Speculators “Have Gotten Over The Euphoria”
The East Valley Tribune reports from Arizona. “When Shannon and Chad Edgerton jumped into the housing boom frenzy, they didn’t want to miss out on the giant equity gains homeowners were celebrating. But the couple plunged in a little too late when they bought a roughly 1,280-squarefoot home in the Queen Creek area in 2005. Since then, home sales and prices have tumbled throughout Pinal County.”
“The median price in Pinal County also slid, dropping from $220,000 in the fourth quarter 2005 to $191,500 in the same period last year. ‘Our timing wasn’t quite right,’ Shannon Edgerton said.”
“Edgerton’s three-bedroom home is one of thousands that have risen from the dusty Queen Creek landscape in recent years. And the building hasn’t stopped, even as builders are trying to unload existing inventory.”
“They’ve tried to entice buyers with pools, cars, appliances, landscaping and tens of thousands of dollars in incentives. ‘They keep offering all of these things that we can’t compete with,’ Edgerton said.”
“With so many new residents in peripheral areas, traffic on the two lane roads has become increasingly congested for commuters driving to work. During the boom, that drive was worth it for many, said Jay Butler, director of ASU’s Realty Studies program. ‘When you had that big run up in prices, nobody cared where they lived,’ Butler said. ‘They were going to be instantaneous millionaires.’”
“Nathan King was transferred to Wichita, Kan. just months after his family moved into their Queen Creek home. They tried to rent the place out but couldn’t find any takers. King then listed the home in August and, like many sellers in the area, has dropped his asking price several times. Meanwhile, he bought a second home in Kansas.”
“‘It’s been pretty frustrating,’ he said. ‘It’s never fun to have two house payments and not be able to find renters. I just feel they built too many homes too fast.’”
The Review Journal from Nevada. “The number of homes listed for sale in Las Vegas Valley climbed to 18,774 in January, a 13.8 percent increase from the same month a year ago, the Greater Las Vegas Association of Realtors reported.”
“Statistics from the Realtors association show that single-family median home prices dipped slightly in January to $302,000, down 2.8 percent from a year ago.”
“‘The (builder) incentives worked. They’re out of inventory,’ said Dennis Smith of Home Builders Research. ‘The investors are looking to buy 20, 30 or 40 homes, but they can’t find them now.’”
In Business Las Vegas. “Las Vegas homeowners are cutting prices to sell their homes in this soft real estate market. The median price of homes sold on the MLS dropped 1.3 percent in January to bring the total decline to 4.4 percent since June, when the sales price was an all-time high of $315,000, according to statistics released by the Greater Las Vegas Association of Realtors.”
“The median price of homes sold in January on the service was $302,000 and is poised to fall below $300,000 for the first time in nearly two years. The prices, however, don’t account for any incentives many sellers have been offering in recent months.”
“‘I think we are starting to see people come to the reality of where the market is and adjust their prices,” said Ken Perlman, VP of Sullivan Group Real Estate Advisors. ‘Those who bought homes in 2004, 2005 or earlier have gotten over the euphoria of appreciations they’ve had and don’t expect to recover every cent of it,’ he said.”
“‘What’s happening in Las Vegas is no different than in Phoenix, San Diego or other parts of Southern California,’ Perlman said. ‘All of the markets had great years and people had a lot of fun, but it wasn’t realistic to sustain those price increases.’”
“When it comes to the price of land in the Las Vegas Valley, Derek Rafie said he’s telling clients to look beyond the statistics. Rafie, a first vice president of the land services group at CB Richard Ellis in Las Vegas, said media accounts last week portraying the price of land jumping 78 percent in the Las Vegas Valley during the past year has left some explaining to do.”
“The clients didn’t make a mistake by not jumping in and avoiding paying steeper prices later, Rafie said. Instead, he tells them the raw numbers don’t tell the true picture. That number, reported in a Review-Journal news story, can’t be taken at its face value because it includes resort property, Rafie said.”
