Is There A Housing Bubble In Your Zip Code?
Post your market observations here! Any kind of personal insight or media report or website is wanted. Some readers are doing so by zip code. “What is your favorite zip code to follow?”
“92648 downtown huntington beach, lots of speculators and new homes that are dark at night. Inventory is up significantly from last summer.”
“I closely follow zips 92603,92604.92612,92614 which is a subset of Irvine, Ca. (Orange County). Activity is currently mixed, with some sales. However, many properties have been listed for many months. Some sellers are reducing prices 5% 10%. Other sellers have refused to capitulate. I have had recent conversations with R/E agents who are now starting to use phrases such as ‘priced right’ when listing properties on behalf of sellers.”
“Lot different posture than last summer when the mantra from the R/E complex was that ‘Everyone wants to live in the O/C,’ ‘Prices can only go up,’ etc. Spring weather is starting to arrive.. This selling season sure is going to be interesting!”
“I live in 92606 and I’m seeing the same thing. No major price drops but DOM longer. Inventory steady. The new stuff across the street at the old Tustin Air Base seems to be selling rather quickly. I also noticed these ‘newer’ places in a sub called ‘Park Lane’ near the railroad tracks of Harvard and Irvine Center Drive seem to be selling briskly as well.”
“I follow 92627, Costa Mesa, CA I see a lot of activity in terms of new signs, changing signs (FSBO to RE), signs disappearing with no ‘Sold’ announcements, and many many open houses. Sitting very very tight until I see mean reversion or more.”
“34102….Naples, Fla. Big time speculators about to get burned in one of the most overpriced cities in US.”
“I’m all over 34787. Winter garden, Florida. Right outside Orlando. Started tracking inventory on Dec. 27, 05 … it was 282. Now, 2 months later, it is at 408. I’d like to find out what people will happen at the midway point this year (June 06), and the end of the year (Dec. 31). Because all the renters are going to be in a rush to buy, and I have a gut feeling, that rush is going to begin sooner, rather than later.”
Another added, “I was hoping you would look into the Reno market. Reno has 5100 houses for sale, including 1800 new listings in Jan 06. Only 500 homes sold in Jan 06 and the Reno Gazette/Ostrich has decided to report little on the home bust here. Considering that Reno has only 450,000 people this bubble could be of epic proportions. Reno is far more expensive than Las Vegas.”
From a reader in Arizona, “Todays Kingman Daily Minor, Rhodes Homes wants to build 650 unit apartment complex in golden valley. the reason is to house the workers that are going to build the 33,000 homes in golden valley. Like Kingman needs more housing, 100s of new homes empty now and the min wage jobs in Kingman the workers here cannot affort to rent, never mind buy.”
To which another replied, “33,000 more new homes in Kingman? My gosh, what are those people going to do to work? There is not anything there to support that number of people. And it already looks like a whole slew of McMansions have been built right next to the freeway. While I drove through last week, all of the trees around Flagstaff were looking pretty dry. If they catch fire, then Kingman can rescue all of the displaced folks. Or is it for still displaced Katrina victims? There is plenty of land to park a trailer. Violla, no houisng payment.”
11735 - Forest Hills (Queens) NY -
This condo was listed at $649,00 starting around October:
http://newyork.craigslist.org/que/rfs/138918043.html
No takers - I guess everybody is at Costco paying 5% markup on goods instead of the over 100% (this place cost AT MOST $300 sq ft to build) instead of the 100%+ markup over construction cost that we’re expected to pay…..
Lastrational -that’s what I’m talkin about. Prices going down, while the Times spouts about buyer-seller standoffs.
PS - think more like $150-$250 a sqft. That’s a pretty fair average (some stainless and granite at cost really don’t drive things up that much renovating these brick boxes - especially if you do it on the cheap - like 99 percent of contractors out there do.) Rule of thumb - 1 yr warranty = cheapo renovation
I got the $300 sqft figure from my sister, who is a manager from a construction company - her firm does commercial bix bog type stuff, but she’s been i the bus for 10 years, so I trust her est.
Sounds like your sister works for a reputable firm! — my thinking on this is that some of these places are really built on the cheap - my estimate (granted it’s more cynical) is based party on city bid guidelines (for building blocks of these low-rise brick box houses) and partly on a few private contractor estimates for building /renos. One of the folks who came it at $100 for a properpty we were interested in was actuallly a hud-approved contractor. Some of the contractors are actually pretty shady characters IMO. ANd many of these guys are the ones building these supposedly great “new construction!” homes.
i did some construction in Long Island NY and a s a novice with a partner in construction that was stealing a little we still built these homes for $75 per square feet.
94025 Menlo Park, CA. Prices have softened 5-10% since last summer. Inventory is still lean and well-priced homes continue to sell, often in just a few days.
I follow my zip code 22303 (Alexandria, NoVA) 4 big condos 2 new subdivisions and a nice spread of sfh but most important is the number of homes for sale is small enough (
This Zip Code commentary is a re-post as I already included it in response to Ben’s earlier article which discussed some distressed sellers in Maine.
Based on the following six month track of single family home listings from Portland (04101, 04102 and 04103) as well as the neighboring affluent suburbs of Falmouth (04105), Cumberland (04021) and North Yarmouth (04097), inventory was 19% higher the first of the year than it is today.
9/6/05 352
9/19/05 394
9/29/05 400
11/3/05 425
12/5/05 406
1/3/06 407
2/2/06 395
2/11/06 352
2/18/06 348
2/24/06 345
3/4/06 343
I’m very surprised inventory has not surged. I’m thinking that it still may be a little early for the Spring market in this cooler climate. But I’m also beginning to think that some sellers who might have normally put their properties on the market are shying away, because they know it may get ugly. It should be good spectating with each passing week
Also, demand in Greater Portland always includes a good amount of equity bandits from NY, Boston, NJ and lately, California. It may be that the bursting bubble in these areas is contributing at above normal levels to overall demand in southern Maine. Of course, eventually, that will run out of steam.
