“We Are Now In Reality Time”
It’s desk clearing time for this blogger. “The housing slump hitting New Hampshire is also hitting the state budget. Economist Russ Thibeault says fewer properties are selling, and those that do sell are selling for lower prices than they did last year.”
From Pennsylvania. “The banner advertising ‘Luxury condos from the 300s’ guarantees that Downtown living is not in Tom Kuretich’s future. ‘I’d have to sell my wife and two kids to afford that,’ said Kuretich.”
“Heather Miller sold herself on buying a new condo Downtown. ‘I wanted to be on the cutting edge of this Downtown explosion,’ said Miller.”
The Washington Post. “As home sellers grew more frustrated with the slow local real estate market in recent months, they abandoned their for-sale signs and put their homes up for rent. ‘This is the first sign that the cooling housing market is having an impact on the rental market,’ said Gregory H. Leisch, CEO of Delta Associates.”
“Maurice Philogene said he has bought at least 20 condos since 2001. He cut Yvonne Carter a break on the rent because she signed a two-year lease. The unit, he said, is ‘pricey — it was nerve-racking to cover the mortgage.’”
The Financial Times. “A leading estate agent has called the top of the property market, claiming an influx of sellers ‘motivated by greed’ is increasing the supply of homes for sale and creating a vicious circle that will send prices lower in 2007.”
“Henry Pryor says people are looking at the prices their neighbours’ are getting for their houses and deciding to follow suit. ‘They are saying, ‘we should cash in our chips,’ Mr Pryor said. ‘We may look back and say the fourth quarter of 2006 was the peak,’ he said.”
From Texas. “I have to laugh when, on the one hand, I see all of the doom and gloom about the collapse of the housing market and on the other hand, look at the boom and boom of cost of Collin County land. If land is selling at higher and higher prices that foretells a strong housing market next year. This housing is not part of a housing bubble in danger of collapse.”
From Colorado. “Local new home construction declined again in December. The slide makes for the fourth consecutive month that housing starts have dropped in Pueblo County.”
“In September, longtime regional economist Tucker Hart Adams cautioned Pueblo housing officials not to overbuild. ‘You don’t want to build more space than you need,’ she said, referring to the nationwide housing bubble she expects to burst this year.”
From Hawaii. “While none of the experts forecast a plunge for Hawaii real estate, the consensus is that it will be a while before homeowners see a return to virtually automatic short-term profits on their properties.”
“Hawaii’s real estate market got its own winter chill in November, when the Oahu median price came in 4.8 percent below the year before, the first significant year-on-year drop since the late 1990s.”
“Bank of Hawaii Economist Paul Brewbaker is adamant that ‘this ain’t no stinkin’ bubble.’ But he also cautions that any return to the price upswings of recent history may be one to five years off.”
From Oregon. “If you thought 2002 was a strong year on the Central Oregon real estate scene, then you’ll probably like the cooled-down climate in the year ahead, a Redmond appraisal service predicts. About 8,400 property sales took place in the region during 2006, a one-third drop from 2005.”
“Not calling it a burst bubble, she said the past couple of years were ‘a glory time that everyone benefited from’ in the construction and real estate businesses and related fields. And while some parts of the country are suffering more than the High Desert, Drahn said we, too, are ‘now in reality time,’ when it comes to real estate.”
Another great week! My thanks to those who support this blog. Please check back this weekend for news, your market observations and topics.
“Heather Miller sold herself on buying a new condo Downtown. ‘I wanted to be on the cutting edge of this Downtown explosion,’ said Miller.”
Wow, Heather is going to make some lucky guy a great ball and chain!
She sounds like just the woman I need.If she can sell herself on the downtown exlplosion I can imagine what else she is willing to sell.The last thing I need is a high maintenance woman spending my money all day.I think a lot of women think the man is simply a paycheck these days.When times get tough they are gone and we wonder why most everyone is divorced these days.
Maybe Heather is being “subsidized”….wink…wink.
” ‘I’d have to sell my wife and two kids to afford that,’ said Kuretich.”
“Heather Miller sold herself on buying a new condo Downtown.”
Human trafficing– the new solution to the housing affordability problem.
Maybe she’s talking about a literal explosion, when all the FBs start torching their own properties in a crazed attempt to get out from under their loans.
A Fannie Mae “bond” fire ?
Please. Plenty of sensible, hard-working, high-earning and saving women out there. Some of them are even the ones convincing husbands not to buy into the bubble. And on the flip side there are plenty of foolish spend-thrift husbands too. Why do some on this blog always play the stereotypical gender card? It’s like the immigrant threads. Tiresome. Can’t we just talk about housing and leave the predudices at home?
Can’t we just talk about housing and leave the predudices at home?
Ha! Very punny.
