“A Settling Market” In Colorado
Inman News reports on Colorado. “Colorado’s housing market endured a slower December as sales and prices of single-family homes dropped from their 2005 levels, according to statistics provided by the Colorado Association of Realtors. There were 5,033 single-family homes sold statewide in December, off 17.8 percent from the same month in 2005.”
“The statewide median home price sank 4.8 percent between December 2005 and December 2006, falling from $245,517 to $233,854.”
“The steepest decline in median home price occurred in the Pagosa Springs area (near the border with New Mexico), where the median fell from $332,143 in December 2005 to $269,231 in December 2006, an 18.9 percent drop.”
The Greeley Tribune. “In 2006, northern Colorado saw record sale prices but fewer purchases, down 9 percent. Weld County had the state’s highest foreclosure rates. The Group Inc. president Chuck McNeal described last year as a soft landing, which he believes the region will slowly take off from throughout the year.”
“‘We have been in a valley or trough in northern Colorado for a while. The question is, how deep is the valley or trough we are in?’ he said.”
“McNeal also detailed the challenges for Realtors in 2007. The market must still absorb many virtually unsellable ‘residential leftovers’ that buyers purchased at high prices. There will be more foreclosures to come, and with the completion of some large construction projects, a decline in construction revenue will impact the market.”
“Still, The Group labeled 2007 as ‘Another Year in Paradise’ for real estate and touted the unique qualities that attract people to northern Colorado. ‘Real estate people have been accused of being cheerleaders, of being overly optimistic, I say guilty as charged,’ McNeal said.”
The Coloradoan. “A task force hopes to curb soaring foreclosure rates in Colorado with a foreclosure hotline. Gov. Bill Ritter recently joined forces with the consortium of private- sector and government organizations involved with the hotline.”
“As of Monday, the hotline had received 7,400 calls since its debut in October. Ryan McMaken, a spokes-man for the Colorado Division of Housing, estimates the hotline receives 100 calls per day, an increase due in part to the new public service announcements.”
“‘It’s not outlandish to say … we have broken 8,000 by (Friday),’ he said. ‘Considering at one time there were 40,000 homes that were delinquent…we still have a lot of work to do to save a lot of families from foreclosure,’ said McMaken.”
“There have been no indication the foreclosure problems from 2006 will disappear in 2007, McMaken said. In 2006 there were a total of 1,253 foreclosures in Larimer County. In 2007, there have been 114 foreclosures reported in Larimer County.”
The North Forty News. “With property tax bills arriving, work is well under way on the looming reappraisals that will determine the magnitude of taxes for the next two years. In the next three months, Larimer County Assessor Steve Miller said, he and his staff will be developing new formulas to more equitably value the thousands of properties in the county.”
“In developing new property values, Miller said, his office this year will consider sales during the last four years rather than the traditional 18 months. Foreclosures also will be taken into consideration, he said. In doing so, Miller expects to balance out the extremes in values, particularly since the real estate market started cooling.”
“‘We’re in a settling market, so we can’t use one time frame,’ he said.”
“Miller said it is hoped that taxpayers will find their property values plausible. He realizes, however, the reaction may not be so enthusiastic. ‘I think we’re going to get a lot of hard questions,’ Miller said. ‘This is a tough market.’”
“The ugly truth about foreclosures in Larimer County is out, a 33 percent increase from 2005 to 2006.”
“Peggy Bauer of the Larimer County Public Trustee’s Office said the figure for 2006 is 1,253 foreclosures compared with 939 in 2005. By late January, the office had an average of eight new filings a day, Bauer said.”
“The very first culprit Sara Allen, director of Consumer Credit Counseling in Fort Collins, mentions is unscrupulous lending practices, some that were almost guaranteed to get people into trouble if the interest rates changed or their houses declined in value. Colorado was in the top five states in the country in adjustable rate mortgages, she noted.”
“Also, there was a lot of what can euphemistically be called ‘creative financing’ flying around Colorado in the past few years. John Green, a regional economist who lives in Fort Collins, said the biggest culprit in the foreclosure boom is the no-money-down mortgage.”
“‘Without a doubt,’ Green said promptly. ‘To put money down, you have to have money. This is like going to Central City with a couple of bucks and playing roulette and thinking you’re going to be rich.’”
