“The Rest Of The Worst Is Yet To Come”
The Des Moines Register reports from Iowa. “Homebuilding activity in Iowa dropped 15 percent last year, new U.S. Census data show, with most major cities having declines that ranged from 10 percent in Cedar Falls/Waterloo to 26 percent in Iowa City.”
“Last year, builders used incentives, offering perks that ranged from upgraded appliances, closing costs and paid association fees to a leased Mercedes, to reduce the number of new homes in the market.”
“The ‘gloom and doom’ of other larger, more volatile markets has made buyers much more cautious, said Colin King, president of the Des Moines builder association’s board.”
“‘A year or two ago, a couple would start building their house, then put their old house on the market,’ said King. ‘Now, couples are waiting until they sell their existing homes before starting construction. They’re willing to move twice, just to make sure their house sells and they don’t have two house payments.’”
“He expects ‘overwhelming’ inventories in the middle market to shrink with continued job growth and low interest.”
“Tom Stevens, owner of TS Construction in Johnston, said he and others expect inexperienced builders to exit the slower market. Stevens said the rush to capitalize on the boom in 2005 contributed to the number of homes in the market.”
The Detroit News from Michigan. “The best that can be said about the Metro Detroit housing market is that some of the worst may be over. And the worst that can be said is that the rest of the worst is yet to come.”
“The only number that went up wasn’t a good one. That’s the number of homes listed for sale, and it soared across southeast Michigan by a staggering 41.2 percent.”
“‘I never saw values go down like this,’ says Steve Cole, a 32-year real estate veteran in Birmingham. ‘This year will be the bottom. We’ll probably see an increase in sales numbers, but I don’t think we’ll see an increase in home values.’”
“Another issue that could continue to hit the market is the rising number of foreclosures. One of every 21 Wayne households entered foreclosure last year, the equivalent of 40,219 households.”
“At the moment, foreclosures aren’t tapering off, says Doug Schrandt of Life Properties in Chesterfield. His firm works with Macomb County owners who are in danger of losing their homes to foreclosure. ‘We have a steady 60 to 70 homes a week,’ Schrandt says. ‘Some areas are really suffering, like Eastpointe and the areas closer to Detroit.’”
“The foreclosure market could improve as auto-related job losses slow down. Or it could increase as more adjustable-rate mortgages continue to reset, hitting struggling homeowners with rising monthly payments that may push their house payments beyond reach. ‘We’ve got lending institutions to blame as well as the auto companies,’ notes Karen Thomas, an associate broker in Commerce Township.”
“Higher-end homes will continue to stay off the market unless homeowners are desperate. Cole just handled the sale of a Birmingham home for more than $600,000 where the owner still had to bring nearly $80,000 to the closing to cover the shortfall in what he owed to the bank.”
“‘If buyers don’t buy now,’ says Cole, ‘they’ve got to be crazy.’”
The Business Review from Michigan. “Housing starts are down and builders are glum, but 2007 promises better times, one economist says. ‘The demand side is good — it’s the supply side we’re working on,’ National Association of Home Builders forecasting director Bernard Markstein III told builders and associates.”
“But the economy and house inventories weigh heavily on local builders’ minds, he reported, judging from responses to this year’s HBA survey. Members indicated that the area is indeed overbuilt, that sales and profits didn’t live up to expectations for 2006 and that the 2007 outlook is weak across all house price ranges.”
“‘2006 was a year to forget, and it was a year we did not expect,’ Erickcek said.”
The Ann Arbor news from Michigan. “Some Pfizer employees are already meeting with Realtors about listing their homes, fearing a glut of houses in an already slow real estate market will drive prices down or make it difficult to sell their properties.”
“‘We do have a number of Pfizer clients who own two properties - they bought a home last year and haven’t sold their (other) home yet,’ said (realtor) Martin Bouma in Ann Arbor.”
“Bouma said the day the news broke, he had several non-Pfizer clients calling in a panic, wanting to lower their homes’ prices to sell it quickly before a perceived glut of Pfizer homes hit the market. ‘I said, ‘Take a deep breath and let’s keep this in perspective.’”
The Daily Herald from Illinois. “Officials of the Federal Reserve Bank of Chicago called on state agencies to clamp down on lenders that make high-risk mortgage loans to people who can’t afford them.”