I vote in favor of the prejudices. If I want bland blah, I can read MSM.
This is why:
http://www.youtube.com/watch?v=Ubsd-tWYmZw&search=suzanne%20researched%20this
Generalization? Yes.
True to life? Anecodtally Yes.
I never get tired of that.
I think Heather had to sell her husband and two kids to afford living Downtown, thus the ball and chain has already been shed from her husband.
Oh, for Pete’s sake! I’m originally from Pittsburgh, and let me tell you, Downtown is perennially on the verge of Something Big happening. But that Something Big never seems to materialize.
How youins doin?
- from Kittaning
MD, call me a jagoff, but the correct expression is:
How y’inz doin’?
But there’s all the shopping to choose from! She can go to either Kaufmann’s, Horne’s or Gimbels!
(Only native Pittsburghers will appreciate this… maybe I can throw in Jenkins Arcade, too.)
Horne’s? Gimbels? Kaufmann’s? LOL. Your post made me laugh. There really isn’t too much downtown nowadays is there? Lots of eateries, bars, and liquor stores but that’s about it.
At least they’ll be able to walk across the street to Mickey D’s.
Alas - the AMAZING Kaufmann’s in now - gasp - Macy’s
“Kaufmann’s, Horne’s or Gimbels!
(Only native Pittsburghers will appreciate this… maybe I can throw in Jenkins Arcade, too.)
And the Deluxe Arcarde, home to 20 Gottlieb pinball machines. The good ‘ol days.
How yuuu-ins doin? Don’t forget Jamesway in Kittaning
This year’s Something Big will be the loss of the Penguins if Kansas City and their FREE hockey arena have any say in the matter. It would just be another nail in the coffin. Pittsburgh is dying and has been for many, many years.
Amen, slim. Take it from somebody who has been going to either school or work in downtown Pittsburgh for the last 33 years — this urban utopia idea will NEVER happen. The two condo towers being finished now — these will be the last we see for quite some time.
And the taxes — good grief, they’re ridiculous. Income, real estate, transfer — add it all up and you feel as if you’re paying to the IRS.
Like to play? I’ve been making my living at it since 1997
Txchickymama-this comment was from another thread but, i wanted to make sure you saw my response…
Know disrespect was intended, you know i have sung your praises in the past. I humbly uncapitalize my moniker as a sign of respect.
Speaking of downtown condo explosions, has anyone been near Little Tokyo in Los Angeles? The amount of condo developments they’re putting up is staggering. Pulte is putting up a 190 unit development just a mere 4,000 feet away from lovely Skid Row. Here’s the link to the development.
http://www.pulte.com/homefinder/community.asp?commorg_acctcode=3541
The picture of the happy young yuppies toasting their new found dream home is priceless. Wait ’til they open their window and smell the nice fresh aroma of musky homeless person urine. Definitely ‘cutting edge’ stuff!
the only thing good about that area:
Phillippe’s French Dip
Shabu-Shabu
Yeah, but even if you’re a Shabu addict, you can always drive in from Silverlake or Hollywood and at the end of dinner, escape again to where the smell of human waste is not quite so strong…
Ah just kick the homeless out with teazer guns, or better kill them like they do in Brazil. You can dump them in the sea or even better, enroll them in the army for Bagdad. Just joking. In the past it was regularly done. I don’t see a lot of Minutemen complaining about the Hispanics enrolling in the army and going to Irak to get their US citizenship. Strange ? Mercenaries for the roman empire ? Why not San Francisco hobos? That way you could boost the bubble perpetually and get rid of the looser in a productive way.
txchicky- From another thread earlier……..
Like to play? I’ve been making my living at it since 1997
i meant no disrespect, you know i have sung your praises in the past. I humbly un-capitalize my moniker in your honor.
Ben:
Wherever you are off to on the weekend have a great time!
“We are also seeing greater demand for attached product — particularly townhomes. Many builders looking for opportunities to cater to the empty nester, young professional and young married markets have found success in townhome product.”
Let’s get something straight. The demand for “attached” POS’s is directly related to the fact that they are by and large “less expensive.” People want affordable housing you dipstick.
Bear…couldn’t agree more. These people and their “logical deductions” answer that age old question of “where did that kid in your 4th grade class go that wasn’t very good at school but talked big and was a self-proclaimed know-it-all”.
Now we know…..RE/building industry.
No. We are never in reality time. Don’t worry they will find a way to hide eventually the reality time.
From Texas. “I have to laugh when, on the one hand, I see all of the doom and gloom about the collapse of the housing market and on the other hand, look at the boom and boom of cost of Collin County land. If land is selling at higher and higher prices that foretells a strong housing market next year. This housing is not part of a housing bubble in danger of collapse”
Did you put this verbal diarrhea on here just to raise my blood pressure, Ben? Hahahah. Check the bottom of the page and see who this clown is.
