“It’s Exciting To Watch Prices Fall $10,000 In A Week”
It’s Friday desk clearing time for this blogger. From New York, “On the housing front, those properties priced below a million dollars were down last year by 5 percent from August 2005 highs, said Chris Chapin, a broker in East Hampton. ‘The hardest-hit range was from $1 million to $4 million, north of the highway, away from water, and outside any village.’”
“‘Properties in this price and geographic area went into contract, in some cases, at 25 to 30 percent less than what they might have sold for in August 2005,’ said Mr. Chapin. ‘In the summer and early autumn, these sellers were dropping asking prices hundreds of thousands of dollars at a time. Every day, the reductions would come in over the fax machine.’”
From Hawaii. “Both the total sales and prices of homes on Kauai and the Big Island dropped in the last month of last year. On the Big Island, the median home price dropped 18 percent to $353,500 from December 2005. ‘It’s changed from a seller’s market to a buyer’s market,’ said broker Debra Blachowiak. ‘Buyers are feeling more in control, and offering lower prices than sellers are accepting.’”
“On Kauai the median price of a home was $605,000. At the market’s height of summer 2005, Blachowiak recalls the median sales price on Kauai reached close to $700,000.”
“The condo market is sensitive. Sometimes rich vacationers pick up one or two or three when the market seems hot. Now that it’s not so hot, ‘they’re offloading,’ says Terry Tolman, executive staff director of the Realtors Association of Maui.”
“That can be seen in Kihei, where more modestly priced condos have stopped selling. Kihei median condo prices have slipped $50,000 from the last quarter of 2005 to the last quarter of 2006, and the number of sales this year – 396 – is down by more than half.”
“Home sales across Maryland dropped for the 15th straight month in December amid a sea of listings. Many areas reported steeper year-over-year sales declines in December than they did in November, including: Prince George’s County, down 31.8 percent from a year ago; Baltimore, down 20.4 percent; Frederick County, down 29.5 percent; and Anne Arundel County, down 10.7 percent.”
“Despite the month-to-month drop in active listings, there were still 47 percent more homes for sale on the market last month than there were a year ago.”
From Ohio. “The slow-down in the housing market experienced in 2006 has led organizers of the annual Homearama show to cancel this year’s event. High levels of unsold homes remain on the market, said Tim Franck, of the Home Builders Association of Dayton and the Miami Valley. ‘Because of the amount of inventory available on the market, builders are not interested in building additional spec homes right now,’ he said.”
The United Kingdom. “Landlords are flooding the housing market at a time when rental returns are falling, according to research. Many regard a buy-to-let property as their pension and may not invest in a separate retirement fund. Experts again warn this could be a mistake if the property market falls.”
“The number of buy-to-let mortgages has soared to a high of nearly 770,000, according to the Council of Mortgage Lenders. In 2000 there were just 90,000.”
“In the whirlwind of money, land and new housing developments, it was easy last year to get caught up in Egypt’s three-year-old real-estate boom. Some analysts have cautioned that a real estate bubble is building, warning that there is a glut of stock and that prices are starting to lose touch with reality. Others, however, point to prices and market dynamics in Dubai and claim that the bubble is far from bursting.”
From Arkansas. “A five-year bull run in area residential home construction and record real estate prices hit a wall in late August. ‘It just amazes me that with all the solid data available to bankers and builders related to supply and demand that banks are still willing to loan and builders are still building. It will hit a wall,’ said John Dominick, finance professor at the University of Arkansas.”
“The numbers continued to look good for Southern Oregon in 2006, despite real estate and residential construction softening, U.S. Bank economist John Mitchell said Monday. ‘Three years ago, how long did it take to sell a house — a nanosecond,’ Mitchell said. ‘Why, because the prices were going to rise. You had to buy then, because it might not be available tomorrow. Now, it might be cheaper tomorrow. I think it’s going to be something we tell our grandchildren about. I don’t think we’re going to see that kind of market soon.’”
From Utah. “Historic downtown Provo can do much more than get its groove back, according to a market analysis. There’s room, and demand, for more downtown condominiums. ‘There is an empty-nester movement that is interested in downtown-type environments generally and Provo specifically,’ ERA VP Steven Spickard said.”
“An urban living center is an option that is becoming necessary, said Kevin Call, VP of the Utah County Association of Realtors. ‘Given where our cities are now, I think it’s needed. We’re running out of developable land,’ he said.”
From Arizona. “The Flagstaff housing frenzy is a distant memory. A slew of condos and townhomes flooded the market in 2006, Realtor Stephen Brighton said, producing more than a year’s worth of inventory. According to the Northern Arizona Association of Realtors’ MLS, there are roughly 282 condos and townhomes listed for sale in the greater Flagstaff area.”
“‘It is an excessive supply,’ said Brighton. ‘and they have come online in a down market.’”
“Leah Waggoner said she is excited at the fierce competition between motivated sellers. ‘It is exciting to watch the prices fall by $10,000 in a week,’ Waggoner said.”
“Waggoner said she was surprised to tour more than a dozen empty homes in the last few weeks, all seemingly waiting for a new owner.”
Another great week! I think we can see new battlelines being drawn. My thanks to those who support this blog. Please check back this weekend for news, your market observations and topics.
“I think we can see new battlelines being drawn.”
True. The group on one side of the battleline refers conservatively to actual data to make its points. The group on the other side continually makes outlandish predictions which turn out in retrospect to be perpetually wrong to the optimistic end of the prediction range. I wonder which group will win the battle?
What do we see, continously, in these reports?
Sales volume down 25-50% Inventories up 50-100%
Fewer and fewer buyers, more and more sellers. A “healthy” market doesn’t have a growing “gap” like this. “Investors” are fleeing (or trying to flee). Suicide loans are being used almost exclusively for fraud (when you can get funded).
There may be more fundamental factors aligned against pricing strength now than any time in history. Probably the only fundamentals not (currently) adding to the weight on prices are job and income declines. Who wants to bet that these last legs won’t go wobbly as well?
If residential real estate doesn’t decline significantly (20%) under these economic conditions I’d love to hear from someone as to what factor(s) will shore up a decline.
Notice the NAR’s rosy predictions never contain a shard of justification, aside from “David Lereah predicts that…”
Soon he’ll be holding up an envelope to his head Carnack Say: What is S@rewed, Glued and Tatooed…..
Thanks, Imploder — luckily I am done drinking coffee for the day, or my keyboard would be drenched
(-:
LOL…imploder great …keep them coming dude.
Old stufff. But it’s amusing to know that some people in theory will have to put up to 96% of disposable income to pay for the house. Bankers are really a bunch of greedy S.O.B. It’s not even good business to do that. Easy Al was amazed at the creativity and inventiveness of american finance. It’s will be very interesting indeed to see all the atomic bombs created by his little Einsteinian bankers blowing up.
