Housing Inventory “Grossly Understated”
The Chicago Tribune reports from Illinois. “Housing analyst David Seiders told Chicago-area builders Thursday that the federal estimate of 3.5 million homes for sale at the end of 2006 is ‘grossly understated.’ ‘There is a big inventory overhang out there, and it’s bigger than anybody understands,’ he said.”
“In an annual forecast on the local industry in Addison, Seiders, chief economist of the National Association of Home Builders, cited the high level of sales contract cancellations in 2006. Many homes marked as sales in government data ended up back on the market too late to be counted as inventory, he said.”
“‘Cancellation rates more than doubled between the end of 2005 and the end of 2006, meaning that net sales for the year nationally may be down 65 percent,’ he said.”
“Alan Lev, a Chicago builder and developer, agreed this is a critical juncture. ‘January and February and into June, this is supposed to be the time of the year that you’re supposed to make your hay,’ he said. ‘In a normal year, we do 70 percent of our sales between mid-January and mid-June.’”
“Maureen Parotto, director of sales and marketing for Itasca-based William Ryan Homes, also noted a pickup in business. ‘Last week we had 39 sales–that’s a record for any week we’ve ever had,’ she said. However, the builder was offering buyers up to $60,000 in free features and upgrades.”
“Analysts note that such widespread discounting and incentives have kept a bad spell from turning disastrous. ‘The common phrase that you hear on buyers’ lips is, ‘What are you giving away?’ said Buz Hoffman, president of Lakewood Homes in Hoffman Estates.”
“Patrick Curran, president of West Point Builders & Developers in Hinsdale, said his company is offering flexible closing dates to address buyer concerns that they won’t be able to sell their existing homes in a slow re-sale market.”
“That fear, that consumers will be stuck with two mortgages, ot only kept browsers out of model homes but also helped to propel those cancellation rates.”
“‘This year is going to be quite an adventure, trying to piece this thing back together,’ Seiders said. However, he said several factors could slow housing’s recovery: uncertainty over the size of the inventory of unsold homes, potential tightening of mortgage lending standards and affordability.”
“The mortgage industry, responding to criticism of lax lending standards feeding a growing foreclosure rate, has begun tightening its criteria. Congress and federal regulators also are considering reforms, he pointed out.”
“On the affordability issue, Seiders said: ‘For [the Chicago market] we’re talking about flat pricing year over year. But we’ve got to get affordability restored’ for the market to recover.”
The Pioneer Press from Minnesota. “A condo clearance sale got results in Burnsville’s Heart of the City. Buyers signed purchase agreements for almost half of the 34 condominiums, discounted by up to $100,000 off their original price.”
“A mortgage lender slashed prices on the units after the original developer defaulted on the mortgage, resulting in the lender foreclosing on the property in May 2006.”
“The Uptown Landing project, which was to have three phases and 111 units, was the first condo project in the Heart of the City. The condos, originally priced from $175,000 for a one-bedroom with 862 square feet to $325,780 for a two-bedroom with 2,021 square feet, now range from $134,900 to $229,900.”
‘Seiders said: ‘For [the Chicago market] we’re talking about flat pricing year over year. But we’ve got to get affordability restored’ for the market to recover.’
How does flat pricing restore affordability? Are incomes going to rise 50% plus in a year? Enjoy your inventory builders.
Dave Seiders has an obligation to not lie about the state of the housing industry he represents. But he’s free to lie about the state of consumer finances.
“How does flat pricing restore affordability?”
Is that an example of a half-truth?
“How does flat pricing restore affordability?”
Because his thinking is that houses kept selling at higher and higher prices…all the way up to the point
that they quit selling.
So, by assuming the prices just got too high, then we need to stop raising them, so we can get back to selling again. He doesn’t really understand that rational buyers did not pay the exhorbitant prices…it was speculation. He just doesn’t get it.
He is paid not to get it. Imagine if he said that the builders would have to cut prices by 30%. They would have his head on a platter.
He has it ass backwards then. Once prices disconnected from fundamentals, which occurred 5 years ago at least, the only reason anyone would buy is because of the expected appreciation. Flat pricing at nosebleed levels = no one except an idiot wants to buy now.
Arms of ma$$ m-racket delusion ? Your blog is fantastic !
Along the same lines, I wonder why anyone would buy a 1BR condo in Burnsville, Minnesota for $135K. And yet they did. Half of the 34 condos offered in the clearance sale discussed above did sell. I guess builders will think they can get away with high prices so long as SOME units are selling.