I read that, shook my head, and mumbled ‘Bucky, I hope you remembered to take some chips off the table before you doubled down on that last one.’
Ed izzzzzzz rrrrrrightttttt.
Check out his web site and take a look at his company’s developments….lots and lots of expensive houses and lots but few are sold. If it’s that hot, why are they still on the market? Dunno; maybe I’m missing something….
“If land is selling at higher and higher prices that foretells a strong housing market next year…”
Sure buddy, whatever you say. This guy must be drinking the Scope. When land starts skyrocketing, I think that’s a sign that the mania has set in, and it’s time to run for the hills. That some of these builders haven’t figured that out and continue to overpay just blows my mind. Do they not see what is happening all over CA, OR, WA, NV, and AZ? Builders overpaid for land, built too large of a house on too small of a lot, then baked all of that into a selling price which less than 10% of the population can afford. So the homes just sit and sit and sit. Don’t these guys ever consider their market? Man they’re stupid.
Collin County, Texas. That may be the worst place in the U.S. to buy a house if you ever hope to resell.
what exactly is there, btw? Like a big fat nothing?
Guns. Lots of guns…
“This guy must be drinking the Scope.”
I gotta try this one. My new year’s resolution was to cut back on the hairspray coladas.
Remember All: TEXAS is Bubble Proof and Recession Proof. After all everything is Bigger in TEXAS, but hopefully not the housing bust! Dont be suprised to see it coming after all we are the POP in the crack of the cattle whip!
Bullet proof recession too ?
Remember All: TEXAS is Bubble Proof and Recession Proof. After all everything is Bigger in TEXAS, but hopefully not the housing bust! Dont be suprised to see it coming after all we are the POP in the crack of the cattle whip!
4th grade - we had a kid move to our town in Northern PA from Texas. The teacher pointed out that Alaska was bigger than Texas and the kid had a *fit*. He was quite flabbergasted because he was sure Texas was the biggest.
And it was part of Mexico. Remember the Alamo and that propaganda bull. You stole it from the Mexicans in a good old style war. Freedom fighters and all that crap.
Is Texas bullet proof too ? Not for President Kennedy.
But I am sure Bush has no problemo with the guys from Texas that murdered a liberal. Nope don’t like Texas.
It makes me think of the Ben Laden’s business associate.
Heres a quote from none other than the late great republican president Dwight Eisenhower…
“Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt, a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.”- President Dwight D. Eisenhower
Texas is a breeding ground for creeps, freaks, nosepickers and knuckledraggers.
Amen.
Please keep taking your Prozac and stay off that DailyKook website
Thats right. Attack the messenger as you can’t attack the message.
Thanks for playing.
Ike was either born or raised in Texas. Is Abilene in Kansas?
Thats right. Attack the messenger as you can’t attack the message.
Isn’t Galveston one of the places where they privatized social security? I understand this is a HUGE success.
Talk about a scam, the RE bubble pales in comparison to social security.
“Not calling it a burst bubble, she said the past couple of years were ‘a glory time that everyone benefited from’ in the construction and real estate businesses and related fields.
Did this benefit towns that lost young families because of high housing costs? How about all the towns where teachers, nurses, fire fighters, police, etc. can’t afford to live where they work? Did this benefit folks who are strapped to the gills with mortgage debt they’ll never be able to pay off?
When will Mr. & Mrs. Sixpack wake up to the fact that none of this was really for their benefit?
52 week low on LEND. Is the Street losing faith in the sub prime arena?
A few more cents and this thing is all the way back to Oct 2003.
I wouldn’t touch anything in the lending arena w/ a 10′ pole for some time.Things are bound to get worse from here.
Nevermind - We already at Oct 2003 levels…
Look at the chart on NEW. Going down lockstep with LEND.
CFC is doing great. Up about 34% over the last four months or so. What’s up?
Betting on the survivors. Remember, CFC said at some analyst meeting in Dec that 70% of their option ARMs w/2007 resets had already refinanced.
I remember I was a bit surprised and my first reaction was that they were puffing.
Really, I only think that helps them if the borrowers refinanced with SOMEBODY ELSE.
Countrywide Financial Chief Executive Angelo R. Mozilo Exercises Options for 70,000 Shares
NEW YORK (AP) — The chairman and chief executive of Countrywide Financial, an independent residential mortgage lending company, exercised options for 70,000 shares of common stock under a prearranged trading plan, according to a Securities and Exchange Commission filing on Thursday.
In a Form 4 filed with the SEC, Angelo R. Mozilo reported he exercised the shares Thursday for $9.60 apiece and then sold them the same day for $42.22 apiece.