“In a conference at the bank on Wednesday, Federal Reserve examiner John Taylor said states need to put more resources into examining the lending and marketing practices of mortgage brokers before a rash of delinquencies and foreclosures do severe damage to housing markets. Mortgage brokers are regulated by states, not federal agencies.”
“‘I’m very concerned that there’s a ticking time bomb in (loan) portfolios,’ Taylor said.”
“Christen Wiggins of Neighborhood Housing Services of Chicago Inc. said part of the problem is the fact that the pitch of lenders is pretty simple: lower your monthly payment. The warning material provided by organizations like the Fed is often hard to understand, containing terms like ‘negative amortization,’ Wiggins said.”
“John Bellini at Farmington Hills, Mich.-based Paramount Bancorp Inc., said his bank does not lend to the highest-risk borrowers, but does offer non-traditional mortgages. He said they have to in order to stay competitive.”
“Michael Mangin, executive VP of retail lending at Marquette National Corp., said non-traditional mortgages were originally created for investors who would purchase property using low initial payment rates, renovate, and flip the property before the loan reset to higher payments.”
“But now those loans are marketed to everyone, even people with bad or no credit. He said that tighter regulation would push out the bad seeds.”
“I think it’s fair to say this isn’t an issue that’s going away any time soon,’ said the Federal Reserve’s Taylor.”
‘Stevens said the rush to capitalize on the boom in 2005 contributed to the number of homes in the market.’
So there was a ‘boom’ in Iowa at the same time as many major markets. National bubble?
Yep it’s national! I know damn well we had “builders gone wild” here in South Carolina
I’ll take “girls gone wild” any day…
I do think this boom was national. As many have pointed out, while certain areas may not have experienced the hyper-inflation in prices, the small gains they did experience were huge considering they should have been decreases due to job losses etc. Areas in the upper mid-west for instance. The loose lending knew no state lines.
Even though many areas did not experience large increases in value many homes were sold to people who should not have bought a home at all or people bought way more house than they could afford using creative financing. Or often multiple spec homes.
I know for a fact in Arkansas this was the case. This means of course that far more homes will be on the market in these areas then the market can absorb for years to come.
Also of course the home building/buying spree resulted in a lot of the regional economic growth coming from the housing industry.
Since the end result will be job losses and a depression in home prices as the market clears even people that did not get involved in the boom will be negatively impacted as housing prices dip below nominal inflation adjusted prices.
What I don’t know is how many people converted to exotic loans and did equity extraction outside of the bubble regions it would be nice to know the extent of the heloc bubble considering the size of the numbers I’ve seen it must have been nationwide. I’d have to assume in many cases outside of the bubble area this resulted somehow in negative equity maybe via widespread appraisal fraud ?
This mean everyone will lose money.
“Homebuilding activity in Iowa dropped 15 percent last year, new U.S. Census data show, with most major cities having declines that ranged from 10 percent in Cedar Falls/Waterloo to 26 percent in Iowa City.”
“The ‘gloom and doom’ of other larger, more volatile markets has made buyers much more cautious, said Colin King, president of the Des Moines builder association’s board.”
Blame it all on what gloomsters have said, and ignore 15 percent drop in homebuilding activity in Iowa, as there is nothing unusual about that…
“‘The demand side is good — it’s the supply side we’re working on,’ National Association of Home Builders forecasting director Bernard Markstein III told builders and associates.”
Is this mere spin, or is the guy truly too dumb to understand the link between subprime and the demand side of the housing market?
I am going to have to go with dumb GS. From what the builders have shown us through overbuilding, this is a no-brainer.
he said they are working on the supply side… as in trying to decrease it…
“‘If buyers don’t buy now,’ says Cole, ‘they’ve got to be crazy.’”
Crazy like a fox!
CR has a great article on BBB MBS securities.
So I blogged it.
http://recomments.blogspot.com/
Don’t buy in 2007… the bottom isn’t even sight yet.
Got popcorn?
Neil
I like this graph the best. Its fallen off the cliff in the last 2 weeks ! A bond that was worth $100.50 in July 06 is now worth $88 ! Thats a loss of 12%
I don’t think this has trickled through to the mortgage community yet and certainly not to mortgage rates. And the decline is no where near levelling off !