My favorite blast from the past (a la early 90’s) are the phrases “check the comps” or better yet “priced below recent comps”. You mean now sellers are pricing their houses based on comps!!! This is a phrase I haven’t seen in the MLS in years.
I am in the San Fernando Valley. SSSSLLLLLOOOWWW sales, and inventory building at a steady clip. We presently have the highest inventory since at least 2001 and the lowest number of sales in any month since at least 1998. We are well over 5 months supply.
Lot and lots of reductions. And tons of BOMs (back on market, fell out of escrow). The BOM to final sales ratio usually runs around 18-20%. It is now the highest that I can ever recall seeing, about 35-40%. This means that for every three sales that close, one falls out. This is a very high ratio. Not a good sign.
I am getting more optimistic every day that the madness really has broken. I won’t believe that it is really truly over until we get through the spring with no price increases.
Keep in mind that the median price is a very rough indicator of the price trend of individual properties. Only the very best properties are selling now that the buyers have so many choices. A buyer may spend the same amount, but get much more for their money. The only way to know what is really going on with prices is to really know your neighborhood and know what an individual house should sell for based on “comps”, like for like.
Deb, you are right the crap is no longer selling…buyers have so many choices they can cherry-pick now.
My FIL living down in Mission Viejo (OC) said he was in a donut shop talking to a washer repairman who told him that they will only take cash. Why? Because may of the people only had a mattress to sleep on, crates in the dinning room to eat off and that the divorce rate is going up and they want to make sure that they are getting paid.
Funny, The same thing happened to me. My Mom and I were at Stater Borthers and she started talking to a young guy in front of us. He owns an air conditioning repair company. He said he was so frustrated lately because no one has any money to pay for his services. I kid you not. He said that just about every house he goes to he has to run 3 or 4 credit cards to get an approval. This is in Huntington Beach.
side note. House across the street from me.
16722 IRBY LANE, Huntington Beach, 92647 List Price: $699,000 zip realty. reduced from 749k
Was bought by a flipper in November 05 for 700k. Zillow.com. He/She never even took the sign down just relisted for 749k. No offers. March 06, Underwater.
Already underwater after closing fees. Enjoy!
Shannon, VERY interesting data point. I think we can now safely assume that 2005 buyers are between break-even to loss-making across bubble areas.
Anybody have more stories like that?
This San Francisco property was listed just yesterday, but I’m not sure which “comps” they were using:
http://www.warwickproperties.com/current_listings/2845_broadway/2845_broadway.html
I wouldn’t give him a dime over $60 million. LOL
Maybe I could buy it with a ‘no-doc’ loan and claim my income is $25M a year. I could live in it for a good six months before the Sheriff shows up to throw me out.
I know zilch about the SF market, but at $65m, this doesn’t seem like the kind of thing someone would build on spec, does it? Sounds like there is probably a sad tale of woe behind that story…
In my own neck of the woods (suburban Phila), we see more and more listings of land being unloaded from what appear to be small builders. “Subdivision complete! Septic and water in place!” That kind of thing. You sure wouldn’t go to the trouble and expense of subdividing lots and putting in systems if you were just selling off raw land. (A few even say “foundation already in!” How pathetic is that?)
It all smacks of small builders/developers seeing the sh*t hitting the fan.
SF is a nice place (on a sunny day) but $65M is bonkers. You can get a gorgeous medieval estate in France for less than 5M.
http://www.real-estate-in-france.com/P406tarn.htm
http://www.real-estate-in-france.com/126Dprovence.htm
http://www.real-estate-in-france.com/003Cloire.htm
http://www.real-estate-in-france.com/doGers.htm
SF is a nice place (on a sunny day) but $65M is bonkers. You can get a gorgeous medieval estate in France for less than $5M.
http://www.real-estate-in-france.com/P406tarn.htm
http://www.real-estate-in-france.com/126Dprovence.htm
http://www.real-estate-in-france.com/003Cloire.htm
http://www.real-estate-in-france.com/doGers.htm
Interesting. It gets better. Pop in the address in zillow.
http://www.zillow.com/HomeDetails.z?zprop=61325111
BayQT~
“Bonkers”–you’ve got that right. The second and third highest-priced listings in SF are both about $23 million. One has been on the market for 3 (three) years without a single price reduction. If this place actually sold for $65 million the property tax would be over $800,000 per year.
I’m following 92301, which is the California High Desert city of Adelanto. I sold my home there July. I remember for the week it was on the market, I would come home every afternoon and have a stack of business cards from realtors who had brought people by to look at it.
Since I have moved, I’ve noticed that inventory steadily increasing and several price reductions. When I moved, inventory was around 80, today its at 175. About 12 homes in my tract have gone up for sale (including mine a few months after I sold it). Some have sold, although I don’t know how much over or under asking price, or been taken off the market. The ones that are up continue to sit for 2-3 months at a time.
It’s interesting to watch because you have the homes that were thrown up at the end of the last bubble (early 90s) flooding on the market at the same time with the ones from this bubble (2002-2005).
This is playing out exactly as it did last time. Exactly. I bet a lot of my neighbors are wishing they had listened to me about selling. From what a long time resident of the area told me before I moved — when the last bubble burst in the early to mid 90s, people would buy a new house “down the hill” (in LA/OC/IE), get the loan, then walk away from their High Desert home and just let it go in to foreclosure.
BTW — Those of you not familiar with the High Desert — this is one of those outlying fringe areas around the LA/Orange County/Inland Empire area that used to be cheap housing. You have homes that were going for 100k now going for 300k — and that is for the honor of driving 70+ miles to work just to get to the edge of LA or Orange Counties.
Chris, you are a smart man. Last July was the perfect time to sell. Good thing you had the experience of the last bubble to know when to get out. Especially from the High Desert area…that area is going down HARD…just like last time.
when the last bubble burst in the early to mid 90s, people would buy a new house “down the hill” (in LA/OC/IE), get the loan, then walk away from their High Desert home and just let it go in to foreclosure.
With the new BK laws, this is not going to work this time around.