“There were only 572 acres sold during the fourth quarter, which is down about 70 percent from the number of acres sold in the fourth quarter of 2005. ‘When you lump everything together, especially when you have gaming property, it looks like a large appreciation when it really wasn’t,’ Rafie said.”
“‘Right now, I am not sure landowners understand the value of their properties have decreased,’ Rafie said. ‘There is a softening. If you need to sell your property in the short term, you have to discount your price.’”
“More than 19,000 Las Vegas Valley homes entered foreclosure in 2006, and the filings show no signs of subsiding. Foreclosure filings in Las Vegas peaked during the fourth quarter, when 6,295 homes entered some stage of the process. By the time 2006 ended, one of every 31 households had entered foreclosure.”
“Las Vegas had nearly 24,000 homes, town homes and condos on the market at the end of January.”
“Based on what he’s seeing day to day, Michael Krein, president of Nevada Real Estate Services, which handles foreclosures, said it appears Southern Nevada foreclosures may be several months away from reaching their peak. For many homeowners, the jump in monthly mortgage payments won’t take effect until this year, he said.”
“‘I can’t hire staff fast enough and get them trained,’ Krein said. ‘It looks like they are going to continue to increase at a rapid rate.’”
“Many of the homes he’s taken possession of recently were owned by investors who bought with the intent of gaining rapid appreciation and selling, Krein said. Several haven’t even been lived in, he said.”
“Other investors have rented out their homes for income and weren’t making their mortgage payments, Krein said. He said he’s evicted several renters who weren’t aware their landlord was pocketing the cash rather than paying the mortgage.”
“Banks have been reluctant to discount prices given the losses they are already facing, but Krein said they will eventually price the homes realistically, possibly discounted by as much as 5 to 10 percent.”
“The rising number of foreclosures has already affected lenders who continue to tighten guidelines for home loans, said Steve Schauer, president of a local mortgage broker. Like others, Schauer said he doesn’t believe foreclosure filings have peaked yet.”
“Many homeowners have sought to refinance their homes in the last two months but have been unable to do so because their appraisal shows their properties are valued at tens of thousands less than they were bought for at the height of the real estate market, Schauer said.”
“Schauer recounted one case in which an investor bought a home at $350,000. Today it’s worth $295,000. His mortgage payment is $2,500 a month and he rents it out for $1,400 a month, taking a monthly loss of $1,100.”
“‘He can’t afford to take a $60,000 loss if he sells,’ Schauer said. ‘So he can continue to rent it out at a loss per month or let it go to foreclosure and ruin his credit.’”
“Nathan King was transferred to Wichita, Kan. just months after his family moved into their Queen Creek home.
Isn’t renting the first option if you are at risk of transfer?
“Isn’t renting the first option if you are at risk of transfer?”
No, the new paradigm is to buy as soon as you know where you will be transfered to, so that you don’t miss out on any equity gains.
I fool so feelish for thinking otherwise.
Get your straights fact
“I just feel they built too many homes too fast.”
Why do you think THEY were building those homes ? Maybe because people like yourself were running to the bank, getting zero down loans and buying everything in sight for outrageous prices !
Funny how the problem is always THEM and never the people in these articles.
Yes his house was built at just the right time but all the others went up too fast.
Built to many homes…..I guess that is why 3 to 5 familys are living in these mansions bought with no down, interest only loans and when they decide to stop sending in payments, wait for lenders to take back house, 9 to 12 months later and move back to mexico. San Jose is reporting new mansions with white sheets over windows and meth growers inside. I guess the drug people saw this also as a “good once in a lifetime opportunity” as well.
It’s ok. The builders, lenders, real estate people made their money these last few years and pushing the prices higher increased their profits to a all time high. There crying now will go on deaf ears.
How do you grow meth?
Meth, drugs, marijuana, it’s all the same. Growing for profits. Get it!