LMAO,
One of your links mad me laugh.
Most unaffordable housing markets.
1.LA,CA
2.SD,CA
3.Honolulu,HI
4. SF,CA
5.Ventura County,CA
6.Stockton,CA
7.London,Engalnd
I have lived my life (cept for stint in Navy) in Stockton. If I wasn’t born here this place wouldn’t qualify for me to stop for gas. Not nocking it bad, but I have coincidentally been to all those places on the list =)..
It is shocking to me to see my home town on that list no matter what it represents. Astounding that my little agricultural, welfare, warehouse town is on THAT list!!!!
The only city I would choose Stockton over is LA, hated LA. They do have jobs, but I thought it Urban Hillbilly Hell, traffic stopped on the freeway at 2a.m. wednsdays!!!
If you had to guess who is going to have better deals on RE in 5-8 years which city do you think?
Simply insane to have spawling delelopments on the shitty side (all sides for that matter) for $450k (shitty side) and $650k other side.
I remember around 99′ there was ONE home listed for a million here. Huge fantastic home, huge double lot, best neighborhood, corner lot whose backyard was on the delta (deep water channel that can take you to the ocean), Massive dock in the back that would park a very large yaught.
Now fast fwd to today. Little (none with inflation) wage growth, many more gangs, illeterates, dirtbags (can go nowhere without scumbags bothering me for money in front of my kids), illegals.
Today million dollar houses are a dime a dozen!
Shit anything approching nice is well into the $400’s. The same homes you could buy for $100k in 99′ are now listed at $300k+.
Again, amazing to see my town on THAT list.
F$*king makes me want to poor a stiff drink at noon and not stop.
Neil you’re right on this one. I’m from Detroit originally and with all of the layoffs things are crazy right now. There never was a bubble. You could always buy a reasonable house on a reasonable wage. The problem is the unemployment. That’s what’s driving the rates down.
Not rates but prices. DUH!
Wait till the guys start running out of unemployment AND union money.
Have you been to Flint? I lived there a while back… Still in the flusher
When the seller brings his $80k HELOC to closing it’s no bargain and the buyer would be an idiot not to realize it. Would somebody slap the next idiot who says what somebody owes is what it’s worth…..
“If buyers don’t buy now, they’ve got to be crazy” - realtor Cole.
This was my favorite comment too. Cole may be crazy, or just desperate. In either case, he is wrong.
“The foreclosure market could improve as auto-related job losses slow down.
Ha ! Ford and GM sales are down 21 and 19% over last year ! They aren’t done cutting yet.
If buyers buy now, they ARE crazy, and they’ll become the foreclosure statistics of 2008!
And if we end up with President Hillary all bets are off!
By the time we get to the ‘08 election, the damage will be done. It doesn’t matter who gets the job, it’ll be a nightmare.
‘negative amortization,’
If you don’t understand the loan, don’t sign the papers.
What does “Nehgahtivy Ammoretizatyon” mean? I can’t comprhensive it.
I know some loan officers who would love to make your acquaintance.
“But now those loans are marketed to everyone, even people with bad or no credit. He said that tighter regulation would push out the bad seeds.”
Racist redliner…
Little late now. The horse is out of the barn and can’t chase or change what has happened. Money has been made by those who new the “set-up” and they have it their hidden, private accounts who knows where. No need to warn anybody as there are no “new ” buyers out there now. It’s over. God Bless America. I guess its the American way.
Yeah, this monster has been decades in the making. I’d guess most around here suspected we were running on fumes (previous generations’ industry and thrift) for quite some time now.
Well put. We’ve really been running on the capital built up by more productive and more educated previous generations. Dark times ahead.
The horse was euthanized two days ago, if my memory serves me correctly.
I would like to see how many stupid quotes of these foolish people how have been caught with their pants down at their ankles and now trying to get sympathy or realt whores trying to keep the bubble party going. Here are some I remember.
Most famous - “15% is in the bag” - Gary ‘where did you go” Watts.
The lady in Reno saying that she shouldn’t be penalized by her POS dropping in value because the builders overbuilt.
The fool that said prices can’t go down because then too many people will be upside down.
Our Marco Island friend who was lamenting his fate and bought “because the salesperson guaranteed it would appreciate 20% in the next twelve months”.