“Green said he couldn’t even pin down a price range of houses for people in foreclosure. ‘I can’t say it’s people in $200,000 houses or $600,000 houses,’ he said. ‘It seems to be pretty much across the board.’”
“Green said the foreclosure problem is a combination of unscrupulous lenders and gullible borrowers. ‘We had a very large number of mortgage companies out there sucking people in,’ Green mused. ‘I wonder how many of them have gone bankrupt.’”
“‘We have had clients whose homes have depreciated before,’ said Allen. ‘What they could do was sell the house, walk away and start over with a little bit of money.’ What’s different now is that some people have gotten in so deep that even if they sell their homes, they are still in the hole.”
“‘Selling their homes does not seem like a very good solution,’ she said.”
“‘You’ve got a recipe for foreclosure,’ Green said. ‘For a lot of people, their answer is to let the bank eat it. So they walk away from their homes.’”
The Rocky Mountain News. “At the beginning of December, people looking to buy or refinance a home could find a 30-year rate at slightly less than 6 percent. Those days are gone. ‘Mortgage rates are rising hard,’ said mortgage banker Lou Barnes.”
“Many of these loans have pre-payment penalties so the home-owners can’t afford to refinance them even to 6.5 percent, said Peter Lansing, CEO of Universal Lending. ‘They can’t sell their homes, they can’t refinance their homes, and they can’t afford their homes because of the adjustable rate mortgages,’ Lansing said. ‘This creates a perfect storm for foreclosures.’”
“‘Obviously, I hope that it doesn’t dissuade anybody from buying. At first, rates were creeping up, and then they went down, and now they are going higher. I hope this persuades people that now is the time to get in a house before they go way up,’ (said) Jeff Rorabaugh, who is selling his home in Broomfield for $265,000.”
Remember that movie from around 25 years ago, about a bunch of kids in Colorado that hold off the bank from seizing all the houses in the state, though foreclosure looms…
Was it “Red Dawn”?
I think it was the Legend of Billy Jean..
But she was not my lover Hee Hee.
Red Dawn was the movie with C. Thomas Howell and Patrick Swayze that dealt with the occupation of the U.S. by the Soviet Union after they had nuked us. I think it is a Cold War Classic.
I was thinking of the updated version, with the actors you described, but they’ll be middle aged now and they’ll deal with the banks and their nuclear loans, that have wiped out the people, but curiously, left the houses intact.
That would be Wisdom.
http://www.imdb.com/title/tt0092225/
Red Dawn is a great movie to watch with Iraq in mind, I love that they call the Americans insurgents. Really hammers things home. Best to watch it on July 4th. It’s also the first PG-13 movie.
Avenge me boys!
“we still have a lot of work to do to save a lot of families from foreclosure,’ said McMaken.”
They can’t refinance, they can’t pay, they have no money to pay…..so what’s going to “save” them? Bailout……?
My biggest fear is Gov. coming up with a bailout plan because it’s going to cost the rest of us a helluva lot of money. For Christ’s sake…..SOMEBODY has got to pay the bill. If they can’t get it from the FB’s, they’ll come after taxpayers.
Please let me be wrong.
Whenever a politician says “we have a lot of work to do”, hang on to your wallet!
The last thing we need is the govt getting involved.
Question for all you brilliant bloggers:
What do you think the premium would be for being able to buy a house now vs having to wait ~ 9 months for a new build? Would you pay 20k for the convienience of not having to wait.
I picked up a flyer this morning and they wanted 295 for a 3 br 2.5 ba 1624 ^2 ft house on golf course lot. Just around the corner the new builder is offering new homes same sq footage w/o golf couse lot for ~ 175K. Figure maybe 35k for golf course premium and we have a huge price difference here.So I wait 9 months and have a home for 175k or pay 260 now(295-35 lot premium). Folks we got a serious issue here.
I wouldn’t call it a premium as much as I would call it a waste of thousands of dollars. Hell, unless the builder also will sell you a put option on that property at $175,000 I wouldn’t touch that one either! More than likely 9 months out that “new” house you bought now will be worth less than that at completion.
The fact that a local UC is preparing to build out some faculty and staff housing (SFH type wood buildings) at a budgeted $350/sq.ft. tells me that there are some real stupid people working in higher education. Mind you this is what these people are budgeting the construction costs as, not what a realtor or builder wants to get when dumping them on an unsuspecting rube. I’m sure there are plenty of newbie real estate agents that figure a new house that is priced at $400/sq.ft., actually believe that is how much it costs to actually build it. Oh to be the general contractor on that job…the change orders alone will add $100/sq.ft. by the time the build out is done.
