Post Local Housing Market Observations Here!
What do you see in your housing market this weekend? Any graphs? How about marketing? “Elisabeth Mills, VP in The Corcoran Group’s East Hampton office, is not sitting back and waiting for buyers in this slow market. Last summer, as the market continued to chill, she took advantage of the potential buyers that flood the Hamptons during July and August by featuring four of her East End listings in television ads that ran on local cable TV, a bold (and expensive) move most agents don’t make.”
“You really have to put more time and effort into marketing homes, as well as promoting yourself these days, Mills says.”
A financing trend? “Home-buyers in a stagnating real-estate market are starting to hear a term not bandied about since the days of high interest rates: seller financing. Walter Molony, a spokesman for the National Association of Realtors, said that seller financing was popular in the late 1970s and early 1980s, when mortgage rates were in the high teens.”
“‘Conventional financing was basically unaffordable, so seller financing was the only thing keeping the industry alive,’ Molony said. Although interest rates remain low, home prices are high enough that some buyers still struggle to save enough money for a down payment. ‘And you’ve got sellers that are more motivated to negotiate terms that might help the buyer,’ Molony said.”
Any statistics? “Eighteen months ago, the market - which includes Charlottesville and the counties of Albemarle, Fluvanna, Greene, Louisa and Nelson, had only 1,100 homes for sale, or roughly four units per buyer. Today, there are 2,504 homes listed for sale in the Charlottesville market, or an estimated 10 homes per buyer.”
“‘The sellers thought they could get the same price as their neighbors who sold in 2005, so they weren’t willing to come down very much,’ broker Michael Guthrie said. ‘But now they’re starting to come to the decision to drop their prices to a certain extent.’”
“Real estate agent Denise Ramey said she too has noticed an ‘attitude adjustment’ on the part of sellers, leading to recent corrective reductions in price. ‘The negative news we’ve all been hearing has helped sellers understand that they need to start being realistic,’ Ramey said.”
Any bidding strategies? “Sarah wants to buy a house. She has submitted a purchase offer on five different houses. Her actions are cutting a wide swath, leaving behind a trail of disappointed and irritated sellers. Sellers are anxious, and houses always are priced much higher than sellers expect to get for them. So she is submitting purchase offers of $250,000, insultingly below asking prices, convinced sellers will welcome them gladly.”
Some of you might have caught my post a week or so ago about my experience going into a KB community called Harbour Isles in Apollo Beach, FL. I decided to email KB headquarters and see what kind of response I’d get. My email will describe my experience so I don’t have to repeat my former post, as this post is on the long side.
Hello. I have a very serious complaint and I request and strongly suggest that you review it and respond. On 12/31/06 I visited your sales center at Harbour Isles in Apollo Beach (Tampa Area), Florida. I was in a discussion with one of your sales representatives, and she stated that one of the main reasons to purchase a home in this neighborhood was the growth in the area. She pointed out that there was a major hospital and a large mall being constructed in the city of Apollo Beach. I asked her where the hospital would be, and what company was building it. She seemed surprised and then stated that she didn’t know what hospital it was, but it would be built very soon. She provided me with a similar response about the mall.
I wanted to know more, so I contacted the Apollo Beach Chamber of Commerce and let them know what I was told. They responded that neither project was in the works. Both projects had simply been thoughts or researched and considered, and both were stricken down many, many months ago, particularly the hospital. That plan had been canceled roughly a year earlier.
Based on the rapport I had with your sales associate, I feel that I was blatantly lied to. I feel she unethically used a sales tactic to deceive me into believing the neighborhood had more growth potential than it does, and tried to make me feel that home values would rise based on this lie. In the current real-estate environment, I believe this kind of deception is not to be tolerated. Are your representatives so desperate to sell homes that they have to make up stories to sell them? I find it impossible to believe she did not know her words were untrue. I wonder what other misinformation she gave me? It is your company’s obligation to make certain that all information provided to potential customer is current and factual. I shudder to think of how many others victims did not investigate this information and have committed to purchasing homes under the false pretenses that representatives of your organization are stating to possible clients.
I therefore request that you conduct an investigation of this incident and provide me with full details of your actions. I will wait 3 business days, and if I do not receive a satisfactory response I may take my complaints to the State Attorney General and other relevant governing bodies that investigate this type of fraud. Thank you for your attention to this matter.
First Response, received only hours later:
Dear Mr. XXX,
Thank you for your candid feedback. I am very sorry for the frustration you have experienced. Please be assured that when we receive a note of concern at KB Home’s Corporate office from one of our customers, we take it very seriously. Matters pertaining to sales are managed entirely at the local division level, however your e-mail has been escalated to the Senior Executives of KB Home Tampa and an investigation into your complaint will be made. You will be receiving a response from a KB Home Tampa division representative soon, if you have not already received a response by the time you view this e-mail.
Please let me know if I can be of further assistance.
Then I received this 2 days later from the Tampa Division:
Thank you for taking to time to inform us of the inconsistent information regarding the Apollo Beach area. We have reviewed the information you mentioned with our sales team and updated the information to be consistent with the current anticipated growth in the area. I apologize that you were given the out dated information and sincerely appreciate you informing us and allowing us the opportunity to update accordingly. Our sales team is typically diligent in collecting area information and unfortunately did not receive updated information. Please accept our apology for the miss-information, the team in no way would find it a benefit to misinform you in this way.
We appreciate you considering KB Home as your homebuilder and again appreciate the information you provided.
Sincerely,
(Some fake name)
So naturally I’ll be paying another visit there soon to test their resolve. I’d encourage any other locals to do the same if your curious. As always, would be interested in any comments…thanks.
Great investigative work!
Well done, Warrior. They’ll have to come up with some other kind of spin to sell those houses. Something like: You’ll be far from hospitals and malls, but it doesn’t matter because you won’t have the money for shopping or healthcare anyway”.
I’m in that neck of the woods and applaud your efforts.
I am seeing insanity around here. I am temporarily renting in a condo complex built during the 70s (not by choice, extenuating circumstances). I’ve never lived in a condo before, never wanted to and now I know why. It has dawned on me that when you live in a condo, everyone is living in each other’s waste, especially in Florida, where much of the drainage is so poor. And that will only get worse, as the development marches on. It has been fairly dry recently, but I predict a few months of wet weather will have neighbors at each other’s throats in many areas. I, of course, am a bit jaundiced, since over the past couple of days I’ve had to experience the effects of not one, but TWO sewer backups into my first floor unit, each time the resident upstairs flushed in the morning. And I am not the only resident here experiencing this difficulty. I got a real education on the pipe and sewer systems of condos and it ain’t pretty.
As to the insanity I referenced above, the condos here are mostly two bedroom, two bath units with narrow little patios and no shelter for the automobiles. Small pool, and a tennis court. They probably sold for about $35,000.00 back in the 70s. The property manager mentioned that the unit next to me was up for sale and they just received a notice from another condo owner who was putting their place up for sale because it was “eating them alive”. Asking prices? $200,000.00!!!!!!!!! Yep, to live in deteriorating structure among the waste of your neighbors. LMAO!
palmetto -
do you know anything about the history of your building? There’s a different building code (in my twp. anyway) applied to apt. construction vs. condo, especially as regards plumbing requirements. (To prevent the exact situation you described - upstairs neighbor’s flushing backing up into downstairs unit.)
The local bldg. inspector was pi$sed at a developer who decided midstream that the apt. building he was building was going to be condos instead. Half of the units are built according to apartment code and the rest are conforming to condo specs.
It’s going to sukk to be a resident in the apt. half.
phillygal, sorry I didn’t reply sooner. I don’t know much about the history of the building. One of the residents here mentioned that the original builder went BK back in the 70s and left the place half done. People started buying up some of the units with the intention of renting and then someone bought up all the remaining units. I am in Florida and don’t know what differences there are in condo vs. apartment code. I’m just glad this is a temporary situation. I’m very anti-condo, but I suppose it works for some people. For me, it is just too restrictive. But, whether apartment or condo, I’ve found out the hard way over the past few weeks how much neighbors in a shared building can upend your life at the drop of hat. I won’t get into all the gory details, but for the folks on this board, if you are renting, I highly recommend renter’s insurance. Thank god I had it.
First-floor sewage mishaps are common in Florida high-rise condos. It’s a shame you are stuck in one. Any chance you can move to a unit higher up? Florida’s rental laws are pretty supportive of the tenant, as I understand it.
i am in a condo in a pretty city but it was built in the 70’s also. i’ve been here since sept. and only now has my skin stopped crawling from creepy condo-itis.
my landlord terrifies me and threatened to sue me if i broke the lease.
i hired a prop manager to help me get out of lease and move to a detached. if i actually find a tenant to take this place i really need a lawyer to sign another rental lease.