The idiot professor in Minneapolis who was now a bagholder on 2 mortgages because “the realtor guaranteed the first POS would sell immediately” and the realtor was wrong.
Please list more -
Dolly Cruz, a Bay Area investor who a year ago bought a single-family home in Lathrop’s Mossdale Landing development for $625,000 (The house is rented out at $1,500 per month):
“‘Even though the price is down, you’re not losing anything if you’re not selling it, is the way I look at it,’ Cruz said.”
“As a buyer you have no leverage in this market,” says Bruce Ross Bernor, an agent in San Francisco. “You have to bite your tongue and go along with it.”
May 6, 2005 “Feed the Squirrels” homes.WSJ
no pun intended but what does “feed the squarells mean”
i know squarrels are animals that live on trees and eat nuts why feed em? yes yes I do not get it
There was a famous seller in San Francisco that made the buyer agree to feed the squirrels at the house after purchase. It was in the contract. If you do a search on Google I’m sure you’ll find the article.
thank you green
Here is the article and some other rather hilarious stuff on the housing bubble.
http://www.inman.com/blogger/2005_06_12_bradinman_archive.aspx
SKB
‘The demand side is good — it’s the supply side we’re working on,’ National Association of Home Builders forecasting director Bernard Markstein III told builders and associates.
Hey, Dip sh*t you might want to go and work the demand side a little bit more in Detroit area before you open your pie hole agian.
“Or it could increase as more adjustable-rate mortgages continue to reset, hitting struggling homeowners with rising monthly payments that may push their house payments beyond reach. ‘We’ve got lending institutions to blame as well as the auto companies,’ notes Karen Thomas, an associate broker in Commerce Township.”
AAAAK!!! My head is about to explode!!!!
‘We’ve got lending institutions to blame
as well as thewhich happen to also be auto companies,’GMAC
“One of every 21 Wayne households entered foreclosure last year, the equivalent of 40,219 households.”
This is staggering. Has no one notified Wall Street or Washington? Yesterday, with the prez at the NYSE, he announced the economy was strong, paychecks growing, business expanding. Was he misinformed, or has Michigan been dropped from the Union?
The Prez lives in his own world. You wouldn’t recognize it if you saw it.
When the CEOs of the big three requested a meeting with Bush last year he put them off. Apparently three of the largest corporations that employ hundreds of thousands of Americans weren’t important to him. He finally did meet with them recently(after much criticism from Michigan’s Senators and Representatives) and gave them a whole half hour to speak. Wow. He probably spends more time every day in photo ops with girl scouts and professional athletes. Apparently Michigan has been dropped from the union.
Jim,
I am still just staggered. And with the Pfizer layoffs added to the big three…and the ripple effects out to smaller businesses..Michigan isn’t alone. Apparently CO. FL. MA. and maybe Nevada are on the “to be dropped from the union” list.
The collusion between Wash. and Wall St. over jawboning a “great economy” is too much to be coincidence. They may worry about Iraq, but they must figure they can outdance the exploding domestic economic mess, at least until Nov. 2007.
I had hopes of giving michigan to Canada.
Arrogant labor democrats in Mich… yeah, I’m sure he just wanted to sit down with John Bonnier and the labor unions.
“When the CEOs of the big three requested a meeting with Bush last year he put them off.”
It was the CEOs who requested the meeting with bush, not labor. You know bush would never allow himself to be photographed talking to labor guys.
I came across a Michigan Emploment Blog last week. It was full of people lamenting the fact that there were no jobs and how they were reluctantly planning to move to another state. Even the low paying jobs were hard to find and having a degree was no help. There are going to be a lot of bargain lake front properties in Michigan is my guess.
So almost 5% of the total population entered foreclosure last year. All I can say is, Wow!
That’s Wayne county which includes Detroit. But, Macomb county’s rate is almost as bad. The problem is primarily the economy, with some toxic loans thrown in. This would have been much worse if the percentage of sub-prime/toxic loans was as high as say California. Think what would happen there if the unemployment rate was nearly 9%.
Your all stupid chicken little types!