Of course this is in Santa Cruz where they emphasize the “high” in higher education.
Let’s just get this straight about UCSC: it is a cluster f*ck. My father worked there for many years, and it has to be one of the lamest campuses in the UC system (great ocean views though). The administration has always been pathetic, and the hippy dippy culture which radiates throughout is pointless. Cronyism and graft abound. Staff are shat upon. Many of their degrees are absolutely worthless in the real world. A bachelor’s in poetry? Give me an effin break! Their “troubled” chancellor committed suicide last year by jumping off a high rise in S.F. This was after creating a special position (at $175K) out of the blue at the school for her lesbian lover. She spent tens of thousands of university money remodeling her free on-campus home. If you have a child with little intelligence or social skills, then it’s the college for them. UCSC? Please, spare me.
But do they have good weed…?
“….hippy dippy culture.”
Reminds me of George Carlin’s “Hippy Dippy Weatherman” character.
BayQT~
Whoa, CA guy,
Tell us how you REALLY feel!
Yea, I have always wondered about Santa Cruz with its flaky no grade chakra balancing curriculum. Evergreen up in Washington is the same way I hear. A bunch of posing hippy wannabees.
To speak to another request you made about southern Oregon, prices are dropping steadily. Prices are even falling in Ashland, but faster in Medford.
p.s. Humboldt has better weed than SC.
Everybody’s going to build a baseball diamond in their Colorado corn field and live happily ever after.
Nice try, Jeff. You have a future in used cars. Next.
“I hope this persuades people that now is the time to get in a house before they go way up,’ (said) Jeff Rorabaugh, who is selling his home in Broomfield for $265,000.”
Yeah Jeff, great idea. Everybody but you should buy while you sell. Yeah Jeff, the newbee buyer should get you off the hook. Planning to rent Jeff?
Yeah, wouldn’t you like to ask this clown why he’s selling if prices are going to “take off.” LOL!
If Jeff is moving he’s going to need a new house, right?
He better buy quick before interest rates rise.
It’s probably Taco Bell Jeff from the SDCIA board trying to unload one of his 200 or whatever houses. I haven’t visited that site for some time but I think someone said the tone was leaning more toward “desperation” than “exhuberance”.
‘Real estate people have been accused of being cheerleaders, of being overly optimistic, I say guilty as charged,’ McNeal said.
Diogenes, your search is over!
(And in the coming months, it is likely that rates will “equal the highs of last year, which was just under 7 percent)
My rate was 7 percent — for a 15 year fixed. And I felt lucky to get it.
Almost 7% on some of these several hundred thousand dollar i/o arms! As Bugs Bunny would say, “Agony, Agony. Oh the agony.” There is def. gonna be some pain felt this year. I can’t imaging holding a $4-500K note at almost 7%. 7% of 500K is 35K, which is 3K/month. That is some serious cha-ching that the banksters are making off these FBs. Some serious pain is coming to a house near you this summer.
As for a bailout. I son’t think so. There will be no get out of jail, er, I mean debt, free cards for this group. Bush is on the way out in 2 years and ” don’t think he cares about the little gut enough. He will make sure the bankster cronies are helped, but not the FBs.
Baring an economic disaster of Great Depression proportions who can possibly imagine Congress acting in less than two years on any significant legislation?
First you have to have hearings. Then you have to have a movie star come in who’s done a movie that relates (in some fashion) to housing…..I’m thinking Shelley Long or, even better Tom Hanks as they did “The Money Pit”.
Then you have to have something like “Farm Aid” and an appropriate country song written.
It will take at least a year to get a good concert going and to work around Tom Hank’s shooting schedule (Shelley is so…..over). No, it will be two years before a bill can be passed and by then everyone who might become toast, will be too far gone for any legislative “solution” to help them.
Even if they do get around to it, what support will they really get? Say what you will about voters, but it’s political contributors that get their way, and FBs aren’t going to be contributing to anyone’s campaign coffers. You can bet the banks will be, though.
The banks want their loans repaid. They don’t care if it comes from the FB’s or the government/taxpayers. Some crap will leak out of this bubble too.