Anyone want to bet against Angelo’s judgement on CFC’s prospects?
What, you wouldn’t take a $34/share profit if your options were about to expire?
Prearranged? Well I think that may help tell us how long HE thought the company was in the porcelin spin cycle.
Not enough religion.
Currencies
Watch for the Greenback to Grow
By Marc Chandler
RealMoney.com Contributor
1/5/2007 4:30 PM EST
URL: http://www.thestreet.com/p/rmoney/currencies/10331030.html
The U.S. jobs report caps a string of impressive data that should but probably won’t silence the pessimists. Already the unseasonably warm weather in the U.S., particularly in the Northeast, is being cited by some to dismiss the recent stability of new- and existing-home sales and the stronger-than-expected employment data.
It’s unlikely that one of the biggest bond fund managers would change his call for 100 basis points in cuts from the fed funds rates this year. Nor will many of the more aggressive economists at some of the investment houses who make their mark with their unceasing ability to find a cloud in every silver lining change their tune.
Nevertheless, the recent economic data reinforce my more optimistic outlook. I suspect the consensus is using the wrong verb tense here. The U.S. economy is not slowing down. Rather, it slowed down and now appears to be poised to reaccelerate.
The verb error also applies to the euro zone and Japan. Those economies are not accelerating but rather accelerated previously and now are moderating.
Less of a Home Sales Headwind
There were two widely recognized and well-documented headwinds to the U.S. economy: housing and autos and their related sectors. Those headwinds may not have disappeared, but their drag has lessened.
New-home sales rose 3.4% in November, more than twice what the consensus expected, and stand almost 7% above the trough set in July. Existing-home sales were expected to decline in November. Instead, they rose 0.6%, the second consecutive monthly rise after a run of consistent declines since April. The most recent mortgage application number, while reflecting volatility at the end of 2006, is more than 10% above the trough set in October.
My argument isn’t that the housing market has definitely bottomed. Rather, I make a more modest claim: that the housing market will not subtract as much from growth or sentiment as it has.
In any event, I have consistently downplayed the link between the housing market and consumption. The key to consumption in the U.S., I argue, is not housing but income and credit conditions.
Personal income in November stood nearly 6% above year-ago levels. To the extent that wages are a critical form of income, the December jobs data point to continued gains. Average hourly earnings rose 0.5%, the most since April. On a year-over-year basis, average hourly earnings rose 4.2% in December, the highest since late 2000.
The one bet that has proven wrong time and time again has been a bet against the U.S. consumer. Personal consumption expenditures, which drive roughly 70% of the economy, have reaccelerated since the summer. Specifically, in July, personal consumption had slowed to a 2.3% year-over-year rate. It has risen steadily since. As of November, it was up 3.8% above year-ago levels. Personal consumption in October and November have already matched the third quarter’s entire rise, and on the basis of some preliminary data, it appears that personal consumption rose in December.
A Windfall of Car Sales
That brings us to the second headwind to the U.S. economy: autos. The cuts in production have helped address the inventory overhang problem. December vehicle sales were at a 16.8 million unit pace, the best since the July outlier monthly count of 17.2 million. This is the third best performance of the year.
Admittedly, auto sales tend to be strong in December, and it may be premature to conclude that the headwind has diminished substantially, but that seems to be the case. Moreover, some foreign-based producers are expanding or plan to expand capacity in the U.S. More important: Auto sales figures suggest favorable personal consumption expenditures and retail sales figures for December.
Business investment also appears to be making a positive contribution to growth. In the second quarter of 2006, nonresidential investment slowed to a 4.4% increase, the lowest since the first quarter of 2004. It recovered to a 10% pace in the third quarter. Proxies that some economists will use to help forecast investment, such as the shipment of durable goods, appear to be stabilizing.
Domestic demand isn’t all that’s healthy; foreign demand is strong as well. The most recent trade data cover the month of October and show that exports were up 13.8% year over year. The U.S. trade deficit improved more than expected during the first 10 months of 2006.
The improvement since summer has been especially pronounced. After peaking in August near $68.5 billion, the deficit has fallen by $10 billion to stand at $58.8 billion in October. I believe there are real and conceptual problems with comparing the trade deficit with the Treasury’s International Capital report (TIC data), but recognize that it’s a metric the media and some analysts like to cite. By this measure, the U.S. trade deficit is being overly financed by net foreign purchases of U.S. assets.
The U.S. dollar itself has been hobbled, especially against the European currencies, by three main considerations: interest rate differentials, the U.S. current account deficit and the diversification by public and private investors away from the greenback. I have argued that the diversification story has been exaggerated by some observers and the media. The latest reserve figures released by the International Monetary Fund at the end of last year lend support to my view. In the third quarter, the dollar’s share of global reserves actually rose slightly.