I’m still waiting to see asking prices fall and sfh rental prices fall as FB flippers try to feed the alligator in Tucson. Does anyone have current data on vacancy rate for homes for sale in Tucson? Inventory here has been hovering near the all time high mark, and I know that some of the sellers must be facing loan resets/payment shock by now. I think that the impact of the subprime lending meltdown will be harsh in Tucson. Average income is nowhere near sufficient to afford median price home if there is significant tightening of lending standards, requirement of down-payments, etc. Chime in with news and views, Tucson folks!!
Howdy, TucsonGuy and all of the other followers of the Old Pueblo housing market. Here’s Arizona Slim, checking in with another one of those bicycle ride reports:
On my rides about town, I’m noticing quite a few empty houses for sale in central Tucson. A lot of them appear to be the properties of “investors” who were counting on double-digit appreciation until the end of time.
I’m also noticing an uptick in the number of formerly for sale properties that are now being offered for rent. And, if you know the housing market in this part of town, mid-February is not a good time to put a rental on the market. Reason: The University of Arizona students are hunkered down for the semester, and more than a few of them are starting to think about summer vacation plans.
And that’s the latest report from Arizona Slim.
Arizona Slim, I’m seeing the same thing in central Tucson. My lease is up in Sept., so I’ll be gathering info to use to leverage a price concession from my (out of town) landlord. The problem is, I really don’t want to move, so I can’t bargain as aggressively as I would otherwise.
The other problem is we don’t want a landlord who is so FB that they will get foreclosed and leave us having to move on short notice. If we did move, I told my wife that we should insist that periodic proof of mortgage payments being made on time be a condition of the lease. Right now we are some of the (probably very few renters) with high incomes and good credit. Wife and I both completed professional degrees and began careers just when house prices peaked, so now we are renting and waiting to buy at a steep discount (no way we’re going to pay over 2001 price, maybe less for a house that needed updating).
Tucson prices are being sticky on the way down, but they have to fall soon.
P.S. A fun tidbit: Power point presentation (about 30 slides) about the Tucson housing market from an economist at the University of Arizona. Not a rosy picture.
http://www.tucsonrealtors.org/public/housing_forecast.htm
Funny you should mention UA economists, TucsonGuy. Here’s a true story:
In March 2002, I attended a presentation by UA economist Marshall Vest. He began his talk by recounting his experiences on 9/11/01. He and several hundred others were attending a business economists’ conference in NYC. At the World Trade Center.
Suffice it to say that Dr. Vest got out in time. But he ended walking something like 10 miles to get to a place where he felt safe. Well, let’s say he felt safer there than he did in Lower Manhattan.
Other than his 9/11 experience, the part of his talk that really jumped out at me was when he expressed concern about the POSSIBILITY that a bubble might be developing in the local housing market.
In fact, he drew a graph with a line that showed housing prices rocketing upward. Below that line, he drew a much flatter line depicting job growth. Between the two lines, there was a lot of empty space. To emphasize that space, he drew a circle and said, “Here’s the bubble.”
“If we did move, I told my wife that we should insist that periodic proof of mortgage payments being made on time be a condition of the lease”
That would be an interesting thing to know but how in the world would that make any difference to you, other than give you a little time to find another rental to move to? It’s too late once the slumlord stops paying the note and you can forget about the deposit given to an FB - that’s toast too.
I hate moving. Must be a tough time to be a renter. A lot of moving targets to keep track of….
I think it would give him more time to try to find a place, and he could apply the deposit to his last month’s rent. I’m not sure if they have this in Arizona, but in California you can record a simple document with the recorder’s office that requests that you get notice of any documents recorded that affect the property. That way, if an NOD is recorded, the recorder would mail a copy to you. It would at least give you several months notice before the actual foreclosure.
tucsonguy, in Arizona, you can record a “Request for Notice of Trustee’s Sale”, and the Trustee should notify you. Doesn’t mean they will though.