Homebuilders: The Most Overvalued Group
By Richard Suttmeier
2/5/2007 3:00 PM EST
The rally in the homebuilders is unprecedented, given the weak earnings and warnings from many CEOs. Valuations are through the roof, but investors don’t seem to care. I don’t believe that I have ever seen a group of stocks this overvalued according to my model. Valuations are so stretched, the forward P/E ratio for Beazer Homes (BZH) at 51.7 times makes Google (GOOG) , at 32.9 times, look like a value stock.
For the homebuilders, technicals have led fundamentals since July, but now several names have reached my pivots and risky levels, which are the prices at which investors should reduce or exit positions.
The National Association of Homebuilders’ Housing Market Index is trying to bottom between 30 and 35, but remember that any reading under 50 indicates that the market for new homes is poor. It is also true that new-home sales rose 4.8% heading into 2007 to a seasonally adjusted annual rate of 1.12 million units in December.
For the year, sales were down 17.3%, the sharpest decline since 1990, and on a par with sales of 2003, as the housing bubble began to inflate. Lower interest rates, lower energy costs and warm weather in the Midwest and Northeast helped the year-end rebound, however. Sales were actually flat in the South and down 4.4% in the West.
The FOMC says: “Recent indicators have suggested somewhat firmer economic growth, and some tentative signs of stabilization have appeared in the housing market. Overall, the economy seems likely to expand at a moderate pace over coming quarters.” Anyone with logical thinking knows that housing does not turn on a dime between FOMC meetings.
Look at the PHLX Residential Housing Sector Index. Note that this index is testing the downtrend that connects the highs of July 2005 (293.66), January 2006 (280.70) and April 2006 (275.52). After viewing this chart, check your portfolio and remove the homebuilders. In my judgment, the housing market will take years to bottom, not quarters.
Philadelphia Housing Sector Index
The index is currently testing its 2005-2006 downtrend
Click here for larger image.
Source: Reuters
Overvalued Homebuilders
Valuations are through the roof, but investors don’t care
Company Name 2-Feb
Close Rating (-UV) /
OV By Fair Value MOM 5-Wk
MMA Forward
P/E Value Levels Pivots Risky Levels
Beazer Homes (BZH) $44.48 SELL 93.30% $23.02 DM $44.69 51.7 36.90 M 53.85 A / 60.82 A
Centex (CTX) $55.10 SELL 184.40% $19.37 DM $53.76 39.8 48.06 M 57.30 M / 57.86 A 60.74 Q / 61.25 A
DR Horton (DHI) $30.86 HOLD 73.90% $17.74 OB $27.38 16.6 23.82 M 30.47 Q / 28.78 A 32.07 A / 36.12 S
KB Homes (KBH) $55.64 HOLD 81.30% $30.69 RM $51.18 13.3 44.64 M 54.84 A 60.42 A / 67.70 Q
Lennar (LEN) $56.11 SELL 107.70% $27.01 RM $52.13 23.5 49.95 M 53.64 Q / 55.45 A 63.40 A / 63.75 Q
Pulte Homes (PHM) $35.10 SELL 107.40% $16.92 RM $33.08 23.1 30.94 M 33.50 A 37.65 A / 40.70 Q
Toll Brothers (TOL) $35.35 HOLD 155.90% $13.81 RM $32.34 22.6 29.46 A 36.41 A / 37.30 Q 39.31 S
Key: MOM, momentum; OB, overbought; DM, declining momentum; RM, rising momentum; OS, oversold; F, flat; M, monthly; Q, quarterly; S, semiannual; A, annual. A value level is a price at which my models project that buyers will emerge; a risky level is a price at which investors are likely to reduce holdings, according to my models. A pivot is a value or risky level that has been breached in its particular time horizon; the stock will likely trade around this pivot.
Source: RightSide.com
Beazer Homes: The stock has declined so far this year, and fair value has dropped to $23.02 from $27.21. With a forward P/E ratio of 51.7 times, why take the risk of owning this homebuilder?
Centex (CTX) : It is down on the year but bottomed at $50.56 on Jan. 29. Its fair value is down to $19.37 from $43.93 at the end of 2006. With a forward P/E of 39.8 times, this homebuilder is no bargain. Investors should consider removing this one with the stock against monthly and annual pivots of $57.30 and $57.86.