Dollar Gains Ahead
This analysis and summary of my views warns of additional near-term U.S. dollar gains, especially against the European currencies. I’m also reminded of the recent seasonal pattern for the dollar to recover at the start of the year from the frequent selloff at the end of the proceeding year.
In the near term, I see the downside risk on the euro extended toward $1.2825-$1.2925. As a guide, note that the 100-day moving average comes in near $1.2870, and the 200-day moving average, which the euro has not traded below since March 2006, comes in near $1.2750. On the upside, we expect the euro to be capped in the $1.3100-40 area.
The downside risk for sterling extends toward $1.90 area. The 100-day moving average comes in near $1.91, while the 200-day moving average is at the more distant $1.8760 area. Sterling has also not traded below its 200-day moving average since last spring. On the upside, the $1.9450-$1.9500 area is likely to cap bounces.
The sharp drop in the euro and sterling in recent days has left short-term technical indicators terribly oversold. A bounce in coming days would probably provide a new opportunity to short. Many speculators probably have been trapped with stale long currency positions and are likely to see a bounce as an opportunity to pare losses, while real investors are likely raise hedge ratios on European investments or reduce their exposure outright.
“Personal income in November stood nearly 6% above year-ago levels”
That’s the beauty of average numbers. Those Goldman Sachs guys (and the rest of the top 0.1% earners) sure pull up the average.
The consumer, consumer, consumer. Does that consumer energizer bunny never run out of steam ? Does it reach a point where it has all the debt it can handle and can’t refi or HELOC the home anymore ? There has to be some sort of limit, right ?
How are auto sales affecting the Detroit Property Market?
From Housing Tracker:
http://www.housingtracker.net/old_housingtracker/location/Michigan/Detroit/
Date Inventory 25th Percentile 50th Percentile
(Median) 75th Percentile
01/01/2007 28,756 $72,900 $116,100 $169,500
01/01/2006 22,483 $84,900 $125,000 $176,900
Inventories up 28%
25th Percentile home prices down 14.1%
50th Percentile home prices down 7.1%
75th Percentile home prices down 4.2%
Blue Collar Detroit workers are getting killed, and it is showing…
Who cares? As long as Rubin and that 800 million sh-t Paulson make a lot of money, there is no problemo. “What’s good for the guys at Goldman and Sachs, is good for America.” And shut the ….
It has a nice name too. The “hollowing” of the US economy.
Yeah it’s going just great at FORD Motors and GM. Firing on all cylinders ! Firing and firing and firing ! Closing plants one after the other. Hey everything is great great great!
I am sure that the construction industry also is really booming.
Phony baloney statistics are always dissiminated at the start of the year. It helps the bastards at Goldman Sachs sell more paper. I wouldn’t be surprised that the “great” increases in jobs come mainly from the Pentagon spending like crazy on planes and whatever. Why should they stop lying? As for the consumer in the US, he has lost a long time ago any reason. And today they even sell you toasters with a 36 months credit installment plan ! Tough it out and laugh at their lies.
Even Mayor Luke Ravenstahl, who at 26 earns $96,511
PGH has a 26 year old mayor…
What, no boomers left where the Allegheny meets the Ohio?
Nope. We had to leave the ‘Burgh to find work.
“Bank of Hawaii Economist Paul Brewbaker is adamant that ‘this ain’t no stinkin’ bubble.’ But he also cautions that any return to the price upswings of recent history may be one to five years off.”
This line (’this ain’t no stinkin’ bubble’) has already showed up in the MSM a few months ago — it is pretty hard to forget it! If Paul keeps saying it often enough, maybe the bubble will go away.
Hawaii is toast. Never had a good economy/job market, and
the housing bubble has peaked here - prices coming down about
1-3%/month in Kauai for those that need to sell. It’s like San
Diego just over a year ago, prices really lumpy, with some
nice homes going for 800K (3K sq ft, pool) and total shacks (1K
sq ft) for 650K. Lots of people in the 400-700K range that are
extremely delusional about what their homes will fetch. We’ll
see where theyre at in the next year or two. I’m sure theyve
heloc’d themselves to jack up their new trucks, buy boats, jet skis, and trips to vegas, krispy kreme run to Maui, etc.
Last month statistics
http://the.honoluluadvertiser.com/article/2007/Jan/04/ln/FP701040345.html
Last month chart: http://the.honoluluadvertiser.com/dailypix/2007/Jan/04/M15601814.GIF
“This ain’t no stinkin bubble.”
“It’s more of a perfumed, flowery-smelling bubble. We replace the lei around it every few days — and we’re careful not to use roses cause you wouldn’t want those thorns anywhere near a bubble like this.”
LMAO- Nice one.
