Post Local Housing Market Observations Here!
What do you see in your housing market this weekend? Changes in local government? “Even at the height of excess revenues from the county’s deeds tax, county officials knew the cash cow wouldn’t graze in Barnstable’s fields forever. Revenue solely from the Registry of Deeds Tax is anticipated by the county to fall $1.17 million lower than in fiscal year ’07.”
“‘For the first time in a long time, there’s actually a housing market $350,000 and under,’ said Mark Zelinski, county administrator and director of finances.”
“In addition to the lower prices, he said, the Cape’s higher-level housing market, above $1 million, has stagnated, resulting in dramatically reduced deeds tax revenue. ‘Revenue-wise … we’ll be under,’ he said.”
Home sales statistics? “New housing starts, a bright spot in the county’s economy for several years, collapsed in 2006, sinking to the lowest level in 14 years, according to statistics collected by The Flint Journal from area cities and townships.”
“The average selling price dropped 16 percent compared to the previous year, said Doris Nurenberg, executive director of the Flint Area Association of Realtors.”
“There are too many never-lived-in houses on the market right now to expect a rebound in 2007, said Ted Macksey, whose family has been building homes in the area since the 1950s. ‘I think it’s a function of the economy. Once we hit June 2005, things just stopped,’ he said.”
Or overbuilding. “At the end of 2006, almost 875 new houses were finished and vacant or under construction in several Dallas and Park Cities neighborhoods, according to a survey. Demand for these high-end homes, often referred to as McMansions, has caused a flurry of teardowns in several close-in residential districts.”
“But while there are lots of unsold homes on the market, some builders may decide to go ahead with more starts, said said Jeff Dworkin, who builds homes ranging from $375,000 to over $450,000 in East Dallas neighborhoods.”
“‘The market has gotten the message in some places,’ he said ‘But there are some smaller builders out there who have no choice, because they already own the lots and have the loans in place.’”
An increase in foreclosures? “The number of properties repossessed by banks was higher last year than after the recession of the early 1990s, as a growing number of overstretched investors were burned by Sydney’s house-price slump.”
“Young investors defaulting on home loans was one factor behind a surge in legal action against borrowers last year, a court spokesman said.”
Changes at local banks? “Metropolitan Savings was closed today by the Pennsylvania Department of Banking, and the FDIC was named receiver. Metropolitan Savings is the first FDIC-insured institution failure in the country since June 25, 2004.”
“The failed bank’s sole office will reopen Monday as a branch of Allegheny Valley. Deposit customers of Metropolitan Savings will automatically become depositors of the assuming bank. All depositors will continue to have immediate access to their insured funds. Customers with more than the insurance limit on deposit at the failed bank should contact the FDIC.”
‘New housing starts, a bright spot in the county’s economy for several years, collapsed in 2006′
I read posts from Michigan saying there was no housing bubble there, but then why was home construction such a ‘bright spot’ for years? IMO, overbuilding and over-zealous lending are signs of an artificially stimulated housing market, even if prices don’t exactly follow the coasts.
Mass exodus from lousy cities with horrible school systems to builder suburbs. That’s why there are so many abandoned houses in the larger cities. Actually, house prices did increase over inflation in most of the 90’s and probably didn’t go down in the early 90’s as they did elsewhere. It depends on what years you use to slice and dice the percentage increases - slower bubble, earlier decline. My feeling is here in Grosse Pointe we’re down to mid to late 90’s prices. Peak was probably 2003. But then again, Detroit declinehas more of an impact here as we borde (AKA the DMZ).
The Michigan market has the sword of Damacles over it. Ford sales were down 19% in January. GM is suffering and so is Chrysler. The spector of further job loss looms mightily over the state. It will put a real damper on already difficult times in the local real estate markets. IMHO, we will see serious misery first in Michigan.
Prices will drop more due to high foreclosure rate.
Ya, they’re up 74% in one year in my area:
Link
My understanding is that CA equity locusts have been big consumers of the MStreets/Lower Greenille and Park Cities McMansions, along with the fearless young (love that term). After all, first year lawyers at some big firms are now making $160K per year. Jesus. Put two of those together and you get an income it has taken my husband and I 20 years to get to.
I think it’s a really bad idea to totally push an established neighborhood of 30+ years way out of its historical price range like that. But nobody asked me.
Do you know what part of ‘east Dallas’ would these $400k houses be going in?
Yeah. Lower Greenville, MStreets, the crappier part of Lakewood (near Gaston and Garland Road), Little Forest Hills (across the street from White Rock Lake on Garland Road). And trust me, $400K is the low end. Most of them are priced at $600K and up.
Here’s a couple
http://dallasmls.mcknight.com/featured.php?listnum=10422128&proptype=res
http://dallasmls.mcknight.com/featured.php?listnum=10619566&proptype=res
http://dallasmls.mcknight.com/featured.php?listnum=10690910&proptype=res
TXchick,
The first house looks like it belongs in Baghdad. The other two, standard issue suburbia in any city in from the last 40 years. Worth maybe 200k, less given value of recent construction. Are there any older suburbs where design specific to Texas exist?
This is the kind of stuff they’re tearing down to build those ugly things
http://dallasmls.mcknight.com/featured.php?listnum=10624837&proptype=res
http://dallasmls.mcknight.com/featured.php?listnum=10619098&proptype=res
http://dallasmls.mcknight.com/featured.php?listnum=10658103&proptype=res
TXchick,
thanks, houses look solidly built for hot weather. Third house I’d happily live in.
And the bad thing is that you lose the character of the neighborhood to put up that crap.
Spike66
Agreed. I would live there also…..for $195,000. Depending on other things like safety, criminal activity, etc.
That area is bordered by South Dallas (a warzone) and East Dallas (little Tijuana). It’s a good area for Dallas, but not something I would pay over $200K
Well, I can assure you that starting salaries for attorneys in Oklahoma aren’t anywhere near that! Think closer to $30K to $36K on average.
Some law firms are only paying $24K starting here. (I know, because I inquired about one a few weeks ago, and that was what I was told on the phone that they were offering.) The law firms that pay that much to starting attorneys usually only pay them that much if they graduate #1 in their class from a top tier law school.
By the way, are you sure that their daddy doesn’t own the law firm?
We’re talking about firms like Fish & Richardson, Gibson, Dunn & Crutcher, Vinson Elkins, etc.
I have a good friend graduated top of Harvard Law, clerked for a Supreme Court Justice, and started at Gibson, et al for $150K + $200K signing bonus.
I think he hates his job and its 24/7 work schedule. Ironically, looked at per hour, he makes about $50hr which is what I make on 40 hour weeks. I’d take the time over money - you can always make more money but you can’t make more time.
An associate at one of the top-shelf NYC law firms can easily pull in $250K after a couple of years, and it can jump to more than a million/year if they make partner.
Making partner, though, is a horrible grind.
My husband was an editor of the Texas Law Review. Texas is a top 10 law school and he didn’t get offered anywhere near that (although it was a long time ago)
The Baylor students actually pass the bar exam at a higher rate then UT students.
I agree, I think that a starting attorney salary of anything over ~70K really takes a superstar student. Yes, some people come out and hit 100K, or even 150K. But only in big cities, and only for the top 1% of 1% of the graduates each year.
Just my take (I know quite a few lawyers who make under 100K and have been working at it for 5-10 years), but I think that the over 100K crowd is the exception, rather then the rule.
Right. Top 10-15% of a top 10 law school. But that’s an obscene salary unless you’re Clarence Darrow.