D.R. Horton (DHI) : It is up from $26.49 so far this year, but fair value is $17.74, down from $19.03. With DHI between my quarterly pivot at $30.47 and annual risky level at $32.07, investors should consider removing this homebuilder from their portfolios.
KB Homes (KBH) : KBH is up from $51.28 so far this year, and strength has reached my annual pivot at $54.84. This is the first level at which investors should consider paring back positions on this homebuilder.
Lennar (LEN) : Lennar is up from $52.46 so far this year, while fair value is down to $27.01 from $35.52. This homebuilder has rebounded above my annual pivot at $55.45, which is the first level at which investors should consider paring back positions.
Pulte Homes (PHM) : Pulte Homes is up from $33.12 so far this year with fair value at $16.92, down from $25.89. Investors should consider removing this homebuilder from portfolios at prices between my annual pivot at $33.50 and annual risky level at $37.65.
Toll Brothers (TOL) : Toll is up from $32.23 so far this year, and investors should consider reducing this homebuilder on strength to my annual and quarterly pivots at $36.41 and $37.30.
——————————————————————————–
At time of publication, Suttmeier had no positions in any of the stocks mentioned in this column, although holdings may change at any time.
Richard Suttmeier is the chief market strategist for RightSide.com, where he writes the Small Stocks and Sector Report. Early in his career, he became the first long bond trader for Bache and later began the government bond department at LF Rothschild. Suttmeier went on to form Global Market Consultants as an independent third-party research provider, producing reports covering the U.S. capital markets. He has also been the U.S. Treasury strategist for Smith Barney and chief financial strategist for William R. Hough. Suttmeier holds a bachelor’s degree from the Georgia Institute of Technology and a master’s degree from Polytechnic University.
And one more before I go
http://www.itulip.com/forums/showthread.php?t=891
Thanks Tax Chick
Why do I keep doing that , I mean txchick .
In my browser address bar, Saving, Asset-Price Inflation shows up as Saving, Ass
I kid you not.
MjM
Wow Jeff…You give “Rocky Mountain High” a whole NEW meaning…psfff…psfff…Can you get ME some “ACAPULCO GOLD” man ???
Unfortunately Jeff has moved on to much harder stuff. PCP is his substance of choice these days. He enjoys the hallucinations and memory loss it offers. And this disconnect from reality fits right in with the marketing strategy for his home.
The market is settling in the same way the weather settles right before the category 5 hurricane hits.
“‘Obviously, I hope that it doesn’t dissuade anybody from buying. At first, rates were creeping up, and then they went down, and now they are going higher. I hope this persuades people that now is the time to get in a house before they go way up,’ (said) Jeff Rorabaugh, who is selling his home in Broomfield for $265,000.”
…”before they go way up” and then Jeff finds himself priced in, forever.
before they go way up” and then Jeff finds himself priced in, forever”
lol -
2007 has changed the mantra
“sell now or be priced in forever”
‘Without a doubt,’ Green said promptly. ‘To put money down, you have to have money.
This is why I’m not an economist. The intellect necessary to make such insightful observations is awe-inspiring!
“Also, there was a lot of what can euphemistically be called ‘creative financing’ flying around Colorado in the past few years. John Green, a regional economist who lives in Fort Collins, said the biggest culprit in the foreclosure boom is the no-money-down mortgage.”
AMEN Brother - In Texas, the mortgage brokers are handing these loans out left and right. Anyone can move into a house these days. All you typically need is $300 - which you can get from a payday loan or credit card advance. Bad credit - no credit - no problem. I have friends whom are in their early twenties and are “buying” houses no money down - it’s a new world.
No money down for a home. Great, and ya’ll never pay that sucker off. Add to that you have the repsonsibilities of a homeowner and that debt to boot. You were better off renting than going 0 down, in almost every case.
Who needs to pay it off when you can flip it for a nice profit? At least that’s how the thinking went the past few years.
You’re ALWAYS better off renting in a falling market, unless your mortgage payment is substantially lower than your rent would be.
I’m sure the folks in Colorado will locate some big spender that bet big money on the GB Packers over the Bears in yesterday’s SuperBowl…Hang In THERE…Spring is coming and so is the new bumper crop of the Next Bigger Fools !
My friend …Suzzane TELLS me these things.
GB Packers ……
And I thought I was obsessed with real estate….
I thought that was Manning as QB, not Favre.