Just watched business news and they said new housing starts were up 4% last month, highest monthly rise sinse 02′. You scrubs will be locked out FOREVER. Your children will be serfs beholden to the land baron McMansionites! The only jobs will be service work work for the McMansion masters. Be prepared to kiss your FB (ment masters) ass for small hand outs dispensed from the paradym shifting of the perpetual McMansion equity ATM machine.
According to the MSM the perpetual motion mechanism has finally been discovered and it is $600k homes in locations with average incomes of $40k. You dolts had better run out and snatch up some of the dwindling subprime money and buy two or you will forever be ignorant, fat, unhealthy, pregnant (yes men too), single, unemployed, hungry, stinky and a pathetic albatross on those of good ilk (ie. the McMansionites).
Tis true they are making no more land and printing an endless ammount of money. Real assets are the only hope. If you don’t buy now..today, this instant you are DOOMED!!!
This is no trolling post, just trying to save your poor demented souls. Join the greater society today or be a slave.
You mean… “AND be a slave.”
LOL, cool post Rich, but when reality hits, I would rather be long gold than owning any house and I sold my last house last Oct after more than a year on the market and discounts of 195,000 from original list.
I’m sorry I couldn’t hear your sarcasm over my bank account and 401k balances. Speak up!
Note: I know you were just messing around.
History do go round. The majority of white immigrants in early colonial America arrived as indentured servants. 8-10 generations later,looky how many have volunteered to spend the rest of their lives in indebted servitude. La plus c’est change…
sorry,
La plus ca change
Bush was at the NYSE? You serious? The stock market will crash for sure! Look out below!!
“Was he misinformed,…”
I am guessing what he says about the economy is whatever Lazear, Paulson and Bernanke tell him to say.
They’ll tell him precisely what to say, though there’s no guarantee that it will be intelligible later.
““Higher-end homes will continue to stay off the market unless homeowners are desperate.”
Exactly, and it’s those desperate homeowners who will be generating the new comps.
“The best that can be said about the Metro Detroit housing market is that some of the worst may be over. And the worst that can be said is that the rest of the worst is yet to come.”
Or to put it another way:
The best that can be said is that the best case for the worst of the betterment of the Metro Detroit housing market happened at the worst possible time. And the worst that can be said is that the best chance of a worsening situation can be best described as a worse case scenario even in the best of times. Of course things could get a lot worse at best, but that’s my best guess, for better or worse.
Is that any clearer?
For those who think real estate only goes up, one of my favorite websites is called “The Fabulous Ruins of Detroit,” showing abandoned, formerly attractive residential and industrial buildings from the city’s heyday. I also lived in Michigan for a brief time, and remember when East Detroit was renamed “Eastpointe.” The addition of the terminal “e” was supposed to suggest cachet, like “Grosse Pointe” allegedly possesses.
http://tinyurl.com/3d7uha
As for the quotes, my God. Who really needs to “keep this in perspective”? Do these bozos think newly-unemployed people can, or should, carry two mortgages? They will have a hard enough time keeping the heat on.
I recently hear there are more than 80,000 abandoned buildings and dwellings in Detroit.
Typical midwestern city…
Scary. Capitalist version of the Chernobyl disaster.
You’re more than qualified for the job!
Welcome back Rainman18!
lol
i rarely return to des moines having moved from iowa 26 years ago, but did this past weekend and was absolutely stunned by the insane housing/condo developments that have overtaken formerly productive farmland on the outskirts of the city. the grotesque part is the size of these monstronsities — families are rarely comprised of 4,5 or 6 kids these days. what the hell is all that wasted space going to except excessive heating bills. most of these ‘communities’ are way the hell out, just off the interstate, but with no surrounding established community — just a 4-5 block development of mcmansions — most of which seem to be empty.
there are tons of realtor signs everywhere; lots of ‘rent to buy’ signs. and my favorite one that made me think of this site was the sign that said ‘FREE BALLOON RIDE’ if you bought the house.
the thing that really mystifies me, though, is who the hell are the people who were expected to purchase and live in these places. there is not a professional class of the size necessary to support all that very expensive (for iowa) housing. discussing this with my sisters, and they tell me that everybody they know is working 2-3 jobs to keep up. .
“and they tell me that everybody they know is working 2-3 jobs to keep up. . “
Which explains why employment numbers are still good, people have to get second and third jobs just to pay for their stuff. A two wage earner family has to hold down 5 jobs just to pay for their $500,000 McMansion.