The joke on the new lawyer is, they expect you to bill 2400 hours. Do the math on that if you “work” a 40 hour week and don’t bill every minute you are there, how long that takes.
2400/52 weeks is only 46.15 hours per week. Thats not bad for an eager go-getter just out of college.
Try that BILLABLE. Even if you are efficient, you are working 70 hours to put in that time and that is no vacation. I don’t pay new associates $160K, but I also don’t demand 2400 hours. All that does is drive the associates to put in a lot more time than most problems require and irritate the client.
Indeed. Eventually it might draw a bar complaint - although not in Texas, as I understand it.
This would be true of most professional careers. I am a software engineer and the same range holds true in my line of work. I know a couple of guys who seem to have schmoozed their way into very high paying jobs with big corps, but on the whole a $50 an hour range seems to hold true if you are competent and hold more than 5 years work experience. Specialties seem to do better, but this is also true of other professions. Of course here in San Diego, we are still out in the cold when it comes to real estate. I just sort of figured everyone makes about twice what I do and that is how they afford these “big” 500K mansions they are all buying
ha ha, no! I make the same wage, and I am out in the cold as well. But, damn, my 401k has been on fire lately.
I’m starting to wonder if the next bubble is back in the stock market.
Stock Market -> Gold -> Stock Market -> Real Estate again…
Hey, around here in South Central KY the county attorneys are pulling $100k in these rural counties. And this is an area where the #1 source of income is a gobment transfer program (Fed and State) with meth labs a close second. You do not need to be from a good school or even a good lawyer, you just need to be elected.
Unfortunately, it’s not how much you make, it’s how much you keep, and when you’re paid by salary, as opposed to business income or a cash business, you lose a big chunk of it to the gov’t…300K will barely buy you a decent home anymore (in LA/SF/NY).
AMEN! The tax benefits of being in business are large and trading time for dollars has a built in limitation.
how much you keep,….YUP……
Been trying to drive that home with the children since their early teens….
Ok, here is the data:
In May 2004, the median annual earnings of all lawyers were $94,930.
9 months after graduation, median income is 55K.
So, I think all of us were both low and high with our guesses. Point remains though, most lawyers are making around 100K a year. When your dealing with 500-1M dollar homes; guess what? 100K ain’t sqaut.
http://www.bls.gov/oco/ocos053.htm
What is the pay for R.N. in Texas?
40s to 50s I believe.
40-50/hr.?
That is what travel pay for R.N. is.
Here in San Diego; a nurse can start at about 36/hr
Here in Ventura we get 55/hr.
Nurses get $55/hr??? That’s 114k/yr. Why go to law school and get 100k in debt to get 100k in average salary then? Become a nurse!
There was a two tier pay scale among lawyers a few years back. Going to the top firms got a new lawyer very high pay. It was because the young lawyer’s hours would get billed out at much higher rates by a top firm than could be possible with the vast majority of law firms. This caused the firms to bid high for the exceptional talent coming out of the law schools. It caused serious problems, though, with the second year, third year, etc associates who had to be bumped up because of the pay of the newest lawyers.
All the above was the case in NY and Boston about 5 years ago.
This was a result of the tech boom. The new lawyers coming out of the best law schools (i.e. Harvard, Yale, U of C) were going to dot.coms rather than Wall Street firms. The big firms raised their starting salaries to try to lure them back.
From what I understand, this new increase in salaries is due to another boom - M & A work. The big M & A firms have more work than they know what to do with, and they need bodies to handle it. They are all competing for the same few bodies.
Kathy:
Is M&A “Marketing and Advertising?” If it is, what work is there for attorneys in that field? (I guess I am clueless why they would need attorneys.) And where are those jobs?
No. Mergers and Acquisitions. Corporate and securities work. For private equity firms, hedge funds, IBs.
Very very interesting stuff. If you’re a partner, not a grunt.
Just goes to show how when you use acronyms you need to first say what they stand for.
Yep, mergers and acquisistions is one of those very technical areas that they want lots of experience for, but you can’t get the experience because there are no entry-level positions for it.
Harvard Law School Class of 2003 average starting salary was $120K (sans bonus), for most graduates, who went to big NYC/Boston/DC/Chicago/LA/SF firms. Public interest lawyers typically started out with 30-35k/yr w/ no bonus. Generally the public interest lawyers were a much happier bunch through law school and later. Associates at high-paying firms were mostly miserable due to the hours and the kind of work they did (one was on Jack Abramoff’s legal defense eam). Harvard Law School students had more herd mentality than I’ve seen anywhere else. These were my wife’s classmates.The other poster’s comment about the dot com boom ratcheting up the salaries is true to my knowledge.
Another Okie!
And I thought I was alone. Well yes, I do live in VA. I agree, I think typical pay for an attyn who has been working for a few years is 50-60K. Corret me if I’m wrong.
Where did you go to Law School?
I went to OU. And pay is not even that high to the best of my knowledge. However, law firms here go to great lengths to hide what they pay. Employees are told to not discuss what they make under penalty of getting fired.
The highest pay I have heard for any attorney in the Oklahoma City area is in the mid-40s (and that is with 10+ years of experience). However, in my Bar Journal that I got yesterday, there was an advertisement that was offering $50 - 75,000 depending on experience if the applicant had Federal Court trial experience. That is the first time I have seen numbers that high, so maybe things are starting to change. On the other hand, having “Federal Court trial experience” is pretty rare, too.
Crimminy, I’m a paralegal in LA and make $80K+ with a 37.5 hour workweek and 5 weeks of vacation each year (although that probably puts me in league with someone making $45K in OK due to the difference in cost of living, with the exception that I could buy a house in OK, even on that salary)…makes me scared to think what paralegals make in the midwest…which is one area we had been considering if the prices in LA don’t correct themselves in the next few years…
–
Chick,
All those Californicators screwing everthing is sight?!
Jas
They are, Jas. They build some of the most butt ugly crap you’ve ever seen around here.
My apologies from LA. At least that means they’re not here building ugly crap. It’s been one of the great shames of this bubble that beautiful old homes in LA have been razed to make room for McMansions. In Santa Monica plenty of lovely old Spanish houses have been torn down to build butt-ugly blocks of stucco (no offense, GetStucco). In Rustic Canyon, which is truly one of the more beautiful spots in LA (Ray Kappe lives down the street in one of his own designs), there have been three homes near where I grew up where awful sprawling pieces of junk have sprung up in place of nice old ranch houses. I guess if you pay 2.5 mill for a lot, you can’t actually live in a quaint ranch house. One family built a house so close to the street you could literally step from inside the house to the street. Oh, and when neighbors complained to the city the family claimed racial harrassment. Nice. In other words, this bubble has done more than merely raise prices, it’s razed beautiful homes, all so people can live in bigger, uglier houses. Yuck.
Lionel, so true……the Hill Country around San Antonio has fallen victim to this scorch the earth/ugly house madness. I live NW Bexar County and for the past 2 years, I endure the sound of jackhammers, watch boring homes slapped together …..and they are, for the most part, not even selling. So it’s all for nothing. It was so beautiful when we bought in early 2003. Hurts my heart.
You should have seen Cedar Hill, TX when I moved there in 1996. A beautiful, heavily wooded hilly town 23 miles south of downtown Dallas. It was like being in another world. Now many of the trees have been razed for ugly crap by KB Homes et al. I have 6 prime lots down there they’d love to have but they ain’t for sale.
–
No one can accuse Californicators of taste. They do go for size. And Tejas is BIG! I remember CalTex, a match made in…
Jas
What exactly is a Californicator?