If Pima County has recorded docs online, you can just run the owner’s name before leasing and once a month thereafter. I check the owner’s name for the house that I am renting in the Phoenix area every month or two. The big dummy bought three rental houses six years ago and never “unlocked his equity” by borrowing tons of extra dough, at least not on property in this county. So, it looks like he is not a FB, although he does have to compete with some FBs for rental dollars.
Dallas Metro inventory:
43,000 resale homes
12,000 new empty spec homes
January sales -4%
January prices -1% (plenty of freebies)
There wasn’t a big bubble here, but the shockwaves from California are headed this way.
The threat of no snowpack in any of California’s mountains is a real possibility and the Colorado River and it’s water, will be possibly the only way for Phoenix, Las Vegas and Los Angeles, to survive. There isn’t enough water for all 3 cities, and Ca., Az and Nv share the water rights, California getting the lion’s share, if memory serves.
Get ready for a good old fashioned water war in the west, on top of all the real estate machinations going on already…
I’m in the foothills of the Sierra Nevada and rain is coming the next few days, via the Pineapple Express. hi/low here 63/47.
Translation: All snow below 8,500 will be melted away by the rain, any serious accumulations will be 12,000 feet and higher.
Don’t forget Utah! Not too long ago there was a lot of discussion in Utah about a large pipeline siphoning off water from the Lake Powell area to supply more development in Southern Utah, St. George etc.
‘It’s never fun to have two house payments and not be able to find renters. I just feel they built too many homes too fast.’
Ben, please stop posting these stories…I can’t tell you how many times I’ve wanted to reach into my computer monitor and just slap these people silly.
Nathan King,
1. You bought a second house before selling your old house. That doesn’t make the builder an idiot, it makes *you* the idiot.
2. You *can* get renters, it’s just that you are charging too much rent. If you are the lowest rent for a given market, and it is a nice property, it will rent! It’s just that you have no idea about what property management entails, so you probably are trying to charge above market rent so that you can cover your high carrying costs. Again, this is not the builder’s problem, it’s *your* problem.
‘It’s never fun to have two house payments and not be able to find renters.”
It’s just not, y’know - fun!
Someone needs to teach these people the definition of speculation and why there is a “risk premium.”
I think its fun to spectate.
Got popcorn?
Neil
Euphoria is definitely gone from stock market. NEW & LEND both down over 10 % making new 52 weak lows. HB stocks look shaky, KBH earnings come out next week we know they will be ugly on top of they have an option scandal.
Yup, hopefully the beginning of a new down leg for the homebuilders where they retest the old lows from last year.
Putting my money where my mouth is. I bought some “SRS” in my 401k. ‘SRS’ is an ETF that is ‘ultra short’ Real estate companies. Up 5.35% today.
Class action suit against NEW. Suit pertaining to “false and misleading statements pertaining to operations during the first three months of ‘06. ”
http://biz.yahoo.com/pz/070209/113477.html
>dying beast in water is being circled by sharks
I high doubt these f’ers are filing this lawsuit for the shareholders. More like they want to be the first to file so that they can become the lead attorneys and pocket a third of any kind of settlement that they can get leaving the shareholders with very, very little. Can’t they go back to chasing ambulances?
What sucks the most in this whole deal is that those of us who actually want to buy a house and get it payed off asap(i.e. do the responsible thing) have been made to suffer by those who ran prices into absurdity so they could turn a quick buck. To add insult to injury, when we the responsible lament or complain about this, the perpetrators dismiss us, and call us names like bitter renter.
Here’s hoping we all get to lick the sweet sweet tears of the Scott Tenormans of the housing market(that’s a South Park reference for those who don’t watch).
“‘It’s been pretty frustrating,’ he said. ‘It’s never fun to have two house payments and not be able to find renters. I just feel they built too many homes too fast.’”