SUBPRIME LENDERS GONE TOO FAR
A Time Bomb Waiting to Explode
by Michael Dawson
TheTimeAndMoneyGroup.com
January 12, 2007
Remember when a 20% down payment was expected when purchasing a house. Sometimes with stellar credit and maybe a special situation, like a first-time home buyer, you could get in with a 10% down payment. I recall a few weeks after my wife and I purchased our first home - both cars broke down. Saving for your first home is one of the few times, from a financial perspective, that both husband and wife are clearly on the same page. Everything takes a back seat to saving for that down payment - shoe shopping, night out with the boys, everything. That’s exactly why both of our cars broke down. We had neglected maintaining the cars and everything else while saving for our down payment.
Obviously once a homeowner, whatever is necessary to keep the house - like making timely mortgage payments will be a priority. After all, significant sacrifices were made and no one would want to lose the home foolishly. So, the bankers have us where they want us. Committed customers who pay their obligations for the most part on time.
Well the greedy little bankers knew that they were missing out on a large opportunity with such tight restrictions. There is a large pool of people who do not have good credit, a secure job or money for a down payment. The bank’s bottom line could be significantly increased by loosen their lending requirements. After all, real estate is an appreciating asset. So, even if the number of foreclosures increase the bank would would still make good by selling the house.
Does the above sound like an exaggeration? It is and it isn’t. Banks have always loaned to people without pristine credit histories. However the marketing of such loans, known as subprime loans, increased significantly around in the mid-90s. According to the Mortgage Bankers Association, subprime loans represented 14% of the total mortgage market by 2003. In the period 1994 to 2003, subprime loan growth significantly outpaced prime loan growth with a 25% rate of growth according to a report in USA Today (Subprime loan market grows despite troubles, December, 2004). These loans helped drive US home ownership to its all-time peak in the fourth quarter of 2004.
Well guess what - the chickens are coming home to roost. By late in 2006, the rate of subprime loan delinquencies of over 60 days was up to nearly 8% according to UBS. The Center for Responsible Lending (CRL) projects that nearly 20% of subprime loans made in the period 2005 to 2006 will fail. The New York Times stated that “about 2.2 million borrowers who took out sub-prime loans from 1998 to 2006 are likely to lose their homes”. One of my favorite commentators, Peter Schiff, believes the the NY Times estimate are too optimistic. He says:
“The secondary effects of the “1 out of 5” sub-prime default rate will be a chain reaction of rising interest rates and falling home prices engendering still more defaults, with the added foreclosures causing the cycle to repeat. In my opinion, when the cycle is fully played out we are more likely to see an 80% default rate rather than 20%”.
I knew that there were some crazy loan products available, but check this out:
“The sub-prime market was designed with a built-in time bomb. In testimony to the Senate Banking Committee in September, Michael Calhoun, the President of the Center for Responsible Lending (CRL), showed an example of the most typical sub-prime loan, known as a 2/28, with an “exploding ARM” (adjustable rate mortgage). Buyers can qualify for this type of loan if the original (”teaser”) monthly payment is not higher than 61% of their after-tax income. At the end of two years, even without a rise in interest rates, the payment will typically rise to 96% of the purchaser’s monthly income. No wonder then, that the study conservatively forecasts that one-third of families who received a sub-prime loan in 2005 and 2006 will ultimately lose their homes!”
What a joke - 96% of your income will go to servicing your mortgage. I hope that Johnny doesn’t need a new pair of shoes. These mortgages were designed to be refinanced assuming that homes continued appreciating. That ain’t happening now.
So, what does this mean to the average homeowner? I will let Mr. Schiff explain, “failures in the sub-prime loan market will put greater downward pressure on housing by increasing inventory and lowering prices.” In other words, the value of your house is going down and its not stopping for awhile.
To prevent this article form being a complete downer think of it this way. Your home is your domain your castle - it was not purchased as an investment. It was purchased for shelter and enjoyment. Any appreciation gained from selling it is an added bonus. Hey, I tried to end it on an upbeat
One thing I don’t hear talked about much is the HORDES of people waiting in the wings (lurking here?) with tons of cash to buy into the market at some point of thier choosing.
Anyone remember if the last CA downturns had such large numbers? I know quite a few of us/me. Are there that many of us to support prices at some level?
I’m with you. Sitting on considerable savings and waiting for the right time to jump in. But the question is when, right? You have to do research on your area and see what prices were during the last “normal” market. Roll forward by an acceptable rate of appreciation/inflation, and that’s what you should be willing to pay today.
“…the HORDES of people waiting in the wings (lurking here?) with tons of cash to buy into the market at some point of thier choosing.”
The number of shrewd buyers pales in comparison to those who bought in during the mania.
We’re renting and waiting. Hopefully paying cash for our next house. The tricky part is deciding when to jump in; if hyper-inflation sets in, then there’ll be a rush to tangible assets and RE-prices might go up or level before they would otherwise. It’s a bit unnerving to have the money sitting in (short term) Treasury bonds these days.
Yes I know, I’ll be told in 10 minutes that we can’t have hyper-inflation because salaries are not going to go up at such a rate. I don’t agree, and I don’t think it’s a given that salaries have to keep up 100% with inflation….
I’m not saying we’re getting hyper-inflation, my bet is 50/50 between recession and hyperinflation.
Folks, folks, folks. The “timing” is really very simple, if you’re looking at a primary residence. Do the rent vs. buy math - when prices come down (and rents may rise) to the point when the monthly cost of owning matches (more or less) the cost of renting - buy. You won’t catch the bottom, but you won’t get hurt, either.
“I’m not saying we’re getting hyper-inflation, my bet is 50/50 between recession and hyperinflation. ”
How do you define hyperinflation? Like the US in the late 70s, Brazil through the late 80s or the Weimar Republic?
Personally I think we’re going to see inflation pretty near zero for ‘07. Oil will go down, the housing bublublububble will keep popping, GDP will be stagnant and the Fed will be (surprise!) reluctant to cut.
“One thing I don’t hear talked about much is the HORDES of people waiting in the wings (lurking here?) with tons of cash to buy into the market at some point of thier choosing.
Anyone remember if the last CA downturns had such large numbers? I know quite a few of us/me. Are there that many of us to support prices at some level?”
I know of only one of me, and everyone I talk to besides a select few smart fellows who get the picture is completely puzzled and discouraged (assuming they are not already a homeowner). I cannot imagine there are all that many folks champing at the bit to jump in and buy, given that everyone who wanted to buy arleady did over the past six years.
The other part of the picture which you may not yet grasp is that if the guys waiting in the wings are unable or unwilling to use subprime loans to buy overpriced homes, the bid will still have to fall from its recent levels to affordably align with incomes.
GS is right. Pretty much seeing this here in SF, too.
Anyone I “know” looking at this like me is online. And when it’s all added up, it seems like a handful of people. I hear anecdotal accounts of people who are hardcore bubblesitting, and I’m sure it’s grown in the last 8 to 10 months or so since rents have climbed some… but the influence of, or numbers of people participating in, this kind of environment here is really very small compared to the total set.
“I know of only one of me, and everyone I talk to besides a select few smart fellows who get the picture is completely puzzled and discouraged (assuming they are not already a homeowner). I cannot imagine there are all that many folks champing at the bit to jump in and buy, given that everyone who wanted to buy arleady did over the past six years.”
Second that, GS is right. There are no hordes.
