Post Local Housing Market Observations Here!
What do you see in your housing market this weekend? A letter to the editor? “In her recent front-page article ‘A popular place for house seekers’ (Feb. 1 Advocate), Jennifer Mann really missed the mark relative to reporting on recent trends in the housing market.”
“Of the 32 homes that priced between $400,000-$500,000, just 25 percent sold at or above their asking price while 75 percent sold for an average $16,000 below their asking price. Of the nine homes, priced between $500,000-$600,000, only one sold at or above its asking price with the remaining homes selling for an average $15,000 less. Of the eight homes, priced between $600,000-$700,000, only one sold at or above its asking price with the remaining homes selling for an average $24,000 less.”
“This rough analysis took me all of 30 minutes. The Advocate staff might take a similar approach the next time they make a contention about the housing market that begs to be supported by current data rather than outdated sales figures and anecdotal comments from real estate agents.”
A new pricing strategy? “Frank Lanham, a real estate agent (in) Fells Point, said he had expected the market to pick up even more last month. ‘I see the market is still sluggish. I’ve seen some agents that have not had settlements for four months now,’ Lanham said.”
“In the past six months or so, Lanham said, agents have started to use the term ‘drama priced,’ signaling price cuts of at least $30,000, and have even splashed that term on for-sale signs. Incentives also are still common, Lanham said.”
Signs of oversupply? “The growing condo glut in New Orleans has experts predicting prices will fall and developers will have to target a less-affluent market. ‘There are a lot of units on the market. You’re going to see asking prices start to come down more,’ said Shaun Talbot, vice president of Talbot Realty Group.”
“Half-empty streets and rows of for-sale signs are common at some of the multi-million-dollar estates in outer Sydney as developers turn to lavish gifts and no-deposit finance to attract buyers. ‘I’m not surprised that some estates are struggling,’ said Simon Tennent, executive director of housing and economics for the Housing Industry Association. ‘These are great quality homes on excellent estates, but do the simple maths and you can’t afford them.’”
Or falling prices? “According to real estate sector experts, high prices in some localities, along with strict bank credit norms and investors’ penchant for buying properties in cities like Pune, Naik and Thane has led to declining demand for mid-segment flats by as much as 25 per cent to 30 per cent in the last two to three months.”
“‘Prices are stagnated and affordability of prospective buyers is coming down. Moreover, even if they have money, people are not buying properties thinking that the prices will come down,’ says Sanjay Chaturvedi, executive editor (of) an industry magazine.”
“Drama priced”? Yes, Frank, that’ll sell those overpriced homes. Keep up the good work rearranging the Titanic deck chairs. Your clients will ride that drama price wave all the way to foreclosure.
“Drama priced”?
I’m holding out for “shock and awe” priced.
Save the drama for your mama and just lower the damn price.
I’m holding out for the “ruptured aneurysm” price or …
the “incarcerated testicle” price or quite possibly …
the “projectile diarrhea” price.
What idiots.
Well, it’s working in the Balto region. More knifecatchers this Jan then last, with still-rising prices.
“‘I’m not surprised that some estates are struggling,’ said Simon Tennent, executive director of housing and economics for the Housing Industry Association. ‘These are great quality homes on excellent estates, but do the simple maths and you can’t afford them.’”
*********
Ah… there’s some truth about a housing market.
Unlike his counterparts here in the US, maybe Mr. Tennent is someone from the industry who just wants to retain his credibility.
Perhaps some around here should give it a try.
Simon Tennent has always had a pretty good reputation for telling it like it is, albeit within the ambit of his job as spokesperson for the builders.
And that letter to the editor in Arlington, Massachusetts was just outstanding!
Went to the recommended site, checked out the wishing prices for houses in my old neighborhood in Greater Boston. Some of my favorites: a 356 sq ft “condo” (bldg used to rent) for what SFH used to go for in 1995 (and will again if there are major layoffs at the defense contractors–Mass is very cyclical this way). Also, a home that advertised “your chance to live in ABCVille” when actually it is a house in ABCVille *Park*, the GI tract house development just to the south–LOL. Good luck on that wishing price 100% profit (assuming bought 10 years ago)… I hope the kitchen has been updated some time since 1973…
Incidently, the “condo” is in a bad location, as the bus goes out of service at 7:30 pm on weekdays and you’re 2 mi. in either direction from the train. The truly valuable houses and condos in that city are all walking distance to the train.
Oh I know - the Arlington Advocate just got OWNED.
“Of the nine homes, priced between $500,000-$600,000, only one sold at or above its asking price with the remaining homes selling for an average $15,000 less.”