Welcome to America, Nathan King. You know Nate, capitalism works both ways. Did they build too many homes, too fast? Of course, if you’re trying to sell a home. I am sure if you were a home builder you would never say that.
As someone who lives in Philly I cringe whenever I hear about us becoming the “next New York” or “New York’s sixth borough”. Mostly because it is stupid. New York and Philly are big cities along the I-95 corridor, that’s about it. Second, because places like Fairfield County, CT, Northern New Jersey and Killington, Vermont staked that claim 100 years ago. But third, I really like Philly and wish more people could buy nice houses. I am a high school teacher, my wife is a social worker. We live in a very modest house in an OK at best section of Philly. The only way we can afford the house we are in is becuase we got a good deal on it since my wife’s parents sold it to us after living in it for close 20 years. My friends from college that are mostly in SW Ohio all have nicer houses than we do and jobs in the same field (social work, teaching, etc).
So go to he** Nathan King. FREE CRUDDY PHOENIX EX-URB HOUSES FOR EVERYONE!!!!!!
shssssss. Don’t let the secrete out about SW Ohio.
Don’t worry about it. When I tell folks I’m moving back to the Pittsburgh area from Cali. they all make comments about it being the frozen tundra, Hicksburgh, snow covered wasteland etc. I’m sure they say the same thing about SW Ohio which is beautiful country.
To most Californians anything beyond Arizona/Nevada is considered “back east”. The snobbery level out here amazes me especially when the people think they are living in the lap of luxury whilst paying $3500+/month for the privelege of living in a 1970’s flipped floor plan tract home development. Yeah, they live near the beach but get to enjoy it 4 times a year at best because they can’t stop working to pay for their crappy shack.
My father was right when he called this place “Crazyfornia”. BTW I don’t consider the Bay Area part of NorCal. You have to go to the state of Jefferson for that experience.
One of my co-workers showed me a pic of her house in Cincinnati. She and her husband are re-los from that city. It was a lovely small bungalow in a neighborhood of similar bungalows. They had been trying to sell it for $130k, but it wasn’t moving, so they decided to keep it since they go home so frequently.
I told her I wished I could airlift her house to a lot in my area. That’s exactly the kind of house I’m looking for but you can’t touch one around here for less than $300k.
I feel a long string of Italian cursing coming on.
Actually, please. I’d like to hear the cursing. I rant — to myself (don’t want to clog up this blog) — regularly about the architectural carp that passes as houses.
And there’s no such thing as a lovely small bungalow anymore. If I want a new small-er home in a lower price bracket, my only option is “attached product.”
Whaaaa…?
Please don’t insult Killington, Vermont like that.
During the boom, that drive was worth it for many, said Jay Butler, director of ASU’s Realty Studies program. ‘When you had that big run up in prices, nobody cared where they lived,’ Butler said. ‘They were going to be instantaneous millionaires.’”
Every area has a situation like this. One that pops out me is the Victorville-Apple Valley-Palmdale-Lancaster area of So Cal. Without the price appreciation of the last few years, who will want to remain living in these absolute hell-holes.
During the stock bubble of 2000 best place to park your money was the riskiest stocks they provided biggest gains. This bubble is no different best place is absolute hell-hole. Just make sure you are not last one in the hell-hole.
Agreed, the price run-up made poor places to live acceptable or even desirable. It is like a bad job being ok because of good pay and/or bonuses. The money makes things better for a little while till the effect wears off and you see that the job really sucks.
yeah and instead of whining about them throwing market out of whack, be happy all the lovely beach rentals they have left vacant…
WOW! Another bloodbath today in sub-prime. When is the right time to cover? Bearishness is overwhelming in this sector now with everyone expecting the next big show to drop any second.
NEW is getting KILLED again and look at LEND & NFI
LOL!!!
The Review Journal from Nevada. “The number of homes listed for sale in Las Vegas Valley climbed to 18,774 in January, a 13.8 percent increase from the same month a year ago, the Greater Las Vegas Association of Realtors reported.”