“Housing analyst David Seiders told Chicago-area builders Thursday that the federal estimate of 3.5 million homes for sale at the end of 2006 is ‘grossly understated.’ ‘There is a big inventory overhang out there, and it’s bigger than anybody understands,’ he said.”
The elephant under the living room rug is beginning to stink so badly that everyone is soon going to have to leave the house.
This inventory overhang is the logical result of building 12 years of new homes in 5 years. As Econ 101 will teach you, when supply far outstrips demand, prices fall. It is the major reason that homes will lose significant value over ther next 3 to 5 years.
Exactly. These clowns went full bore and borrowed from their future demand. The average person has no idea how the government figures its sales stats, and cancellations are raging. All the news reports is that sales were up last month. The very fact that Seiders is admitting this is big news. The problem is BAD. Good for us though!
“Many homes marked as sales in government data ended up back on the market too late to be counted as inventory, he said.”
Was it hard to foretell where this systematic undercount would lead?
““That fear, that consumers will be stuck with two mortgages, ot only kept browsers out of model homes but also helped to propel those cancellation rates.””
There was a builder boasting on this site the other day that he had a lot of room to undercut the “used” home market and so would hang on for a long time. That approach may work with the entry level home market, but the above quote points out the weakness of that relying on that approach for any move-up or trophy homes (most of what’s being built).
True. So much depends upon what the builders paid for the land, which tells us what their break even price is for houses. Land cost is probably a bigger proportion of cost than square footage. The other thing is just like FBs, can they lose money on sales today and still stay solvent for tomorrow. If they can’t stay solvent, running as deeply into bankrupcy as possible is probably the logical (if immoral) answer.
I’ve seen a few spec homes ($3-4M range) with annual taxes of 25K, not to mention the cost to build the structure, and the “land” (which had a house that was torn town) as well.
Several of these have been vacant for a year. I don’t know how the builders can carry such properties, but they’re certainly not lowering their prices in order to sell.
If they’ve been empty for a few years, they might as well tear them down. If you don’t run the AC in the summer and keep the foundation watered, the house will have major structural problems. I wouldn’t buy anything that has sat empty for a year without factoring in the cost of mold and structural damages
Would it be too expensive to run the house on a damage prevention schedule? In the northern climates, you don’t let your house freeze or even go down to 40F but heat it to 45-50F, to prevent mould. With the windows and doors closed, heating costs are low. Isn’t it similarly possible to run dehumidification in wet summers?
And of course I’ve never heard of watering the foundation. I’ve always been taught that the idea is to keep runoff AWAY from the foundation. That’s why we have those long tubes atatched to the bottom of the downspouts.
I think JfR may be talking about dry-out problems if there’s clay under the house.
Did anyonce catch CNBC (Faber) just now? What was the index of sub-prime mortgage that went from 700 to 1400?
Why are you still watching CNBC?
The Fox Business Channel doesn’t waste your time with any of that negative talk.
It’s all good, all the time.
I saw a clip this morning on a taco bell in new york city that was infested with rats.Literately running around the store like they owned the place.YUM might have another bad day.
I was waiting to see that. Did they mention which one it was? I hit the one on 6th Ave. in the Village every once in a while. The rats would still be cleaner than the customers.
I heard about in on the radio (in West Palm Beach) and it was a KFC if I am not mistaken. Is there a KFC in that area?
No, KFC is where they deep-fry the rats.
It’s one of those combo fast food joints…..one side is Taco Bell the other is KFC. If I’m not mistakened they are both part of the same company? I live in NYC and caught it this morning on Fox-5 news.
Yes, its a combination of the two restaurants so you can get fried chicken and tacos.
GTA San Andreas had a great parady of it, their restaurant is ‘Cluckin Bell’.
So you’re saying you can get your rat fried or in a Taco?
Got popcorn?
Neil
I refuse to eat at Taco Bell. The hygiene, or lack thereorf, of their employees is revolting. Once I see the people, I’ve already lost my appetite. And, I can only imagine what goes on behind the scenes. Furthermore, the quality of the ingredients is extremely questionable. No thanks.
I read somewhere that the KFR (Kentucky Fried Rat) in Lagos Nigeria was sued because somebody found a piece of chicken in their food. Can anybody verify this for me?
W.4th & 6th Ave? Bingo! That’s the one!