Weld County had the state’s highest foreclosure rates. The Group Inc. president Chuck McNeal described last year as a soft landing, which he believes the region will slowly take off from throughout the year.”
This just in Chuck:
Greeley, Johnstown and Windsor, CO new home sales for January 2007 . . . Grand total of (drum roll please) 4, 3 and 14 homes, respectively!!! Down 71% YOY in Greeley, 66% in Johnstown and 26% in Windsor.
Not only a slow takeoff, I think it slid off the runway after hitting a moose.
Down 71% YOY. Interesting. That implies a drop from 14 to 4.
Now how many homes are on the market?
Got popcorn?
Neil
Right on Neil . . . 724 SF building permits in 2005, 367 in 2006 (1,091 total) approx 550 new home sales during the same time period. 81 new home sales in last half of 2006. Assuming all permits became new homes, about 3.34 years supply at recent sales numbers. Earlier article in Denver Post reported a 27 month supply - probably accurate, if not a little light due to FSBO. Greeley is the foreclosure capital of the universe, predominantly in the $170k to $250k range, however, the builders have yet to fall - that’s coming next IMO.
Make mine Fiddle Faddle.
The realtors have had a field day with house prices in North Colorado because the newly built houses are huge, so average house prices were going “up” because of all these big houses. What was worse is that many people moving into these houses were leaving a house they could afford and using creative financing to get into something “more comfortable”. We haven’t had much actual appreciation because there is so much land here. The bubble, as I have mentioned before, was not in house prices, but rather in the amount of debt assumed by our courageous buyers.
Now people are wondering that with such “reasonable” prices how CO can have so much trouble. As far as I’m concerned the prices here aren’t all that reasonable either, our prices have just been driven by CA refugees for so long people don’t realize it. The “boom” here started in the early 90’s as Californians overwhelmed the local markets. It must be remembered that the population of the entire state of Colorado is a small fraction of the LA metro area . CA refugees had a huge impact here in the 90’s. Colorado is still a very small state population wise.
why do these people need these supersized houses?
do they skateboard in these monstrosities?
oh yea it is to fit their overinflated ego’s and their
overweight spoiled brat kids
True story: Years ago, when I was renting a guesthouse behind another house, the landlord got the bright idea to rent to a couple of college students. One of their favorite amusements was mountain biking inside the house.
No, the houses have expanded to absorb all the money being thrown into residential housing. Seriously, when folks from CA ask “what can I get for $500k” the builders, realtors and lenders start to drool.
How big are the houses to which you refer, and where are you seeing them? I still see most of the new builds in the 1800-2800 sq. ft. range, which I don’t consider enormous. Big, yes, but not enormous.
‘As far as I’m concerned the prices here aren’t all that reasonable either, our prices have just been driven by CA refugees for so long people don’t realize it.’
This gets to point talked about here from time to time. That there is residual inflation in many housing markets from previous price episodes. Dallas, and Austin, Texas come to mind.
Do you have any knowledge of the Pagosa Springs market? $300k+ median sounds high for the CO/NM border.
I doubt any self respecting CA RE locust would plow any money into Weld county…there’s no dignity living in the wheat fields among the cows.
“The steepest decline in median home price occurred in the Pagosa Springs area (near the border with New Mexico), where the median fell from $332,143 in December 2005 to $269,231 in December 2006, an 18.9 percent drop.”
does this put a damper on that whole soft landing theory?
I love that area , but no economy. I can only guess the $330k figure was caused by equity locust who are no longer coming to the party.
Hey!…According to zillow, Suzanne and my trusty Superbowl magic 8 ball…Jeff’s GEM just went up $278 in the LAST MONTH !
http://www.zillow.com/HomeDetails.htm?o=North&zprop=60235120
Raise your PRICE and give them Hell Jeff
Hi,
I have an unrelated (to Colorado’s real state market) question: Is it allowed to relist a house? I have seen one house in my neighbourhood that has been in the market since last September with small reductions in price (5-10k) and now it is relisted since beginning September with a biiiig reduction and just 33 days active in the market and without the price reduction history. I recall to read in this site about NAR advising not to relist houses…but I could be wrong. I sent an e-mail to ziprealty (the website where I found the relisted house) and they replied it was common practice after the MLS contract expired. Is that true? or is it just a way to have a “clean” history?
it is done quite a bit these days
a “new listing” with a picture taken like 9 months ago
believe it or not some realtors can be unethical
I also think it is not ethical as it is a way to mislead buyers; however I wonder if it is allowed within NAR rules.