“More than 19,000 Las Vegas Valley homes entered foreclosure in 2006, and the filings show no signs of subsiding.”
“‘The (builder) incentives worked. They’re out of inventory,’ said Dennis Smith of Home Builders Research. ‘The investors are looking to buy 20, 30 or 40 homes, but they can’t find them now.’”
Yes Mr. Smith, is this how you run out of inventory?
The builders did run out of inventory, now its being held by flippers.
This is called ‘passing the buck’.
Something tells me that the builders aren’t out of inventory in Vegas. Maybe they are for SFRs, but they have plenty of condos left. And, are we to believe that the builders have stopped building in Vegas? And who in their right mind is looking to buy homes as investments in Vegas right now, when prices are declining and inventory and foreclosures are so high? Finally, do investors only buy new homes? There are plenty of resale homes on the market for them to buy, if they really want to. I’m sorry, but these statements from Home Builders Research sound like cheerleading BS to me.
‘The investors are looking to buy 20, 30 or 40 homes, but they can’t find them now.’
Hurry, buy them now before they are all gone! Cheerleading BS for sure.
The investors are looking to buy 20, 30 or 40 homes at 50 cents on the dollar but they can’t find them now.’”
I modified that statement so it makes sense.
“‘He can’t afford to take a $60,000 loss if he sells,’ Schauer said. ‘So he can continue to rent it out at a loss per month or let it go to foreclosure and ruin his credit.’”
How much more convoluted and stupid are things going to get? I guess this is something taught by RE guru’s in their seminars.
If he ruins his credit he won’t be able to double down with another property at the bottom of the dip.
“…bought a home at $350,000. Today it’s worth $295,000. His mortgage payment is $2,500 a month and he rents it out for $1,400 a month, taking a monthly loss of $1,100.”
So, let’s see:
Assuming the property doesn’t decline even more in value over the next few years (doubtful), AND assuming the property tax + insurance + maintenance are negligible (very doubtful), AND assuming he minimizes transactions costs by selling it himself (possible, but unlikely), it will take only 5 years for his alligator to accrue the loss he would have incurred by selling today. Factor in those hefty T+I+M costs, plus the likely added future depreciation and I bet he hits the mark in half the time.
But, at least he has “pride of ownership”.
But, at least he has “pride of ownership”.
He also has something to talk about with other “losers” at the next Donald Trump Millionaire Seminar
It’s called a quick sale…I wouldn’t say ruin his credit but it will certainly do a number on it. Still, it’s a better choice in my opinion than trying to ride this one out.
Just so you know, loans in NV are with recourse, meaning they have to be paid back. You cant just hand the keys back to the bank like with 1st T.D.’s in CA. So I think he may take a pretty big hit on his credit before it is all said and done.
How do you tell if NJ loan is or is not recourse?
“How do you tell if NJ loan is or is not recourse? ”
I believe “deficiency judgement” is the more common term. Whether or not a deficiency judgement is permitted is dictated by state statute, not by the loan terms.
NJ does not allow deficiency judgements. N.J. Stat. 2A:50-1
http://biz.yahoo.com/pz/070209/113477.html
Its ending EGGS-ACTLY like the dot com scamplosion! Class action lawsuits for everyone.
What ? Stocks can go down ? UMPOSSIBLE !
“‘The (builder) incentives worked. They’re out of inventory,’ said Dennis Smith of Home Builders Research. ‘The investors are looking to buy 20, 30 or 40 homes, but they can’t find them now.’”
How can a person believe anything they read in the press today? Lying has become a way of life in the commercial world.
“Schauer recounted one case in which an investor bought a home at $350,000. Today it’s worth $295,000. His mortgage payment is $2,500 a month and he rents it out for $1,400 a month, taking a monthly loss of $1,100.”
“‘He can’t afford to take a $60,000 loss if he sells,’ Schauer said. ‘So he can continue to rent it out at a loss per month or let it go to foreclosure and ruin his credit.’”