A Californicator is a “Californian” (I use quotation marks because most of these people aren’t real Californians, they’re imports) who takes his/her equity and “snaps up” investment properties in other states & cities.
This raises prices in those locations, effectively pricing out the locals, and leaves swaths of empty “investments” with too high rental rates and too high asking prices for the area.
Californian in Oklahoma: “Oooooh, you mean I can buy a 3/2 SFH for ONLY $65K? Sign me up for twelve, as I have to snap them up before other investors discover this hidden gem.”
What if said Californicator only buy himself a house? Does he still qualify? I get the feeling Jas Jain would think so.
Big Ad in the Ventura County Star this moring for Riverpark in Oxnard. Super Low Payments. 486,850 home was 4459/Mo. Now Only 2,802/Mo. At bottom of the page in fine print was all the put you over the barrell in front of Bubba with no lube B.S.
Lube is available, but it costs extra.
Well, apparently Florida is still in the dumps as per Moody’s downgrade of WCI’s debt:
Moody’s Lowers Ratings of WCI Communities; Outlook Remains Negative
Approximately $650 Million of Debt Securities Affected
New York, February 01, 2007 — Moody’s lowered the ratings of WCI Communities, Inc. (”WCI”), including its corporate family rating to B2 from B1 and the ratings on its senior subordinated notes to Caa1 from B3. The ratings outlook remains negative.
The downgrade and continued negative ratings outlook were triggered by the company’s persistently unfavorable performance vs. expectations in 2006 and Moody’s concern that this underperformance may last for much of 2007. Moody’s believes that WCI’s cash collections in the fourth quarter of 2006 were adversely impacted by delays in construction, in receipt of certificates of occupancy, and in getting buyers to closings as well by higher cancellation rates. Moody’s remains concerned that first quarter cash collections will similarly be short of prior expectations, with more sliding into the second and subsequent quarters. While the company may yet be able to collect on the approximately $1.3 billion of contract receivables that it had on its books at year-end, each delay worsens its ability to get reluctant buyers to closing. Moody’s expects full-year cash collections to fall short of the $945 million implied by the $1.3 billion of receivables ($1.3 billion less 18% average down payment already collected less 8% company-projected default rate). Thus, the company’s ability to reduce debt leverage from its unacceptably high current rate of nearly 67% to its target rate of 50% and its capacity to comply with financial covenants in its bank credit facilities will be greatly challenged.
WCI’s earnings in 2007, even after excluding land impairment and option abandonment charges, will decline significantly from 2006 levels, perhaps breaking into negative territory. As a result, Moody’s anticipates that WCI will have difficulty in complying with the existing interest coverage covenant of 2.0x, thus necessitating covenant relief. Finally, management’s ability to build liquidity and reduce debt leverage in the face of a downturn of unknown breadth and duration is as yet unproven.
Going forward, the ratings could be reduced again if the company were unwilling or unable to reduce and maintain debt leverage below 60% after the tower closings occur, if earnings (excluding impairment and option abandonment charges) were to turn sharply negative, if covenant violations were to occur, or if interest coverage (as defined in the bank credit agreement) were to fall below 1.75x. The ratings outlook could stabilize if the company were to place greater emphasis on building liquidity and reducing outstanding debt, were to stay profitable in the coming quarters, were able to meet its debt covenant tests with some headroom, and were to generate interest coverage (as defined in the bank covenants) in excess of 2.25x.
The following ratings were affected:
Corporate family rating changed to B2 from B1
Probability of default rating changed to B2 from B1
Senior sub debt ratings changed to Caa1 from B3
LGD (Loss-given-default) assessment and rate on the senior sub debt confirmed at LGD5, 83%
Headquartered in Bonita Springs, Florida, WCI Communities, Inc. is a fully integrated homebuilding and real estate services company with 60 years of experience in the design, construction, and operation of leisure-oriented, amenity-rich master planned communities targeting affluent homebuyers. Revenues and earnings for the trailing twelve month period ended September 30, 2006 were $2.1 billion and $128million, respectively.
New York
Tom Marshella
Managing Director
Corporate Finance Group
Moody’s Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Joseph A. Snider
VP - Senior Credit Officer
Corporate Finance Group
Moody’s Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Yep. And that news really hammered WCI’s stock this week.
http://tinyurl.com/375p9v
Who needs a poison pill for Carl Icahn? The stock is up over 60% since dropping below $14 a few months ago. The future P/E ratios of the builders are starting to look like late ’90s tech stocks.
Thanks, PPT.
What I see this weekend? Yellow signs out along Ray Rd west of I-10 for model home furniture for sale! I’m in the market for a dining set but probably can get a better deal looking at the bulletin board at this apartment complex. We’ll see one year old 4 X 4’s and pickup trucks for 50 cents on the dollar all over Phoenix this year or next year. I miss my old 1997 Silverado Sportside but I think I’d opt for a Toyota Prious for practical reasons (Peak Oil).
If peak oil is real, then you have a lot more to worry about than the gas mileage of your hybrid.
Let me give you a preview of a coming scandal, just to illustrate the chase for yields. In the US, about 25% of the mortgages on new homes are what is known as sub-prime mortgages. These are mortgages that are slightly less creditworthy and therefore offer higher interest rates. In the beginning this was a good thing, as first-time owners and those just starting out in life were given an opportunity to own their own homes.
But then came a world of liquidity looking for yield. Investors demonstrated a large appetite for these mortgages. Investment banks would buy those high-yielding sub-prime loans and package them into something called Residential Mortgage Backed Securities. Now, a sub-prime loan is not considered an investment-grade security. But when you put a group of them together into a pool and break them up into various sub-groups or tranches, through the alchemy of high finance, you turn lead into gold. You create high-grade bonds from sub-prime debt. In fact, 80% of those grouped together get a AAA rating, because that tranche gets the first monies paid back to the debt pool. And it probably is pretty safe money. No problems yet.
Then the investment bank starts slicing smaller parts of the pool and eventually ends up with the final 4% getting a below-investment-grade BBB rating. Again, this is all a good thing as it allows investors to buy the risk they want and makes for a more liquid real estate market. But then we start to get cute with alchemy. Not content with turning lead into gold, we start trying to do the magic on sewage.
Investment banks pool all these BBB tranches into yet another pool called a Collateralized Debt Obligation or CDO. The rating agencies have sophisticated models which tell them that with the increased diversification, 87% of these former BBB bonds can now be sold as AAA or AA investment-grade bonds. Only 4% is considered actual BBB debt. So we have taken an original security that is not investment-grade and turned all but less than 1% into an investment-grade bond.
Again, if all those mortgages pay off like they have in the past, then not too much problem. But recent research suggests that as many as 20% of these mortgages sold in 2005 and 2006 are going to default or foreclosure. But the CDOs assume that less than 1% will default. If the number of defaults is even half of that predicted, then someone is not going to get their full capital back, let alone the interest. And we are seeing home foreclosures at record levels in every part of the United States due to the large number of sub-prime mortgages.
Why such a growing default rate? Because investors kept throwing money at mortgage bankers, who found out they could sell mortgages with little documentation. For instance, you could get a loan without actually having to prove your income. So the bankers said, “Let’s take the fees and run. Bonuses all around for selling more mortgages.” Now there is anecdotal evidence that a small but significant portion of these low-documentation loans had some items that were misrepresented. You know, little things like whether you were actually going to occupy the home.
Who bought these CDOs? Again, my sources say it was primarily Asian and European institutions, which simply looked at the rating on the bond and bought them. There will be lots of finger pointing over this one. Look for massive lawsuits and a major scandal to start up by the end of this year.