Just like in the early 90’s and more today. Many are moving out of SF Bay Area. Most driven for cheaper cost of living. We dont have a surge of employment as we did in late 90’s. At the peak employers were paying $3 per sq ft now $1 per sq ft. … there is no hordes due to lower economic activity.
Are there that many of us to support prices at some level?
Others above suggest there are not so many; even if there were, the prices that bears will support are substantially lower than current prices. Once prices are obviously crashing, no one will want to catch a falling axe.
10$ oil ?
NO ????? You don’t say !!!!!!!
The statisticians are lying again. What’s new.
Housing market pain not revealed by stats
Home sellers are crying but the data doesn’t seem to reflect their woes.
By Les Christie, CNNMoney.com staff writer
January 11 2007: 6:09 PM EST
NEW YORK (CNNMoney.com) — We hear lots of stories about the pain:
An Indiana man writes to say he can’t sell his house even asking less for it than he paid - four years ago.
A Duluth, Minnesota, reader writes, “The housing market is brutal, has been for months. Prices dropping at least $20,000, some as high as $60,000 just to get them sold. Most aren’t selling even with the drop.”
Some battle. We’re going to club them like baby seals.
That was very funny….and so true.
It’s better to slaw a sacred cow. The sacred cow in question is the myth of real estate as the ultimate store of value.
“new battlelines being drawn”
I agree. The REIC is now heading in to Stalingrad to make their grand statement. It will be a grand statement alright, just not the one they thought they were making.
The siege will take time but the defeat will be catastrophic for the REIC. Here in New York all seems well but this will be to the REIC what Berlin was to the Reich. When everything else has fallen there will be nobody left to defend this final holdout. A recession, and the death of Goldilocks, will destroy this market like so many before it.
Ben,
thanks for all the great work. You are the man.
It is an excessive supply,’ said Brighton. ‘and they have come online in a down market.’”
“Leah Waggoner said she is excited at the fierce competition between motivated sellers. ‘It is exciting to watch the prices fall by $10,000 in a week,’ Waggoner said.”
“Waggoner said she was surprised to tour more than a dozen empty homes in the last few weeks, all seemingly waiting for a new owner.”
Wow! This is almost as exciting as watching prices go up crazily the last 5 years. Can’t beat the capital asset markets for excitement. But it takes patience to make money and keep it.
This prompted me to check zillow. My primary residence has been falling $10,000 per week since October. $1.07m to $878k today. I’m no longer a millionare, sniff.
I am down $7,724 (last 30 days) and $56,215 (from the peak) = Per my zesstimate…
Hey, you two can make it back and more on the way back up in a few years.
I should have sold at the peak… I spent too much time here and I missed the top! LOL.
That is ok. You can load up on RE at the bottom in a few years and make out like a bandit (dishonest mortgage broker, dishonest RE agent, overpaid CEO, etc.).
Easy Al will be back. Don’t worry.
“Hey, you two can make it back and more on the way back up in a few years.”
You do not have to wait few years. Next spring, there will be an exodus of buyers which will create bidding wars. Do not sell your houses yet because it’s just a little market correction/adjustment. Just wait few more months and you will see people lining up bidding for your homes. Plan how are you going to handle the crowd. You might need to hire some type of security to prevent a riot. It will be a very spectacular sight. Please take some pictures so that you have something to show to your grand kids to prove how insane our generation about owning a home. It will be a good laugh for them.
Aloha
I’m down 50k from peak on the current house . Don’t care to much because I have a low fixed note and I can afford the payments and I’m in a last stop before they take me out in a box retirement home .
You never know when you might need to sell however, but I’m hoping that won’t happen to me . I stayed in the last house 23 years, so I don’t like moving ,but needs change sometimes .
My rental house is down…wait a minute, I don’t care how much my rental house is down.
“My rental house is down”
Must move. Tell landlord sorry, I can’t be seen living in a place of such reduced value. I must keep up appearances.
lol
My rental house is down and I do care because it means that the sky is fallin baby! Sky high, unaffordable, run up by shit for brains anal cavity REICshillspeak, spank-you-laters and touron GF`/FB (touron = tourist + moron) “investments”/charming/Buy of the Decade/Won’t last long/now or priced out forever/get in the game/ … thingies.
Value Range: $605,649 - $767,155 Last updated: 01/02/2007
30-day change: -$16,854
Look out below MoFo
(my apologies for the rant - I’ve been up since 0230 jamming on some inter-carrier code - and bloggin of course)
Holy crap. They’re running out of land in Provo too? It’s an epidemic.
Yeah, just like they ran out of land in Hong Kong…..about 100 years ago….
LOL HK prices dropped big time…so much for land lock
I hope that they will not use that excuse in Hawaii. Former sugar cane and pineapple fields added thousands of acres of land. They can build as many homes as they want now.
Land is not the problem here on Maui. Water is. The easy aquafers have been maxed out. If they overpump they run the risk of ruining the source. Other sources further out have been contaminated by pesticides used 50+ years ago. The untapped aquafers further out will be tapped eventualy but it will be very expensive to bring that water to the population centers. Water has been used as a way to check growth here for many years now. There are people up where I live that have been waiting for 15 years on the list just to get a meter. The priorities on Maui for new water is 1) Hawaiian homelands 2) agriculture 3) residential uses. Add to that the new ethanol requirments will give sugar a new lease on life. And the final nail in development is the new law (passed this year) that all new subdivisions be 40% “affordable”.
“An urban living center is an option that is becoming necessary, said Kevin Call, VP of the Utah County Association of Realtors. ‘Given where our cities are now, I think it’s needed. We’re running out of developable land,’ he said.”
I laughed out loud when I read that. Provo is urban now?
I guess it is, if there’s no more land in Utah.
“…We’re running out of developable land,’ he said.””
Let’s clear something up right now you jack@ss, there is no shortage of land in your state. You’re in the wrong portion of the country to use that tired old excuse, so just shut your piehole before you humiliate yourself any further.
I don’t think the problem is a lack of developable land. I think the problem is that some people would prefer to live downtown. And many downtowns lack suitable housing.
I keep posting this and some people think I’m crazy — but I’ve been over to Pasadena CA where they tore the roof off the mall and built European style condos over the shops below. It’s so cool to see open walkways and balconies (where the condos are) over the shopping areas. I’d rather have a small condo in the heart of things than a SFH out in the suburbs. I think it is ever-so-cool that those folks who live in those condos can put on a pair of sweats in the morning and stroll down to Starbucks for coffee — without ever getting in their car and without walking a mile first.
Unless you live in a crowded urban city (like Los Angeles) you have no idea (but you are going to learn) how much the USA car culture blows. Owning a home in the suburbs is so 1950s LeaveItToBeaverish. I don’t believe everyone wants to feel like a hamster on a treadmill — but that is how a lot of people are going to feel once their commutes get even longer and the time spent just sitting in traffic gets more and more noticeable. And it’s going to happen because the USA is far behind in building and expanding freeways and roads, particularly in urban areas.
So, good for Provo Utah and likeminded communities! I think they are going to attract a lot of retirees and empty-nesters as time goes by. Build some housing in areas people would like to live in!