Agitated, I hope your situation resolves. You have my sympathies. In the short time I lived over in the Orlando area, I experienced a property manager who really sucked, but I handled the situation.
Chip, my landlord is thankfully an great person and has really helped me out in this situation. Some dipstick in the building has been flushing t-shirts, I am amazed at what some people do. This is only temporary for me, like for a couple of months, so as long as it doesn’t happend again, I’m OK. But I know what you mean about first floor condos in Florida. It doesn’t even have to be a high rise for there to be a problem. Just poor construction and weird neighbors.
Is that legal? Doesn’t the developer have to upgrade the half of the building that was apartments to condo specs?
At this point, all I know is that the bldg. inspector halted construction while he and the developer hacked out a resolution.
I will attempt to find out. Construction is 90% complete and the units are now on the market. Not selling, though.
I love your grassroots effort to stomp out this fraud. Excellent work, Ultimate Warrior!!!
Please let us know how your future info-gathering activities go.
Just an added tid-bit about KB Homes a little further north on US41. KB has 3 developments around Palm River.
Today I was driving home along 41 south when I saw a KB sign twirler. It was the first time I saw one here.
But beside him as a “walking house”, yes a clown in a Box, beside the twirler, trying to attract new customers into their lastest debt-traps. I smell desperation. It smells like………..victory!
Ultimate Warrior, that is awesome follow-up on realtor lying.
You know, we’ve gotten so used to hearing lies from agents that we just make the assumption that that’s what they do to sell homes.
You’re experience makes me do a double-take! Perhaps the motto should be: “We’re not gonna take it anymore!”
I’m sure that evrybody in every market of over 10,000 people in the US has heard major lies from agents about the area. Lies designed specifically to hype the market. And lies that are easily verified or not.
It’d be great if we all took the time to register a complaint with the top next lie we get.
“miss-information?” Do you think this was a freudian slip, is a nasty referance to the woman involved?
Forgive my carelessness. This should read, “Do you think this was a freudian slip, or a deliberately nasty referance to the woman involved?” Of course, the guy who wrote the letter may have just made a mistake.
reference, not referance. Sorry again.
Apollo Beach. Yuch.
Apollo Beach is not a “beach” in the sense that the Gulf of Mexico laps at the shore.
Apollo Beach is located near the industrial heart of the Port of Tampa. Right next to the old Gardnier Phosphate plant.
They have built out this bubble everywhere. I didn’t know that actually living next to huge petroleum storage tanks, a busy shipping port, and chemical production facilities was “desirable”.
Tampa has officially gone nuts. Nobody in their right mind would even consider developing along that corridor from Apollo Beach down through Port Manatee…..until recently.
N VA 22151 turnover ok at 2005 pricing
10-12% off peak
The article on “Sarah” is quite contemptuous of her. That’s unfortunate.
Contemptuous and condecending, at the same time! I submitted a comment which probably wouldn’t pass the censors, since they allowed that article to be published. Her timing may be a bit early, but go Sarah!
Josh
Exactly. Her timing is early, but she should stick to her guns.
A friend of mine used the same tactic in Laguna Beach in the mid 90’s. He was just visiting the area at the time and he liked it. On a whim, he contacted a RE agent and made crazy low-ball offers — up to 50% below asking — on 10 homes. His thinking: the asking prices are meaningless; the counter-offers will show the market value.
He only got two counter offers, including a counter offer of $750K on a home listed at $950K. He had bid $500K. He bought it for $550K.
Here’s what was happening in Laguna Beach at the time. About a year earlier, a freak wild fire had hit the area. Plus, Orange County had declared bankruptcy because the people who were in charge of its finances had make a bad derivatives investment.
Clearly, Laguna Beach was distressed at the time. No one wanted to buy, so low-balling worked incredibly well.
The great thing about lowballing is that if you’re looking to buy a home to live in, you only need to find ONE distressed buyer. You may insult 30 other sellers before you find one that accepts your bid, but you only need to find one.
The writer of the ‘Sarah’ article, Rita Glastris, is a Colwell Banker agent near St. Louis, MO. I can see why a selling agent would hate this tactic. Probably Sarah will end up with a nice place at a nice price.
Here’s her email address. Feel free to call her out on her BS. I will, too.
srglast@cbgundaker.com
Virtually all the real estate articles in the local fishwrap, the Colorado Springs GAZETTE, are written by “real estate experts” who invariably have a vested interest in propagating the “it’s never been a better time to buy” NAR-speak. They will frequently cite some supposed example of unacceptable buyer behavior, like low-balling, and try to present it as a You Must Never Do This cautionary tale. Of course, despite their “contemptuous and condecending” treatment of these misguided souls, the more saavy readers can’t help but note that in a dead market, you’ve got nothing to lose by lowballing, and all it takes is one reasonable counter-offer to strike a deal.
Sarah is WAY premature on her bargain-hunting, but I’ll bet a lot of greedy sellers feel a lot less sure of themselves and their inflated asking prices in the wake of her lowball offers, especially when that’s the ONLY offer many or most of them are getting these days.
It always takes a pioneer to get things going. Way to go Sarah.
Looks like the realtor Rita Glastris sponsored an Orangutan by becoming a Zoo parent at the Saint Lous Zoo.
Check out her name Under G at
http://www.stlzoo.org/supportthezoo/zooparentsprogram/perksofparenting/zooparentsrecognitiong.htm
Wonder if she is as condescending to the Orangutan as she seems to be towards buyers like Sarah who offer less than listing price to the seller !!
You may insult 30 other sellers before you find one that accepts your bid, but you only need to find one.
I submitted a comment saying more or less the same thing.
I know. I saw it, and shamelessly cribbed it.
This article contains another mind-boggling statement:
“Though the housing market has leveled in the metropolitan area, it is far from flat.”
Huh? Last time I checked, “level” and “flat” meant the SAME THING.
I’m in St. Louis and the inventory is up almost 30% yoy and has been rising since Jan 1. I’m actually getting ready to start doing what Sarah is doing. Worrying about insulting sellers has got to be the most ridiculous thing I’ve ever heard. How dare someone make an offer on a house that’s been on the market for a year with nary a looker. The first house on my list has an asking price nearly double what they paid for it five years ago. Am I allowed to be insulted by that? If you happen to read this Sarah I’d be interested in hearing what kind of responses you’re getting.
The “Insulting-the-seller” line is just another way to keep the sheeple from influencing the market too much.
The ‘expert’ RE agent has a vested interest in keeping the price up, and tells the inexperienced buyer that it’s bad to insult the buyer. And the sheeple do as told.
When I hear that line as I low ball on homes, I will reply, “Should I be insulted that the sellers think that their home is worth the inflated price they are asking?”
Language is fun. I keep reading a lot of Reamtors using the term “plateau” to describe current pricing.
Anyone ever seen a “plateau”? A plateau is a “highland area of fairly level land separated from surrounding land by steep slopes.”
You can’t go higher from a plateau, you can only go down. And steeply, at that.
Have no idea is RE prices have “plateaued”, but find it funny to hear Reamtors using this term when they obviously have no clue as to its implications.
I’m sure the sellers are disappointed and irritated, BFD. I heard somewhere that’s something called “life”.
I got lowball offers all the time when I sold my rentals. You accept, counter or reject. Funny how many consider it an “investment” but don’t act that way.
Interesting that the DB real estate agents are bringing the sellers the offers. Yeah, I know they “have to”, but I was told by more than one they wouldn’t - until I told them I would report them, tell the seller myself, and use someone else. That was in the previous acquisition phase of course.
Of all the stuff posted here, at the top of my healthy fear/due diligence list is going into an area with undetected appraisal fraud used to generate comps. It is unclear what happens to fraudulent comps when the fraud has been detected. Apparently, they just stay in the database?
Good point imploder . Does the lender alert all the other appraisers/lenders that the comp was a fraud in the data based ?Does Zillow acknowledge the bogus comp ?
To me appraisal comps in a high speculation ,high sub-prime lender areas are mush anyway and not to be trusted . All it takes is just a couple of those comps to mess up the data based . I think lenders are going to have to check for long term trends in areas to get accurate appraisals ,but it’s still hard in a declining market ,(also with fraud scr-wing up the works) .
Really , until the system sorts out the sub-prime /fraud mess any appraisal is suspect .
The sellers should be happy to get any offer at all…besides, they can use it to claim “multiple offers’ at some point. If more of us did what Sarah is doing, and sellers got multiple offers at 25% below asking…it would be a good thing! Let’s help lower those comps!