His plan A was to flip for quick 50K. Everyone told him RE always goes up.
He did not have a plan B, so now he is bleeding $1,100 at least. Counting in tax , insurance, it’s another $500. How about repair/vacancy ?
May be his plan is to take the rent money, while letting the house go in foreclosure. At least, he’ll walk away with $1400 x 6 = $8400
Look at how some of the speculators are pocketing the rent and not paying the mortgages . Most likey the low down unqualified ,liar loan flipper/speculator type or crook trying to get every last penny
they can for nothing . Isn’t that just what this housing mania lure was ,get something for nothing ? I wouldn’t even rent from one of those stupid flipper/bagholders.
“Banks have been reluctant to discount prices given the losses they are already facing, but Krein said they will eventually price the homes realistically, possibly discounted by as much as 5 to 10 percent.”
If banks could sell them for 10% less, they would have. Cut those prices by a third or more if you want to get lookers.
“Schauer recounted one case in which an investor bought a home at $350,000. Today it’s worth $295,000.”
Worth? How did you determine that? Sounds like a guess; maybe it is only ‘worth’ $225,000 and dropping.
“With little standing inventory of finished new homes, investors and home buyers will turn to the resale market and burn through some of the MLS listings by the end of the year, Dennis Smith of Home Builders Research said.”
“The (builder) incentives worked. They’re out of inventory,” he said. “The investors are looking to buy 20, 30 or 40 homes, but they can’t find them now.”
Dennis, welcome to 2007. There are no investors looking to by 20, 30, or 40 homes in Las Vegas. I am pretty sure most speculators have gotten the memo by now.
“Krein said they will eventually price the homes realistically, possibly discounted by as much as 5 to 10 percent.”
My heart is bleeding. No, really it is.
Really…er. OK, actually, my sides are splitting.
“‘Our timing wasn’t quite right,’ Shannon Edgerton said.”
LOL - that’s an understatement. Sorry, but no pity for the Edgartons, who look like flippers to me. They bought in 2005 and are already looking to sell? Oh, it’s because they NEED a bigger home because of their growing family. Sorry, but they’ve got three boys ages 6, 3, and 1. Those boys don’t each need their own room at that age. They can easily share a room with bunk beds (I did when I was growing up). No, they were trying to get rich quick, and now realize that they were the last GF.
“But the couple plunged in a little too late when they bought a roughly 1,280-squarefoot home in the Queen Creek area in 2005.”
Do you realize how small this house is for a so called 3 bedroom ? They made a big mistake buying a house this small as it will have little or no resale value. Cripes, Mom is going to go insane with 3 small kids in a box that size.
Hey, my folks raised eight kids in a 3-bedroom, 1 bath, 1200 square foot rambler my dad designed and built himself. It can be done. Frankly, I wouldn’t recommend it for eight kids, but for four or fewer it can be just fine. Unless you’re spoiled.
Remember, though, that you probably were allowed to play outside, doing DANGEROUS things like riding your bikes and climbing trees and eve (*gasp!*) using PUBLIC PLAYGROUNDS…
(My father, one of nine kids, also grew up in a space we would think of as hopelessly cramped today. I was one of five and we grew up with 1.5 bathrooms and it worked out just fine. I DON’T see what the problem is…)
“The (builder) incentives worked. They’re out of inventory,” he said. “The investors are looking to buy 20, 30 or 40 homes, but they can’t find them now.”
I can’t believe this person actually said that with a straight face. They must have left off the “hahaha, just kidding” part or something.
The only “Investor” type of activity here in Vegas are hand written signs on telephone poles which say “Real Estate Investor Seeks Apprentice - 20k/month”…..basically looking for a straw buyer for their alligator before it eats them alive.
“‘When you had that big run up in prices, nobody cared where they lived,’ Butler said. ‘They were going to be instantaneous millionaires.’””