It’s insane that everyone seems to think the suburbs are luxury living. They most certainly ARE NOT! In fact, in mature areas — like Los Angeles and NYC, the most expensive housing is the housing that is “close-in” — the housing that is closest to the areas people work/play in. It doesn’t matter that the housing is smaller or not as new as the new McMansions several hours outside of town.
Anyway… It’s something to think about.
Here’s a link to Pasadena’s new mall housing:
http://www.icsc.org/srch/sct/current/sct0900/36.html
My thought was “there’s another Utah somewhere?”
“Leah Waggoner said she is excited at the fierce competition between motivated sellers. ‘It is exciting to watch the prices fall by $10,000 in a week,’ Waggoner said.”
Whatever floats your boat, I suppose…
“I just love the smell of Napalm in the morning…”
LOL,….
Finally some sense in the media…….sorry it is a bit off topic, but it makes sense and exposes a lot of the B/S that is currently being slung around.
http://www.theglobeandmail.com/servlet/story/LAC.20070112.RKOZA12/TPStory/Business/columnists
Not off topic — quite the contrary, in fact:
‘Official statistics are so massaged and seasonally adjusted and weighted-averaged and smoothed that I often find them hard to believe. It seems like only yesterday (Dec. 12, 2005, actually) that the National Association of Realtors was predicting that the U.S. national median house price would rise about 6.1 per cent in 2006. After all, gushed NAR, over a full year, the national median price “has never declined since good record keeping began in 1968.”
After the recent “good” news about the U.S. housing market, the median price was still down about 2 per cent for the first 11 months of 2006. That makes that NAR forecast fairly embarrassing, but the market has discounted the actual small drop as a mere healthy correction, hardly the harbinger of an incipient downward cascade in house prices — or at least, not yet.’
“This is scary because, according to a recent study by the Center for Responsible Lending (a U.S. non-profit), one out of every five subprime mortgage loans made in the past two years will go into foreclosure. That would mean 1.1 million houses getting repossessed by banks, vaporizing $74.6-billion in homeowners’ equity.”
“The banks will sell the repossessed properties as quickly as possible, driving house prices lower, triggering more foreclosures, putting more excess properties on the market, driving prices lower and, well, you get the idea — a negative feedback loop, the mirror image of the one that built the bubble.”
This guy gets it. First time I have seen the “Negative Feedback Loop” mentioned in the press and drawing the connection with the “Positive Feedback Loop” that sent the market into the stratosphere.
Too bad I could not get access to the “Waterfalls” article referenced. Sounds interesting.
P’Cola Popper
Planned collateral damage.
Here you are………http://www.donaldcoxe.com/triple.html
Thanks. I went back and saw that the embedded link was busted in the main article.
I did a bit of follow up and found this article from Forbes about “Triple Waterfalls” if anyone is interested.
http://tinyurl.com/8fetq
Not to be too picky, but he used “negative feedback loop” wrong. A negative feedback loop is one that is self-adjusting, like a thermostat in your house. A positive feedback loop is one that spirals out of control - i.e. is self-reenforcing - on the up side and on the down side.
You are correct! Chalk up another point for one of Ben’s bloggers.
I double checked on Wikipedia after being burned by this so called “journalist” who doesn’t know how to properly apply the English language. Sheesh.
http://en.wikipedia.org/wiki/Negative_feedback
Not quite. The number will be even bigger than 74 billion. That number does not include the collateral damage to all the marker. It’s just for the re-”possessed” houses. The domino effect will be felt on all the other houses not re-”possessed”. The repossession will put pressure on all the market.
“Exorcist III - The repossesseds” is coming soon to your cinema.
- From Ohio. “The slow-down in the housing market experienced in 2006 has led organizers of the annual Homearama show to cancel this year’s event. High levels of unsold homes remain on the market, said Tim Franck, of the Home Builders Association of Dayton and the Miami Valley.
- Thanks for the ‘Heads Up” on the cancellation. I was planning to reserve airline tickets from So Cal. Darn it.
Yes, the Dayton, Ohio “Homearama” sounds like a really hot ticket!
“Condorama” too would make a great title for a porn film.
It’s a story about pigs that can get enough of it.
Yes, the Dayton, Ohio “Homearama” sounds like a really hot ticket!
2nd biggest show of the season, right after Dayton’s Tires-arama, the city “show stopper”.
“Yes, the Dayton, Ohio “Homearama” sounds like a really hot ticket!”
Sorry………….this year it’s….Home-a-Drama
I sure hope they have it again in 2008. I love going to my condo hotel timeshare in Dayton, Ohio during the Homearama Spectacular week. Last year I got Vanna White’s autograph on my chest (still haven’t washed it off) and lost my voice from screaming while Loverboy rocked the joint. Since I already have the time off, now I’ll probably just spent a week at my timeshare in downtown Des Moines. I beg everyone to call the Homearama promoters and demand the event for ‘08.
I heard that Gary, Indiana and East St. Louis have entered bids to host the 2009 event. The theme will be, “Drive-By Shootings are the Key to Preventing a Housing Bubble in Your Town”.
I heard the tobacco companies are optimistic cigarette sales will soar this year and are lining up to be sponsors. The mantra for 2007 is “Light up. Cigarettes are soothing after you get fu***d in the housing market.”
I am optimistic the producers of Jack Daniels will similarly do quite well in 2007.
Prices down but are they really with some investors. The guy down the street had his house 400k over the models he put a ad in the paper 200k off sounds good but really he is still 125k to high?
From the post:
“An urban living center is an option that is becoming necessary, said Kevin Call, VP of the Utah County Association of Realtors. ‘Given where our cities are now, I think it’s needed. We’re running out of developable land,’ he said.”
An urban living center that’s needed? That sounds another REIC urban legend to me.
“That can be seen in Kihei, where more modestly priced condos have stopped selling. Kihei median condo prices have slipped $50,000 from the last quarter of 2005 to the last quarter of 2006, and the number of sales this year – 396 – is down by more than half.”
Damn those finicky buyers. To hell with them. Take the properties off the market. That outta show ‘em.
Guy in my office just bought a condo in Hawaii. I was telling him it isn’t a good time to buy. But he said it is a good investment and they might retire there anyways. Oh well, still hard to convince people to wait to buy.
Why do any of us even say anything to our co-workers any more? I got the “renting is throwing money away” comment at work today. I am amazed at how economically dumb the average person is. I do not discuss housing at work any more. Everybody deserves the misery they get from this thing. Closed minds deserve empty bank accounts.
I couldn’t agree more, NYCityBoy. I had a conversation yesterday with a person who purchased a “new home” two years ago. There was a defect in the wiring, so the place burned. I made a very mild comment about the potential danger in the construction of homes built over the past five years and the person got VERY defensive. I just let it drop. Let ‘em get the place all fixed up with more shoddy work and materials and experience what happens next.
You’d think someone who had a severe problem as a result of shoddy materials would be very interested. NOT! I agree, closed minds deserve empty bank accounts. You just can’t save people from themselves, it is a thankless task. I am getting so cynical about the situation, it just seems there are so many people BEGGING to be cheated and ruined, why not oblige them? The problem is, live and let live is not always the best policy, because the idiocy of others can have a severe effect on one’s own life.