Yes, it was contemptuous but looking at that rag it probably has a readership of 25 people. It might just as well be called, “The Bootmenders Yearly Journal.” Pretty obvious the writer owns a home and is writing something to convince herself that, “It ain’t gonna happen. Prices only go up. I hope.”
As most of us know on Ben’s blog, the biggest, most over-hyped, most momentum driven, most excessive inventory laden bubble in the past 100 years, has now burst and is in the process of deflating. By the time it’s over it will be financially far worse than the tech boom bust.
The bust probably will not go straight down. It will hit levels, pause, go up, go down, etc, but down it WILL go way down eventually. The only questions that remain are how far and how long? Hard to answer that because of several variables. A possible recession will accelerate the decline depending on the depth of the recession. I say “the” because it looks like a recession is baked in but the depth isn’t yet known.
Then we will have government attempts to save f*b’s, bringing in legislation and working with the lenders, etc. The lenders (banks) being more important to government than the borrowers even though they will deny it. We need to remember it isn’t in government interests to see lots of people on the streets, homes boarded up, stories about people suffering being shown on t.v. Governments interests lie with the health of banks and they couldn’t give a s*it about the borrowers but it’s bad for business (image) and more expensive to rescue f*b’s after the event. Thus, prevention is better and usually less expensive than the cure. Far easier to fix it by some kind of helping hand legislation.
Interest rates will come into play of course and do a LOT of damage to sub-prime borrowers. We are now in the “wait-and-see” period. That could take a couple of years.
Excellent assessment of the situation, Mike. As much as a smooth, swift deflating of the bubble might appeal to our sense of drama, real life is generally never as neat or clean as we would like it to be.
DC, Wall Street and the REIC all have a vested interest in denying the downturn. Interestingly enough, that denial will also prevent them from doing anything about it until it’s far too late.
Well put, TJ.
The handling of sub-prime lending is a great example of how governments handle this.
Here’s what I posted as a reply comment on that newspaper’s website. Let’s see if the moderators will approve it (fat chance).
—————————-
Indeed, one should always overpay. Using a low starting offer like Sarah is criminal because it hurts the feelings of sellers with inflated egos and inflated expectation of what their chitboxes should net them. Sarah should be a docile greater fool like the millions who have been driven into taking a leap into the abyss with foreclosure as the bottom. Sarah should quickly take on an unaffordable loan so that there are more transactions and hence more commission checks for the shills of the Real Estate Industrial Complex.
Awesome!!!
Go Sarah GO!
She has the right idea.
I think Sarah is right on. What makes buyers think five years of speculative frenzy has increased a home’s value by as much as fifty percent? The market is still turning downward and will not hit bottom until late 2007. Sarah is simply ahead of the trend. She is doing what many prospective buyers are already doing… testing the bottom.
I think that seller financing is an interesting, but I certainly would not offer it this time around. As the article notes, it was a way for sellers to get around exorbitant interest rates — not lousy credit. Can’t imagine why it would be used now, with rates well below 9-10% except to put someone in a house they really can’t afford at the price.
Anything to avoid lowering the price, right?
And then you have to foreclose when the buyer defaults. You might be able to sell the note at a discount to another party who will be pricing in a hefty risk premium.
I’m seeing offers of that “50 year loan” product with ads on craigslist LA! Only a fool……
Anything to keep from lowering that price! Jeeez….
I sold a piece of raw land last year and did a carryback for 50% of the purchase price - 15year fixed 6.25%. There were no comps in the area for the previous 2 years. Buyer paid me 9x what I paid for it 7 years before. There has not been a comp since. I was happy to carry, I had no other use for the money, and I was afraid that if I got an appraisal the deal would fall through. I really like the property, and wouldn’t mind owning it again. I guess I really don’t care if he defaults. It would actually be to my favor if he did, I get the property back, and now I have enough money to build on it.
! lose the realtor
Any bidding strategies? “Sarah wants to buy a house. She has submitted a purchase offer on five different houses. Her actions are cutting a wide swath, leaving behind a trail of disappointed and irritated sellers.
Sellers taking back purchase money second trust deeds will help with lender risk in a declining market .Course you have to have the second T.D. approved by the lender and the appraisal has to make sense or it just another scam .
Wiz — I like this, from the end of the Jan. 12 Guest Commentary at Prudent Bear:
“As a result, there is no built-in restraint mechanism in place for this new age credit creation machine as it were. It is analogous to a vehicle that has an accelerator but no brakes. If people were to drive such a vehicle, what can we surmise would be the eventual outcome? As a society, we are now collectively driving in this “vehicle” and will eventually suffer the consequences of doing so.”
While the article is focused on credit derivatives, the conclusion seems pretty appropriate to the financing gimmicks lenders and sellers continue to contrive.
MY uncle runs a construction company in Ventura, CA. He has an ee who works for him off and on. That ee has a very difficult time finding long and steady work. His wife is a hairdresser. They were just approved for a 1.2 million dollar loan. Unbelievable.
I’m assuming “ee” does not mean “electrical engineer”????
Sorry for my ignorance, but what is an “ee”?
English Expert?
Enema Enhancer?
Egg Eater?
Employee would be my guess.
EE is probably Electrical engineer…
Company I’m at… Quality organization renamed as Mission excellence.. Now all the QE are MEs
So we have Manufacturing Engineer as ME, Mechanical Engineer as ME and Mission excellnce guys as ME.
Sweet.
Forgive me if this is a dupe post:
Some of you might have caught my post a week or so ago about my experience going into a KB community called Harbour Isles in Apollo Beach, FL. I decided to email KB headquarters and see what kind of response I’d get. My email will describe my experience so I don’t have to repeat my former post, as this post is on the long side.
Hello. I have a very serious complaint and I request and strongly suggest that you review it and respond. On 12/31/06 I visited your sales center at Harbour Isles in Apollo Beach (Tampa Area), Florida. I was in a discussion with one of your sales representatives, and she stated that one of the main reasons to purchase a home in this neighborhood was the growth in the area. She pointed out that there was a major hospital and a large mall being constructed in the city of Apollo Beach. I asked her where the hospital would be, and what company was building it. She seemed surprised and then stated that she didn’t know what hospital it was, but it would be built very soon. She provided me with a similar response about the mall.
I wanted to know more, so I contacted the Apollo Beach Chamber of Commerce and let them know what I was told. They responded that neither project was in the works. Both projects had simply been thoughts or researched and considered, and both were stricken down many, many months ago, particularly the hospital. That plan had been canceled roughly a year earlier.
Based on the rapport I had with your sales associate, I feel that I was blatantly lied to. I feel she unethically used a sales tactic to deceive me into believing the neighborhood had more growth potential than it does, and tried to make me feel that home values would rise based on this lie. In the current real-estate environment, I believe this kind of deception is not to be tolerated. Are your representatives so desperate to sell homes that they have to make up stories to sell them? I find it impossible to believe she did not know her words were untrue. I wonder what other misinformation she gave me? It is your company’s obligation to make certain that all information provided to potential customer is current and factual. I shudder to think of how many others victims did not investigate this information and have committed to purchasing homes under the false pretenses that representatives of your organization are stating to possible clients.
I therefore request that you conduct an investigation of this incident and provide me with full details of your actions. I will wait 3 business days, and if I do not receive a satisfactory response I may take my complaints to the State Attorney General and other relevant governing bodies that investigate this type of fraud. Thank you for your attention to this matter.
First Response, received only hours later:
Dear Mr. XXX,
Thank you for your candid feedback. I am very sorry for the frustration you have experienced. Please be assured that when we receive a note of concern at KB Home’s Corporate office from one of our customers, we take it very seriously. Matters pertaining to sales are managed entirely at the local division level, however your e-mail has been escalated to the Senior Executives of KB Home Tampa and an investigation into your complaint will be made. You will be receiving a response from a KB Home Tampa division representative soon, if you have not already received a response by the time you view this e-mail.
Please let me know if I can be of further assistance.
Then I received this 2 days later from the Tampa Division:
Thank you for taking to time to inform us of the inconsistent information regarding the Apollo Beach area. We have reviewed the information you mentioned with our sales team and updated the information to be consistent with the current anticipated growth in the area. I apologize that you were given the out dated information and sincerely appreciate you informing us and allowing us the opportunity to update accordingly. Our sales team is typically diligent in collecting area information and unfortunately did not receive updated information. Please accept our apology for the miss-information, the team in no way would find it a benefit to misinform you in this way.
We appreciate you considering KB Home as your homebuilder and again appreciate the information you provided.