Last month stats:
http://the.honoluluadvertiser.com/article/2007/Jan/04/ln/FP701040345.html
Last month chart: http://the.honoluluadvertiser.com/article/2007/Jan/04/ln/FP701040345.html
Big Brother says NO BUBBLE and what says Big Brother is TRUE.
Only Big Brother holds the truth. Exactly.” Keep repeating a lie sufficiently long enough and people will believe it.” Goebbels the propagande ministry of Adolf Hitler was right on that.
“Mr Pryor, who has called the property market correctly in the past, said his website had details on 800,000 properties, making it the biggest website for UK property sales. He said November saw the start of an increase in homeowners selling their property and moving to a second home or rented accommodation in order to cash out at what they believe is the top of the market.”
Is Mr Pryor trying to stampede the herd?
Manhattan numbers are in for 2006.
“Sale prices for Manhattan apartments fell in the last quarter of 2006, while the pace of sales was reported to be strong and the backlog of unsold apartments fell, according to several market studies released yesterday by large real estate brokerage firms.”
and
“Overall, 2006 ended with an average price increase of 6 percent over the previous year’s sales, Mr. Miller said, while the median went up by 11 percent. ”
Full article
http://www.nytimes.com/2007/01/03/nyregion/03housing.html?ref=nyregion
It’s different in Manhattan…
‘The new quarterly numbers led brokers and market analysts to conclude that the Manhattan real estate market — with its legendary high prices — appeared to have so far escaped the worst of the real estate market excesses, like large price cuts by developers, reported across the country.
“It shows us that we hit the soft landing that a lot of people were hoping for,” said Gregory J. Heym, an economist who prepared market studies for two brokerage firms, Brown Harris Stevens and Halstead Property.’
Manhattan has quite a bit of inventory coming online in the next 6-18 months as well as the other 4 boroughs
the prices will be lower not everyone works on wall street
Well, I know it sounds funny to say on this board, but as far as Manhattan goes. it sort of is “different here”. Personally I wish it weren’t the case, because I rent here, and the amount I pay on rent could buy a beautiful house in most parts of the country.
For one, there’s Wall Street. And as bonuses go, so do apartment prices. Sure, not everyone works on Wall St., but the prices of everything in the city do revolve around the Street. And this year bonuses were nauseatingly obscenely fat.
And secondly, there’s foreigners. Europeans are like kids in a candy store right now with the Euro being this high and the dollar beng this low. As long as that trend persists, Manhattan will see this continuing stream of currency rich Eurotrash buying their piece of NYC.
If I had to bet on how the chips fall in this area, I’d bet we see total carnage in the Hamptons, and the North Fork and some serious bloodletting in the outer burroughs — with the exception of much of Brooklyn.
“A leading estate agent has called the top of the property market, claiming an influx of sellers ‘motivated by greed’ is increasing the supply of homes for sale and creating a vicious circle that will send prices lower in 2007.”
I disagree. The inlflux of sellers are motivated by FEAR, the only financial emotion more powerful than greed. I agree with the rest, though
“A leading estate agent has called the top of the property market, claiming an influx of sellers ‘motivated by greed’ is increasing the supply of homes for sale and creating a vicious circle that will send prices lower in 2007.”
I disagree. The influx of sellers are motivated by FEAR, the only financial emotion more powerful than greed. I agree with the rest, though
“Not calling it a burst bubble, she said the past couple of years were ‘a glory time that everyone benefited from’ in the construction and real estate businesses and related fields. And while some parts of the country are suffering more than the High Desert, Drahn said we, too, are ‘now in reality time,’ when it comes to real estate.”
Gosh. A story with “glory” and “suffering” in the same paragraph.
Sounds Biblical to me! All we need is a plague of locust. And money changers. And a couple of sheep.
Wait a minute…we already got all that!
Are you refering to equity locusts, mortgage fraudsters and sheeple????
‘I’d have to sell my wife and two kids to afford that,’ said Kuretich.”
I predicted that financing option more two months ago, when I saw that RealtyTimes recommended using your 401k for RE investments.
- Sell your kids for the down payment, throw in your wife’s kidney for a granite counter upgrade
I know of a broker who will take kids as part of the LTV calculation. Just kidding.
LOL. Now that is very funny…
Well it’s probably the case in Pakistan or Afghanistan. Nice real estate in Kaboul, wife and 10 kids with it.
And if you have trouble paying bank or opium war lord, you sell them to carrrpet maker or war lord.
Lord happens to sell a lot of opium but has big big big bank account at the Republic Bank of New York and likes Hawai real estate. Ok you can replace him by a Yakuza or chineese member of the Triads.
Anyone ever use a site such as foreclosures.com ($50 a month) ?
I’m looking for best way to get list of REO/NOD etc.