ChrisH,
Yup, heard from a realtor friend that nearby Victorville is spouting “for rent” signs like weeds…all from the “investors” that came in to either flip or rent (for negative cash flow). I’ve got a break-even in Apple Valley, and the Victorville mess is causing downward rent pressure there (and in Hesperia, Adelanto, etc.)
more from the NYT today. they had 3 real estate articles today.
Vermont Losing Prized Resource as Young Depart
Dog Is Included in Sale of House
By Most Measures, a Housing Boom for the Ages
By FLOYD NORRIS
Who cares if how the seller feels about the transaction. I remember last summer, all the people writing letters to sellers trying to get picked for the privilege to buy some over-priced POS. After they got picked, they waived all the customary inspections, etc. and even let some sellers live there a while until the sellers felt like moving out. And of course, there is the squirrel story. I’m just glad things are turning the other direction.
ah yes, the squirrels.
If you want to buy my house, you have to feed the squirrels.
IMO, that marked the peak of the market.
and the low point for humanity.
if not for squirrels!
But… WERE THE SQUIRRELS FED?
Squirrels everywhere will want to know.
fed AND eaten. fb’s get hungry you know….
After Lisa Lai Fook offered the $499,000 asking price for a town house in Oakland, Calif., last month, the seller asked her to write a letter describing her background. Ms. Lai Fook walked away. “I’m really busy,” says the 33-year-old chemical engineer. “To sit there and write a letter to someone I don’t know after I’ve put down a ridiculous sum of money is insulting.”
An example of one person who saw through the BS. Insulting is not a big enough word. That letter writing campaign exposed the unwarranted desperation that a lot of people felt. It’s amazing the level to which the herd mentality can escalate.
BayQT~
Squirrels are good eatin’ for some.
Feed the squirrels, feed on squirrels — it’s fairly close verbiage.
“But Tuccillo, a Sarasotan who is former chief economist of the National Association of Realtors, says the housing market remains on strong footing. ‘There’s no way you can’t interpret this as a slowing down of the market,’ he said. ‘But no market goes to pot unless the underlying economy goes to pot, and that’s not happening here. We’re going through a cycle. This is a marginal change downward and the market will stabilize.’”
Another spear catcher trying to twist a horrible situation for the Realwhores. This guy reminds me of Baghdad Bob. “There is no American army in Iraq.” So I guess the NASDAQ didn’t really crash either b/c the underlying economy didn’t go to pot. Maybe I can sell him some Lucent for $70.
20009 — Dupont Circle DC
its a bruising battle with values down about 10 percent off the peak. buyers have become much pickier and have greater leverage (inspection contingencies etc.) but with the rebirth of Washington DC how low can it go?
rebirth of d.c. my ass.
Marion Barry is still in the government and crime is still high. I have a lot of friends that live in D.C. with stories of people getting shot in front of their apartment/townhouse.
tell that to the 33 y.o. architect from Arlington who caught a stray in the chest on U St last weekend by hoods arguing over a parking space.
Some of my favorite zips to monitor: 92127 & 92130 (Rancho Bernardo, Carmel Valley parts of San Diego). These zips seem to be good indicators of what is going on in SD. I recently started looking at the 91913, 91914, and 91915 zips in Chula Vista b/c I applied for a job in that area…not sure of what is happening there…over 1,100 homes listed at very high prices and not that many reductions.
In LA, I like looking all over the place. I have lived in Silverlake (90026) and grew up in Tarzana (91356) so I check those out routinely. I also check Westchester (90045) b/c I have friends that recently bought there and Diamond Bar (91765) because I applied for a job out there.
i live in and track 90026- and it looks looks like most of it is now for sale;)
i also own and rent out a condo in 92126 so i track that as well. Prices are definitely coming down and there are many, many for sale.
Seattle, WA:
Inventory not doing much, although the frenzy appears to be gone.
Interesting anecdotal evidence: I work for Microsoft, and we have an internal online classifieds board. Rental inventory on the classifieds board is typically around 100/200, but it started booming in the past 4 months. I just checked, and we currently have 526 employee-owned houses for rent. I also picked up my rental here. $1045 rent (+$150HOA) for a $300k place….”cash flow positive” redefined. And this is typical around here. To my amazement, the vast majority of my coworkers, otherwise highly intelligent, believes that their house, purchased in 1999 for $200k (average), now worth $500k, will make them millionaires…what gives?
I GUESS THEY HAS TO BELIEVE THAT SINCE THE STOCK AINT GOIN ANYWHERE!
I know some guys who work in Redmond liquidate their options/awards and buy real estate. Some of them have 5K/month in mortgage payments for 2 or more properties. Some really smart people I know think the market in the seattle area will not crash because Microsoft is expanding their campus, etc etc. I think they are in for a nasty surprise.
Microsoft is expanding their campus….all the way to India
Microsoft is expanding its campus locally and will be hiring 12,000 people to work in it. Frankly, having been sitting and waiting since 2003, I find this discouraging news, from my standpoint. I’ve been anticipating a price drop here and have seen prices go up, and the economy going strong, more and more people move here and there is not enough inventory. I’ve begun to think that it will not happen. Why would it, if the economy is strong here, the prices are less than CA, for example?
Apparently, there is still the flood of Californians coming here, 33,000 last year, per a report today from car licensing dept. Seattle is never listed as being as inflated as states in the NE, CA, and FL; it’s been a more moderate increase, reflecting the wage increases that have gone on here over the past 10 years.
So Seattle has people moving here with money, and many managers who make 110,000 and above, and it’s the busiest port in the world–I recently heard. Why would the prices go down?
Sharecropper - be patient. 12,000 is not enough to maintain the RE market in a city of 3 million. And not that many managers make $110k. Don’t forget that the average household income is somewhere in the $50k. Not enough to buy the average $500k house. Be patient…
Oh - and whoever told you Seattle has the biggest port in the world, is probably the same person who told you we’re running out of land.