From a John Mauldin speech.
Excellent post. Many thanks!
Thank you forthat great explanation. I’ve been trying to reiterate the increased appetite for subprime mortgages in the secondary market in the past few years, and how that led to riskier lending (all while being supported by an accomodative yield curve), but I don’t think I really did it justice. I just saved that post and am going to share it with a group of us at the movie studio where I work who believe in the bubble.
Russ:
Thanks for the education. Happy to hear that most buyers of these MBS’s are non-American, maybe that will soften the blow to our economy when this house of cards really starts coming down.
“Who bought these CDOs? Again, my sources say it was primarily Asian and European institutions,”
How does the falling dollar affect the investment, for the foreigners. With the dollar down 30% against the Euro, over the last few years, does that mean if they wanted dump these CDO’s they could be down as much as 30%? If that’s the case, the continued slide in the dollar isn’t much incentive to buy U.S. debt?
Who, or what organization, rates these MBSs? I’d think that these rating agencies will be in a world of hurt for credibility with foreign investors, once the lid blows on the CDO sewage they’ve been sold.
You guys see this?
http://www.boston.com/business/personaltech/articles/2007/02/02/subprime_borrowers_facing_tougher_qualifications_for_mortgages/
“Previously, borrowers with a FICO credit score as low as 570 (out of 850) could qualify for a single loan financing 100 percent of their home purchase, Carmona said.”
Isn’t 670 (or something like that) the national average? 100% financing for someone with a below average credit score, and stagnating or falling collateral (house) prices? No wonder “It’s tightening up a lot”.
Pretty soon it will cost more actual money to buy a house than to rent. Then where will this country be?
in the hottest markets, we passed that milestone a long time ago. Even with the tax deduction on interest, renting is still much less expensive than buying. The worst places like San Diego and the OC, the cost to buy a new house, in terms of monthly payments/taxes/etc. is about TWICE the cost of renting the same house.
I think AG knows this - he lives where it costs about 3x as much to own as it does to rent.
Thanks SLO-B, yes, I was trying to be funny, because of the fact that you actually have to have some money in order to rent (required deposit), while you could actually get a house while being peniless (no money down, no closing costs, NINA/SISA + variations loans).
Only people with actual money in a bank account can rent. The same can’t be said of buying.
I rent a small 3BR / 1.5BA home in San Francisco for $2,000 month. House would sell for ~ $900k - $1mm. It is a “no brainer” at least to me that renting makes much more sense. I would NEVER pay $1mm for any house much less a 1,500 sq foot house. I keep telling myself to be patient that prices WILL eventually come down significantly even here in the SF Bay Area! Thankfully my wife is supportive and isn’t insistent upon buying another house right away. I do wish that the lending standards would tighten sooner than later since this the primary culprit in keeping prices artifically high.
It already does in the bubble areas. Look at the houses for rent in the bubbly areas and then see what they want to purchase. Insanity!! Why would you want to buy, unless the price is going up, even then it would need to raise exponentially.
Wagons Ho! We’re finally starting the long journey down Sanity Trail. Passing through Purgatory, first.
80/20 monthly payments should be costing a fair bit more than those 100% models, I’d think. It will be nice to see the correlation between monthly payments and offering price kick in, just when it’s the equivalent of “piling on.”
I’ve use up a full day’s allowance of metaphors for this one.
Las Vegas
I have lived here for about 3 months now. I live in a cul de sac of 12 homes in a relatively new community adjacent to Summerlin. Besides the home I live in 2 or 3 are vacant, 4 are for sale and the rest (4 or 5 ) are occupied. Looks to me like a market on the brink.
Very common in Las Vegas. A lot of brand new (built 2005) homes in ghost towns.
Not just Vegas and not just new. On my end of my block (in College Park, a close suburb of DC) we’ve got 2 vacent and 2 for sale out of six houses.
I meant to also say that these houses were built in 49-50.
Any bloggers from the UK?
According to the Daily Mail, one in five of UK home buyers are Polish:
http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=433442&in_page_id=1770
Is this whats been keeping the UK market afloat?
“He said that, as Poles often earn slightly above the UK minimum wage their entry to the property market is frequently fuelled by taking on large amounts of credit, many taking 100 per cent mortgages.”
LOL! Why the hell not. Spread the foreclosure wealth.
Absolute rubbish (both the article and your header).
For a start, the article says that in some areas 1 in 5 buyers are Polish. I would add to that by saying 99.999% of statistics are wrong to three decimal places.
Loafer
One in five buyers in Poland are Polish. The other 80% are Californians.
NYCityBoy, your point about WCI is well taken. The disconnect between the debt and the equity on this one is unbelievable. Icahn is mad or simultaneously shorting the debt to make cash. I really think he is up to some game, Moody’s indicates that the senior subordinated debt is close to default. As i remember Enron default “shocked” the equity markets and the stock went from 80 to nothing for a share
Icahn may be positioning himself to grab the land in bankruptcy. I wonder how much of the WCI debt he owns? When a bankruptcy occurs the bond holders form a committee that may propose a plan to the court to bring the company out of bankruptcy. Control of the committee may allow Icahn to grab the land at favorable prices using his bond holdings (which he may have purchased at a large discount ) to pay for it. The equity holders may also form a committee but equity has a lesser claim on the assets and therefore less leverage in the bankruptcy. But if Icahn has large holdings of bonds and a large block of stock, he might be able to control both committees. That would be advantageous to him, of course.
Just sheer speculation, of course.
And the thought has undoubtedly occurred to those monitoring this blog that he may have overly optimistic ideas about the speed of recovery in the Florida real estate market. If he gets the land, he may be a very long term holder.
Icahn was born on February 16, 1936. How long can he hold this land?
Guys like Icahn really piss me off. They are vultures. Before he passes from this world he will make sure that he does as much damage as possible. Awful!
NY, I agree. My thought is that Icahn saw a way to make a quick buck on a short squeeze. Wouldn’t surprise me at all to see him out of WCI in 6 months.
I love the last line, “And make sure you find a lender who won’t try to sell you something you can’t afford.”
That’s right, its the lenders fault that you cant figure out your own budget. Folks i see this in every form of lending facility, its nothing new. I take loan apps from people that make 30k year with a $600 car payment. You cant stop people from being stupid. Im not absolving the lending industry, i am just illustrating a point that i have made before. The number one reason for this whole mess, was greed and it starts with all the get rich quick buyers.
On another note…. anyone notice how alot of the articles posted here have articles that use local phrasing such as, “area home building slows”. Why do local media outlets continue to act as if their local real estate observations are confined to their distribution area?
ooops, was supposed to post under txchick’s article from the Boston Herald.
I can understand if not always sympathize with people who couldn’t afford their house after their mortgage reset. I can’t conceive these people dumb enough to get a mortgage where they can’t afford the initial payments.
It’s not all greed, a lot of buyers are just really, really stretching to buy a house to live in.
In the LA Times RE section today, I noticed a few houses in Westchester dipping below 650, one in Culver City below 600 and one in Eagle Rock below 600, otherwise pretty ridiculous. I don’t know if anyone else in LA is as amused by these fake names that keep cropping up (Mar Vista Heights, Westport Heights in Westchester), but I laugh every time I see a new one. Who does this? Realtors? Recently I’ve also seen Beverlywood Adjacent and Burbank Adjacent, oh and Santa Monica Adjacent (uh, that would be West LA).
Glendale and Pasadena adjacent - Highland Park.