I am from there originally too. I am just floored by this growth in West Des Moines-Iowa actually had slightly negative population growth over the past decade-thanks to people like you and me leaving-yes, that city is growing due to the rest of the state shrinking, but the incomes are just not there to sustain anything like what is being built. I agree the professional class there is small. The problem with that city is that a guy who is like a sales manager at a rent-to-own furniture store or a guy who is an insurance claim processing supervisor there will often think he is a yuppie or an executive of some type-who make 38000 a year and will think that entails living in some type of luxury development-easy prey for today’s lenders.
A thread I saved once, anyone from DM can appreciate this:
Okay, first of all, there is nothing to do in Des Moines. E
veryone who lives there thinks they are big shots living in a big city. The
attitude gets really annoying. 75% of the nightlife involves going to
really crappy bars/”nightclubs”. These establishments also have the notion
that they are big city roller joints, and the crowd which frequents them are
beyond pathetic. Not only is there nothing to do in the town itself, but there is
nothing interesting to do within a two hour drive of the town.
Seriously, the biggest event is something called “Clive at Five.” Clive is some
tiny suburb, and in the summer everyone goes to some empty grass
field there at five o’clock on Fridays to drink. You pay something like 10
bucks to get in this fenced off grass field and they give you two tickets good
for one beer each. Some local radio station plays music and that’s about it.
So you have several types of people living in Des Moines:
The people that moved there from smaller Iowa towns and got
white collar jobs and think they are big shots because they wear a suit to
work and live in the biggest city in Iowa. They generally think they are
better than everyone.
Then there are the people that grew up in Des Moines and work in
white collar jobs. They think they are big shots, but feel they are
even betterthan the first group since they’ve always lived in Des Moines
and are “city people”.
Then there are blue collar types that grew up in Des Moines.
They generally dislike everyone except other blue collar types that they went
to high school with. They especially hate the next group.
Blue collar types that grew up in small towns and moved to Des
Moines because the plant/factory/gas station they were working at in
their small town went out of business. These people are nicer than the
previous group but often a little slow.
Lastly are people stuck there from other places because their
job made them move there or because their spouse is going to school. These are good
people, but they have a high turnover rate as they generally do not stick around long.
“and my favorite one that made me think of this site was the sign that said ‘FREE BALLOON RIDE’ if you bought the house.”
Be careful. That’s not a real balloon, its just a financing gimmick.
There’s a mini-McMansion down the street from me (near Springfield, MO) and the owner/realtor has plastered 100s (I’m not kidding) of hand-made hand-written cheesy little signs all over town “4bd 3bath nothing down bad credit OK”. There was an open house a few months ago and I asked the guy who he thought could buy the house given that it was priced at 3-4 times what the typical house in town sells for. His answer? A doctor or dentist that is getting a divorce and whose wife (or husband) ran up their credit cards. So s/he has the income but bad credit (and I assume a bunch of kids). Given that this little town can only support at most 3-4 doctors and dentists this seemed like the craziest thing I’d ever heard. Most people here work at the cheese factory, the truck stop, one of the fast food places or drive a truck. It’s been a year or more and that sad little McMansion just sits there.
I thought one of the rules of real estate was to avoid being the best house in the neighborhood since when you try to sell the other houses pulled down the value, sounds like this realtor needs to go back to realtor school.
“‘I never saw values go down like this,’ says Steve Cole, a 32-year real estate veteran in Birmingham. ‘This year will be the bottom. We’ll probably see an increase in sales numbers, but I don’t think we’ll see an increase in home values.’”
Mr. Cole has never seen a decrease in values but he’s a veteran who is qualified enough to call a bottom. Are these journalists dopey or what?
I think he meant he’s never seen values go down to the extent they are currently decreasing.
Then again, he did say buyers who don’t buy this year are crazy, so maybe he’s just insane.
STAND BACK FOLKS…..Just a Stampeding Herd of White Elephants Coming Through ….Nothing to SEE here …Move Along and KEEP Shopping !!!
Any popcorn left Neil ?
“Michael Mangin, executive VP of retail lending at Marquette National Corp., said non-traditional mortgages were originally created for investors who would purchase property using low initial payment rates, renovate, and flip the property before the loan reset to higher payments.”