Condos in Kihei were built in two phases. In the ’80’s and early 90’s the condos were beachfront. After the beachfront was built up they moved mauka of South Kihei Road and farther away from the beach. Beachfront is still selling. Anything mauka is dead. For $100,000 more you can buy a house with the same walk to the beach.
“It is exciting to watch the prices fall by $10,000 in a week,” Waggoner said.”
Not nearly as exciting for you Waggoner, as it is for the bagholder’s who watch gleeful faces like yours circle through their “investments” week after week without making any offers. Ten thousand, Twenty thousand, Thirty thousand……. oh boy, this is really “exciting”… sniffle, sniffle, sob, sniffle……
I think this person needs to look into S&M internet sites for a start .
I have some two income friends at work. They took a loan out against the 2br/2bth condo and some cash. Rather than sell they decided to rent the place out and take a loan against the equity.
Bough a second place for around 950K per month. They both make in the low six figures. I’m not sure what the loan types were but one is ashen looking every day.
Probably looking at 100K loss on the big house. The condo will also go under water. Fortunatly they have enough money to refinance out of this (maybe). I warned them about getting over leveraged in 04.
They have a couple of small children and were talking about relocation to the midwest. They are choking a bit since she is out on maternity leave though.
The high income earners have definitely got into this RE mess. When we were thinking of buying, I talked to a loan officer who was just getting read to do a loan that required 70% of buyers income for the payment. The loan officer told me these were high income folks so there would be plenty left over once the house payment was made! This conversation came about because I was asking the loan officer about the ridiculously high prices in the area and how people were able to afford them.
950K price not per month… oy vey
Yeah, I was gonna say, like this is in the spire of the Chrysler building with a bat-signal, right?
Funny that the “low end” places in the Hamptons are defined as “below $4 million.”
I really hope Manhattan starts to show cracks soon. I’m still hearing a lot of bragging from co-workers and at cocktail parties about how much somebody’s house just sold for, and I’m starting to get some ribbing about my bearish predictions of last year.
I recognize that everywhere is interrelated, but at this point in time Manhattan is truly different, as are a number of other communities serving the very-rich. I’m beginning to wonder if the housing bubble pop will merely end up being another massive transfer of wealth from the middle class to the rich, resulting in a bloodbath in the Bakersfields and Sarasotas of the world but a boost to the Aspens and Manhattans. I really hope not, but it would be consistent with other trends in our national “Brazilification.”
You’ll get both — Manhattan will get cheaper, but only the rich will have any money.
manhattan never cracks.
never …
http://tinyurl.com/mythk
“manhattan never cracks”
What a great read for people buying right now thinking the bottom has arrived
yes, i know three people who rode that ride … down.
two of them were friends. the third will go unmentioned, if you know what i mean.
this is not rocket-science or brain surgery.
but then, i’ve benefited from having
‘looked at life, from both sides now.’
ok, sing along if you insist …
http://tinyurl.com/ybu7zh
“New York City Property Values Jump 19 Percent”
Based on the “tentative property assessment roll.” Don’t know what that means — besides higher tax bills.
http://www.nytimes.com/2007/01/12/nyregion/12cnd-property.html?hp&ex=1168664400&en=b916d8b4494cff56&ei=5094&partner=homepage
all it took was about 8 years from the peak, back then … back then when it ‘could never ever happen!’. ha! hahaha. not so funny for some us.
oh, and the view from the bottom: there was no light at the end of the proverbial tunnel.
can you say … Japan?
funny how the psychology played out,
and i suspect will again.
my best guess … the fat lady hasn’t even finished make-up.
Thailand.
You are brilliant Marc! Congratulations. Maybe sometime soon you will have something to *offer*. Or maybe not. We won’t hold our breaths. But thanks for being a smarty-pants, there are never enough smarty-pants for quota.
“MARKET WATCH; Where’s The Cash, Mr. Trump?
Is Donald a deadbeat? Is Donald a deadbeat? Donald J. Trump’s failure to come up with a measly $30 million to pay bondholders at Trump’s Castle, which he bought five years ago on amazingly generous, less-than-no-money-down, credit terms, is far from the final chapter of the Trump saga….”
This is hilarious. That link is a must read for everyone on this blog.
jack posts “manhattan never cracks.”
I thought that area followed Wall Street. Regardless of what was going on at Main Street USA?
That is a myth. A new york appraisal company did a study that concluded there was very little (if any) correlation with wall st. bonus money and nyc real estate prices.
Speaking of bragging about how much one’s home sold for, here’s a Tucson example:
http://www.tucsonweekly.com/gbase/Opinion/Content?oid=oid:91244
See the “Comings and Goings” squib at the very end about a former city council member’s recent home sale.
You can’t beat market fundamentals. The difference between the rich and the rest of us is that they don’t buy homes as investments. They buy them because they can. And they don’t need to sell because someone lost their job or had a bad day in the market. They sell because they don’t want them any more (or their kids do after they die). Then, whatever it is, it goes to market (including down market).
Actually, the masses don’t buy them as investments either. Anything you live in isn’t an investment, it’s an expense. At best it’s a forced savings account.
True, but people THINK they are.
Yeah, Manhatten is different. Only US City that went BK and had to have the Federal Treasury bail them out. Did the city every pay the Feds back the money? New Yorkers love to talk, and once in a while they migth even tell you the truth.
david cee,
New York never went bankrupt.
Under Felix Rohatyn’s leadership, Prez Ford provided 1 billion in loan guarantees…
“…Ford he signed legislation providing credit to the city; this unlocked other pieces of the package: from the banks, the pension funds and insurance companies. It saved New York but it did not save his presidency. Jimmy Carter was elected in 1976.
In 1980 the city balanced its budget; in 1981 it re-entered the securities markets and repaid the government guarantees. Since those dark days the city’s recovery was uninterrupted, except for 9/11. New York’s present economic boom is ample proof that those who opposed bankruptcy were right, and that in a crisis, bipartisanship and business-labor cooperation will go a long way.
http://www.opinionjournal.com/cc/?id=110009476
And look at the cast of characters that advised Ford to let the city go bankrupt and devastate the financial markets…
“Felix Rohatyn, one of the chief architects in steering the city through the fiscal crisis, described Ford as a “hugely decent and nice person.”
Rohatyn said Ford was poorly served by a slew of advisers - including Alan Greenspan, Dick Cheney and Donald Rumsfeld - in his initial handling of New York’s fiscal crisis.
http://www.nydailynews.com/front/story/483810p-407257c.html
So david cee, in your neighborhood, clearly you like to talk, but what’s your feeling about spreading urban myths?
david cee,
New York City did not go bankrupt.
“…Ford signed legislation providing credit to the city; this unlocked other pieces of the package: from the banks, the pension funds and insurance companies. It saved New York but it did not save his presidency. Jimmy Carter was elected in 1976.
