG’s
“The local Realtors group says it no longer will submit sales data to the National Association of Realtors, after the area’s median home prices were ranked lowest in the country in a couple of recent quarterly reports.”
When, when, when does someone step in and stop letting the realtor groups control this information !
Its like letting Enron tell you how much money they are making ! There is so much manipulation of the numbers that nobody knows for sure what is going on until its too late. Except us, of course !
OK, little question here… how is the NAR of realtors going to calculate the national averages if Illinois doesn’t submit their numbers ? I guess they will just exclude the area with the lowest prices ! Yeah, that makes sense. Sheesh !
If the Realtors won’t provide the info I suggest boycotting the local Realtors.
The USA Treasury lets the private Federal Reserve control what is supposed to by OUR money.
“Conditions are ideal for buyers as we head into the home stretch for 2006 with more choices and room to negotiate with current inventory levels”
Please tell me how more choices and room to negotiate leads to prices going up
“The local Realtors group says it no longer will submit sales data to the National Association of Realtors, after the area’s median home prices were ranked lowest in the country in a couple of recent quarterly reports.”
Or… maybe the NAR asked/begged Danville to stop reporting such crappy data to them so they aren’t pulling down the overall figures so much.
“‘The housing market is stabilizing and is shaping up to be the third best year for Illinois home sales. Conditions are ideal for buyers as we head into the home stretch for 2006 with more choices and room to negotiate with current inventory levels,’ said Robert Zoretich, president of the Illinois Association of REALTORS. ‘Sellers are offering competitive pricing in line with current market conditions.’”
WTF! I hope not to meet that guy…Sales are waaayyyy down from last year and he is talking about the third best year for sales!!?? This guy is an idiot.
Sellers are not giving up for what I have seen in Naperville. Some reduced their asking price by 5k or 10k (on 300’s or 400’s selling price!) and all of them have their houses in the market waiting for the spring “rebound” (hehehe). There is a townhouse in my neighborhood, asking price 265k, no buyers, no change in price, it has been for sale since last August. A house nearby, asking price 365k (it has been reduced from the 400’s) for sale for 7 moths, also for rent, still empty although it’s a nice house but the lot is tiny…There are more houses for sale in my neighborhood since at least last summer with open houses even during the snowstorm (I just cannot imagine going to an open house during a blizzard) but since they have not reduced their prices they are not selling. The only reduction on prices have been done by the builders and they are the ones selling something right now.
If the spring sale season is as “good” as last year’s some will start to understand they have to reduce prices.
Florida land evolved from a sand bar to a mosquito-infested forbidden land and now emerges as a tropical paradise. Unfortunately, the sandy-soil conditions haven’t changed that much over the last one thousand years. Our battle-worn lawns and gardens don’t thrive in these conditions and have a tough time surviving in the hostile environment of heat, humidity, weeds, salt intrusion, poor water retention, invading insects, fungus and other pathogens.
This is from a pest control co web site. http://www.trulynolen.com
GO FLORIDA
I always liked how Truly Nolen advertised with “bugs” parked everywhere with the company name painted on them.
I have a question about the prevalance of suicide financing in the Chicago area. Does anybody know how common interest only, neg am, etc. financing was around here? Statistics would be appreciated. Most other articles from around the country cite them as a reason for the downturn, but not in Chicago. I can’t believe that everybody who bought an overpriced McMansion here could afford it.
Kathy, here’s a link to the “map of misery” from businessweek a while back. It shows 7.8% in chicago area used payment option loans. Not high compared to more bubbly areas, particularly california (wow!) and Florida.
http://www.businessweek.com/common_ssi/map_of_misery.htm
I don’t think affordability is issue in Chicago area, as incomes are high relative to prices compared to more bubbly areas, but there is all sorts of excess inventory.
according to this Chicago Tribune link, the affordability index is at 95% in Chicago (they didn’t list what methodology they used to compute “affordability”, so i’m a bit suspicious).
The median price is $283,150 versus median income of $65,000 (ratio of 4.36 to 1, which is high, but not exorbitant).
http://www.chicagotribune.com/classified/realestate/financing/chi-0612240400dec24,0,3317059.story?coll=chi-classifiedfinancing-hed
I don’t have inventory numbers, but there are so many thousands of units being built right now it makes me dizzy to think about it.
Yeah but don’t forget that the houses in developed areas where people like you and I would want to live cost well above $283K. One can find a house in a safe area for $283K but you’ll be in a outer county, not Cook, and you’ll be driving an hour and a half to get into the City.
Thanks, I saw that before. I guess I just doubted its veracity. Where I live in the western suburbs, no way would the median income buy the median house. The median income is about $80,000 and the median house is about $450,000. That $450,000 gets you a 3 bedroom cape cod in average condition. The McMansions go for $900,000 and up, and I just can’t see enough people being able to afford the numbers that have been bought. I’ve thought about this a lot, and either a lot of people in this town have $300,000 plus salaries, or they’re just more willing to bet it all on the house (figuratively and literally).
There are a ton of people with high incomes in the Western suburbs. Think dual professional incomes….$300K is a bit high but I’ve personally seen plenty of W-2’s and tax returns from those in the Western suburbs who are well above the $150K or $200K range.
I used to work for one of those upscale companies near Naperville. From what I saw, my guess is that all those people who have the $900,000 homes have very nice employment contracts. At that level, the company will usually cover your loss if you are transferred out of the area. Executive moves are so common at that level they have very little risk. I have one in my contract but since I work from home there is no chance of a move.
However, I used to live in Sacramento and worked as a State employee. The State would never cover the loss.
So here is a little buying hint, if the person is being transferred find the position and the company. If relocations are covered, after about four months it will be transferred to a relocation company who will dump it in a few months.
I saw a graph couple of months back that had 7% of homes purchased( I am not sure on the timeframe) had i/o or neg am loans……which was considerably less than any other major real estate market. Phoenix almost 20%, same with Vegas, Florida and California all major markets above 30%. But it is surprising how many 500-750k homes in DuPage, North Cook, and Lake counties people own, especially with collar counties high property taxes, usually above 2%.
Again, those suburbs you talk about are my bread and butter. There are a ton of people out there making a ton of cash, and even more money ‘trading up’ in the last few years. You would never believe how much money people in sales, consulting, insurance and finance earn. Not a single week goes by where a lawyer in my office reviews a client’s income and says, “why did I go to law school.” I $hit you not.
yes, that is the graph……my memory is not bad, just yet….I overestimated the Phoenix market.
It seems to me that the builders/realtors and flippers(if they can) are the only ones selling (cause they know better). The other FB “average joes” are waiting for spring. Any bets on the dates of the sob stories on Oprah and other shows? Get out your camera for the 2007 season of America’s Funniest FB an GF.
Ha!
I am from Danville originally. My mother is a Realtor, and an honest one at that (the 0.0001%). I am not saying this because she is my mother… Anyway, just spent a week there with the parents and saw this headline in the local newspaper and quizzed her about it. Apparently, Danville has been used in many, many MSM sources about having the least bubbly market in the US. The local Realtors are tired of it.
On the other hand, a co-worker in her office took a COLD CALL from a NY investor that bought, over a years time, 150 houses. Of course, all to be rented to Section 8 candidates. Scum.