Did that ONE sell at or above, really don’t need to go with the “or” with only one item in question. Just more BS trying to give hope by the way of confusing the issue….
And we all know that the one home that sold above it’s asking price was a cash-back deal ,in other words fraud .
I figured the “at or above” meant just “at” — the use of the phrase was intended to mislead. If it happened to be “above,” I’d agree with Wiz.
‘I see the market is still sluggish. I’ve seen some agents that have not had settlements for four months now,’ Lanham said.”
Hah! 4 months? They should count their blessings! Most agents where I’m sitting had 1 or 2 commission checks all of last year. If you factor in cost of advertizing and all the other bull that goes with being a RE agent, most were seriously in the red last year.
I guess that begs the question of increased unemployment and its effect on the economy. Will there be a (or is there now) huge loss of income from under-preforming agents? What about jobs in the lending industry? Jobs in construction? I don’t feel too bad about the first two, but am sorry for jobs lost by honest laborers. Can this type of thing trigger recession?
It’s not going to be just in construction. It’s going to trickle down through to pretty much everything.
I sold furniture up until a couple of weeks ago. Nobody is buying houses which means nobody is buying stuff to put in it. Nobody is taking cash out anymore and buying big ticket items anymore. We haven’t seen people from CA who cashed out and would walk in an frop 40k on stuff in an afternoon. After getting a commision check for under $100 for 2 weeks work, I walked. I’m sitting on a nest egg from selling my house a couple of years ago so I’m in okay shape and can be okay for awhile.
I suspect will be hearing about people cutting back on non-essentials like cable/cell phones etc. as their ARMs adjust and people do anything and everything to stay in their houses.
Being a real estate agent now, is like working for Amway.
Actually, you’re right…it’s pretty much a Ponzi scheme all the way at this point. How many suckers can they get into the base of the pyramid before it collapses under its own weight.
Real good analogy.
“The growing condo glut in New Orleans has experts predicting prices will fall and developers will have to target a less-affluent market.”
NOLA condos for everyone!
Speaking of “condos for everyone!!”… I have mentioned before the dark condo buildings at night in South Beach down near the ballpark here in San Francisco.
I wonder if “anyone” (with a brain or without somebody else’s money) is buying those these days - and there are many more being completed in the vicinity (7th & King near Macromedia; another large project just over the CalTrain tracks as part of Mission Bay; above the new Whole Foods going in at Rhode Island & 17th… and there are more). Could some of them become apartment rentals for a number of years if the sales proceed slowly?
In any case, note that this condo construction craze in SF is nothing like what is occurring in San Diego, Miami or Vegas, I’m absolutely certain of that. On a relative basis, however, as compared to how tight inventory has been for years and how fast, overbid and incredibly ridiculous the buying activity was in this area until 2005, I think it’s rather interesting.
I can’t tell you how many people have told me they want to live in NO.
Someone said the other day that it’s the weather that’s responsible for slowing home sales. If the weather’s too nice, people have other things to do rather than go out and shop for houses. If it’s too nasty, folks just stay inside and no one looks for houses.
Therefore, until there is NO weather, sales will continue to be down.
This makes perfect sense to me!
You made me laugh… there will always be some kind of excuse. It doesn’t matter what kind of weather we’re having these days… it’s going down!!!!
What’s so fascinating to me about this bubble, is, that it’s worldwide and parts of it, are clearly advanced in their decline, (i.e. Australia) while other locales are 6 months or a year away. The ramifications for everywhere, being much the same.
The willful destruction of finance, as we know it.
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Gloablization of finance and everyone copying the Anglo-Saxon borrow-and-spend lifestyle.
Yes, the whole thing will come crashing down due to leverage. Even professional take time before they learn the lessons of leveraged specualtion. When the amateurs enter the game, as in housing, watch out.
Jas
Let’s just call “leverage”, “speculation using debt”. This way, it doesn’t sound so glamorous, and exposes it for what it is.
And what will happen when EVERYBODY adopts the anglo-saxons sicko lifestyle ? Yeah. Anglo-saxon sickos. It means only one thing.
Much much much higher inflation and much higher interest rates. “Borrow and spend anglo-saxonite maniaco-depressive dementia”. It will soon be a mental disorder disease in the DSM-III.
Wealth Destruction, would be a more accurate description.
I agree this housing/credit bubble is global (at least for the anglo-saxon part of the globe) but in Europe there is still no sign of tighter lending rules or an end to the ‘get rich quick with RE’ mania. The EU bubble started long before the US housingbubble, and it will probably take many more years to before it ends.