Near the coast - Barstow. At least compared to Las Vegas.
Las Angeles adjac…err, no wait, Las Vegas adjac…no, ummm, somewhat near Bakersfiel…oh *sigh*, forget it, it’s in the middle of nowhere - Trona, CA
Santan Barbara-adjacent = Santa Maria.
AG, Santa Maria is going to be the epicenter of the Central Coast housing bust. The amount of NOD’s for that small town is amazing.
SLO-B, there is a new feature in Realtytrac that allows you to display a map with all of the NODs, Trustee Auctions, and REOs displayed…wow, northern Santa Maria is peppered with them. It will be interesting to see what happens later this year, as the southern part is filled with new development, and those people have nice shiney new mortgages taken our during the height of the insanity (including a family freind of ours).
Also…
Cambria-adjacent = Shandon
Santa Maria-adjacent = Cuyama
Wow… Trona… hahaha… I’ve been often asked as to why I’m not buying, to which I respond, “It’s too expensive” - to which I get the response of, “Well, you can buy in Rosamond, California City or Littlerock” …and or Mojave, Lake Los Angeles (which has no lake), Boron, California City… … Too which I respond, “I’m not that desperate.”
If you think Lancaster/Palmdale wasn’t crappy enough, there are always even crappier outlying towns.
Lionel, today I noticed “lower Mar Vista Hill”, wtf is that?
What is interesting for me about today’s real estate section of the LA Times is there are a lot of houses for sale in my area (90024) that don’t show up. There is a flipper on Wellworth avenue on the market for 1.9M that has been there for a couple of months and I never see it in the paper. Maybe the realtor figures it’s not worth the money to advertise a house that is so grossly overpriced.
Cass, it’s right next to lower mar vista hill adjacent.
That would make it Mar Vista dumps…
Or the end of the santa monica airport runway.
I just trolled the mls and noticed that Culver City inventory has exploded. I am thinking that I may settle there after this all shakes out - it’s close to the beach cities and has a lot of semi-hip restraunts sprouting up. Plus, it’s quiet and feels like a community.
Anyway, most all of the sfh’s were around $800k, and most in the mls are still in that range, but I’ve noticed quite a few properties boxing out for position in the $650-$700 range. It’s a start.
In 2004, I remember seeing plenty for $530k, they have a ways to go.
In other news, the guy who cuts my hair has been telling me to “buy a house, buy a house, buy a house” since 2003. He is now a realtor (very nice guy, don’t hate him), and was completely bullish on LA RE as of last dec.
I got my haircut on Wed., and he told me to wait and save. Says all that he hears about is people getting laid off these days. Also, was talking about how he’s getting his client a house for “a steal” west of the 405.
I think he sees what’s coming. Prices dropping will be better for the realtors pockets anyway. It would bring the volume back.
waitinginla, whan I was looking around a few years back, I checked out an area of CC called Rancho Higuera (right next to Rancho Higuera Adjacent), which was pretty nice, families out playing etc.) If you’re at Sony, that would be a pretty easy commute.
You could do a heck of a lot worse than Culver City, I actually like it a lot because many parts of it seem less congested than the rest of the city, yet you can get anywhere really easily. Now if I can just stop getting lost on Washington Blvd., I’ve only lived here my whole life…
CC’s got a nice vibe. My writing partner and I stop in at a Starbucks next to Sony on the unlikely event that someone actually wants to meet with us, and there’s a consistent friendliness to the place, blacks, latinos, whites all hanging together in harmony. I’ve volunteered with a gang diversion program in CC, so I’ve seen other not so nice things going on, but overall it has a much more comfortable, almost midwestern feel than the rest of west la. For those of you with intimate knowledge of LA, it’s more of a Clippers crowd, instead of a Lakers one (I’m a diehard Laker fan, but, heck, the Clipper fans seem much less pretentious).
One of the markets I’m following is East TX. Not much selling or new listings through Dec. Then, a week ago everybody began rushing to the front of the listing line. New and resales are coming online and it seems as though every existing house is being relisted. Houses that have sit on the market as far back as March are appearing as “just listed”. Asking prices are NOT coming down. One prime example is an ‘06 “parade of homes” house was listed at $450k in Apr….fast forward….it’s still on the market and at the same price. The largest “discount” from list has been $5k on a $314k house. New construction lists from $110 to $130 sq/ft. Closing price has been about 98% of list.
So…..not much selling, but what does move is going pretty close to asking.
There’s not been much of a big runnup in prices over the past few years so the “bubble factor” isn’t as severe. BTW, Mr. ‘06 HGTV house winner still has it on the market at $5M. ROFL
Dan, where in East Texas?
I am trying hard to picture more than one 450K house in Lindale or Dibol or Whitehouse. Maybe a couple in Lufkin and of course Tyler always has had its pretentious set.
Smith County (Tyler)….on the MLS:
Out of just over 1000 listings:
400k - 500k = 41
505k - 750k = 39
755k - 1M = 7
and 6 over 1M
There is almost NO new construction in the area less than $300k. I have a file on just about every house in that area between $350k and $450k
A few months ago I made an offer to a builder (cash w/2wk close) List was $405k….offered $385k…..he counted at $403k. I countered at $386k and he got pissed. I told him to shove it up his ass. I suppose that ended the negotiations. LOL
Tyler is such a nice little town. Unfortunately, you drive 5 miles out of town and you’re in Deliverance country.
For some people that’s a selling point.
What’s Deliverance county?
You know….the movie….by John Boorman.
Just curious….TxChick. You slam every single community posted on the blog; especially in TX. Is there ANY place you don’t? Not that it matters but you either have a dry sense of humor or live an extremely bitter existance.
No, I don’t. You haven’t been reading long enough.
Hmmmm….I’ve been here for six months and you’ve trashed evey place on the map. LOL
I hope you find happiness….somewhere….I truly do.
I’m happy as a clam. Don’t spend five seconds of your life worrying about that.
With all due respect, TxChick’s analysis is right on about E. Texas. I’m there every year. You’d better know someone… Good thing I know my wife and her family…
On a cross-country road trip, I was driving into Texas going east at about midnight, only to get pulled over in a small town about 30 miles in as I was going to grab some snacks at a gas station. Officer just wanted to know what an asian guy with California plates was doing in a small east texas town alone at midnight. I said, “Just passing through” — although, in hindsight, I should’ve said, “Me scouting for donut shop locations.”
Chuen,
LOL, that’s a good one.
Had a similar experience in Oklahoma. Was visiting relatives in Ark., and needed an ATM — nearest one was in OK or TX. On my way back from OK, stopped to get gas.
Guy saw I was from CA, and started interrogating me. When I said I was visiting family, he eyed me suspiciously and asked, “Who’s your kin?” (kid you not)
When I told him my last name, sure enough, his daughter was a friend of my cousin’s wife, and his entire demeanor changed. This was a good hour away from my cousin’s town.
Weird stuff in those small southern towns. Gotta know where you are and what to say, IMHO.
Oh, when he was interrogating me, it went like this:
He: “You from California?”
Me: “Yes”
He: “Whatcha doin’ in these parts?” (and NOT in a friendly way)
I can’t imagine houses in backwoods East Texas redneck country going for over $100/sf when houses in fast-growing surburbs Frisco and McKinney are going for less than $70/sf. There are lots of good-paying jobs in the northern surburbs and nothing in East Texas other than a few oil/gas equipment industries. Even the best of those jobs only pay $50K/yr
I have been following a new mcmansion neighborhood in davie, Fl. They’re are approx. 250 units on builders acres. In 2001 they began selling at $550K by 2006 they hit a high of $2m. There are 34 units on the market that I could find ranging in price from $1.2m - $1.9m. I know many people that live there. They say their homes will never fall below a million. What do you think?