In 1980 the city balanced its budget; in 1981 it re-entered the securities markets and repaid the government guarantees. Since those dark days the city’s recovery was uninterrupted, except for 9/11. New York’s present economic boom is ample proof that those who opposed bankruptcy were right, and that in a crisis, bipartisanship and business-labor cooperation will go a long way.
http://www.opinionjournal.com/cc/?id=110009476
and look at the characters advising Ford to let the city go bankrupt and devastate the financial markets…
“Felix Rohatyn, one of the chief architects in steering the city through the fiscal crisis, described Ford as a ‘hugely decent and nice person.’
Rohatyn said Ford was poorly served by a slew of advisers - including Alan Greenspan, Dick Cheney and Donald Rumsfeld - in his initial handling of New York’s fiscal crisis.
http://www.nydailynews.com/front/story/483810p-407257c.html
I think the property market and the economy in general is FAR worse than we are being led to believe. I just got back from Costco. My bill came close to $100. There’s just my wife and myself and 3 mutts and we have, basically, everything we need in life. A bigger energy bill, for instance, is neither here or there and a bigger grocery bill doesn’t mean much. We can afford whatever we decide we want. A new Lexus? Why, when I’ve got a 10 year old Land Rover which still works which costs me $90 in taxes. My wife? She has a 6 year old Camry in great shape. Why bother getting a $80,000 vehicle which has king size tax bite attached to it so that some factory installed gizmo can tell me, “Turn left at the next corner,” if I’m going somewhere. I can still read a damn map for chris’ sake!
In a few minutes I’m going to fill the Land Rover up. It’s a gas guzzler but it’s still a hellava’ lot more sensible economically than spending $80,000 on a new one. I could have bought a bloody condo in LA for that in 1980!
My point being, WHO can afford these ridiculous property prices when you take into consideration all the other living expenses and the incredible amount of debt in this (and other) countries. Than banking world has REALLY reamed people another financial a**hole, aided and abetted by government figures which are totally manipulated. I figure TRUE inflation is running at around 7%.
It doesn’t affect me but I feel sorry for those in their 20’s and 30’s who are trying to get started. Putting it another way, when I was younger and coming from a working class background, it was tough….but for todays young people, it’s MUCH tougher.
7% sounds about right. With the USG understating the inflation rate by juggling the formula when it’s convenient and the NAR changing the affordability formula every time that number makes them uncomfortable, it’s a wonder anyone can trust anything that’s published. We herald unemployment drops and yet no one pays any notice when personal income levels continue dropping. A lot of duping going on. When the music stops then what?
“I feel sorry for those in their 20’s and 30’s who are trying to get started.”
Thanks, Mike! Love your posts, they are right on, IMO. Don’t forget that Lexus now has a car that will parallel park itself. Because that is so very hard to do? Seriously, when I have driven other people’s luxury cars I have found myself seriously confused with all the buttons, GPS, stereo, automatic seats/mirrors, etc.
Our economy is up the creek.
Ditto ,good post Mike
Mike as a rational member of the demographic you mentioned, I can assure you it is VERY tough. Last year my wife and I pulled in just shy of $200k. Nice income in most places, but all but meaningless here in Silicon Valley. Even with that, and even with $100k that we’ve managed to save in spite of ludicrous graduate school loans, we can’t even SNIFF a house in a decent neighborhood. So, we do the sensible thing and rent at literally 25% of what it would cost to pay a mortgage on our current home, but then get absolutely SCREWED on taxes thanks to AMT and not having any mortgage interest to deduct. A starter home across the freeway in a gang-riddled neighborhood goes for about $600k these days. No thanks. Needless to say, we’ll have to move at some point - but we know our incomes will drop significantly, job opportunities will be fewer, and we’ll leave behind family and friends. Not a happy thought.
“…but then get absolutely SCREWED on taxes thanks to AMT and not having any mortgage interest to deduct. ”
Well, that’s never going to change - a paycheck will be taxed up the maximum, because it is the easiest thing to do. A paycheck recipient does not have a choice - he or she needs money. Unlike other forms of assets and incomes that can be easily moved to a greener pastures. So those have to be taxed more competitively. Once I realized that, I started to work hard on shifting my sources of income. Buying RE after everything settles down in a few years may not be a bad idea.
This OT but car GPS’s have become very useful, accurate AND affordable as of late 2006. Sure you can spend $700 on one that speaks out the name of the street to turn onto, or $2k on an in-dash unit, but there are very good $200-$250 GPS’s you can buy at Fry’s or Staples that are phenomenally helpful in reducing marital stress when driving to places you haven’t been before, or in complicated neighborhoods. You can also take them along when traveling to a new city. Maps are nowhere near as good.
i have to disagree pdx, i am a map lover and happen to have a great sense of direction as well and rarely if ever get lost anywhere, does not matter where i am, nyc, la or portland,
the technology is amazing but i am old fashioned
how did we live without ipods,cellphones,pda’s,gps etc etc??
it still can be done
Just as long as nobdy is getting lost in the west side of Chicago, be it via analog or digital maps.
Out of town businessmen in rental cars do get lost in this part of the City, and sometimes they do not come out of it alive.
Just get rid of the car altogether. I find that to help the marriage. Then live on a really small island where you can’t get lost by more than a few blocks. Another plus for the marriage. NYC might resemble a sewer on occasion but I have found married life to be simpler with no car and an apartment the size of our old walk-in closets. Simplicity is bliss!
excellent points made mike
as a mid thirties person it is hard these days
but thank god i got financial religion a few years back
and i consider myself lucky to be sitting on capital
instead of being a slave to a bank. got my 5 year old paid
off car and loving it. mass consumerism kills!!
Never had a loan on my 5 year old car
I am hitting the consignment shops looking for a large CRT TV for a song to replace my 19 year old 20″ TV. Many people spending thousands trading up to Blazmah and LSD these days.
They need me more than I need them so I will wait for them to lower their ridiculous asking prices for these used TVs. (I am serious. You can buy brand new for less.)
Meanwhile, I continue to enjoy my old color TV. Every few years I perform a touch-up color purity and convergence alignment, the picture is really quite good
When TV switches from analog to digital, will these old TV sets be any good?
There will be aftermarket converters for the signal.
Chronicles of the Real Estate Telepathic Ponzi Scheme
True story. During October 2005, I was a host at my condo complex for an open house event. Guests came and went on trolley buses, and my only responsbility was to quickly introduce the guests to our condos and guide them to a few showcase units.
I informed the guests that the first unit they would see is a remodelled 2 bedroom, 2 bath unit that was purchased for 90K and had about 30K to 40K of additions to it. Then, I went on to say that the couple that bought it and fixed it up, just put it on the market for 170K.
As soon as I finished mentioning the price, this guy in his 40’s immediately and arrogantly said “So, by next year it’ll sell for 300K, right!?”
Even today, after ample time and a few price reductions, that unit still has not sold.
San Diego December statistics are out:
http://www.sandicor.com/statistics/stats2006/12-2006/sfd-12-06-stats.pdf
The link at Sandicor
http://www.sandicor.com/statistics/stats2006/12statistics.html
has typo’s in it, exchange 2005 an 05 with 2006 and 06 in the URLs.
I guess they just copied last years page….
New York City Property Values Jump 19 Percent
Click the link for this story. It’s different here . . . the big difference is it’s going to hurt a lot more when the chair gets pulled out from under us.