All these bubbles are interconnected. It will not take many more years in Europe, to end. It’s just that Europe is a big colony of the US. They are always late to the party and always the last to leave. Europeans are about the most stupid people in the world when it comes to imitating the US. They have a tendency to imitate the bad things. There is a saying in Wall Street. “Sell when Europe buys.” The same can be said for the stupid Europeans and their real estate market. Stupid Europeans!
I live in south-central washington state near a government nuclear cleanup site. The housing market has been on a massive expansion for the last six years or so. Housing prices have only been slightly above inflation 3 to 5% over that time, so I wondered how much affect our local area would see as the bubble deflates. Imagine my surprise to see a local listing with a free car if you buy a home this weekend. We don’t have any of the big national builders, just local and regional ones.
We are(were) looking at buying a house this summer (15 year fixed, payment less than 25% of take home pay), but I am starting to wonder what will happen to an area that has expanded due to government cleanup which will go on for twenty or so more years and hasn’t seen a big runup in prices. Houses are around $100 to $120/sqft. How low could prices go? I guess I’ll probably be waiting around to see how much.
Tri Cities goes through wild booms and busts based on Hanfords funding. Moved there in 1986. Nice houses in north Richland were going for ~50sqft. In 1994, I considered buying new construction house: ~1100 sqft for 80K.
FY08 DOE Budget Request shows Hanford Site total at $513.0M. Drop off in FFTR cleanup and increase in Site cleanup.
FY06 Appropriated was $520.5M, FY07 Request 513.2M.
I was curious if anyone has the same situation as what is happening in my little corner of the world (ITP / Atlanta). Most new construction that I see is 800k and over.
Are any builders out there trying to reach the vast middle class? It seems everyone wants only to build these huge mega mansions on tiny lots. I’m not kidding when I tell you I can count 100 places for sale over 1mm within 2 mile radius of my house, and more coming online everyday.
One such house has been sitting vacant for 3 years priced originally at 1.9mm and now it’s “drama priced” I guess at 1.5mm. It’s still sitting vacant after being reduced to 1.5mm for the past 6 months. This is in one of the nicest country clubs in the city.
They are still buyilding with the assumption that any person with enough life to fog a mirror will get an ARM with teaser rate to get in these MacMansions.
Wait a minute, those days of loose credit standards are largely gone but there are few adventurist Mortgage lenders who are giving it a last shot before they go under.
Any home proced above $400k will have a hard time to sell as after doing simple math majority of people will not be able to afford it.
I wouldn’t buy anything over $200K. There’s no shortage of land anywhere in the United States except maybe Manhattan - but they can always keep building vertical.
Jackie -
I live in “inside the perimeter” (ITP) in Atlanta and think I know what area you are speaking of(Club Dr?). The builders are pushing townhomes to the middle class these days. Centex is building some townhomes off Dresden but they’ve dropped the starting asking prices by about 100K to $270K. That is significant for ITP prices and eventually all prices will have to come down or stay unsold.
Not too far away (2 1/2 hours) from ATL here in upstate South Carolina, most desired area is Eastside of Greenville & Greer - builders are in 2 camps. Production builders in the 150-250K range and custom in the 475K-900K’s. The thing is that in most of the existing neighborhoods priced in between, especially the 325-425K range there is almost nothing for sale. When they go on the market, they sell within a few weeks. But no one is building new homes in this price range. Strange. (Tons of new people looking to move from other areas, we can’t believe the out of state plates - I mean STUNNING!!!)
If I were buying, I would steer clear of builder homes in a state with lax building codes and hurricanes. I would buy something that still stands after 30 years (and is still in good shape). This may be why the cheap new tract houses aren’t moving. (Also, perceived neighborhood quality.)
The building activity I saw in Mass. (very regulated state) when the boom started was quality with few exceptions. The building activity I see here in Fla. at the end of the boom is sh!te, with few exceptions. Even locals who ought to be used to Fla. standards think the stuff going up is junk.
Incidently, the Fla. Panhandle got special exemptions to Fla’s already lax building codes. DO NOT BUY IN PANHANDLE. And you won’t get insurance, trust me on that.
” Tons of new people looking to move from other areas, we can’t believe the out of state plates- I mean STUNNING!!!”