Help me here. I never took out one of these loans but my understanding is they all carry substantial prepayment penalties. How do you do a flip with that extra cost burden to contend with, or are flippers that dumb that they throw every single bit of caution to the wind?
“Bouma said the day the news broke, he had several non-Pfizer clients calling in a panic, wanting to lower their homes’ prices to sell it quickly before a perceived glut of Pfizer homes hit the market. ‘I said, ‘Take a deep breath and let’s keep this in perspective.’”
Sounds like the sellers are keeping things in perspective. There is a huge supply vs demand and the supply side is about to grow. The average person is starting to get it and all the deep breaths in the world can’t stop the coming panic attack.
Are Pfizer homes especially difficult to sell or something?
They might be, in Ann Arbor, since Pfizer just announced a huge round of layoffs (FIRINGS).
Having gone to school in Ann Arbor, I know how expensive things are there. (The town isn’t called “La Jolla in the Midwest” for nothing.) One wonders if there will be a downward “Pfizer Effect” on the price of housing and other things in A2.
Sounds like the non-Pfizer folks are getting it. they need to find a new real-ter who will say “Take a deep breath and let’s price it to sell’.
You can smell their fear just by reading. Not a good 5 years to be a Real Estate Clerk (Realtor). 7 yr cycle in CA….but this time is different right?
I had assumed the economy would be softening by now and the fed would be lowering rates, helping bail out all the FBs. Now with the latest GDP report I think they are well and truly screwed. The rest of the economy is holding up pretty well and the fed is still concerned with inflation, so no rate lowering at least through most of this year. I see a bifurcated future where most people are enjoying low unemployment and a rising stock market while a small segment of FBs who bought in the past 2-3 years struggle to keep from going under are totally ignored. They will be pleading for help but no one will be listening.
Holy crap, look at the plunging ABX indices for the BBB loans. Someone is gretting burned!
http://www.markit.com/information/affiliations/abx
” I see a bifurcated future where most people are enjoying low unemployment and a rising stock market while a small segment of FBs who bought in the past 2-3 years struggle to keep from going under are totally ignored. They will be pleading for help but no one will be listening. ”
Does that mean no bailouts?
Not only will there not be any bailouts but under the worst case scenario Bernanke might even have to raise interest rates. Hah! That will cause true desparation.
“‘2006 was a year to forget, and it was a year we did not expect,’ Erickcek said.”
Yeah, no sense learning from your mistakes…let’s just forget it.
One of every 21 Wayne households entered foreclosure last year, the equivalent of 40,219 households.”
—————————————————————————-
Yikes! This is a scary stat!
That is truly frightening. Almost 5% went into foreclosure during a single year. How is that even possible?
What I REALLY want to know is if houses sold by banks, foreclosure, auction or FSBO get entered into the pricing/comps database. If so, we should see some real downward action on comps and average selling prices in the not too distant future.
I think there was alot of mortgage fraud going on in Detroit City proper.
“Federal Reserve examiner John Taylor said states need to put more resources into examining the lending and marketing practices of mortgage brokers before a rash of delinquencies and foreclosures do severe damage to housing markets.”
—————————
“Before a rash of delinquencies and foreclosures”? Waaaaay too late to stop that. The horse left the barn a long time ago.
That strange, tight feeling around the chests of todays HouseDebtors is just that rare and almost extinct American Credit Boa Constrictor readjusting his GRIP. The best technique in dealing with this legendary creature is to immediately drop your price wishing price 20-30%, breathe out and Relax. It will all be over shortly and unlike the REIC vipers, he his non posionous.
Good Luck,
The FED
“What I REALLY want to know is if houses sold by banks, foreclosure, auction or FSBO get entered into the pricing/comps database. If so, we should see some real downward action on comps and average selling prices in the not too distant future”
Yes, I would like to know too. Anyone know?
“‘If buyers don’t buy now,’ says Cole, ‘they’ve got to be crazy.’”
Crazy like a fox, Cole ol’ boy.
In so many areas the builders were building for investors that thought they were going to sell to the baby boomers or the locals (who are priced out ).
You just can’t explain this over-building by any other reason . Why is that so much of what the builders were building was not really something that anybody but a investor would buy who didn’t have to live in the place .