Sincerely,
(Some fake name)
So naturally I’ll be paying another visit there soon to test their resolve. I’d encourage any other locals to do the same if your curious. As always, would be interested in any comments…thanks.
That reminds me of a time that I went to an Acura dealership and the salesguy told me all kinds of falsehoods about the engine horsepower, gas mileage, etc for a CL. Either he was lying or wildly incompetent, both unacceptable. It takes very little time to do basic research whether it is on a car or a houses. I don’t expect a car salesman to be able to explain the 4-stroke combustion engine to me, but he should at least know the basics listed right on the sticker. The rub is that this sort of behavior won’t change until the population at large does some basic research for themselves. That’s probably not going to happen, so the best course of action is to sit back until the right time and call people on BS when it comes time to negotiate.
To break the BS artists from sucking eggs, have them jot down their “selling points” so you can share them with your significant other. Explain your need by saying it’s tough to remember all the fantastic points…sure to impress them and make the sale. Then, copy the powers that be, media, etc…….hard to deny something in writing.
Had the same thing going on at a local dealership. However, my wife had been researching everything and she has a sharp memory for details. She called those sales guys out on every turn. We got a great deal (well below Costco price) and I was busting up laughing inside. Nothing stops a BS’er in his tracts like facts.
Look at this B.S. article from the NY Times that says prices are still rising.
“Property Values in New York Show Vibrancy”
http://www.nytimes.com/2007/01/13/nyregion/13property.html
Horse piss! I think lower wage earners have been so driven out of the market that only the top end properties are selling. Therefore the median price goes up.
The article also says;
“While people predicted that the sales prices were coming down, they haven’t been coming down,” she said. “It might take a little longer to sell something, but actually, the prices have been holding.”
Well, here in Queens there is a 12 month supply of housing and I have seen prices for SFHs come down at least 10% - 15%.
So the prices are coming down and it takes a LOT longer to sell.
Screw the Times! Articles like this just make sellers more stubborn.
edhopper,
I agree the NYTimes is cheerleading RE, not informing its’ readers.
Did you see yesterday’s piece encouraging people to spend a quarter million to buy second homes in obscure places 5-6 hours away from NYC?
The people up in Albany/Schenectady area will be cheering this idea on. Escapees from high NYC prices have been floating those economies for a couple years now. Places that would have sold for 50K in 2003 going to New Yorkers for 250K in 2004 have created quite an RE buzz among the locals.
It’s hard when I talk to friends out there and subtly suggest that the party could be winding down soon. Seriously, these NYC/Boston transplants are the last and only hope of these communities.
I was looking up in Dutchess county this summer and fall. One house I know of started on the market at $389 now down to $349, still not sold.
Total crap. I have a relative who owns a small studio coop in the Village. She got two $400K cash offers in 7/2005 — but the damn coop board would accept the buyers. Today, she could get no more than $340K for the same place.
A friend is a realtor in Manhattan. She started having mid-range (@650K) properties take a substancial hit last summer.
She’s going after one last big sale to the Wall Street big bonus guys. They’ll keep high end rolling for another couple months. Then it’s the 70’s all over again for Manhattan RE. IMO.
I sold my studio fourth floor walkup [not trader bonus property] on the UES for $260 in late September. Today it would sell at $240. Timing the market, I am renting until prices drop another 25% minimum in Daytona / Ormond Beach. It is all about timing. Gordo
clarification, those are “estimated market values” qouted in the article
I am an appraiser (and agent) in lower Northern Va Area. What NAR is reporting is actually correct. You may make numbers say anything. This is what the real story is. Average sales prices are up. What is selling actually are the higher end homes at significantly lower prices from what they would have commanded a year ago ($100K-$200K). Therefore, the average sales price may be $450-$475K but the sales price a year ago for these same homes were significantly higher. Hence average price is higher but what you get for the average price is approximately homes that one year ago were easily $550-650K. Therefore folks, values have decreased even while the average sales price has increased.
Houston mortgage fraudster convicted. The infection is everywhere.
http://www.chron.com/disp/story.mpl/business/4467900.html
Ha! I used to work with that judge when he was in private practice.
Where I live the market is really dead . My neighbor turned down a offer for 10k below what she wanted and now her house sits .
Another listing was pulled on my block while the seller now put up a sign for a short term rental on it .
What I’m seeing lately is sales falling out and the houses go back on the market ,(what’s that all about ,lenders pulling the funding ?)
While it is true that Nov-Jan. are not big selling months ,usually the stock that is put out does sell in a reasonable time period ,so something is wrong .
I check the area in LA County that I use to live in alot and I see that the houses that use to be in the 800k + range are listed in the 650k to 750k range. Regardless ,the listings seem to be sitting on the market ,(Valencia Area ). Does anyone have a update on Valencia ?
No, not Valencia. But in Studio City two more older homes were torn down this week to make way for new, zero lot line Mc Mansions. Many rentals have recently sprung. Some listings sit(2 brdms for 900k and up) and some have sold.Several new Mcs being readied for market soon. We seem to have no shortage of knife catchers, but alas, it’s different here….
When I sold back in Aug. 05, we had 2 offers. One was full price with 5% down with a 80%-15% financing, the other was 45K below asking with 20% down …needless to say we went with the full price offer. Another example of those who can’t afford it edging out reasonable buyers. As an appendix, the buyer moved in for a few months…realized he couldn’t afford the thing and moved back to Wisconsin. He tried to sell it for 200K more than he paid…no luck. It is now rented out for 4k a month(about half of his payment) to a rapper!
BTW, it was a 2000 sq ft 4bdr 3 ba in Studio City at 1.2mil.
Silly price….just silly. Bought it 9 years ago at 325K.Added on…but silly…..
Your story shows how idiotic people are out there, and definitely a good example of how the weak (unqualified) buyers have been pushing the qualified (something to lose) buyers out of the market.
The next few years will be a reversal of that, IMHO, as the bubble-sitters let the FBs twist in the wind. We certainly don’t intend to bail any FBs out, that’s for sure.
LILL, talk about selling at the top. Aug.05 was exactly the time when I realized we could never afford a home in LA (Westside). I did not realize at the time that we were competing with a bunch of overleveraged people. We finally gave up and used the money we had saved for a downpayment to buy a property abroad paying cash.
Yeah LiLLL - it seems to be all the rage. Gawd, I wish they’d stop trying to fix what isn’t broke.
The husband and I took a drive through south Encino/Tarzana/Calabasas a few weeks back, and were dismayed at the amount of new building going on. All those nice mid-century modestly sized houses being knocked down, so that a 4000 sq ft behemoth can be put up, on a lot well sized for a 1500 footer. If I see the word ‘Tuscan’ in a description again, I’m gonna puke…
I keep seeing ’seller has plans for a (way too big) home’ on ZipRealty. Guess what? Keep your ‘plans’ and sell the house that’s already there. There’s already a huge glut of McMansions - stop building them, cos no ones going to buy them…
Unfortunately, Zip doesn’t have a search for ’square footage under xyz’. When I look for places now, I just don’t bother to check anything bigger than 2000 sq ft - and the lot size has to be 5 + times bigger than the house.
Since the New Years surge in inventory (over 200 new places on Zip since jan 1st), I’ve only managed to find 2 or 3 places that fall into that category.
Its not as if the swankier areas of LA don’t already have big, big houses. Most of them aren’t selling - why make yet more?
I got a bit of a surprising report from a builder friend of mine that had two upper end homes he built in Vail, Co. He reports that it is very busy up there this past weekend and that he had offers on both houses even though the second house was not for sale (he is keeping it as a personal holding). The houses were in the 2.5-3.0 million range. The one he sold was a cash offer.
He has another half dozen in the same price range in Atlanta. One customer is negotiating two lots combined with an approx 4 mil. home to be built on the land for a total of 5 mil. I can’t believe how many folks are around with this kind of cash?
I’m going to meet with him later on this weekend and perhaps I can get some further information to shed light on this story. Crazy.
Thanks for the post Auger. It seems there’s a DCB in motion right now.
As I’ve watched the market for the past few years, it’s interesting to note how sometimes, things just start to pick up for no apparent reason. It used to be tied to interest rates (you could literally watch the housing turnover increase when rates fell), but there’s something else going on since around 2005.
Are these movements related to new toxic loans coming out (12modef, for instance), or hedge fund money (in the case of cash offers for high-end homes), or general mood (caused by the unexplainable stock market rally?) or people just buying on the dips???
Been trying to figure out what causes these sub-cycles, if anything, and haven’t seen a definitive answer. Anyone else have any ideas?
Lots of money chasing limited RE in Vail and Aspen. None of those people who pay these amounts live in these areas full time.