I think they’ve been harvesting some particularly radical weed down in the basement.
and they are smoking something, you can get nice canalfront for that kind of money now.
Where and does it have ocean access? My husband’s dream not mine given the hurricane situation.
“During the housing boom, borrowers and lenders took comfort in the fact that home prices rose and rose, with no signs of slowing. Even if a borrower had an interest-only loan, the rising value of the home would build equity for the owner.”
(from txchick57 link) Now when you read the sentance above make sure you take note… borrower and owner are two seperate things I think by owner he/she means the bank.
City of San Francisco
According to the local RE shill newsletter that came through my inbox yesterday. The Spring Selling Season is off with a bang. Supposedly everyone is out looking to buy a house and the newsletter’s author had to re-institue his Maximium Overbid of the Week ™ column. Apparently some little POS listed in Outer Parkside at 549K had something like 50 offers and was going to go for over 740K.
Interesting to see how long this will continue. I would like to know what type of loans San Franciscans are getting–if it is the same toxic crap they are using in the suburbs it won’t end well but if these buyers are well-capialized with conventional loans a complete implosion might be avoided.
“I would like to know what type of loans San Franciscans are getting”
The county recorders office will have records of what loans were used. I’m planning on doing some research here to find out what the mix has REALLY been around here.
I lived in the Noe Valley area of San francisco for 22 years and I have to say many of the people buying the 1 Mil. plus houses there use the “bank of Mom and Dad”. You would not believe how many very wealthy trust fund babies reside in San Francisco.
I grew up in San Jose, CA, and it’s the same story there. The families with money tend to have a lot of money.
Yup….Happens far more than many realize….M & D want the children (& grandchildren) close by and will do what they can to achieve that…
Hmm, then I wonder why there is such a high volume of interest only loans being issued in the Bay Area. Doesn’t add up.
“Hmm, then I wonder why there is such a high volume of interest only loans being issued in the Bay Area. Doesn’t add up.”
Because the trust fund babies are being funneled big yearly incomes from the family trust. People with very high incomes often use IO loans for tax reasons.
But the majority of I/O loans are probably not being used by people with high incomes for tax reasons. At least, in my personal experience, most people I know with I/O loans do not fall into the category that you describe.
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/05/20/MNG5CCS82U1.DTL
picked up the 3 rags in nyc today post/times and the news, just a quick glance tells you this bubble is hitting the lower income fringe areas hard. sections of southeast queens are getting hammered with major foreclosures and plenty of homes under 300k selling no money down quick closing blah blah blah.
the papers are loaded with listings and tons of open houses.
well let me see you are asking 40% overvalue for your home
it is superbowl weekend and temps are dipping into the single digits.let me just rush out of my warm aprtment and bail your ass out, notttt!
this will move it’s way to the more affluent areas
and all these smug broker types in nyc will eat crow the shameless bottomfeeding huckters they are
rant off
My poor, poor mgnyc. You just don’t get it. Brooklyn may collapse. New Jersey may collapse. Bronx may collapse. Westchester may collapse. Queens may collapse. Wait a second. What is my point? Oh yeah, that’s right. I remember. Long Island may collapse. Staten Island may collapse.
But Manhattan will never collapse. It is soooooooooooooo different here.
I think I will go have a nice Brooklyn Lager before Brooklyn Lager collapses. That is my favorite local brew. If they disappear then I am moving to Pennsylvania to be closer to the Yuengling brewery.
Home prices in Pottsville are pretty reasonable…
I fear for Rolling Rock’s future now that Anheuser Busch owns the brand.
If AB now owns this brand then it is just a matter of time before they destroy it with cost cutting.
i just want LONG ISLAND to COLLAPSE!!! I’m getting TIRED of waiting!
- liz
A few sales pitches from the Washington Post Realestate section:
Ryan Homes: Today’s Buyer’s market will soon be Yesterday’s Missed Opportunity & Perfect Time for the Savvy Homebuyer
NVHomes: Don’t Miss Your Window of Opportunity
Lots of discounts advertised, price protection schemes, no money down deals.
In the same section they have an article on appraisal pressure/fraud:
Appraisers Under Pressure To Inflate Values
By Kenneth R. Harney
Saturday, February 3, 2007; Page F01
With home prices softening and sales volume sagging in many local markets, real estate appraisers say that pressure on them to inflate values has reached pandemic proportions. http://www.washingtonpost.com/wp-dyn/content/article/2007/02/02/AR2007020200712.html
Looks like builders are gearing up, in concert with NAR, to corral the last few suckers who cme out after the Superbowl.
In general, I don’t think that the idiots will fall for it. When the bubble was going like gangbusters you really DID have to bid immediately or miss out. Homebuyers realized that waiting for a week to decide just wasn’t an option. You can’t create a crisis when the house that they looke at 3 months ago is still on the market.
It doesn’t matter if the fall for it. They can’t get nutcase loans anymore, they have no money or they can’t sell their current shitbox. That’s what the babbling fools in the REIC don’t get. For every 20 houses on the market now, there might be one person who is actually able to buy it!
And of course even if all those 20somethings who bought houses that they can’t really affort in the last few years actually manage to hold on and don’t get foreclosed on, all those sales were cannibalized from future first time home buying sales. Demand will be down not only because there aren’t new idiots, but because the old idiots are already trapped in homes.
Tx,
I have a story from Santa Monica Ca. that proves your point.
My tennis pro sells real estate on the side (that’s another thread altogether) and he listed a “flip” in Brentwood for 1.6 million. I told him it was priced too high. Anyone can look up the house on zillow to see the flipper paid 900k just 3 months ago. This guys says “We don’t expect to GET 1.6, but why not ask for it?”
So after 3 months of weekly open houses, the owner pulled the listing from the tennis pro and gave it to another a-hole realtor who is having weekly open houses, never reducing the price, waiting for some phantom buyer who is stupid enough to pay 1.6 million for a crappy flip. That buyer is not out there.
Real estate agents are so arrogant! They think “if I wait long enough, the right buyer will come along, but I refuse to lower the price and lower my comission.”
“appraisers say that pressure on them to inflate values has reached pandemic proportions.”
Apt choice of words. Sociopathic greed spreads like a virus. (Apologies to H5N1).
ROFL! this post tickled my funny bone. Thanks.
That said, not sure most people know what H5N1 is!
*(hint, birdflu belogns to the H5N1 subtype of influenza)
Nice to see you posting DOC….
The single family home inventory in Portland, ME (zips 04101, 04102 & 04103) was 62% higher one year ago. The town continues to fill up with equity bandits from Boston, NY, NJ, Ct and surprisingly California.
One man’s ceiling is another man’s floor I guess.
186 9/6/2005
223 9/19/2005
224 9/29/2005
248 11/3/2005
241 12/5/2005
210 1/3/2006
212 2/2/2006
204 3/3/2006
180 4/4/2006
194 6/4/2006
220 7/22/2006
237 9/9/2006
223 11/5/2006
187 12/15/2006
166 12/30/2006
131 2/2/2007
What’s your source for the numbers?
The source is Realtor.com, which I know is not perfect but is valuable directionally.
For one, Realtor.com does not include For Sale By Owner. However, in this market, FSBO is not much of a factor as best I can tell.
Also, homes are often taken off the market and relisted to put Days on Market (DOM) back to zero. So whenever a home is rested as such for a day or so, it is not showing up on Realtor.com.