I am worrying that this trend will be the proverbial skunk at the garden party for many of us Bubble Blog Bears. We are nearing the end of our lease but are in no hurry to buy. Inventory is back over 53K properties in the greater Phoenix area.
in my country (Netherlands) about 90% of the new homes that are built are only affordable for households with two incomes that are 2-3x above the median income level. As long as the credit spigots are wide open this will not change, why built ‘affordable’ housing when everybody can get a home that is 2-5x more expensive than they can really afford with normal lending rules? And for existing homes in good condition the gap between price and local income is often even bigger.
Same thing in Montréal. 3,000 luxury condos sitting empty. It’s fascinating to see these stupid stupid stupid developpers assuming that the luxury condos are different and that demand will catch up. I don’t know where they take their market data ? Probably from Mickey Mouse.
http://tinyurl.com/2hqkta
A slideshow of the cities with the top 10 foreclosure rates in the US.
For 2006.
Still renting in Rancho Cucamonga, CA. This area is still WAY overpriced. House across the street is 3600 sq feet, nice place, postage stamped sized lot. Can’t have a conversation outside to save your life due to freeway noise. Went on the market for 1,050,000. WHAT ARE YOU THINKING? I’m seeing very little sell in Rancho, but unfortunately what is selling is still at least 10% higher than it should be. I’m hoping 2007 is the Year of Foreclosures for a LOT of people in RC so that these homes can come down a bit and make them more affordable for those of us who are responsible and patient in this market. I think 2008 will be the time to buy for me and my family. Prices are down ten to fifteen percent from last summer and I’m looking for a similar down trend going into the summer.
Dont worry Nayte, while Rancho Cucamonga is a little “whiter” than say Fontana and Moreno Valley, I can guarantee that all of the Inland Empire, CA will go down in flames including Chino Hills (bordering multiple incarceration facilities and cow farms) and Temecula/Murrieta (at least a two hour drive to employment in either the OC or San Diego).
You will be able to get a home for 30 cents on the dollar at some point. The question is will you want to buy since most of the mcmansions will be occupied/rented by extended families at the lower end of the socioeconomic spectrum. Which brings a whole new set of issues - see Moreno Valley for more info.
Wait until thanksgiving 2008 before even looking.
absolutly, wait at least 18 month. SH!t has not hit the fan yet.
In my neck of the woods, homes that are selling are more than 5% off the list price.
This is what I am seeing for comps within the past six months
Original Price $559 List Price $544900, Sold $510K
Original Price $589K List Price $569K Sold $528K
Original Price $589K List Price $589K Sold $510
Days on Market 49, 70, 60
What I am seeing is that homes that are more than 90 days on market the prices are not being reduced at all and you have the Stubborn Seller refusing to lower the price. A few will sell at less than 5% off list but that is because they are priced well.
“What I am seeing is that homes that are more than 90 days on market the prices are not being reduced at all and you have the Stubborn Seller refusing to lower the price.”
Some of these stubborn sellers are FB’ers who can’t lower the price because they can’t afford to bring a check to the closing table, so now they’re just “chill’in ’til the sheriff arrives. “Game over, man…game over!” –Hudson, Aliens.
That’s what I see in central Florida — three types of properties: the stubborn ones that have been on the market a long time and (obviously) are priced way too high; the builders’ homes on which prices are being lowered in order to get rid of them; and brand-new listings that, for an equal property, are priced well less than the “stubborns.” While there likely are a lot of those latter who can’t afford to lower their price due to their debt, there doubtless are others who are operating solely on ego.
Taylor Woodrow Homes in Hillsborough County Florida offering an incentive of $11,000 that they will put into a Florida Prepaid College Fund for your child. Here is a link to the story:
http://www.tbo.com/newtampa/MGBMZ4Z2VWE.html
Local market: Lots of open houses, some price movement downward in NYC boros-just not enough for me to jump yet. I suspect here in NYC we will be the last to abandon bad loan standards. Still a lot of 100% finance ads in Daily News and Newsday.
And now, for the market view from planet forbes:
http://www.forbes.com/free_forbes/2007/0226/110.htmlhttp://www.forbes.com/free_forbes/2007/0226/110.html
what is this guy on and who is he sleeping with?
Must have been a typo. Here’s the link that actually works: http://www.forbes.com/free_forbes/2007/0226/110.html
Unreal. I think Forbes is selling out. Last week, another of its weekly columnists said that the U.S. negative savings rate is nothing to worry about because we have so many appreciated assets, specifically in RE and stocks. In other words, he’s saying that it’s OK for the us to spend more than we earn because our stock and RE holdings make up the difference.