There is a very small percentage of the population who are making magabucks in finance (Wall Street) as well as some doing very well practicing law. These higher-end second homes appeal to people who love the locale and can often pay cash. Any drop in values doesn’t distress them.
This is a very small market in comparison to the rest of the country and should have little effect on the FB’s who have to borrow money to buy homes.
There is a very small percentage of the population who are making magabucks in finance (Wall Street) as well as some doing very well practicing law. These higher-end second homes appeal to people who love the locale and can often pay cash. Any drop in values doesn’t distress them.
This is a very small market in comparison to the rest of the country and should have little effect on the FB’s who have to borrow money to buy homes.
“Sarah insists on only looking at houses in the $300,000 to $325,000 range, which is $50,000 to $75,000 more than she can afford. Her rationale is this. It’s a flat housing market. Sellers are anxious, and houses always are priced much higher than sellers expect to get for them. So she is submitting purchase offers of $250,000, insultingly below asking prices, convinced sellers will welcome them gladly.
Sarah’s thinking is totally off the wall.
The reality is this. Though the housing market has leveled in the metropolitan area, it is far from flat. Things are not selling at the frantic pace they had been in previous years. Rather, there has been a return to reason. But buyers still are out there. And prices are remaining steady.”
Sarah is a smart cookie. Article says she is advancing in her career–no wonder. When more inventory gets piled onto the existing homes after the Super Bowl, and more ARMs reset, there will be sellers happy to unload for a 50 or 75k haircut. Sarah is firing a warning shot over the bow of mulish sellers and lying realtors…so let them be irritated with her lowball offers, time is on Sarah’s side.
And if the buyers are still out there, why is inventory piling up?
And note the realtor’s concern with what Sarah can “afford”. Ain’t that sweet?
Sarah, You go girl!
Every month that goes by, Sarah should lower her offer by $2,000 so by the end of the year, she’ll be offering $225K. Some fish will eventually bite the hook. It’s a numbers game.
LOL Yeah…and those sellers think they’re irritated now….just wait.!
SD renter - if lowering the bid by $2K each month is a good strategy, then why would Sarah want to stick her neck out on the chance a buyer might take today’s $250K bid?
Sarah is angling for a 17% to 25% discount ($50-75K) off an asking price of $300-$325. Let’s say that $325K house is “really” worth $285K, so Sarah is up $35K on purchase. But if we are to assume that she can shave another 5% off that offering over six months and eventually the market will be bad enough that some buyer will bite, then - assuming she rents cheap and saves -isn’t she pretty much making money just by NOT buying? A “windfall” discount over asking price (or minor windfall on best guess current depreciated value) is pretty thin and pretty scary - quite possibly a Pyhrric victory.
Put it another way. Who loses more? - the sucker who bids full asking and inevitably is foreclosed on/goes bankrupt - “net zero” (no worth and possibly judgement proof) by 2010, or someone who drove the hard bargain, made sensible decisions, preserved their credit…and now is sentenced to 10 or 20 years of sacrificing potential retirement funds, etc. to a depreciating asset that they can - yes - technically afford. No carnage, just a slow, seeping wound that doesn’t heal.
Well, I’m off to re-write that grasshopper/ant fable, now…
from the article:
“In addition, the days of overpricing houses when listing them are long, long gone.”
Not really. What I’m seeing: Sellers overpricing homes when listing, then when houses don’t sell…listing them as rentals - at inflated prices!
Sarah is actually doing those irritated, insulted would-be sellers a BIG service: she is acquainting them with the realities of the current housing market. It has been discussed here that the first offer a seller gets is usually the best offer.
Sarah, are you a HBBer? What’s your handle, girl?
A friend made a “low ball” offer in the 90s decline. “Insulted” seller ignored him, didn’t even counter. A few months later, she calls friend back, will take his “low ball”. Friend says, sorry, offer is now x-15%. Seller doesn’t counter (insulted again). A few months later….seller accepted x-15%-10%…….
Sarah is doing just fine. The market is now a game of musical chairs…fewer buyers, more and more chairs. As people realize ANY offer may be the ONLY offer they’ll get over their “offense”.
My brother and his wife made a lowball offer (about $50K below asking price) on a house in Anchorage, and the seller said, “No way!” That was in September. Seller called them back in November and said he’d lowered the asking price to the price my brother bid and begged him to take the house. But in the meantime, my brother and his wife had decided that they wanted remain living close to downtown, and the seller’s house was about 7 miles away. So he said no. The house still hasn’t sold and the price has dropped another 15K. The starting price was about $370K. (Brother’s wife has a condo with a lot of equity so they don’t have to finance as much as a first time buyer would.)
They did get outbid on another house, but it was “the perfect house at the perfect price in the perfect location.” They bid $10K over asking and it sold for $25K over asking.
(My brother’s in a hurry because they have a baby due in May and need more space than they have in the condo. But he’s keeping his wits about him.)
“(My brother’s in a hurry because they have a baby due in May and need more space than they have in the condo. But he’s keeping his wits about him.) ”
Transation: My Brother would like more space than they have in the condo. He is trying to keep his wits about him as he knows it will save them $$ to wait However, his wife is pushing hard to buy, buy, buy!!
Ok, could be wrong, so flame away.
DOC
Or someone will call her back later on.
In 1989 I made an offer of $275K for a house in NP Beach Ca that was listed at $349k. I insisted that I be there when the offer was presented and dragged my wife along so the seller could see that we were just a nice young couple trying to buy a house and not some investor trying to take advantage of her. Even so, it was obvious she was offended by the offer. The brokers managed to coax a counter of $325k out of her, and, after further haggling, we wound up buying the house for $310k, which was $10k higher than my target.
We sold the house in the fall of 05 for $1.475 mil and are now renting in Costa Mesa for less than half of what our next door neighbors are paying for their house they bought, also in the fall of 05. Plus, I practically live for free as the interest that I make on the money I banked is more than my rent.
With inventory at a record high, what to do? Why, build of course:
‘The Camp Verde Planning and Zoning Commission got its first look Thursday night at the plans for a proposed residential subdivision to be built off of Arizona 260 and Cherry Road. To be known as The Crossings at Cherry Creek, the subdivision is being built as a Planned Area Development that will include both commercial and residential lots.’
‘The developer, Read Homes Development/Theaerm Investments, is proposing construction of 154 single family homes, 145 multifamily units, up to 115 apartments, plus 23 acres of commercial development and 25.5 acres of open space.’
‘Included in the proposal is a dedicated wastewater treatment plant, which the proposal calls for turning over to the Town of Camp Verde at some later date. The development has been in the planning stages for the last couple years and will be the first major residential subdivision to be built in the “growth corridor along Arizona 260.’
Just anecdotal evidence, but driving up Barry Avenue from Santa Monica Blvd in WLA yesterday, I saw many of the same sale signs since Labor Day, but now several are sporting “reduced” as well. However, in spite of this obviously slowing market, the owner of my rent controlled building recently posted notice that he has applied to convert the building to condo’s this year, pending city approval. Maybe he thinks the market will recover, or perhaps he thinks he can get more by selling a few 500k 1 br condo’s than the below market rents some of us longer term tenants are paying. Seems like a gamble to me…
I noticed a pair of houses in SM in the GIGANTIC LA Times RE section tomorrow renting at just over 3K. They’d probably be listed at 900K or so, so the rents are pretty out of whack with the bubbled up prices.
Also noticed a lot of reduced prices throughout LA and more than a few bank sales.
From Westwood. There is an amazing amount of inventory. If you drive along Fox Hills Dr. between Olympic and Pico you will see at least three condo buildings offering units. That is not all, there is a new building on Fairburn, another on Eastborne, and several older buildings (including mine) with one or two units for sale. In one building the sign says 3 units for sale. I dropped by an open house for a rental with 3 bedrooms on Wilkins. I was interested because we rent a condo with 2 beds and my daughter is getting a little old to sleep with her pesky little brother. They were asking 4K, but I did not like the unit. The interesting thing was that there was another condo offered in the building across the street. I haven’t seen this kind of supply in Westwood for years. Lots of open houses and it was Saturday.
A Bellingham realtor has finally come clean about median price! About 6 months too late but still…
There was an article in the local paper that showed 2 sets of median stats:
One with the ultra high end included (median still rising)
Another without the ultra high end- median falling.
They repeated the process for all the major towns in the county. Mid to low end medians falling in all but one town. Anywhere from 6-12%.
Finally!! It’s been so obvious here all year that, month by month, you could get more for your money. But til now, it’s always been “Medians rising! Quick! Get a house or be priced out forever!”
I love it when people tell the truth!
Hey SPD -
Where did you read this? I’d like to see it.