Call your local title company. Most will send you NOD’s for FREE! Thats how I get mine!
hey thanks.
Your local county government should have them either soft or hard copy…Here is where I look.
http://www.seminoleclerk.org/Foreclosures/
One more thing - looks like you are in the TO area (based on your posts). Here is the countrywide REO list. There is a big one from TO in there:
http://www.countrywide.com/purchase/f_reo.asp
THOUSAND OAKS 1521 HONEY CREEK COURT,
THOUSAND OAKS, CA 91320 PUD KATHY/BOB MCLEAN 805-2670455 $1,356,900.00
I hadn’t looked at that link in a long time…
Wow are there a ton in Sacramento, San Diego, Temecula, HEMET, and Elk Grove. That property in Thousand oaks is a doozy of a default. That’s gotta sting…
Neil
Are greedy sellers that want to exit the inflated market getting in the way of this RE agent selling because of the excess inventory ?
What did the REIC think would happen if sellers had perceptions of a peak in prices and even possible downturns in prices in the coming months ?
Want to talk greedy? Let’s talk about that 6% comission.
“I wanted to be on the cutting edge of this Downtown explosion,” said Miller, one of 20 people who have purchased condos at The Carlyle before construction has begun.
Poor Heather. You drank the kool-aid, and now you’re going to be on ground zero of the downtown implosion.
LOL. Exactly what I said to myself when I read that! I hope the paper goes back in two years with a “where are they now” article on Heather Miller, RE Investment guru. From everything I have ever heard or read, including on this thread, this downtown project will be a bust. Also, I didn’t quite understand what Heather’s job is, but I got the impression she is somehow tied into this development. It is going to take some time (a long time) before these urban “explosions” ever come to fruition. I hope for her sake that Heather has the ability to sit tight until then. If not she might want to keep her air tank and flippers close at hand because by the time this conversion is completed I would bet she will already be underwater.
The caption that appears when you click to enlarge Heather’s photo says that she is a sales rep for ‘the company, meaning, I assume, the company that is building the condos. No wonder she’s so sure about how great it’s going to be!
Yes, the local title company sends me NOD’s once a week for free by e-mail. Call one of your local title companies and give them your e-mail address.
“…Mr Pryor said. ‘We may look back and say the fourth quarter of 2006 was the peak,’ he said.”
WTF? I thought that 4Q06 was the BOTTOM?! Aw heck, there isn’t a bubble anyway, let’s all go out and BUY! Or sell! It’s a great time for either, right?
Hey all..here’s a thought…
Instead of buyers being “priced out”, sellers are now “priced in”. They’re expectations of an unrealistic sales priced has them locked into their house. Even if they see a house that they would like to buy, they can’t, because they are too “attached” to their current house.
I think there is an assumption out there in R/E land that all buyers are first time buyers. I would be willing to bet that it is exactly the opposite. It appears that the “buyers” are to blame for not buying. I think the reality is that the sellers are not willing to sell (at a reasonable price). While it may be that there are many that can’t sell due to being upside down, my personal research is showing that many sellers have plenty of equity and could easily adjust their price. Not everyone is going to sell and rent, so many must be stuck between wanting to buy, but are refusing to sell.
With all apologies to Speilberg:
Flipper: “Why doesn’t the market just…stay up?”
Ben Jones: “This is reality Greg.”
ben- can we have a new bits bucket? say one around 7 or 8pm EST? I think it’s tough to wade into the bucket when there are 100 replies.
from brokers universe:
NY area underwriter needs a job-not from MLN
Since the market has all but collapsed in the tristate area, I figured I would open my career this way..networking right now sucks, the market is about to be flooded with persons in light of the market…
so, what the hell..
21 yrs in industry…plus I am a nice guy - LOL
Any input is appreciated - or I will entertain any and all questions or comments you feel like venting on - MLN - Fremont - WMC subprime in general - brokers etc……..i think I know it all…..
by smiggilicious January 5, 2007
Where has this Pryor guy been for the last year? Q4 2006? Try Q3 2005.
Long, long, long way to go before prices return to sane levels:
http://graphics10.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif
Pryor is in the UK, and is referring to the UK market. So, he might be right about the UK market having just peaked in Q4 2006 (I don’t know that much about the UK market, but I know that it looked like it had burst previously, only to reinflate when interest rates were lowered. It would be nice if that market has peaked, too).
The UK market has been remarkably resilient, especially with that recent bounceback a year or two ago when most of us gloom-and-doomers (that’s me, having watched that market closely when I lived there) thought it was headed for a dive. Surprisingly, it’s kept going.