I have a question that hopefully someone on the board will have an answer. One of the “upscale” developments( Canoa Ranch) in Green Valley, AZ which is about 30 miles south of Tucson which are all SFH with exception of small hotel(Windham)is listed on the Pima County tax rolls as condo’s and townhouses. There are literally hundreds of homes and the only thing that I can see in common are interlocking patio walls on each block. The setbacks between houses appear to be about a total of 8 feet. I first saw the “condo” designation on Zillow and thought it was a mistake. Apparently, it is not. Real estate ads list a SFH. How and why the condo designation ? Higher density, tax break ? Anyone know or have a thought ? Thanks.
I think these are called detached condos. I do not know what the exact purchase aprameters are–a coworker lives in one and essentially owns the building, but the association keeps up the lawn and other outside areas. I don’ think he owns the land the house sits on, but I am not sure of what the deed is actually to.
This sounds like a developer’s solution for an area in which deed restrictions/covenants either are difficult to enforce or “die” in a fairly short number of years due to regulations or legislation. Through common ownership of the land, controlled by an association, the development guarantees buyers a predictable, more or less perpetual “look and feel.” Some folks love that, others hate it.
Inventory, per ZipRealty:
TAMPA
01/21/07 59,865
01/27/07 60,665
02/03/07 60,627
02/10/07 61,771
MIAMI/FTL
01/21/07 103,131
01/27/07 104,442
02/03/07 106,008
02/10/07 107,150
ORLANDO
01/21/07 32,341
01/27/07 33,030
02/03/07 33,123
02/10/07 33,702
PHILA
01/21/07 32,698
01/27/07 32,494
02/03/07 32,216
02/10/07 32,474
ATLANTA
01/21/07 57,620
01/27/07 59,127
02/03/07 58,956
02/10/07 60,456
BOSTON
01/21/07 42,170
01/27/07 44,434
02/03/07 42,292
02/10/07 42,818
BALT.
01/21/07 46,025
01/27/07 46,178
02/03/07 45,225
02/10/07 45,835
Get a load of this. Forbes columnist is a big housing bull: http://www.forbes.com/free_forbes/2007/0226/110.html?partner=yahoomag
“You can see right through the housing crash story by looking at the prices of housing stocks. The market knows what the economic worrywarts do not, which is that the housing sector is already making a comeback. In the last six months housing stocks are up 24%, well ahead of the overall market. If housing were destined to fall apart in 2007 these stocks wouldn’t be so strong now.”
This guy is an investing genius! He is saying that since housing stocks have gone up 24% it means that they will continue to go up and he knows that housing won’t “fall apart” since stock prices have gone up.
Remember the .com bubble? Surely the stock market must knew something, stock price kept going up on any news, good or bad.
Lot of suckers ended up losing big. Same for this guy.
“The market knows what the economic worrywarts do not, which is that the housing sector is already making a comeback.”
Relax, $65k/yr can easily afford a $650k mortgage…the market knows it.
Very true that housing stocks have gone up sharply since July ‘06, but then so has the general stock market! A rising tide lifts all ships, but if you look back a little further all those housing stocks had gone down 50% or more. This is nothing but a retracement rally, and the “beta” of these stocks is a bit greater than the market.
So that basically means that when this rally is over, they will fall much harder than the general market. These stocks were just a trade, and smart investors will bail from them soon and move into something else. In the long run they are toast.
Also if you look, their PE ratios are even more out of whack than they were a couple of years ago. The PE ratio of some of these homies is greater than Google. So eventually they will fall hard.
If housing were destined to fall apart in 2007 these stocks wouldn’t be so strong now.
A million lemmings can’t be wrong!
Wonder if he has a different view than already posted here: that falling construction costs will enable builders to continue to sell product at a reasonable, if not remarkable, rate because they will undercut used-home sellers’ prices. They’ll be helped by the 100% financing of so many of the the FBs’ used homes against which they’ll compete.
I watch a nice townhome community in Potomac, MD.
Prices in 2002 were about $425K.
Identical units maxed out at $810K in 2005!
In 2006, sales slowed down quite a bit. People listed at $800K or higher. The last person to delist had dropped his asking down to $699K. No sales or takers. Most of these listings expired off of MLS.
A couple of weeks ago, new listings started appearing. Here are the asking prices: $769K, $815K, $825K, $845K. Mind you — these are identa-townhomes. With the usual differences (end units, upgrades, etc.)
As recently as OCTOBER of 2006 — a unit did NOT sell at $699K. Clearly everyone wants to experience the satisfaction of the seller who got above $800K in 2005. Does anyone really believe that will happen in 2007?
Ask me, I wouldn’t pay more than $500K or so for these units.