On a $200K +/- house!?!
It’s bad enough to see money melt away when your house depreciates. It’s far worse when you really don’t want to live there!
Re, we are out of homes guy article
the things that make Las Vegas and our local economy so unique,” he said. –RE Handbook Translation = “”"Its different here”"”
“They don’t necessarily understand that we have a lack of private land available for development. –RE Handbook Translation =”"They aren’t making anymore land”"
And they don’t always understand that our population and job market will continue to grow faster than almost anyplace else in the country–RE Handbook Translation =”"Everyone wants to live here”"”
From the Trump seminar—Now when you are out in your field representing yourself as an expert remember to use the three G’s…
Good = This community is special
Gooder = They will not be able to make anymore like it
Goodest = Everyone wants to live in a place like this
Of course find your own words, but make sure you repeat the 3 G’s
(Trump walks away laughing counting the g’s some dumbass just gave him)
“The investors are looking to buy 20, 30 or 40 homes, but they can’t find them now.’”
Pause….Sorry, I just barfed.
I laughed so hard I just -arted!!
At least you didn’t “shart”
If you think all of this is bad, I’ve heard an ad on the radio several times in past couple of days that goes something like this: “If you’re like me, you don’t care about paying off your mortgage. You just want the lowest payment possible. We have a loan that will only cost $20/month per $100K of loan, fixed for 10 years. You must have a 660 FICO to qualify.”
I just about started screaming in my car after I heard this nonsense. Un-Fing believable. This is what sane and responsible people have to compete in SoCal/San Diego. This place is complete and utter fantasyland at this point. This crap boils my blood.
Heard that one, too. They’re claiming you can finance $1M for only $200 a month. The kicker seems to be the “minimum 30% equity” requirement — sounds to me like the ultimate NegAm. Insane.
My, my…the US sub-prime mortgage sleazebags reach foreign shores
http://dailyreckoning.com/Featured/Kate2907.html
said Dennis Smith of Home Builders Research. ‘The investors are looking to buy 20, 30 or 40 homes, but they can’t find them now.’”
And another thing, nobody in their right mind would purchase 20,20, or 40 new homes unless they were in it for the fraud money you dumb fucking asshole Dennis Smith (if that is your real name and not the fraudulant name you used to get that license out of a crackerjack box) and you are a party to that fraud for working the paper work and you need to be hung up by your balls while everybody cracks you in the head with rocks.
Sorry
Rant off
Awesome…LMFAO!!
“He said he’s evicted several renters who weren’t aware their landlord was pocketing the cash rather than paying the mortgage.”
So how does find out? Really, if there are this many crooks in the world, what hope is there? I used to think that most people were trying to do the right thing, but not anymore.
Most people take path of least resistance, if you find a dime on the street pick it up.
“Schauer recounted one case in which an investor bought a home at $350,000. Today it’s worth $295,000. His mortgage payment is $2,500 a month and he rents it out for $1,400 a month, taking a monthly loss of $1,100.”
“‘He can’t afford to take a $60,000 loss if he sells,’ Schauer said.”
Let’s say we have that miraculous ’soft landing’ and prices now start to rise 3% from their current levels - where does that leave our ‘investor’ who can’t afford to lose $60K?:
1. In 10 years his $295K current value climbs to $396K which NETS him $18K sweet profit on his original $350K investment.
2. Assume rents rise 3% PA - he will have subsidized his tenant to the tune of -$103K (mortgage) - $45K (property taxes) - $50K (maintenance) + $77K (equity) = -$121K.
GRAND TOTAL: $18K sweet profit less -$121K hateful loss = -$103K
So the ’soft landing’ best case scenario for our ‘investor’ is a loss of $103K over a ten year period. And this muppet hasn’t figured out that taking it in the shorts now by losing $60K is probably about as good as it gets.
But then the muppet is probably too stupid to even run a back of the envelope calculation.
That’s an insult to muppets.