Being orginally from Rotterdam, it took me 0.3 seconds on google to disprove that ridiculous claim. Somehow, Seattlites tend to think too highly of their facilities (no offense to you personally). Just like the Seatac airport…I’ve heard so many people say Seatac is a “large airport”. LOL.
http://people.hofstra.edu/geotrans/eng/ch4en/conc4en/majorports.html
AmazedRenter,
It depends if you are talking tonnage, or TEUs (container units)…in TEUs, in 2003, only Hong Kong and Singapore shipped more than the Los Angeles/Long Beach ports (if you count them as one, as they are right next to each other)…didn’t see Sea/Tac anywhere on the list…
http://www.infoplease.com/ipa/A0104779.html
I heard the comment by someone not from Seattle who was discussing the port of Dubai on the radio. He said that it was the second biggest port after Seattle–he sounded like he knew what he was talking about. So I didn’t bother to google it. But it doesn’t sound likely, so I shouldn’t have said it. What I started to say was that there is lots of money coming here from Asia, which I also don’t know to be true. But as most of the imports are from Asia, I assume that there is a lot of money gushing around for purchasing houses.
As for Microsoft, well, maybe 12,000 isn’t much in a city of 3 million, but the salaries would presumably be pretty high. I don’t think that there are 12,000 houses fit for the Microsoft types at this point sitting around empty.
As for being patient, I’ve been waiting for 3 years now. My kids are growing up cramped in an apartment, which might have it’s charm, being rather cozy, and maybe it will inspire them to better themselves….I like to garden though, and I don’t see anything major happening this summer. But I am waiting to see.
It’s just that every decent house that comes on in a neighborhood, that is priced well for that neighborhood, sells very, very quickly. I think that agents are now pricing under in order to bring interest and possibly bidding wars.
Sharecropper - I’m up for coffee some time. My wife has the first one on the way. Yes, it has been an incredibly long wait, but finally the beginnings are here. LMK if you’re interested.
I wonder how the RE market in Seattle is going to react after the recent NatGeographic eartquake show. It proves that Seattle is under a clear and present danger of being totally devastated by a mega-earthquake strike.
Sharecropper,
Seattle is nowhere near the level of insanity as bubble areas. In fact, according to the latest valuation report (As of Q305), Seattle is 24% overvalued; personally, I define a bubble as 30%+ overvaluation. Places like CA and FL have no appropriate descriptive words.
So if 1) you are convinced that the economic prospects are Redmond are good 2) you do see softness in the housing market and affordability improve due to tighter money and 3) your holding period is sufficient, you should be ok.
If there truly is a large bust and if affects fairly valued areas with good economies, and your finances are good, you should take the opportunity to refinance at a lower rate.
My humble opinion.
I seem to remember arguing with Hedgefundguy on Seattle previously, but now I agree. NWMLS numbers for Feb came out today, and King County active listings are lower for Feb than any Feb 2001-2005 (I only have monthly data through 2001). Prices have flatlined over last six mos. MSFT has purchased a 700k sf campus and intends ~1M additional sf over the next five years. At 250 sf per worker, thats maybe more like 6000 new employees… but many of these are high income potential buyers… buyers at the margin… the entry level in King County is going to be tough to crack, for the bubble worshipers. In addition, it is relatively affordable compared to the California markets, and has population and job growth forecasted for the next five years, higher than Cali… will be interesting.
I know a guy up there who, back in 99, had made about 5 mil on stock options. So what’d he do? He bought more MSFT stock with the profits. By the end of 2001, he lost everything and had to sell his houses (he had two) to cover losses.
I believe that this is extremely common. Look at all the RE agents who, in addition to their clients’ listings, also have a few of their own properties to sell. They’re f*ed.
I like to use the N AZ rental classifieds to see where the flippers are getting burned. From this weekend:
Jerome 3br, 3ba Brand new 2,000 sq ft home, plus 750 sq ft of decks, 2 car garage $1,500/mo
Lake Montezuma golf course 3br 2ba. Nearly new. 2 car garage. $1,195/mo. Rent to own possible, $450,000.
Village of Oak Creek Newer 4,000 sq ft with jacuzzi $1,995/mo
Cottonwood New 3br 2ba w/ 2 car garage $975/mo
Flagstaff Brand New! 4br/3ba 2cg $1,350/mo
BTW, Ponderosa Trails looks to be ground zero for speculators in Flag, with numerous new homes for rent.
A buyers agent in Sedona wrote this in a weekly column:
‘Good News for Buyers, Many would-be sellers here appear to have a tenuous grasp of the current realities of the marketplace and seem to be under the impression that they can continue to demand top dollar for their properties. They simply cannot, if they expect to sell. We’ve seen a severe drop in the number of buyers.’
‘For the first two months of 2006, only 47 homes have sold compared with the recent annual average of 73. That’s off 36%. And the number of homes for sale is up 55% over last spring and rising.’
It goes on to say the situation for raw land is ‘grimmer’, with sales at 38% of ‘normal.’
Ben, looks like some great deals for renters in that area. How is the rental market holding up in the Phoenix metro area?
ockurt - there are a ton or rentals in the Phoenix area. I have even seen a 3,300 sq ft home in QC list for $1000 a month.
Also, it was posted previously a couple of weeks ago that there are property management companies in the Phoenix area have stopped accepting new properties because they can’t even rent the ones they have…
Hope that helps…
Wow. A 3300 sq. ft. home for $1000? Good deal.
I heard that about the property mgmt companies too. My co-worker sold his PHX properties because the rental market was so soft. He told me the outlying areas are even worse…must be paradise for renters there now…
Most quit taking new rentals last summer in the north.
we are renting in n scottsdale and pay approx 1900/mo for a home that is priced around 700k. i am waiting out the market renting, meanwhile living in a resort like setting, doing no repairs and son’t pay taxes and inaurance. we moved here from la 9 months ago….. in la the house we are renting would easily go for 1.2 to 1.3 mill, probably more. love being a renter in az.
Ben, could you email me the details on that Flag and Sedona properties, i.e., contact info or tell me where you saw those? Thanks.
They have a converted former insane asylum in Jerome. Now it’s a hotel/restaurant and it’s called “The Asylum.” Seems appropriate with all the flippers out there.