Friend of mine actually owns a place in London where he is so confident of appreciation that he KEEPS IT EMPTY! Says he doesn’t want the hassle of tenants messing it up, and he’s actually expecting these gains since 1999/2000 to continue for a decade. Oh my. I keep telling him to sell, and he keeps telling me that if he’d been so dumb to listen to me and had sold last year, he’d have missed out on these big gains.
We’ll see about his big gains if the market slumps. (I’d be suspicious of “gains” anyway because he’s got a huge mortgage on an empty place, so it needs to appreciate rapidly just to keep up with the interest he’s paying. What a doofus.)
Lots of my older Brit friends got nailed about 1990-1992, saddled with “underwater” places they couldn’t sell and had to rent at a loss for a decade. Most (unluckily) bailed of their rental out as soon as they could sell for the price they bought, about 1999/2000/2001 or so; had they held till now, they’d be laughing - though probably very nervous as well.
There is name for this type of investor. First you have a bull. Then a bear. And finally a pig.
“Carter’s landlord, Maurice Philogene, said he has bought at least 20 condos since 2001, with the intention of renting them out for the long term. Philogene, a software engineer, said he planned to live in the unit Carter now rents but changed his mind. He cut Carter a break on the rent because she signed a two-year lease. The unit, he said, is “pricey — it was nerve-racking to cover the mortgage.”
Funny the writer didn’t follow up on the obvious. Here’s a software engineer….purchased TWENTY condos…..however, he’s going to live in this one.
There’s a great story about a software dude who’s the “condo king” or he’s a REAL FB or he’s full of BS….
Not sure if it was mentioned but has anyone looked at Lennar’s fourth quarter loss and earnings estimate. (It’s on their website under investor relations). They just posted a huge “unexpected” loss due to inventory valuation.
This is the same company that was holding a ton of spec homes for months without reducing prices. I couldn’t figure out why they wouldn’t bring price down to move the houses. Now I wonder if they did that to try to delay the adjustment. (It was better to have no sales so that the appraisal would be at the higher early 2006 prices).
I’m wondering if anyone working for the large accounting firms knows how auditors are handling RE valuations. Are the just taking the past few sales or are they really looking at what it would take to sell off all the inventory. Considering Enron, I would think they would be very careful but maybe not.
The reasons builders were loathe to reduce listed selling prices have been well documented on this blog. It probably had nothing to do with delaying the write-down of impaired assets (land, work in process, completed inventory). If anything Wall Street give companies an incentive to get all the bad new behind them, AKA “clearing the decks”. Write down of an impaired asset usually is based on “management’s best estimate”. Auditors usually accept these estimates if they are at all reasonable.
How are the auditors going to determine what is “reasonable”. If the developer goes bankrupt, people are going to be looking very closely at that balance sheet. I’m just wondering how much analysis they are going to give to land values.
Feeble attempt. It might make a small dent, but with new lending guidelines (Fannie backed) it is likely to be insignificant. the RE market has rolled over. Whoever wanted one, two, three, or eight houses has them.
Pimco’s Gross Says Fed Will Slash Rates to 4.25%
By Elizabeth Stanton and Chris Cooper
Jan. 5 (Bloomberg) — Bill Gross, manager of the world’s biggest bond fund, says the Federal Reserve will lower its benchmark interest rate by a percentage point to 4.25 percent this year to support economic growth.
The Fed will start cutting its target for the overnight lending rate between banks in the first half as the economy slows, he said. The nominal growth rate, unadjusted for inflation, was 3.8 percent during the third quarter, compared with 5.9 percent in the second quarter.
“Slower economic growth, certainly slower nominal growth, ultimately forces the Fed to lower” the cost of funds, Gross, chief investment officer at Pacific Investment Management Co., said in an interview. The rate may be cut to “below the nominal growth rate in order to re-stimulate assets and re-stimulate productive growth in the economy.”
Ten-year U.S. Treasury note yields will fall to about 4.50 percent, Gross wrote in a report published on his firm’s Web site yesterday. The 10-year yield, 4.60 percent at 5:08 p.m. in Tokyo, has risen in the past two years.
Leveraged as the whole financial system is, they will have no choice. The bubble must continue by hook or by crook.
Riverside, CA realtors or buyers. Need your opinions please
Prices are lower???? There is a NEW development I’m looking at. 2bedroom 2.5bathroom 2 car garage attached townhomes in Riverside County, Lake Elsinore area. Starts at 270,000 up to 3bedroom @ 300k
Is this price still the old run up prices from 2005 or is it a “safe” bet to jump in on this at this price??
What do you think the possible scenarios for 2007 regarding housing in Riverside county? Should I wait it out? Should I jump in??? Pros and cons scenarios? Also, I’m worried that if I go in would they offer these townhomes at lower prices if the demand is low later in the year????
Thanks for your time.
are you kidding ?!!! Read the posts here - buy in the IE now at your financial peril