I’m in a subdivision in Loudoun, VA (20152). In 2002, townhomes sold for ~$245. In 2005, the highest sales price was $460.
There is lots of pricing uncertainty, with nearly identical units ranging from $365 to $430k, with 1 foreclosure at $345k.
Based on rents, these should be priced at around $300k.
$365k (http://tinyurl.com/2u45q)
$430k (http://tinyurl.com/2ngb6e)
The price will slide back to 2000 or further. The rental market has sufferred a higher vacancy rate since more unsold homes go to the rental market.
Not on your life. That would mean that the prices would slide down to $185k.
From LA. This weekend brought a real explosion in listings for SFH’s (the condos have been sitting for a while, many of them). For the first time in years, I am seeing houses priced under 1M in my zip code (90024), although you only see that in houses that have a real location handicap, such as being on the corner of a busy avenue or practically under the freeway. This does not mean that they are not horribly overpriced, but out here it does look like progress. With this sudden jump in supply, it becomes a matter of how many knifecatchers are around with enough money and credit. There have been some lower comps established already, but I’m excited to see if this new crop of homes will finally kick down prices in a way that the statistics can’t hide. Most sellers don’t seem to think so, judging by the asking prices.
Congratulations Cassiopeia, and welcome to the party.
Yes, the flood this week is undeniable. Flipping through the bloated RE section in the LA times, I noticed some lower pricing than I have seen in a while (in certain propeties). Makes me want to keep waiting and see what this looks like come summer. … and then the summer after that. I guess I will be munching on popcorn like Neil until then.
Hung out at my buddies 1/1 condo in Santa Monica last night. 3 for sale signs out front, units have been listed for a few months. I believe the lowest price is still $470k. My buddy bought his for $435k in 2005. I think $350k sounds fair to me.
A lot of people seem to have missed their tax payments here in Santa Monica. Go to foreclosure.com and have a look:
216 listings in 90405
156 listings in 90404
159 listing in 90403
112 listings in 90402
39 listings in 90401
(These numbers include preforeclosures and BK sales, but are almost all tax liens at this point.)
Same thing in seattle when I checked a few weeks back, literally hundreds of tax liens in one zip. A huge increase from previous years.
In Westlake Village, CA I’m seeing a recent flurry of sales, some within 5% of asking price, about $900K for SFRs and $400K for 2 bedroom condos. I don’t know where these idiots are coming from. Inventory is climbing steadily now.
An interesting look at the different desperate measures being taken by home builders in Reno, #1 is no payments for a year.
http://www.myrenorealestate.com/reno-new-home-builders.html
Lots of denial in Massachusetts market - a noted example is on the “Best Money” weekend radio show on 96.9 FM where the (otherwise rational) real estate lawyer/radio host has been consistently denying over many months that Boston and metro Boston area has experienced any real estate estate bubble in recent years - and insists prices will now hold firm now or very close
The only possible exception he admits would be for a “huge spike” in interest rates” which might then supposedly only produce a moderate 10% or so correction
This is Land of Oz type wishful thinking in my opinion and its rationalized by claming the actual 1990 to 1993 downturn in Metro Boston was a result of certain tax law changes - from a late 1980s tax bill
All of this completely ignores, among other factors, the huge problems today with no doc, subrprime, zero or no down loans, and adjustable rate loans - which were much less of a factor back 17 years ago during the last big correction
Lots of home sellers in Boston metro have been pulling properties off the market when they get no prospects - and the situation is much worse than the numbers might suggest
Agreed 100%; I am also in the area. Boston-area prices declined about 6% last year, and there’s a huge amount of unsold inventory.
Today’s Globe had an interesting article about the lack of starter homes for families. There is nothing between a $200-$300K 2-BR condo and a $750K plus McMansion being built. Average SFH lot size is close to an acre, and no smallish (~1200-1500 sq ft) 3BR single family homes being built *anywhere*. And of course that’s largely because the towns don’t want people with kids moving in, because kids are expensive. This is not a sustainable economy.
When defense sub/contractors start laying people off in Mass., prices will crater. Big time. Remember 1995?
I’ve listened to that show a number of times. Rick (the host) was saying last year that there was no bubble and that prices wouldn’t fall. After prices started to decline he changed his tune and claimed that he said all along that prices would fall by about 3% because real estate had gotten too expensive (apparently a 3% fall puts the income to purchase price disparity totally back in line, LOL). But he was explicit that prices wouldn’t drop any further.
Nowadays he is claiming that prices could drop a bit if totally unanticipated events unfold (like interest rate spikes, etc.). He’s a real estate investor and he obviously has a vested interested in talking the market up, but I’m finding it to be entertaining to hear him dance around the price drop issue.