Driving around, I have noticed pronouncedly fewer for sale signs. My guess is that those who want to sell for more money have stepped out of the game. Yet there is pretty relentless demand from “away”. Those folks think the prices here are a bargain compared to their states. Now we don’t have an abundance of well paying jobs, so these folks typically come with their own revenue sources.
Dateline - Oceanside, CA
“Buy a house, get a Harley.”
I nearly died laughing.
“Buy a house, get a Harley.”
You better buy now, they aren’t making Harley’s anymore. Actually this is true, Harley Davidson workers went on strike Friday.
The more things change… the more things stay the same… from today’s Post:
Greetings from Danbury/Bethel/Newtown area of Connecticut. Travelled here from Fla for the first time in a few years to handle some family matters. It’s boneass cold compared to Fla. Scoping out housing prices, whew! Friend of the family purchased in this area for $80,000 five years ago. House under contract for $250,000.00. Housing prices here seem to be high compared to what I’m used to and apparently holding steady. (Looks to be minimum $300,000 for anything decent. Anyone familiar with this part of CT care to comment?). Must be the effect of those closer in to NY spreading out. Condo project nearby, next to car wash, starting prices advertised on sign of $450,000!!!??? Are you kidding me?
Chip, dimedropped, or anyone from central FLA, I’ve been following the tornado story. Any on-the-ground info? What a shocker.
Some recent condo sales in Santa Barbara and Montecito, CA:
10/23/06- 1230 Coast Village Road, Montecito 1,542 sq ft 2/2 condo $648,000 ($420/sq ft). You couldn’t touch a condo in Montecito for under $1 million in 2005.
1/19/07- 1220 Coast Village Road, Montecito 1,500 sq ft 2/2 condo $720,000.
12/1/06- 843 Cieneguitas St, Santa Barbara (North La Cumbre) 1,622 sq ft 3/2 condo $610,000 ($375/sq ft).
1/31/07- 965 Cieneguitas St, Santa Barbara 1,400 sq ft 2/2 condo $539,000. A similar condo sold at this address for $589,000 in April of 2005.
Notice of Defaults have shot up 300% in Santa Barbara County year over year. Thousands of homes and condos financed with ARM’s are coming up for reset in the next two years. Condo prices are dropping. There will be no market rebound in the spring. Am I right in thinking that the time to buy will be in 2008?
My Dad flipped a home in Montecito back in the day 1973. Pretty town. Bought 110K sold I think 145K 6 months later. Moved to TO. Dusty place back then. Now its more like Montecito at least over by lake Sherwood. Present day Tucson reminds me of TO in 1973.
Dusty and under construction.
Everyone rags on Zillow and their zestimates as lagging indicators, but the SB place I’m renting has lost over $100K in the past 6 months or so. (down to 840K).
Ben,
Was having dinner with my neighbors last night, and the one thing I haven’t seen discussed is the effect that the realtors who would purchase houses themselves and then flip them…was this much of a factor? I wonder how much this happened…realtors taking the cream of the crop before they hit the MLS?
crush
ps…my neighbors said that they knew of a few realtors that did this in other cities…
I can tell you for a FACT it’s happening in Las Cruces, NM. They have to disclose ownership….”agent owned”. Now, I’m sure they can hide it if they want to. When I first saw a couple I told the realtor to make that a screen for searching….no agent owned houses. I told the agent I wasn’t going to pay a commission on top of some sh*thead’s markup…..
If I had $100 for every listing I saw which was Owner/Agent during the time when I was actually considering buying, I would have had a nice chunk of change to add to a downpayment.
From what I gathered from a realtor I spoke with a couple of years ago, it wasn’t uncommon here in SD during the boom. He was buying too. I also have to wonder how many realtors out there are getting doubly hit with no sales and carrying costs on their flopped flips?
Happens all the time. I knew a realtor that screwed a family member that way. Family member put him in charge of marketing condo project. He suggested a low X price and then had his buddies in the office buy some units knowing they could flip them for X + 20%.
Update on So Cal and central Cal inventories (informal):
No big flood or drop in inventories in the five areas I track in So and Central Cali…increase in inventory is about 5%-8% for the month of January (as per the realtor.com-sfh method), but there is a lot of fluctuation during the month.
Let’s see what Feb. brings…
Based on a quick perusal of some free “Homes for Sale” magazines, both realtor-friendly and FSBO-dominated. Area is roughly the Merrimac valley, northeastern MA and southeastern NH.
Price seem to be down a bit. More homes with desperation phrasing like “must sell, relocating”, obvious places that are facing foreclosure, etc. New homes offered by builders have a lot of incentives added and the prices seem to be coming down, too. Now of course if you want to pay under $300K for a SFH you have to be willing to live in a less desireable town (Lowell, Lawrence, Methuen).
The most interesting listing was a HUGE historic Victorian in Methuen offered for a little under $600K. That is for one of those gigantic, many bedrooms (but not so many bathrooms), original period details, fancy old houses. I can’t decide if that’s way overpriced, or if it’s shockingly low and there’s something very wrong with the house. A similar place in Lowell is on the market for $1.1M. In Lowell!
Something like this?
http://dallas.craigslist.org/rfs/272753834.html
Not quite the same but yes, that’s the right idea.
Tchick;…..Makes me want to buy it just to say I own it…..Almost…..
BTW;….I have restored about six of these over the years…..
Wow…that is gorgeous!!!!
So very tempting…
“Metropolitan Savings is the first FDIC-insured institution failure in the country since June 25, 2004.”
One down and God only knows how many to go!
We need an “Implode-O-Bank” site.
Interesting sign in front of a “farmette”…
PENDING sale…but instead of a realtor logo, it was Mellon Bank’s bright green calling card! The property looked shabby, but it did sit on some acreage. I’ll have to look up the address to see its situation.
Also talked to a friend this a.m. who told me her realtor buddy said that just like the spring-flowering bushes were all mixed up this year and bloomed early, the buyers came out early too.
I said to friend, that’s probably just folks beating the anticipated price spike that’s coming this spring. In other words, sales have been robbed from Spring 2007.
We’ll see what happens. In my area, I think there will be a spike in sales but median price will stay more or less flat. (spring 07).
After that it gets interesting!
The local raw land market has ground to a halt. The paper reports that only one lot sold in January, 2007. This compared to 15 in ‘dismal’ January 2006. A total of 333 traded in 2005; 115 in 2006.
Checked out the new Ralph’s Ranch grocery store (in 4$ Ranch, 92127 SD). The store is lovely — a serious supersized competitor to Trader Joe, but I am afraid for its future, because it was nearly empty at midday on the day before Souper Sunday. Maybe it was the 70 degree weather — everyone out on the golf course, ya know…
P.S. Today was Grand Opening day, with special savings on many items…
Who needs to save money in San Diego? Everybody’s rich, right?
If Ralph’s Ranch wanted to have a good turnout they should have marked the prices UP 50% and made the Grand Opening an Exclusive event then probably half the city would want to show up.
Steep drop in Long Island home sales.
Suffolk home sales down 40% in Dec’06 compared to Dec’05
Nassau home sales down 38% in Dec’06 compared to Dec’05
Source:
http://www.nysar.com/pdfs/monthsales.pdf
http://www.nysar.com/pdfs/monthsales.pdf
http://www.nysar.com/files/stats.html
The Hamptons real estate market is letting out a death rattle. It couldn’t happen to a nicer group of people.
sgood….. why isnt there a LONG ISLAND bubble blog…seems we need one HERE as much as they do in California… PLUS OUR real estate taxes are the highest in the NATION!