At least they have a new picture with snow (it is in Naperville Il)
They relist houses all the time. It is one of the industries dirty little secrets. The new listing will show the current days on market but does not include the days on market of the previous time it was listed. Unless you are sharp and ivestigate you might get swindled.
In what way will you get swindled? If the house is of interest to you at the asking price, why does it matter whether it has been on the market for a week or a year, except possibly to strengthen your negotiating position if the seller hasn’t lowered the asking price enough.
You have answered your question. It is deceiving, they try to swift the negotiation power to the seller with misleading tactics.
Actually I am not going to buy now (in a year or so maybe) but I’m checking already the market and forming an opinion about the agents and their tactics…for later on.
Just had to post this. My friend’s boyfriend is again trying to argue that the housing market is not tanking as we speak. After once again offering lax lending standards, greedy speculators, suicide ARM/neg-am mortgages, a softening market and readjusting ARMs as reasons for/proof of the coming devastation in the housing market (and repeatedly pointing him towards this blog), I got this as a response and just had to post it:
[QUOTE]
“Of course greed/money was the driver, as stated below. It’s what makes the economy work!
For the most part, the lynchpin of your argument is based on the fact that people won’t be able to afford their payments when certain loans interest rates adjust.
Well, there are 2 glaring holes in that argument.
Firstly, the only way to even remotely make that argument would be if you proved (hell, even something that suggested) that these mortgages holders had God-awful back-end lending percentages (i.e they qualified by the film on their teeth). Why? Because that is what this all boils down to: people are allegedly stretched so thin financially that they won’t be able to make their mortgage payments. I guess wages increases get thrown out the window here as well…(which, if you have kept up to date with current economic events, salaries are on the rise at the moment, contributing to a stronger economy…)
Further, it also violates a fundamental law of economics, that being, banks are in business to make money, which directly challenges the notion of “lenders’ reduced lending standards.” The primary reason banks get “aggressive” lending money in this situation is primary due to the fact that they do NOT see the market crashing. As stated above, they are very much in the business of turning a profit. They monitor the real estate market very closely. They wouldn’t mindlessly lend money to people if it exposed them to unreasonable risk, which is what you are exactly suggesting they did.
Think about it: Banks are almost ALWAYS in a loss (at best, a breakeven) position when they re-possess a house or any other asset. As such, why on earth would they be that risky with their money???
So, you want to make that argument work, you pretty much have no other place to look than proving that the banks were pretty much morons for lending money to these people. This is accomplished by clearly demonstrating that their back-end lending percentage is extraordinarily HIGH. Make THAT argument and we might have something to consider. Anything else is a waste of time.
And my good man, for the love of God, please stop using thehousingbubbleblog.com as your sole reference. You criticized my previous references because the articles merely quoted people in the real estate industry. The housingbubbleblog.com—are you kidding me? This is 1,000 times more biased then any local/national newspaper publication that I sent you. Hell, at least the articles that I sent you quoted real estate professionals had the cajones to put their reputations on the line. These guys on this site have nothing at stake. It would be equivalent to me sending you a link of http://www.nohousingbubbleblog.com.
I wonder what http://www.totallyfullofcrap.com has to say about things…”
[ENDQUOTE]
I guess this genius hasn’t heard that the banks aren’t holding onto these loans for more than a few microseconds, but are passing them off to suckers like pension funds. This destroys his argument that they wouldn’t knowingly make loans that wouldn’t be paid back.
Q. E. D.
Banks book negative amortization as current income, so it is in their interest to have this value grow. Look at Countrywide. They posted something on the order of $650M in income last year, and also had ~$650M of negative amortization on their loans.
“The housingbubbleblog.com—are you kidding me? This is 1,000 times more biased then any local/national newspaper publication that I sent you.”
You should answer, “biased by the truth, you butt-reaming dickhead.”
Bwwwwaaaaaahhhhaaaa
Tell your friend to RUN LIKE HELL away from this idiot.
Anyone that talks (er, writes) like that is obviously a legend in his own mind. God help her.