Phoenix metro area - HAPPY 37K MLS Listings. According to ziprealty.com, we hit 37,111 MLS Listings today.
Burn baby burn….
Rumor is that MLS shows 14,000 ‘vacant.’
Holy Crap! 14,000 potentially vancant homes?!?!?!
So many people I have heard from keep saying that it will pick up here during spring. I just politely smile and mentally roll my eyes.
There seems to be a collective deep breath taking place around here from people who have so much at stake with this market, hoping that this envisioned spring pickup turns out to be true. It seems as though what is selling is to people moving from out of state (at least it is with with my neighborhood). It makes me think of the lines from the LOTR movie, Return of the King. Pippin is talking with Gandalph on some balcony one evening in Minas Tirith right before the crap starts to hit the fan. Here are the lines from imdb.com:
Pippin: It’s so quiet.
Gandalf: It’s the deep breath before the plunge.
Pippin: I don’t want to be in a battle. But waiting on the edge of one I can’t escape is even worse.
That’s a pretty good analogy of what we are starting to embark upon here in Phoenix and in so many areas across this country and the rest of the world.
The Arizona Department of Economic Security released the January unemployment figures yesterday and construction layoffs were reported as 3,900 for that month. It will be interesting in the coming months to keep an eye on those numbers. Also, mortgage/banking and general RE employment sectors will be interesting to watch.
Those 3,900 jobs lost were probably feeding 5,000 mortage payements– So much for the new paradigm.
Portland Oregon has been undergoing unsustainable double digit bubble appreciation due to infusions of California equity. Now like many markets pending and closed sales are down according to a report by the RMLS, the local mls service. Inventory is beginning to rise.
Of course Portland appreciation has been driven by the insane housing markets in California. And as we all know, those markets are currently tanking. But If that wasn’t bad enough for Portland’s market outlook, more bad news looming on the local economic front. Looks like a one-two punch is about to land on Portland.
Because Intel is the largest private employer in Oregon. Over 90% of Intel’s Oregon employees, or approximately 16,500 persons, live in the Portland Metro region. So in the classic housing market scenario, problems with a major employer would have a significant effect on the local housing market. But itsn’t it interesting how this bad economic news from Intel didn’t make it to the online version of the Oregonian or to the major tv station online news site (I’m not sure about hard copy news sources, but I wouldn’t be surprised if this news was buried small and deep in the sand). And watch out Silicon Valley, this may be a one-two punch for you too –
AP
Intel Lowers Revenue Forecast on Share Loss
Friday March 3, 5:08 pm ET
By Matthew Fordahl, AP Technology Writer
Intel Lowers Revenue Forecast on Weak Chip Demand, ‘Slight’ Share Loss to Rivals
SAN JOSE, Calif. (AP) — In a troubling sign for a tech industry dominated by Intel Corp. chips, the world’s No. 1 semiconductor company sharply cut its first-quarter revenue forecast Friday after seeing weaker-than-expected demand and a “slight” share loss to rivals.
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The company said it expects to post sales of $8.7 billion to $9.1 billion, down from its previous — and scaled back — estimate of $9.1 billion to $9.7 billion. Analysts had expected sales of $9.42 billion, according to a Thomson Financial survey.
Intel shares fell as much as 3.1 percent after the announcement but regained most of the loss by Friday afternoon.
The $400 million reduction at the lower end of its forecast was one of the sharpest warnings from the company since 2001, when the whole tech industry was sinking into recession. This time, Intel’s troubles have so far not been shared by other chip or computer makers.
Analysts said that’s likely to change, given that Intel’s microprocessors are used in roughly 80 percent of the world’s personal computers and servers.
http://biz.yahoo.com/ap/060303/intel_outlook.html?.v=12
I should add the fact that a few days before this announcement of lowered earnings and market share Intel announced a $300M investment in a new assembly and test facility in Vietnam. Construction is to begin immediately so they say. If revenues and market share are down but they are investing in Vietnam, the tea leaves are pretty clear that resources will have to be shifted around.
http://www.intel.com/pressroom/archive/releases/20060228corp.htm
Time for the U.S. based employees to break out the “company sized jar” of vaseline, I would say.
Costco has big jars of KY too.
I hear they are moving the Vaseline factory to China next year.
I too live near Portland, and am waiting for prices to drop. Paying $1K/month to live in a 1100 sq ft house that would be “priced” at $300K. It’s true value (land + replacement price) is probably not far from what the owner paid 3 yrs ago, something like $170K. We shall see.
It is tough to compete with the rich Californian’s who pay cash for what they see as very inexpensive real estate.
Which part of Portland do you live in where property is $300/sqf??? In ALL of the areas I track, sfr’s are ~$150-!80/sqf, with a median of ~250K. Cheap compared to CA
I’m in one of the more desirable ‘burbs of Portland, right next to me a builder just finished detached homes around 2000sqft for $250Ks. Even though they are finished, there are about 15 still for sale, these were selling for $280K about a year ago. Also they have a sign up “Closeout sale”, don’t know what the incentives are, but some people got burned. I agree with the other guy, prices still very low compared to rest of the west coast, etc.
Deb said…
“I am getting more optimistic every day that the madness really has broken. I won’t believe that it is really truly over until we get through the spring with no price increases.”
_______________________
Agree with that. Last year was a big disappointment for us bears due to the spring bounce.
Deb, thank you for keeping us updated on LA/SFV stats. That area really **is** different because of the job base, and yes, “everybody wants to live there.”
I track 92009, La Costa (Carlsbad) in San Diego county. Flat here since 2004, but homes still sell and flippers are still buying and making money. They just sniff out the desperate sellers and really lowball them, do the granite/ss/beige thing and have been getting about $100K to $200K more. Unbelievable!! We also had a lot more inventory about a year ago, so I am not fully convinced it’s over here, yet.
IMHO, this thing won’t fully die until lending standards revert to normal. Any dips will be seen as a chance to buy by the “investment” crowd. And they will make money on the DCBs. We need defaults to scare away the MBS buyers and force regulation, IMHO.
That being said, the increase in national inventory sure is a good thing!