I spoke with an honest realtor this past fall when I was looking at a rental, this person told me that he expected prices to really begin dropping in the spring.
Lately I’ve noticed more rentals are suddenly becoming available, nicer homes that are/were up for sale? Talked to one couple who had been flipping about a house a year for the past four years and suddenly hit a wall here in Whatcom County. Too bad they already purchased their next house down by Seattle. They seemed puzzled and somewhat distressed that they couldn’t get the local place sold and needed to rent it out instead.
It was in last Saturday’s Bellingham Herald and I just saw it today- a week old already. Check the neighborhood recycling bin! Went to throw some old papers out and there it was. Huge article, on the front page I think it was, headline all across the top. Unbelievable.
Like Seattle, B’ham news tends to go back and forth with the RE truth. I expect that soon we’ll get a different article about “growth” and “out of control home prices”, a little scare tactic to rally the homebuying troops.
But this article was a breath of fresh air cuz it mirrored exactly what I’ve been seeing all year just watching Zip and roaming neighborhoods.
I’m with your honest realtor - prices will start tumbling in the spring. There are still a LOT of hold-outs here. They haven’t lowered their prices even if the stuffs been sitting for more than a year. Once those people wake up to reality, watch out. They are the only thing propping the market, such as it is, up at all.
Thanks, I’m gonna try to track down that article.
Here’s where Washington State is headed according to Hosuing Predictor.
http://www.housingpredictor.com/washington.html
Washington
Pushed by a growing trend of new residents, Washington has become one of the most dominant states for growth in the nation. But the Washington housing market offers a contrast of sizeable gains in appreciation and forecasted average losses in some markets for 2007.
Seattle was a strong sellers market with a low inventory of homes. Seattle had been one of the hottest real estate markets in the country. Strong job growth with new employers moving to the area and comparatively low taxes provide a promising future for Seattle.
Home sales have slowed and prices are headed downward in the Seattle metro area, which had seen double digit appreciation for years. It was nearly a record sellers market in Seattle, but with an increasing inventory of homes on the market Seattle saw its median price hit $310,000, which chilled the housing market. The thaw out has lasted nearly a year and is forecast by Housing Predictor to continue into 2007. Seattle is projected to lose an average of 6.7% in 2007.
In Vancouver just north of Seattle homes are less expensive with a median price of just $229,000. Vancouver will average a loss of 5.6% by year’s end. The influx of new residents, some of whom moved to the Pacific North-West from China, are bolstering the local economy.
In Tacoma homes are also less expensive with a median of $214,000, but as home sales have slowed so has appreciation, which will be off 4.4% on average in 2007.
The Spokane housing market in Eastern, Washington over the Cascade Mountains, however, is experiencing the opposite effect. Its real estate market has been on a two year ride of strong appreciation, and although sales have slowed, Spokane will have a healthy year through 2007.
It’s not unusual for Spokane to boom while so many other states real estate markets are headed in the opposite direction. It seems to happen about every 15 years.
The median price is $178,000, an all-time record for the area. Spokane was Housing Predictor’s pick for the top appreciating market in the state in 2006 and it easily claimed the prize. In 2007 Spokane will appreciate again, but not as strongly as last year at 5.1%.
In the southern part of the state, three communities compose the Tri-Cities area, which includes Richland, Pasco and Kennewick. All three saw a growing market weaken on the heels of higher interest rates and rising prices to become a slower market. The median price in the Tri-Cities is $142,000, which is still the lowest for any median in the state.
Washington State has some of the nation’s most scenic areas and is a land of many contrasts, each offering a unique beauty all their own. The Pacific coastline and the harbors of Puget Sound, the deep forests of the Olympic Peninsula, the rugged beauty of the Columbia River Gorge and Cascade Mountains to the semi-desert area east of the Cascade Range. As Washington continues on its path of growth, lawmakers are fighting to keep a balance between man and nature to retain the state’s natural beauty.
House down the street has a FOR SALE by OWNER sign now. I guess they gave up on the realtors? This is in Phoenix AZ. Been for sale all summer and fall.
and spring and summer and fall lol
Headed to work today in Phoenix on 44th street. Had to detour because the PF Chang’s Marathon was today. I did not keep track of when or where it was. So I had to detour between McDowell and just north of Indian School. Some neighborhoods on the south are a hodge podge of POS and crack houses with a mix of nice well-kept places. On the north end are mostly well-kept homes. Anyhow, I noticed a lot of for sale signs in the neighborhoods I detoured through. This is a boudary from 38th to 44th (east and west).
Meantime, my own apartment in Phoenix in a safer area is a very nice place to live. I’m getting the carpets steam-cleaned since my sister (former co-renter) is gone and there is an empty bedroom and living room and dining area. This place is very clean and has all I want, but prefer to be in Scottsdale where there are more things to do. It’s very easy to clean a 1,000 square foot luxury apartment. But to maintain a 3,000 square foot place and spend money on it is nuts. Better to rent it and have the owner spend the big bucks maintaining the place. Even as a renter, cleaning a big castle will take all your spare time!
And now for some bad news about the local market:
(I’ve posted this elsewhere, sorry for the repeat but I’d like to make sure people know, it seems very important).
WA. State Realtors have begun an absolute media blitz the last couple days, encouraging people to go to this website http://itsapriority.com and send a prewritten email to legislators boo-hooing the high cost of homes (can you say price supports?!).
Fortunately, you can delete their prewritten email and write your own. The letter goes to a long list of WA. lawmakers.
This ad is on every TV station, all the time. It’s a blitz the likes of which I’ve never seen before.
So there’s the bad news . Is this happening in other states? If so, I hope people go there and write your own email to send to lawmakers. I suggested they look into appraisal and lending fraud as the basis for sky high prices.
Hey, I have no problem with Realtors arguing for more housing supply. In fact, I wish they would do it here in Silicon Valley (although newly-elected officials in 2004 in downtown San Jose cleared the way for 5000 condos there!) My thinking is that more supply and less demand means that prices drop faster. Bring on the homebuilding!!!
Agree with SlashChick. Looks like the realtwhores are supporting more homes as opposed to even more toxic suicide loans. I like the fact they are addressing the need for different types of housing, new infrastructure to match the new growth, better & safer schools and communities.
Wish they’d do that everywhere. Perhaps then, we’d see more affordable housing as opposed to more “affordable” monthly payments.
“Perhaps then, we’d see more affordable housing as opposed to more “affordable” monthly payments.”
CA Renter — that’s an excellent line, IMO — the type that should be slipped into posts on local newspaper blogs everywhere.
Thanks, Chip!!
The reporter failed to mention a whopping 42% drop of condominium sales from last quarter to the same period last year. Instead the article paint a rose picture for Hawaii real estate.
Scroll to the bottom for the chart.
http://the.honoluluadvertiser.com/article/2007/Jan/11/bz/FP701110310.html
Chico Area MLS for SFH only. We’re swellin’ again:
Date: Number:
11-06-06 534 of 784 properties
11-09-06 525 of 774 properties
11-22-06 496 of 764 properties
12-04-06 466 of 725 properties
12-19-06 457 of 633 properties
01-05-07 396 of 626 properties
01-10-07 414 of 642 properties
01-13-07 424 of 654 properties
Sorry, not the MLS, just Realtor.com….
On a side note, about Chico sellers in denial: I got interested in looking at these duplex/townhouse/condo….whatever they are, homes in Chico, because we were interested in renting one. They are in the golf course community where we sold, all are privately owned and are about 1650-1850sqft. They originally sold in 2003-2004, for about 317k – 330k. Two are for rent, 1400/mo-1850sqft, and 1500/mo-1850sqft.
Two are also for sale, 399k-1680sqft, and 389k-1850sqft.
The rental for 1500/mo is at least 20k in upgrades over the other three, and originally sold for 325k, so I’m sure the upgrades were cash paid. It is by far the nicest unit there. Now for the fun …..Zillow shows this place selling in September 2006 for 321k (6 Lily Way). Zillow price estimates are useless, but the sales history – when shown - appears to be accurate.
These two wannabe sellers (3 Lily & 9 Lily) have had their places on the MLS for quite a while now…… I can’t understand why? Good luck getting that appraisal. Oops.
“so I’m sure the upgrades were cash paid”.
Sorry again ….tax assessed value = 338k, which equates to 325k sale in 2003-2004.
This is my second attempt to post. Somehow it’s not showing up.
The reporter failed to mention the 42% drop in condo sales.
Fourth Quarter Home Sales.
Been following the inventory weekly here in Loudoun county VA since last year. It had been on a steady decline pretty much every week since last summer. However this week a sharp reversal, and listings started increasing again rather significantly. An early start to the spring rise perhaps?