(Anyone else notice how all callers to his show seem to be making well into the 6 figures, yet they have questions about basic finance?)
Here’s an ad from the Bellingham Herald classifieds that I’ve notice a few times this week that tries to exploit the last bastion in the buy vs. rent argument (with the usual lack of logic):
“No More first/last/deposit, buy a home with zero out of pocket, 580 cedit score required. Starworth Financial 800- 393-7113 ”
That 500K $h%tbox is just SO MUCH CHEAPER than rent!
I am so happy that subprime is imploding. Hopefully prime will be next and then back to sane lending and sane prices. This whole situation is just too nuts for words.
Isn’t a 580 Credit score pretty darn bad? Multiple collections, 60 - 90 day lates etc?
I have noticed here in San Diego inventory is not bouncing back much since the beginning of the year. The previous two years inventory came back VERY fast. Any ideas why this year is different?
I posted this info over in the “bits n buckets” thread so sorry for the double post.
On the way to Durango, CO. we passed by Williams, AZ where we observed 4 houses built back to back in the middle of a field by the HWY (40). The sign indicated they started “from the 300’s). These were cookie cutter 1800ish sqft slab on grade types. Yeah, I’ll take two!
We toured the Durango Mountain Resort area north of Durango (20 miles or so). We witnessed LOTS of construction activity at the mountain (condos) and LOTS of multi-million dollar homes being constructed at places like “glacier club” which is a mountain golf community. The land prices in the area bordered on ludicrous with an average lot priced in the 500K range and a decent view lot being 700K+. Saw dozens of million+ lots although I have no idea what is being sold or any of that info.
We noted that the re-location guide is touting the per capita income as being 28K.
I pulled up a mls search for homes and land. The inventory looks high although I have no idea what the historical norm would be for the area. Does anyone here live in the Durango area that can comment on the RE in this area?
My family liked the area and perhaps in a few years we might consider re-locating there but it seems like this area needs a serious ass-pounding on the prices before we would even consider it.
On a related note, could someone here please review for me how to research past purchase prices for land? Would I go to the county recorder office or would it be located in another area? Is there a way to research online? I may go back in late 08, early 09 and do some serious low-balling but need to research a bit (looks like I have plenty of time).
I’ve noticed western colorado seems to be taking it’s time to drop. It will eventually.
Zillow has sales data for houses. To find info on land, go to the County Assessors web site. Some counties have crappy web sites tho.
“On the way to Durango, CO. we passed by Williams, AZ where we observed 4 houses built back to back in the middle of a field by the HWY (40). The sign indicated they started “from the 300’s). These were cookie cutter 1800ish sqft slab on grade types. Yeah, I’ll take two!”
Speaking as a local, yeah, those four units have been gathering dust for quite a while now. I laughed when I saw them being put up and am still laughing. Wonder how much they’re asking for the lots that back up to the trailer park next door. They also get the roar of I-40 to the south and the stench of the transfer station a couple blocks away to the west (that’s usually upwind!)
Dream on, dreamers, dream on . . . .
omg, I just for the first time saw an ad in the RE classifieds today in Ann Arbor MI for a 220k little split-level as *coming with the bmw in the driveway* if you buy it!
wow, I thought that only happened in CA.
Economists at UM predicted, according to the aa-news, that the announcement of the pfizer facility taking its 2400 jobs away will actually result in 6000 total jobs lost over the next couple years, most of them from the county AnnArbor is part of. And Chrysler just announced it would cut 1000 white-collar jobs in a nearby county.
This area is sooooo hurting.
Shit, maybe now is the time to buy my Ann Arbor property. I studied Computer Engineering at University of Michigan and I love Ann Arbor. One of my goals is to buy a rental property there. It’s not about the income, but rather feeling a part of the town. Rents are relatively high in Ann Arbor (60% LA prices), but housing is cheap (20% LA prices).
Sounds pretty smart if that seller can pull it off. Get rid of two crummy asset classes…old BMW’s are expensive to maintain.
Yeah, but they are incredibly fun! (especially with lowered springs and Bilstein shocks)
The past 2 weeks, I’ve noticed those small signs on wooden stakes popping up here in Phoenix.
“Invest in housing before it’s too late!” (NAR ad campaign?)
“We Refi all mortgages”
or my favorite:
“Buy houses, no bank involvement!”
These appeared almost out of nowhere, but now they’re all over the place. Almost looks like political season again.