I’ve been closely watching 2 coveted zip codes here in Seattle for about 2 and 1/2 months and have noticed a few things:
1) The percentage of price drops has risen a lot. As of March 2:
98115 (Ravenna) # of houses on market: 57
# of price drops : 18
98103 (Green Lake) # of houses on market: 71
# of reduced: 24
A month ago, 16-20% of the homes had price reductions, now we’re up to more than 30%.
DOM’s , some are upwards of 200 days. And NOTHING sells within a month anymore.
A lot of stuff goes off the MLS only to show up a month later under a different #.
But here’s my favorite: The (basically) same house in same neighborhood that went on the market for 700K last fall and did not sell , last month went on the market for 550K and did not sell and as of yesterday same type of house on market for 450K. Will it sell?!
So you have the situation of the same basic house in the same neighborhood. 2,500 s.f. Craftsman. Do you want to pay 700K? 550K? 450K? Take your pick! They’re all within a block of each other and all equally lovely!
What’s the address of this house? I was looking for a craftsman for 450,000 and couldn’t find. I found one for 439,000, essentially a two bedroom. I thought maybe you meant a new one? Anyway, I found nothing in Ravenna or Greenlake for this price.
Just curious…though I wish I could quit looking at houses and go on with my life…..
San Diego Inventory has climbed to 17,400 this week. One thing is for sure. The vast majority of these listings will NOT SELL period. Those that do will be reduced. Of course, (having been accused more than once of being a glass half full type) I personally wont buy here unless prices correct 50%. This will still leave a substantial profit for those who have owned for over 5 or 6 years.
I say: “San Diego condos for everyone!”
I track a few cities in Bay Area. One is Cupertino, because I consider it the innermost circle of the bubble, and Morgan Hill and Pleasonton as edges.
The inventory is not growing rapidly. In fact Cupertino has gone down from 74 to 69 - yes, that is very little. Hence if the bubble starts bursting in Cupertino, it would get very ugly for the rest of the Silly-Con valley. The numbers for almost all the cities are less than what they were in Summer 05. I did not start tracking before that, but people tell me the inventory is up YOY, and significantly.
There are price reductions in all the cities. The % of number of houses with reduced signs differs from city to city. But even Cupertino has some. Of course the reductions are from atronomically high prices, even with reductions, they are higher than a year ago.
In new constructions, builders are being far more competitive. The new townhomes in Sunnyvale by Toll Bro, they are throwing some incentives.
One big change. No bidding wars, no frenzy. It is very slow and very quiet. Something inimaginable a year ago. The change is really drastic. But people are buying, and some buyer are in the same mentality - fear of being priced out forever. These are the last lemmings, but we have not run out of those yet. Slowly - but surely - the number of idiots will become zero.
So it is still in the very begining phase. I had always supected that this would really be the last area for the bubble to burst. The numbers that will come out in Oct - Nov about the summer will tell the real story. Just hang on till that time.
I can think of a lot worse fates than being “priced out” of Cupertino.
Drove thru Salinas yesterday. There are For Sale signs everywhere. This was a flipper-central town last year. Up 50%+ YOY. Just an Ag town w/nothing there, lots of crime.
I have been tracking the real-estate market in Santa Clara, which is right by Cupertino. The y/y inventory increase is around 50%, but prices haven’t dropped hardly at all from the peak last summer. There’s no huge increase like people have reported in San Diego and some other cities.
I live in Charlotte County FL, located between Lee and Sarasota Counties. M.L.S. listings for single family homes ending 3/3/06 was 5,000, avg. price $399,000 and still building new ones.
Businesses popping up everywhere, all service oriented low wage jobs, unaffordable housing and inadequate infrastructure raises serious questions here in paradise.
I’ve noticed that the Inventory here in the OC is ballooning, and the people who ‘own’ are noticably changing.
At the place I work, those who ‘own’ had a foot loose, fancy free mentality just a couple of months ago.
Now, these same people are all running around trying to get people in trouble.
In short: I’ve noticed that those who rent are finding them under attack from those who ‘own’.
I told someone else about my observation, and this person was at first skeptical, then astounded.
Have we already entered the Anger Stage?
If so, I predict Mass Panic in early September.
Most of the online real estate web sites can’t even keep up with all the new Inventory, and keep going down.
What we seem to be witnessing is the Titanic, after hitting the iceberg.
The optimism has died off, and the doomed are attempting to find lifeboats- while shoving their elbows into the guts of those around them.
Great Titanic analogy - very colorful picture!
…and there aren’t enough lifeboats for everybody! Enjoy those icy-cold waters of the N. Atlantic, flippers!
Shall we BBQ the squirrels from that ridiculous story from last year?
95476
Sonoma Valley
Properties sold for the month of February 2006 = 25
Properties sold for the month of February 2005 = 43
MLS Listings (GMAC MLS)
$950,000 and under = 160
Over $950,000 = 60
55 houses are listed as under contract, but take a look at the number of houses that sold for February. Only 25. We will see how many of these under contract fall out of that stage.
Total MLS listings: 220
2/24/06 = 193 listings
2/25/06 = 200 listings
2/27/06 = 214 listings
New listings are averaging about 1 new listing per day.
50 properties w/price reductions
3/4/06
San Diego’s severe condo shortage continues, as evidenced by this listing of new condos and condo conversions:
http://www.cindydavishomes.com/f-dash.asp?Page=112701.html
LOL!
That deserves a special edition:
I say “San Diego condos for everyone AND their mother!”
Any opinions on this site?
http://www.seizedrealestate.com/
Thanks,
GS
Can anyone verify or refute the following post (gleaned off San Diego Craig’s List):
“MLS Wizard Regional Search
Please Select a District
There are currently 19331 listings in San Diego County”
The maximum number of homes listed in over ten years was supposedly 19,280 in 1996; if correct, this bit of information suggests we are already there. Any thoughts?
http://isistage-websql.istrategy.com/mlswizardnet/(ujycramnc4z2d1iu50pdxcza)/MlsSearchRegion.aspx
Oops — meant to type 1995, not 1996…
The link did not take either; try this tinyurl:
http://tinyurl.com/gpmls
March 5, 2006
SD MLS (Sandicor) active listings:
houses 10,134
condos 6,661
2-4 units 719
mobiles 638
lots 1,617
total 19,769
Jim,
You left off cruise boat condos from the list.