Hey, Ben - don’tcha think Lake Texoma is a GREAT place for highrise condos?
http://dallas.craigslist.org/rfs/262083805.html
this has to be a joke.
In a blue collarish Boston neighborhood I have four neighbors trying to sell. Three have been on the market six months (or more), one’s been on the market a year. Two have been empty.
The only notable price activity is a $100,000 price reduction on the one on the market a year (and empty) from $589,000 to $489,000. Sadly for my nice neighbor, it won’t sell for more than $400,000.
The market is off a third from peak. Easy.
jag, here’s the problem:
“Blue collarish” + $489,000 = no dice.
I live outside of PA and am looking to buy in Narberth. There is more inventory than there was but things are still selling.
At least prices aren’t going up anymore!
I finally found some real estate in Seattle that I can afford.
http://seattle.craigslist.org/see/rfs/261968421.html
Dude instant equity!!
Idea for new TV show: “Flip That Plot”
I’m not sure how to upgrade such an item but i’m sure someone can figure it out. (use recycled granite counters for headstones!?)
I think you’re onto something, Crash. With all the boomers set to die, this could be the next bubble.
Finally, the place where all boomers will eventually be moving to!
we’re all dying to get there!
Isn’t that right across from the Home Depot on Aurora? Bad feng shui.
Inventory in PIttsburgh this week is down very slightly from last week. Closings from 1/1/07 - 1/13/07 are down 20% YOY from the same period last year, and down almost 50% from the same period last month. There are currently 582 pendings v. inventory of 8,311.
“The Corcoran Group’s East Hampton office plans a seminar in March geared toward first-time buyers. The two-hour luncheon event will be either in an agent’s home or a restaurant. The goal is to attract up to 30 people who want a crash course in home buying, says Susan Ryan, sales associate”.
Talk about the fox guarding the hen house. What do you want to bet that one of the seminar’s message to these tenderfoots will be if they wait selection will evaporate, prices will increase and interest rates will go up. Then they’ll tell them if nothing else, they are very smart even just looking now. And then they will pull out all their tricks like “I heard from the listing agent there’s a couple from Manhattan that is probably going to place an offer on the cape that you liked”.
Do you think they’ll be told the truth - that the Hamptons is one of the rapidly unravelling ground zeroes in the housing implosion — a community of all second homes where investment is always a strong motivation for buying. What are these overstretched investors going to do when their house is worth less than what they borrowed.
“The goal is to attract up to 30 people who want a crash course in home buying, says Susan Ryan, sales associate”.
well susan it is easy, buy one of your overpriced pos and it
will be a crash course in financial ruin
This is a perfect opportunity for the 30 aspiring buyers to collect contact information, form a pool and collectively bargain the commission down.
When oner drops the commission from say 6% to 5% meaning the listing brokerage will get only 2.5% and the referring brokerage only 2.5%, do you think that referring agents will be slow to push the house?
What about when one offers incentives to the brokers?
Cleveland downtown condo growth spurting, lacking only buyers. But the empty nesters are coming.
“Nationwide, developers worried about the vola tility of residential real estate are shying away from for-sale housing projects.
But not in downtown Cleveland. There, realty firms can’t buy and dig up land fast enough. ”
http://www.cleveland.com/plaindealer/stories/index.ssf?/base/business/116807597834530.xml&coll=2
Oh, God, puh-leeze.
CLEVELAND?
The ONLY sign of life in Cleveland: [Pittsburgh - 133 miles]
The only good thing that ever came out of Pittsburgh: the Ohio River
Dude, give me an IC light!
Just trolling craigslist for a buddy looking to rent and found two bungalows in Santa Monica for under 3K. Places that have been routinely selling for 800/900K.
That will cover the PITI…..NOT!
well well well
the wife and i went to jersey today to visit my sister and my in-laws and there was this one corner with no less than 6 open house signs on it (sorry did not have a camera)
is it spring yet?
North County San Diego:
Was with a few other moms from my daughter’s school the other day. One of them “shamefully” admitted to being a renter — you could see that she was embarassed to admit it. Of course I said we were renting as well (surprise all around). At that point another mom said, “Have you noticed how home prices are dropping like a rock, lately?”
From there, we were talking about various homes for sale or rent in the neighborhood — a few have been on and off the market for over **two years** with the intermittent “for sale or lease” signs. Everybody was on board the “prices dropping” train — laughing at the idiot sellers and their ridiculous asking prices.
Unfortunately, one mom was silent. I know her situation (two 100% I/O loans with a second that keeps adjusting — she won’t likely be able to refi to a fixed because the price of her house has gone down so much). I felt very sorry for her, as they sold in 2001 (lost a job and had a baby) and rented for years, waiting for prices to drop to more affordable levels (2001 was too high in So Cal). They finally gave up in 2005 — totally the peak in our market — and bought their house with 100% financing. Needless to say, they can’t afford their payments (even though they are I/O). The do not spend their money foolishly — no SUVs or flashy clothes or vacations. They honestly were not greedy, but were freaked out by how prices skyrocketed beyond what they could afford — by a long shot. Started to think it was a permanent situation. Now, they are one of the FBs. I’m trying to figure out how to help them, but not seeing any really good options.
I think there really are people out there who just wanted a home and believed the realtor hype about being priced out forever. Think about it, we’ve all seen these crazy prices continue to go up year after year with our own eyes, while everyone in the industry was telling us this is the way it will be from now on, and the media reported it without question or reference to prior downturns. I feel sorry for the people who just wanted a home. I realize many posters on this board think it was a form of speculation and in my more cynical moments I can see that point of view, but I think some folks just got scared that they better buy before it got any worse. I know one couple who bought near the top, just to have a home, not a greedy people at all. Actually, rather the opposite, responsible but not focused on money and so felt they should listen to realtor advice and take the plunge or never be able to own a home.
Take two groups:
These poor souls assumed that there was a requirement that they buy a house, so even though they knew that they could not afford it, they went through with the deal anyway. They took out exotic loans because they felt it necessary to live in this part of the country and that the house value would always go up anyway.
Then there are the people who really really wanted to buy a house but knew they couldn’t afford it, so to preserve family unity they rented and saved.
Group A helped drive up the prices to keep Group B out. Group A helped drive up the prices sucking in more of their group A counterparts. And helped price Group B out.
“I feel sorry for the people who just wanted a home. I realize many posters on this board think it was a form of speculation and in my more cynical moments I can see that point of view, but I think some folks just got scared that they better buy before it got any worse.”
I agree with the sentiment — I think the really sad cases are families who just wanted a place to call home and raise their kids who somehow were suckered into buying at the mania peak. However, the logic that says “buy now or be priced out forever” is fatally flawed because it narrows the choice set down to only two options, when there are a number of other ones:
1) Rent a smaller home;
2) Relocate to a cheaper market;
3) Stay put and keep the faith that trees really don’t grow to the sky, no matter what your Realtor says.
“I know her situation (two 100% I/O loans with a second that keeps adjusting — she won’t likely be able to refi to a fixed because the price of her house has gone down so much).”
This is why I try hard to keep my mouth shut in group discussions on the SD housing situation, and if I am in a one-on-one discussion, I always first assess the other guy’s situation before sharing my views.
“They finally gave up in 2005 — totally the peak in our market — and bought their house with 100% financing.”
Sorry, but I disagree with your word choice here. I had a conversation with a friend last week who said he has given up on the market, by which he meant that their family is resigned to never buying a SD home.
Well, they did “give up” on renting and waiting for the market to correct. They had waited over 4 years, IIRC, while prices doubled, tripled and quadrupled. It was jarring, to say the least. At some point, and with all the “expert” rhetoric, they finally capitulated and bought.
Very nice people who watched their rent climb every year while everyone else was making $100K per year just for owning a mortgage.
Before Ben’s blog, we didn’t have as much info as to the national and global aspects of this CREDIT BUBBLE. People honestly believed that “something” changed WRT population growth in So Cal. You know, the immigrants are coming with all that cash! AND they aren’t making any more land, after all!!!!
If you weren’t looking for the story behind the story, it’s easy to see how people got caught up in the lies.
Glad I found Ben’s blog, so I could finally communicate with sane people.
THANK YOU, BEN!!!!
…even the guileless, the innocent get sucked in, chewed up and spit out by the power of this housing bubble. that it’s grown to such proportions reveals deep-rooted problems in the very structure of society and the economy.