Manhattan never cracks
Does anyone remember the 70s?
You could not GIVE an apartment away, Maintainance could easily be double your mortgage.
Landlords walked away from many, many, thousands of buildings.
The City ended up owning them because landlords stopped paying taxes way before they walked on the buildings.
Don’t believe me?
Most of these buildings still exist today,and are filled with squatters.
Have a look for yourself….Walk any steet on the lower east side and many area in Harlem, this is why these areas were so resistant to gentrification.
Who wants a $500K studio next to a boarded up building full of squatters.
Walk through the South Bronx to really blow your mind.
There are areas where you see nothing but rubble for ten blocks in any direction, after the landlords walked, the buildings were one by one, burned, stripped of all cooper and lead, then all the bricks were taken. In the 70s a used brick was 25 cents,since the buildings were solid brick, there wasn’t much left.
When there were no buildings left in the S Bronx ,the “material recyclers” moved on to the streets. The S. Bronx is a very old part of the city and the streets are cobble stone under the black top. In the 70s a used cobble was worth $2.50 . Now many roads in the S Bronx are dirt roads with scraped off blacktop still piled on the side.
Finally, There are more Heroin Junkies in Manhattan than any where else in the country, the men pay for drugs by breaking into cars and taking stereos. That is why the streets of Manhattan are littered with car glass, and that is in ALL areas. The female Junkies usually become whores.
Does anyone remember which of the Kennedy kids were arrested for Heroin in the 70s?
nyc was a different place in the 70’s and 80’s, these days i
cringe with what is going here. manhattan has turned into one big shopping mall,duane reade’s on every corner as well as banks
everywhere you turn. ny was great for all the mom & pop type of stores, now it is starbucks-jamba juice-cvs-chase etc etc
and can be just like many other middle america places in some areas. we also have the pleasure of being the euro trash playground as well. i love ny but i’m not sure how long i can stay here. you need major cash to really enjoy what nyc has to offer
“Walk through the South Bronx to really blow your mind.”
Are you crazy? I get nervous going through the South Bronx in a Metro North train. The Fordham stop alone makes my butt-cheeks tighten. I’ll take your word for it.
There are no squatters on the Lower East Side. One bedrooms go for a half a million bucks there.
Doug_home,
Things change. You gotta keep up.
“If you saw parts of the South Bronx today, like the neighborhood centered around Charlotte St., to the east of Crotona Park in the South Central Bronx, you would never believe this was once a neighborhood with a disreputable past.
Walking down Charlotte St. today you see attractive ranch houses with shiny, new vans parked next to them, well tended lawns, and a pleasant, relaxed atmosphere. It could be suburbia. The old, slummy-looking high rise apartment buildings, once so characteristic of this neighborhood, were torn down (those that weren’t burnt down, that is) and replaced by owner-occupied single family homes and row houses. The residents who moved in the early 1980’s paid prices around $50,000 for these houses. Nowadays, as real estate prices all over New York are going up, surprisingly one of the places they are rising fastest is the revived neighborhoods of the South Bronx. The Charlotte St. houses presently sell for around $180,000.”
http://realtytimes.com/rtcpages/19990422_bronx.htm
You are completely out of touch. NYC has gone through a complete Disneyfication. There is still sh*t all over the sh*tter but nothing like the 70’s & 80’s that I grew up in. Outerboros are a mass condo conversion for Russians, Asians & Pakistanis & the Isle of Manhattan will eventually be purely a tourist destination & home for uber-rich & wanna be uber-rich who can get suicidal loan approval. There will still be a massive crash there at the end of the cycle for the rest of the country, as has happened in every previous cycle. But the pictures we see will be much sanitized compared to the burn-baby-burn South Bronx & East New York of the gritty past. No-english cab drivers will work 70 hour weeks and pack homes to the gills with extended family to stave off the foreclosure referee but the blood will be shed here and there anyway. Just not as bad as in the exurbs.
I remember growing up in the LES in the late 60s through 70s.
Watched from my bedroom window people getting “worked over” in the park across the street. (Lots of Heroin in use back then.) A tenament building down one block from me was being gutted for renovation but then the skeleton fell down. The firemen where using ropes from the other rooftops to hold up what was still standing while they searched for trapped workers. My older brother was a plumber in NYC and he had done some plumbing work to renovations that eventually ran out of money and the buildings where abandoned. One such RE investor was known as “Lucky.” (For real.)
But not all of my memories are bad. From my grade school windows I watched the two twin towers chase each other to the sky. The small quaint family operated Puerto-Rican “bodegas” offered authentic savory ethnic food. NYC was, and still is, many small “complete” neighborhoods where you can attend public schools and do all of your shopping and errands by simply walking. People like to trash talk the NYC public schools but I learned Calculus, Physics, Chemistry, French (now lost), Literature; and I did not even go to a magnate school. I played lots of stick ball, stoop ball, and hand ball. I ate lots of pizza slices “on the go.” (Not that hard - you fold it in half at the crusty end and eat it with the pointy side facing you and work your way down to the crust. Last yah for one full city block.) And the cops would say “yous guys.”
I went back for my 25 year HS reunion to discover lots of changes. The site of the fallen building now had a brand new building there, same dimensions. My old neighborhood was mostly Jewish owned but is now part of Chinatown and mostly Chinese owned. Lots and lots of graffiti everywhere. All tenament apartment buildings now have front building door locks with buzzers. The subways no longer accept tokens, now they have these newfangled electronic cards with a magnetic strip. (My friends and I used to use fake tokens punched out of ordinary aluminum sheet metal stock:-)) The pizza looks and tastes like cardboard. And the cops are no longer all tall men, now some of these cops are pathetically small and wide.
“My friends and I used to use fake tokens punched out of ordinary aluminum sheet metal stock:-)) ”
Ahh, the Subway Slugs!
“‘The hardest-hit range was from $1 million to $4 million, north of the highway, away from water, and outside any village. Properties in this price and geographic area went into contract, in some cases, at 25 to 30 percent less than what they might have sold for in August 2005,’ said Mr. Chapin. ‘In the summer and early autumn, these sellers were dropping asking prices hundreds of thousands of dollars at a time. Every day, the reductions would come in over the fax machine.’”
Can you imagine having to drop your wishing price $100K at a time to attract a buyer? It must be nice to have that kind of money to throw away…
This news that home prices in New York are dropping in $100K+ increments resonates well with this story from 1987. (BTW, the largest stock market crash since 1929 took place in October 1987…)
———————————————————————————————-
Home Buying Drops Sharply In the Suburbs
By THOMAS J. LUECK, SPECIAL TO THE NEW YORK TIMES
Published: July 27, 1987
http://query.nytimes.com/gst/fullpage.html?res=9B0DE0DA1731F934A15754C0A961948260
The surging market for homes in the suburbs of New York City has abruptly shifted gears. In many suburban communities, where real-estate prices have more than doubled since 1980, industry experts say there is a huge inventory of unsold homes, and a sudden paucity of buyers.
In May, June and early July - normally the peak of the home-buying season - anxious sellers in much of the suburban region have been lowering their prices, sometimes repeatedly.