Just some observations from the non-bubble (of course!) Philadelphia suburbs (Chester County to be exact). First off ChesCo is CRAZY overbuilt with townhomes. But anyone who’s out here knows that. AND I just found out a 600plus mixed-housing development is going up just off Pottstown Pike just north of West Chester - more new housing no one appears to need.
There was a house for sale on a road near me that I’ve always kind of liked. It’s almost exactly like my house, but a smaller lot, and on the corner facing this road, which is kind of busy. It was listed for $800K which BLEW MY MIND. A week later the listing was down $20 (drop in the bucket!) I probably overpaid for my house (with one more full bath than this one and 1000K more sq feet) in ‘02 - just under $400K. They are the same age and style, mine has a new roof. If that house is worth $800K (or even $600!!!) I will eat GetStucco’s hat.
MEANWHILE on this very short (half-mile?) of road, there are three new signs up. Lots o’ crazy balloons everywhere. It’s a balloon war! Should be interesting out here - tons of new construction, more on the board, and now all these resale houses sitting.
Sure is different here!
I meant down $20K - oops!
In Plymouth, MN (western suburb of MPLS), the guys selling the realtor signs must be making a killing. In one large complex of townhomes/tract housing, I counted no fewer than 25 for sale signs in 5 minutes. I went through about a quarter of the complex. Yikes. I stopped to talk to a realwhore at an open house - wasn’t even there for their own open house. No food either. When will they learn to have food at open houses here in the midwest? Arggh.
Also, the local FOX station seems to be catching on to the implosion. After the blurb the other day about the guy who got jammed with a half mil in debt as a straw buyer, they are advertising a piece on the foreclosures mounting in the area. I’ll post a link tomorrow.
http://505valley.com/
Why is that Realtors (TM) have a nearly uniform lack of understanding of the basic rules of spelling and grammar?
By the way, $2.5 million “wishing price” for this 3 bedroom eyesore. Excuse me, it is a “luxurious “green” home.” This monstrosity is hideous. Somebody thinks it’s July 2005.
I see such errors in listings way too often and, worse, many go uncorrected for month after month. It irritates me that the brokers do not review each of their agents’ listings for errors and kick some typographical butt once in a while.
Saw KIRO TV 7 (Seattle) Evening News tonight.
They had news clip about the great demand for downtown condos…..that people want to live downtown because it’s close to work, gym, shopping, everything! Empty nesters were wanting to buy and live downtown too. Some realtor was interviewed and said that Seattle condos were different because they limit the number of sales to investors and would be mainly principle residence buyers, UNLIKE places like Arizona.
Of course, it’s different in Seattle…..ya, right!
“Drama,” is a noun. The signs should read “Dramatically Priced.” However, if the signs were hand-painted with virgin blood, I might not be such a quibbler, since that would express drama.
Report from Long Beach Ca:
I perused zillow and looked at sold prices of about a 100+ sfh’s in LB zips 90810, 90805, 90806,90807. These are generally working class or lower middle class neighborhoods with WWII- era older sfh’s. Exception: Bixby 90807 is a small isolated middle-upper middle class enclave.
The point is that of the 100+sold homes in last three monthes,only a half-dozen have sold at or below the previous peak sale prices of 2004-2006. All the rest still showing sold prices at close to or above peak prices. What this tells me is that The sold prices in this part of LB generally have not showed any pullback, and sellers are still getting prices of $400,000-$450,000 for 2/1 700-900 sq ft WWII shoeboxes, at $450-$600 per sq ft.
And these are SFH’s in marginal declining older hoods of LB,
though not yet at ghetto stage. The larger 3/2’s of over 1000+sq ft are selling at $500,000 and up.
Also looked at foreclosures in this area, and not much % reduction. Banks are not giving away these foreclosed properties. Maybe yoy might find a steal in some nasty bombed out hood part of Westside(90810) or North LB(90805),
but no deals in foreclosures in the better neighborhoods yet.
Too early for foreclosures to affect the overall local market at least in this section of LB, as it looks as if there are still an overwhelming supply of GF’s/RE idiot buyers still overpaying for aging LB POS houses, and still able to get in with toxic loans.
Looking ahead to Dataquick Jan figures, I can extrapolate
that Prices in many inner CITY LA, marginal LA communities will still show YOY% increases of 5-30% The effects of the cutting off of toxic subprime loans, ARM resets, and foreclosures have not yet hit the inner LA city hood/marginal areas as of Jan 2007.
WE at Bens blog may have to eat crow from the Local LA REIC for several more months till the real S*it hits the fan maybe by late spring 2007.