There are lots of 4BR+ homes in my hood priced at $2m on up. Check out this one, for instance (off ziprealty.com):
————————————————————————————————-
17221 SILVER GUM WAY, SD - Rancho Bernardo, CA 92127**
List Price: $2,150,000 - $2,350,000
ZipRealty will give you up to $12,900 cash back.*
Bedrooms: 5
Full Baths: 6
Partial Baths: 0
Square Feet: 5,450
Lot Size: N/A
Year Built: 2003
Listing Date: 01/04/07
On Market: 10 days
Type: SFR
Status: ACTIVE
MLS #: 076001213
Seller will entertain offers from $2,150,000-$2,350,000.00,most sought out floor plan in all of santa fe valley! Upgrades including: built in refrigoator (sic),travertine flooring,granite countertops,brand new carpet,crown molding. Buyers/agent to verify all mls info prior to contingency removals. Seller is licensed ca agent.
————————————————————————————————
Here are the recent comps, from the SD County Assessor’s web site:
Street Address Sale Price Parcel No Sales Date
———————————— ————– ——————– ————–
17125 SILVER GUM WAY $2,050,000 678 430 32 00 06-27-2006
17137 SILVER GUM WAY $1,800,000 678 430 34 00 08-17-2006
The wishing price has a lower bound of $2.15m / 5,450 sq ft = $394 / sq ft.
The close proximity of the two recent comps and the tendency for these tract home developments to feature cookie-cutter floor plans suggests the market value may have dropped by $250,000 between 6/27/06 and 8/17/06.
Recently other homes in the same zip code have sold on the $230-235 / sq ft price range. I guess having the most sought-out tract home floor plan plus gated security makes it worth a $160 / sq ft premium?
GS — good analysis. I liked your earlier suggestion about sorting ZipRealty listings by square footage; unfortunately, the MLS in the market in which I’m looking, in the SE, no longer lists square footage.
This is from as close friend who lives in Dallas and is about to retire. Because of his job with the Federal government, he lived in Virginia until 2 years ago, then asked for a transfer to his home town of Dallas, Tx. He sold his house in Virginia for fat profit, then bought in Dallas. Nearing retirement (with a very big Federal government employee pension which boggles the mind and makes you wonder how the nation can afford a Federal government) he bought some land outside the city with the intention of putting up a modular home but he had to sell the house in Dallas. He phoned this morning to say he has sold the house for a nice profit.
HOWEVER! Here’s the real meat of the story. The new owners are investors and he is going to RENT off them for about a year until the modular house and all the facilities can be put in. Phone lines, water, electricity.
So, it looks like people are STILL buying to rent as opposed to hearing those stories about people who have already bought and have become a f*b and trying to rent to cover their costs. I’m not sure how Dallas is doing in the boom/bust and I think my friend “priced to sell”.
–
Here in Tehachapi, CA, we had the coldest temp. in the past 15 years over the last two nights. Here is from a realtor friend:
“Several of the new KB homes had frozen and/or broken pipes Friday night and I’m confident there were more last night. ”
Another friend built a spec house (not being able to sell for the past six months), expensive by local standards, and he had broken pipes and lot of damage, two months ago, without any weather related issue.
Booms lead to lot of shoddy construction.
Jas
“Booms lead to lot of shoddy construction.”
And that, in turn, is another good reason to avoid buying a California home during a mania. It is much better to wait for the inevitable hangover, as that is the point when the few buyers left out there will sort out the question of which homes are well-constructed and which are best left to sit on the market for a bit longer until their price drops to a level which reflects the fact that they are already falling apart only a few short years after the builder shat them into their overpriced tract home developments.
From Santa Barbara, California. Here’s the number of SB area sales in the last 5 years (excludes the Santa Maria area north of here, which is very different economically)
01 02 03 04 05 06
Jan 157 194 161 176 163 139
Feb 127 189 137 168 146 132
Mar 229 267 167 258 201 160
Apr 198 274 204 239 199 142
May 227 264 197 244 234 138
Jun 256 236 213 271 257 166
Jul 229 220 234 227 221 132
Aug 258 241 304 206 263 178
Sep 154 212 212 207 196 129
Oct 193 196 214 184 146 151
Nov 173 174 155 173 136 123
Dec 149 194 206 202 156 na
Aside from October, monthly sales are the lowest in the 5 years charted here. Forget about median, sales are way down.
(Info is from from CORT)
“Forget about median, sales are way down.”
That is what usually happens when market prices fall — sellers lose their enthusiasm for selling when they face the prospect of losing money on the sale…
I am starting to see short sales on the CA Central Coast. The house in a Craigslist posting (below) was purchased on 12/05 for $425K.
$375000 Adorable 3/2 House in Los Osos-Owner Must Sell Quickly!
Adorable 3 Bedroom, 1 1/2 Bath House in Los Osos needs to sell quickly! WAY below current market value - This is a true opportunity for a bargain!! Home backs up onto Los Osos Community Park. Close to schools and shopping! Great family home, first-time buyers, or investment property! Tile flooring in kitchen and wood floors in majority of the home! Fruit trees in yard!
Serious Inquiries Only Please!
Great news, those prices are starting to sound downright reasonable.
Kind of like Los Osos, sort of like a low-end Pacific Grove
How much does something like that rent for per month?
4334 E South Fork Dr, Phoenix, AZ 85044
the above house Just sold for 295K when all comps are putting these at about 265K. Werid?
At that amount of difference, I’d guess that the buyer had -0- to put down and the seller fronted all the closing costs and up-front financing charges. Not the same as the type of fraud Paladin is tracking down, for example.
Here are some Santa Barbara Stats.
South Santa Barbara County
Month Number of Sales Average Sales Price Median Sales Price Number of Sales over $1 Million
December 2006 143 1,473,486$ 940,000$ 63
December 2005 156 1,526,282$ 980,000$ 76
December 2004 197 1,252,142$ 859,000$ 66
December 2003 201 1,031,696$ 749,000$ 67
December 2002 191 1,402,536$ 666,500$ 47
December 2001 146 879,130$ 562,500$ 28
Santa Barbara
Month Number of Sales Average Sales Price Median Sales Price
December 2006 66 1,342,962$ 954,750$
December 2005 78 1,381,076$ 1,100,000$
December 2004 94 1,003,042$ 792,000$
December 2003 89 1,076,179$ 825,000$
December 2002 101 981,277$ 739,000$
December 2001 65 686,284$ 600,000$
Goleta
Month Number of Sales Average Sales Price Median Sales Price
December 2006 30 736,567$ 722,000$
December 2005 41 1,161,280$ 889,000$
December 2004 49 809,867$ 815,000$
December 2003 53 718,122$ 592,500$
December 2002 46 2,361,032$ 507,500$
December 2001 53 543,632$ 449,500$
Carpinteria
Month Number of Sales Average Sales Price Median Sales Price
December 2006 8 1,473,750$ 910,000$
December 2005 14 961,214$ 674,500$
December 2004 22 1,555,818$ 580,000$
December 2003 22 592,175$ 572,000$
December 2002 16 572,687$ 447,500$
December 2001 10 439,750$ 390,000$
Montecito
Month Number of Sales Average Sales Price Median Sales Price
December 2006 26 2,473,173$ 1,975,000$
December 2005 13 2,210,192$ 1,850,000$
December 2004 18 2,897,166$ 2,515,000$
December 2003 30 1,799,839$ 1,550,000$
December 2002 21 2,032,785$ 1,675,000$
December 2001 18 2,807,472$ 1,550,000$
Isla Vista
Month Number of Sales Average Sales Price Median Sales Price
December 2006 6 908,417$ 419,000$
December 2005 0
December 2004 2 1,275,000$ 1,275,000$
December 2003 1 967,500$ 967,500$
December 2002 3 708,000$ 724,000$
December 2001 0
Hope Ranch
Month Number of Sales Average Sales Price Median Sales Price
December 2006 2 3,655,000$ 3,655,000$
December 2005 4 8,234,125$ 3,723,250$
December 2004
December 2003
December 2002
December 2001
Summerland
Month Number of Sales Average Sales Price Median Sales Price
December 2006 3 3,216,667$ 1,350,000$
December 2005 5 1,145,500$ 970,000$
December 2004 10 1,991,300$ 1,597,500$
December 2003 6 923,333$ 885,000$
December 2002 3 1,841,666$ 750,000$
December 2001 0
goleta is almost back to 3003 prices !
back to the future
3003? Do you really expect the downturn to last that long?
Investors in a price war. Both have homes next door to each other one put their new flip house for 1.2 million and the other put his for 1.1 mil with a pool . Neither house has sold in over 7 months now the 1.2 m is 999k and the other house was just lowered to 995k. I can just imagine what will happen if in 6 months neither sells.
I hope they don’t both have a gun fight at the Ok Corral?