GO BEARS!!!!!– liz
I was cleaning a condo for an owner whose tenants had already moved in. The owner was asked if he was getting positive cash flow. He said yes, then admitted that the mortgage was covered…but not taxes, insurance, or HOA fees ($400/mo).
“asked if he was getting positive cash flow. He said yes, then admitted…not taxes, insurance, or HOA fees”
“positive cash flow”…I dunna thingk those whord mean whot he thingk they meahn.
Pensacola Beach
Inventory is increasing on the beach and price points for like units in condos are starting to spread out. In soundside Portofino Towers (high rise) wishing prices range from $550,000 to $950,000 for a two bedroom unit with 1,300 sqf. As far as I can tell the major difference between the units is the floor the unit is located. In soundside Boardwalk Condos (low density/townhouse style) prices range from $320,000 to $650,000 for a two bedroom unit with 1,100 sqf.
Prices need to drop 50% to 60% in order to make the properties attractive to me as a buyer. Probably will never get there but since I only need a unit a couple weeks out of the year I am cool renting.
Probably will never get there…
Oh, they’ll get there. I’ve got family in Pensacola, and (as you know) there isn’t money there to support those prices.
Sales prices are adjusting and tax assessments will need to as well. A house in my neighborhood (NOVA) which had a tax assessed value of $470k just sold for $408k. I’m bad at math, but that looks like a 13% haircut from the tax assessed value. No, it wasn’t a foreclosure. No, it wasn’t pre-foreclosure or distressed. It appeared to have been an arms-length, free-market sale.
Relisting is the rule here in Oakland. One of the units in my building was on sale before the holidays (October to late November, Early December)
Being the nosy neighbor that I am I checked it out. Well I thought it was pretty lame…overpriced compared with all of the recent condo conversions in the neighboring blocks. Miraculasly I noticed the sign was no longer up, I said to myself, what crazy person bought at that price! Last weekend I heard construction for the whole weekend, it looked like a bathroom rennovation because of the boxes in the hall. By the end of the weekend the construction was done, and well today there is an open house and the unit was relisted on 1/30 at a lower price!
“‘The market has gotten the message in some places,’ he said ‘But there are some smaller builders out there who have no choice, because they already own the lots and have the loans in place.’”
I do not understand why they do not have a choice. They could sell the lots or have the banks sell them as REOs and tell the banks to cancel their lines of credit. Isn’t this a choice?
New Hampshire home sales down
Published: Sunday, Feb. 4, 2007
MANCHESTER (AP) – Home sales dropped significantly last year in New Hampshire after five straight years of record growth.
The New Hampshire Association of Realtors says the average sale price dropped slightly. The group predicts things will improve this year.
“There’s no denying that it was a relatively difficult year in terms of sales,” said New Hampshire Association of Realtors President Bonnie Guevin. “But we’ve felt market swings before, and this one feels like it’s on the way back.”
According to figures supplied by the Northern New England Real Estate Network, sales of residential properties totaled 22,903, down 19 percent from a year ago when sales were 28,352.
The average selling price dropped slightly, from $253,503 a year ago to $252,826 for 2006. The average number of days on the market increased from 88 in 2005 to 97 in 2006.
http://www.nashuatelegraph.com/apps/pbcs.dll/article?AID=/20070204/NEWS02/202040382&Login=1
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We had some nice weather earlier this month and the for sale signs came out but then it got quite a bit colder. I don’t think that prices have dropped that much resulting in far fewer sales.
I’m a bit surprised that the average price decline is so small as that’s not what I’m hearing anecdotally.
And yeah, the crummy schools in cities thing applies here too.
On my Portland to SD flight Friday night, I had an interesting talk with an LO at small, conservative, 4 branch Commerical Bank from Portland He was headed down to Pacific Beach for his friend’s Super Bowl party. He stated how he’s seeing about 5 Mortgage Brokers a week interviewing at his bank hoping for work. He also went on to say that a lot of people in his Organization are very worried about the local and macro economic conditions. He said things are still moving in Portland RE albeit very slowly.
I’ve been tracking Portland/Vancouver, WA for 6 months and San Diego for a year. In Portland, the guy I met was right. There is still some activity. Out of every 10 houses I’m tracking, 1 SFH is sold, 2-3 are reduced (usually in the 5-10K range), 2 expire (and are immediately re-listed) and the others just languish there.
Here in SD, Nothing is happening. Nothing. It’s been DEAD. There are several over-priced POS on my street which have been on the market for months over end. DOM are horrendous. People are starting to sweat. You can see it and smell it. More people have left and still more people (our friends included) talk about leaving SD. In ‘09 there will be blood in the streets.
Here in SD, Nothing is happening. Nothing. It’s been DEAD. There are several over-priced POS on my street which have been on the market for months over end. DOM are horrendous. People are starting to sweat. You can see it and smell it. More people have left and still more people (our friends included) talk about leaving SD. In ‘09 there will be blood in the streets.
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We are seeing and hearing pretty much the same thing.
The next few years will be interesting to witness.
WSJ stopped publishing its weekly real-estate index in December. I guess we know that it turned negative.
I live in the Brentwood area of Los Angeles (for those familiar with the area I’m near the Barrington Ave/Mayfield Avenue intersection). The neighborhood I’m in is mainly apartment buildings and condos, with an occasional house mixed in (although most of the remaining houses have been gradually torn down and replaced with condos over the last decade or so). I’ve either lived in this neighborhood or checked it out as a possiblility every time I’ve been in the market for a new place so I’ve got some longtime perspective on this area, and in the time I’ve lived here I’ve never seen as many listings (both rentals, resale condos and new condos) as I’ve seen lately. There were quite a few last summer, but that died down in the fall/winter (mostly due to people taking them off the market, but there have also still been a decent amount of sales (much to my continued chagrin) mostly 10% - 20% off asking price, but mostly still far higher than the units were purchased for by the prior owner. Now, due to several new condo complexes that have recently come online, and a number of resale units that have been relisted, the number of properties available seems to be perking up to where they were last summer already, which seems to be a harbinger for many more listings to appear once the spring selling season starts taking off…
…But one difference between what I noticed in the fall and what I’m seeing now: more traffic at the open houses. Last fall, you’d see the realtor sitting outside an open house, oftentimes smoking or reading a book, all alone, very entertaining… But last weekend and this weekend, I’ve been seeing a lot of foot traffic throughout the neighborhood at the open houses (especially iritating as these people keep taking up all of the street parking). There is a nice unit a couple of doors down from me going for $779,000 (down from the initial asking of $849 when it was first listed late last summer), which had ZERO traffic all last fall, whereas today there was a steady stream in and out all day… There is also a new building (called “Vincenza” or something like that) across the street at Mayfield and Granville that just started sales a few weeks ago, where the “cheapest” listing is $975,000 (for a 2/2, about 1600 sqft), and again, there must have been close to 75-85 people checking the 16 units out. MADDENING!!! All fall I just laughed as they rushed to finish this building, thinking how f***** the builders were going to be once it was finally done, and yet it appears that there are still, at least in this neighborhood, more brain-dead fools…I don’t even think I need to describe them anymore than that. I went over to look at them with a buddy just for laughs and to gauge the seriousness of the potential buyers, and damnit there seemed to be at least a few of them, …saw similar traffic in another new building a block north of here…but at least none of the units on the realtor’s list were crossed off as sold as of yesterday, so there is some hope…
Anybody in any other areas of LA with better news?