… and Criag’s listings (see my post below)…
I’m keeping track of Oceanside, CA. According to Zip Realty, the inventory grows by about 20 homes every week to 10 days. In our old neighborhood of 92057, price reductions have been between 5 - 10%, but it’s really hard to tell sometimes, because pricing is all over the place. When we sold in mid 2004, we were the only one in our subdivision of 95 homes selling. I know of three homes on the street that were listed since last November, 1 under and 2 over our price, and have now been taken off the market. And a different one just came on for an absurd price, and I’m sure won’t sell either. We lost 15% on our first home in the last CA downturn. It’s very strange seeing it from the other side this time–and it brings back some very bad, scary memories.
You really need to pay attention to the price of whatever has sold, as sellers are clearly dreaming with the prices they are asking for these days…
Pamela,
What part of 92057? That is our old area, and we sold out in 2004 as well. No way those houses are worth even 60% of what they’re selling for now. Our area (College/Adams) has increase another $75,000 or so when we sold (not really trying to time the top). Unbelievable!
No bubble here in Seattle.
MLS: 25124458 (click URL in my name)
Bed: 3
Bath: 1
Ft2: 2960
Built: 1903
1997 Price: $250K
2006 Zillow Price: $623K
2006 Asking Price: $1.6M
Greed or stupidity?
Unbelievable…..
both
I’m tracking Santa Clara County. Inventory shot up quickly last month. However, over the past week it seemed to reach a plateau. It doesn’t look like much is selling but not much new inventory is being added. I received emails from two of my RE agents this week saying I better hurry up and buy now because they are receiving multiple offers on their listings. I find it odd that both of these agents would go out of their way to contact me if their listings are receiving multiple offers.
The open house in my building did have some activity yesterday - two units up for sale now. One is priced to move, so far no one has snapped it up, but the listing is only two weeks old.
It feels like the market is holding its breath here - a stand off of sorts. Waiting for Spring…
Hey Lunar,
I haven’t seen any new listings on my Zip searches for more than a week (since 26March). However, other sources show sharply increased inventory last week. I think Zip is “broken” & not updating right now. Anyone else seeing the same (in SF bay area/Santa Clara county)?
Yes, I’m seeing places listed on http://www.mlslistings.com that are not listed on Zip. In fact, the unit that went up for sale in my building last week is still not listed on Zip.
Yes. New listings in Menlo Park and Palo Alto haven’t been picked up for at least a week on Zip. But San Francisco is current.
Can people around chicagoland please share their thoughts on the local RE scene?
Just got this e-mail from zip realty and thought I would share:
Hi Lisa,
Just a quick check to see where you are with your home search in San Diego County? Have you noticed that the market has picked up and prices are inching up? The feds just raised the interest rates 1/4% and indicated there will be one more in the 2nd quarter.
Homes don’t stay in the market as long as few months back and seem the housing market is shifting again.
Let me know if you have any questions and if you like to see ant of the homes you see on line.
Thanks,
Ray
Very interesting. I noted in my post above that I received an email about the market picking up - the realtor was from Zip Reality (up here in Norcal). I was told by my realtor that the local news is reporting on the increased market activity. It looks like Zip’s realtors have been busy talking up the market.
the chick on the seizedrealestate.com sure has a short dress on
Posted elsewhere already, but probably belongs here. Does anyone else see anything unusual about listing a $985K Rancho Santa Fe home (2BR/2BA) on Craig’s list? Any takers on this great offer?
http://sandiego.craigslist.org/rfs/139096213.html
P.S. There is a link on the top of this listing which reads as follows:
‘Stating a discriminatory preference in a housing post is illegal - please flag discriminatory posts as “prohibited”‘
This housing post should be flagged, as it implicitly discriminates against terminally stupid people who might consider taking this listing seriously.
(Maybe implicit discrimination is OK by Craig’s standards?)
GS,
I’m sure you know RSF, but it is one of the most expensive areas in the world. That actually might not be a bad price in today’s price. The odd thing is they’d be willing to trade for a condo in Lake San Marcos. WAY different neighborhoods. They must be expecting cash in addition to the trade…I dunno.
Posting on CL, as opposed to hiring a Realtor is unusual for these people, though.
Yesterday we went whale watching at the Festival of Whales.
As we were driving from Laguna Niguel to Dana Point there were for sale signs on every corner - yes every corner. It ranged from one to six signs. OC real estate finder won’t update their inventory. Are they hiding something?
http://chicagobubble.blogspot.com/
Chicago area inventory jumps from 70K to 90K+ in 45 days. What out Chicago area
I love it!
Let’s try that again….
http://orangecounty.craigslist.org/rfs/139088134.html
Oh my God!!!! That is crazy!!! Lake Forest? Is she nuts? Lake Forest is one of my least favorite places…. in South OC. Will the insanity stop?
Hey, but it’s LOW space rent at $750/mo. for a 55+ senior mobile home park!!! Gotta love it!
I am in the East Bay, specifically Walnut Creek. While things are definitely slower than last spring/summer, I am still watching stuff sell for close to asking and fairly quickly. Inventory seems steady, no odd spikes. We have owned for 10 years, but don’t plan on moving so whether the market goes up or down, it doesn’t really affect us. HOWEVER, my sister would love to buy, but has been priced out. She has considered very seriously moving from the area due to the insanely ridiculous pricing. Atleast once a week I am in a conversation with someone who is heading out of California for this reason. These are quality people our state is losing due to wacky prices. I for one am a home owner that would like to see prices correct. I would love to live near my family and if they have to leave i would consider leaving as well.
Tday in the ann arbor news there was this yearly ‘outlook’ thing they do. boy, is it a crap paper for an allegedly educated town, so I don’t ever expect first-rate journalism, but their “retail/real estate” reporter Stefanie Murray is either sub-par even for the AAscene or taking a kickback.