“Because that is what this all boils down to: people are allegedly stretched so thin financially that they won’t be able to make their mortgage payments. I guess wages increases get thrown out the window here as well…(which, if you have kept up to date with current economic events, salaries are on the rise at the moment, contributing to a stronger economy…)”
…and also on the rise are NOD and foreclosure numbers, credit card payment delinquencies, and huge RE inventory increases. The national savings rate is negative. People bought houses and things for those houses that they could not realistically afford.
I seriously doubt Joe Sixpack is going see a cost of living increase that would cover an extra $1-2K/mo or so against an adjusting mortgage payment increase.
I wouldn’t waste my time with this guy. It takes doing some homework and watching numbers to see where all this is heading. Let him believe that bankers, brokers and realtors all have his best interests at heart, and that they would never do anything that might blow up in their faces. Until he understands that lenders foisted most of their risk off onto someone else (Think Fannie Mae, MBS or CDO) almost as fast as they signed the documents, he’s not going to get the rest of the picture. See what he has to say next year.
“These guys on this site have nothing at stake.”
Actually quite a few here, myself included, have homes and futures which have been put into jeopardy because of this bubble. We all will have to live with the fallout (to some degree)even despite our choice to sit out this huckster RE nonsense - the politicos will see to that.
Your friend’s boyfriend sounds like a flipper I know. Be nice to hear from him in a year when all the builder stocks tank, banks fold, and foreclosures increase tenfold, and then the stock market heads south, just like everytime we’ve had a recession due to a speculative bust.
there are banks that got on the subrime lending that didn’t have backing as MBS’s…these are the ones that will be truly F’d
“Hell, at least the articles that I sent you quoted real estate professionals had the cajones to put their reputations on the line.”
i take that back…he sounds like a realtor…
ah yes, I’d much rather trust the objectivity, and sound– facts based support of a realtor whose reputation is at stake (and livliehood..sp?), than the biased HBB that references the gambit of sources, to include realtors and allows the reader to decide what’s real…
crush
Yeah, I continue to answer each of his arguments with calm, rational logic. The one question I posed to him, he still has yet to answer: What fundamental change took place to explain 100% price appreciation in the last five years? If there is none, then prices have to come back down.
U.S. housing vacancy suggests further pain-analysts.
http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-02-05T164644Z_01_N05292464_RTRIDST_0_USA-ECONOMY-HOUSING.XML
I’ve been watching Larimer County for my own possible move, and I did see some inventory move off the market in the segment I track (tens-of-acre ranchettes). But those that did were selling at a deep discount to asking price. And only the lower end ones were selling. We’ll see how the inventory creeps up as spring approaches.
One place was asking $575K for 70 acres in the mountains, and sold for $525K. I was waiting for $475K, but I guess that might be a Fall ‘07 price.
Just found this little gem
http://www.car.org/index.php?id=MzcwNDM=
on the CAR website. Short video but the unsubstantiated conclusions at the end are priceless. There logic goes something like:
There are no woozles in wonderland, ergo poptarts taste good.
Could someone post local observations from Longmont/Niwot or Boulder? How are things?
Does anyone have any info on the market in the Durango area or the DMT area? Thanks!
I grew up in the Boulder / Weld county area… can’t help but wonder how many old classmates and friends are now FBs.
Pagosa Springs - second homes for people that can’t afford to buy in Durango, or that like to ski Wolf Creek about 30 miles away. I can’t believe the median was $330,000 last year. 1 acre lots with small summer cabins on them - no real industry, ski-snowboard rental places, some fishing.
The Rocky Mountain News. “At the beginning of December, people looking to buy or refinance a home could find a 30-year rate at slightly less than 6 percent. Those days are gone. ‘Mortgage rates are rising hard,’ said mortgage banker Lou Barnes.”
“Many of these loans have pre-payment penalties so the home-owners can’t afford to refinance them even to 6.5 percent, said Peter Lansing, CEO of Universal Lending. ‘They can’t sell their homes, they can’t refinance their homes, and they can’t afford their homes because of the adjustable rate mortgages,’ Lansing said. ‘This creates a perfect storm for foreclosures.’”
Who in his right mind would refinance to a higher rate? Refinancing only makes sense when rates are going down.
Over here in Mesa County, CO things are still booming mightily. Natural gas exploration is fuelling our growth. I wonder how long our expansion will last if world oil prices are declining and dragging other energy costs down with them.
Not to worry… the availability of natural gas is as big an issue as Peak Oil, if not more so.