”The number of properties on the market is unbelievable,” said Richard Palmer, regional vice president of the National Board of Realtors for New York, New Jersey and Pennsylvania. ”For the moment, the unsatiable demand for homes seems to be satisfied.”
C’mon Stucco, you know they never “had” that money to throw away to begin with. It was “wish” pricing far above the healthy profit already in pre-bubble equation.
Words of wisdom. They never had the money in the first place. It was just make believe all along and is still is.
Here’s an ad from SLC Craigslist. These houses are in Utah County between SLC and Provo.
Couple of thoughts…
If $50,000 is a “high” salary in Utah, what does that say about the prices of these homes? And I’ve been looking at real estate for a while in Utah since we are moving there next spring….$336,000 is a pretty reasonable price. There’s a lot out there in the $400-$500K range.
Also, even though these houses sound big, probably only 1,800-2,200 is finished square footage. The rest is typically unfinished basement.
This guy has three contracts on new builds in one neighborhood??? When I was out there last spring/summer (2006), the buyers (investors?) were still snapping up everything at outrageous prices. Were they drinking the kool-aid longer than the rest of the country?
I really want to buy a house when we move there, but I know we should wait. My husband makes a six figure income, but I *still* wouldn’t be comfortable spending $500,000 (the only stuff I’ve liked is in that price range) on a tract home in SLC.
What do you all think? Is SLC headed down the same path as the rest of us? Anyone have any first hand anecdotes?
———————————————————————-
$360000 Kick Me While I’m Down - Save Thousands
I will assign my interest in a new home purchase agreement for a J. Ballard home in their Winter Haven development on Traverse Mountain in Lehi. I purchased it last April as pre-construction and since then the builder says the base price of the home has increased $20,000. I’m told another price increase will come early in 2007. The home should be completed this winter. It is on a premium lot and has a walk out basement.
I actually purchased three homes in Phase 6, all with assignable contracts. I paid a lot premium for each lot to accommodate the walk out basements. I ordered the following upgrades: staggered kitchen cabinets, stained railings, large floor tiles, and both gas and electric dryer connections. The Cardinals are approximately 3650 square feet and the Falcon is approximately 3560 square feet. Buyer must verify square footage.
I purchased these homes as an investor but since June I’ve had 2 major surgeries. The last one produced a blood clot that put me back in the hospital and just about took me. I’m still recovering and that’s why I’m selling my contracts.
Traverse Mountain is a perfect location for people going north or south on I-15 Between Sale Lake City and Provo. It is only 3 or 4 miles to Flash/Micron which is in the process of hiring approximately 1800 people at an average salary of $50k. For Utah that is a high salary. This is an excellent location to live in or invest in. Appreciation varies by neighborhoods and this is one of the best neighborhoods in Utah in terms of annual appreciation.
As a real estate broker I was given a 3% discount (in lieu of commission) at the close. This will be passed on to you in the assignment. My assignment fee is $1000 per home. This is all reflected in a spread sheet which I will be happy to email at your request. These three houses are very competitively priced with others in Winter Haven.
you already know what we think. (cost to rent vs PITI).
SLC is one year behind AZ, LV, SD, FL. if you want to be, a year from now, in the position FBs are in those areas I listed, then you should buy now in SLC.
“…what does that say about the prices of these homes?”
Buy now and get priced in forever…
I live in Salt Lake and would like to buy a house but not at the prices people are asking right now. A couple of years ago you could buy a very nice house for 250k, now those same homes are going for 500k +. PDXrenter is right, SLC is at least a year behind other markets but I think it will proably fall faster than other markets because prices haven’t been this high for as long as other markets so their are more people with actual equity that they can use to undercut the market.
“The Flagstaff housing frenzy is a distant memory…”
Flagstaff? Housing frenzy? That’s the best non sequitur I’ve seen in print in a very long time.
Wikipedia gives the following definition. Non sequitur is Latin for, “It does not follow.” The term may refer to: 1)Non sequitur (absurdism), a comment which is humorously absurd or has no relation to the comment it follows.
Not to be a language-prick… (sorry in advance) but its more accurately an “oxymoron”. Non-sequitur’s more commonly apply to logical disconnects, failed causalities and faulty sequential reasoning. Reaching a conclusion that has not been logically established by the premises is a “non sequitur”. That Wikipedia definition is really weak.
Sigh. Wikipedia.
Here’s the posting link…
http://saltlakecity.craigslist.org/rfs/261639879.html
“Properties in this price and geographic area went into contract, in some cases, at 25 to 30 percent less than what they might have sold for in August 2005,” said Mr. Chapin. “In the summer and early autumn, these sellers were dropping asking prices hundreds of thousands of dollars at a time. Every day, the reductions would come in over the fax machine.”
There is no question that the smart money started leaving the Hamptons well over a year ago. The Hamptons buyers are largely investors even if people don’t admit it. Even if these wanabees delude themselves that they are America’s elite despite the fact most are overextended to the hilt. They came rushing out there in the last few years with the idea that property would skyrocket. And they kept coming and coming. Just because someone weekends in a house doesn’t mean it is not an investment property. Well, now the place is starting to unravel and people are getting scared. And as these RE tenderfoots start seeing the law of gravity in action they are going to sh_t in their little designer shorts and bug out.
2007 will likely be a good rental year because nobody wants to buy if they think it will be less expensive in three years. Rentals are something to watch now, as rental season starts early.
2006 was already a down year for the Hamptons rental market. It will get worse.
Egypt, eh? I was visiting in 6th of October three years ago and it was a weird place out in nowhere. In the development that I was staying there were lots of unfinished houses. They weren’t under construction; just sitting there. Hmmm… and this was during the start of the boom.
Fundamentally increasing home prices are driven by inflation. The Egyptian pound was 3.4 to the USD in 2000. Now it is about 6. It really tanked in 2000-2003. And remember that this is relative to the deterioating dollar! I think this real estate boom was a delayed reaction to the increasing money supply.
Congratulations!!
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Mystery blogger targets real estate market
From the Merced Sun-Star. Speaking of the Internet, Loose Lips has noticed a new blog in town called Merced Going Quickly. The site chronicles Merced’s bursting real estate bubble with scathing wit. Loose Lips wonders who’s behind this blog. Come out, come out, whoever you are!
Check out the pic of the empty house in the caption “Dark windows without curtains watch over empty driveways” of the MGQ blog. Looks like something out of a Frankenstein movie.
Ok, it is just a gag. But still fun to look at
Kris. I grew in SLC, and was just back 2 wks ago visiting family. It will drop like a rock there. Too many homes built in flood plains, mud slide areas, etc. I was shocked when I went back recently (to see mud slide homes). I left in 89. Send me an email at housingbubblesobstory@yahoo.com and ask me any questions of UT. I can inquire to folks currently there too.
need some riots in LA to get UT back on top- great roads
Have they gone too far?
http://www.floridarealtors.org/NewsAndEvents/n2-011207.cfm
Now, let’s see:
a) Prices fall by $10,000 in a week
b) 1 years worth of inventory = 52 weeks
c) 52 weeks x $10,000 = $520,000 reductions this year!
LOL. (Of course that doesn’t really work like that, but it sure is fun to think about).