I guess I need to do my own specific tracking, because all I got from her was the uselessly (deliberately?) vague:
“Fewer homes were sold in Ann Arbor in 2005 compard to 2004, while the number of homes on the market increased dramatically. Michigan’s unemployment rate–higher than the national average–volatile energy prices and a steady loss of manufacturing jobs have combined to create a sluggish economy that’s spawned jittery sellers and bargain-driving buyers”.
After this feast of info she goes on to report that “area real estate agents are mixed on how much the market will change this year” and claims one says he expects a steady but fairly flat environment in 2006: continued higher inventory with about the same number of buyers.
Isn’t that grandly useful?!
But she goes on to cite NAR nationwide projections of an expected slowdown in sales plus an expected increase in price, both moderate. I guess we are supposed to be the same here.
She does let us know though that (at least some of) the white-collar workers in the autoindustry should be fine and thus will ’stabilize the market’, as well as executives like Bill Ford Jr. CEO of Ford and Bob Lutz vice-chairman of GM, who live in the ann arbor area, since as she says “their jobs have been slightly more protected amid domestic restructuring”. So, we don’t have to worry apparently that Mr Ford or Mr Lutz will lose their job and add their houses to the market this year!! thanks for that, Stefanie…
Since anecdote apparently passes for news here, I can say that though I don’t know The Fords, I do know some of them white-collar workers who are going to need (or want, they’re so sick of the work environment right now..) new positions.
cheers!
I had to drive down to the hardware store in Culver City today. That drive takes me through 90405 (South SM/Ocean Park) and 90066(LA/Mar Vista). I noticed Open House signs on almost every corner, but no one seemed to be attending.
Out of curiosity, I trolled Zillow.com just now to see what’s up. In 90405, there were a smattering of comps in the area, between $1.2 and $1.9 million. These are 1945 houses that were in the $600K range in 2002, and in the $250K range in 1996.
In 90066, I drove through one of the nicer areas just South of the airport, and this area was completely plastered with Open House signs. From Zillow, it looks like several of these were flipped in the $800K to $1 Million range during 2005. These are 1953 houses that sold for $250K or so during the early 1990s, typically about 1200 sq ft on a 6000′ lot - basically scrapers.
This stuff has a long way to fall……
omg, I just caught on the web part of an ABC news piece on how “Renting may be Wiser than Buying”
http://abcnews.go.com/GMA/MellodyHobson/story?id=127560&page=2
and found there
more specific information on ann arbor than in the ann arbor news!
I was just noticing too that the Open House
listings were kinda lame today, the usual range of outrageous prices and the smatterings of “priced right” “priced to sell” “price reduced”, “bring all offers”, etc.
I had been hearing from realtors in the early winter that holding OHs were feeling like a waste of time and the 100 bucks to run the ad because traffic was so (clearly) low. maybe they’re not even holding them much now. Sellers just aren’t coming off their prices! I saw an ad today for a house I had gone into and thought was okay but overpriced at least 20% as usual, but it clearly had some major mustiness issue. When I went down the basement it had this uncovered crawlspace dirt and a centipede the size of your head on the wall. And the mustiness had me choking for the rest of the day. The seller bought it recently for like 15K under what he was asking. Took it off the market, tried to rent it, perhaps succeeded in that, back on again now, with a big ad showing the price reduced to maybe now 5K over what he bought it for a couple years ago. Just holding holding holding out, trying to avoid the dreaded “losing money” on it. But more and more you’re seeing people who’ve bought in the last couple years unable to sell for what they bought it for.
Word is finally getting out about that. There seem to be an awful lot of houses for rent now too, and for decent prices. Maybe some of that is people digging in their heels and saying they won’t sell til they get what they deserve price-wise.
oops, sorry…that was an *old* report, from sept 2004!
didn’t catch that at first…so, someone was telling us to rent back then?! wow…
Wow seattle moose, that’s a pretty hefty mark-up. Knew that sort of thing was happening in N Seattle, didn’t know about West. Must be the ocean views… do you guys have a movie theater over there yet?!
I just drove back from a day 4 wheeling in Perris. Came through Lake Elsinore across the Ortega Hwy and down into San Juan Cap. There were multiple signs on almost every corner in both cities. I have never seen this many signs in the 15 years I have been here in SoCal.
Stand firm buyers, the longer you can hold out the sooner prices will start moving downward. Remember, IT IS NOT IN YOUR BEST INETEREST TO BUY UNTIL RENT = PTI - MID. To do so puts you at risk financially (asset value loss) and has you paying taxes on an overvalued asset.
Hey CA renter; I sold in the shadow oaks crappy neighborhood (college and adams) in summer 2005 for 495K for a 1411 sq ft 4 bed/2bath with 120/mo HOA fees. That was the peak for that neighborhood. I have only seen lower prices since mine. I bought it in 1999 for 168K
Wow. I didn’t know those were going for that much. You did get out at the peak, congratulations! We lived on the other (also crappy) side of college. Bought in 1998 for $118K, sold in 2004 for $400K. Can you believe how stupid people are for paying so much for these things???
ca renter;Sounds like you did just as good as me. I know that hood the older ones built in the 60’s and 70’s directly across from Shadow oaks. Lots of shopping carts always lining both sides of the street. at least you didn’t have HOA fees of 120/mo. The family that bought my house did 100% financing they couldn’t speak great english and their Realtor/Lender was called “Mi Banco” and I’m serious. Their young 20 something pretty hispanic realtor thought they were getting a great deal being in “Oceanside” Also they loved the granite countertops and stainless steel appliances I had added for my own pleasure… oh and the jacuzzi I put in in 1999.Sucks to be them
33129 (Miami - the roads/brickell areas)
Crazy. the prices here are ridicuoulously high but “for sale” signs are starting to pop up like crazy everywhere. I am positive there will be considerable price decreases specially in condos because of the high number of new buildings in the area, conversions, and buildings currently being built or planned (many, many, many of them)