Possibly the new shift managers?
I just hate it when my beef burrito has a tail sticking out.
… and is screeching desperately as you try to bite it.
Now I know why oats are heart-smart: they feed on beef burritos.
Nah they’re just re-employed mortgage brokers.
I get a little concerned when the burrito choices on the menu are: chicken, beef and “other”
A Taco Bell in Bowling Green, KY had some teeny-bopper putting his feces in the chili a few years back. People got sick. TB fired the entire staff, managers and all.
Yeah, they are finally catching up to posters on this blog. What next? Will they declare a shortage of buyers and excess inventory and tightening credit are going to force sellers to lower the price?
Since every sane person would want lower home prices, so an honest-working family can afford a home, by wishing the prices to “hold up”, the big-business mouthpieces reveal whose side they are on.
Don’t forget 70% already own a home and want prices to “hold up”
Good thing prices aren’t something that can be decided via ballot proposition, or we’d all be screwed.
Well everyone gets to vote on what home prices are, but the poll taxes are quite hefty.
This is going to be so much fun. The homes built in the last N years are P’sOS with super low QC and shoddy everything. Someone should start an information service to give a history of each property. That’s a money maker. Something like “Is the house I am going to buy a POS?” 1-800-ZIT-APOS
LOL. You could pretty much put a recorded answer on the hotline. Unequivocally the answer to “is it a POS?” will be YES! It really was amazing that people were willing to pay so much for what is obvious to the naked eye as crap. Super low QC?? That is an understatement, IMO.
This is a great idea. There is already a website for used car history called Carfacts. A house-facts website, giving the full history of used homes, would become a billion dollar company in no time. Consumers would love it.
As a SF Bay Area resident (Sunnyvale), I noticed an interesting thing going on. I drive by some new townhome developments now and then (N. Mary St, Bernardo St, N. Mathilda Ave), and even though they say “Sold”, they are still mostly empty. Like that new development on El Camino + Mathilda is still a see-through, no drapes, empty rooms, a year after it was “sold”.
Can anyone explain what does that mean?
Sure it’s not a whorehouse?
Before the developer could get approval to build from its bank, it had to show sales potential for the project. Usually a bunch of flippers with no intent to live within the project buy these pre construction units and at the end of the project sell them to the public at the higher end of the developers pricing spectrum. Lately, it has not been working out well for the flippers.
You might be right, at least a part of the development must have been sold precon. However, what is amazing, is that these are pretty solid, nice areas we are talking about. Of course it’s not Palo Alto, but still OK.
In addition, sold is not equal to closed. It could be a reflection of cancellations.
There was a development in SE Florida that, after they finished, said: SOLD OUT!
When I drove in most units were empty and had individual ForSale/ForRent signs behind the windows. I suspect he builder sold out, but now all the floppers were trying to unload.
“Can anyone explain what does that mean?”
That means that this share of the US national housing stock (and similar ghost tract home developments elsewhere) will suffer from a much higher rate of real depreceiation than owner-occupied housing. The nice thing about owner occupants is that they tend to have a self interest in keeping the roof from caving in on their heads. The rush to create an ownership society (which in principle puts the invisible hand to work at better maintenance of the housing capital stock than if everyone was a renter) may have had the unintended consequence of leaving behind 2.7+m vacant homes which nobody can afford to properly maintain.
Affordibility? A traditional bungalow in a nice area on the northwest side should NOT cost upwards of $500,000. They used to be starter homes for Chicago families. Yeah, that’s right, starter homes. Young couples would buy them to and start families. Families could afford them. That’s all changed in the last 10 years.
Now, even an unrenovated dilapidated bungalow in the crappier areas of the NW side costs upwards of $350K or more. I mean, 1970’s appliances, faux wood paneling, in need of new HVAC and roof, etc.
Generations of chicago families grew up in bungalows. Unfortunately, the youngest generation has been priced out. It’s amazing a couple years of ‘great’ appreciation can ruin something so good.
I personally know someone who purchased a bungalow in an OK (but not nice) area around Cicero/Addision for $187,000 in 2000 or 2001. I could afford the mortgage payment on a house for $187,000 with my income.
He HELOC’d the $hit out of house, because, well, he needed new furniture, new cars, new pool, etc. He took out a 2nd mortgage for $180,000!!!! That’s right folks, the lenders said his home rose in value from $187,000 to $367,000 in six years!!!
Other homes on the block are similarly priced in the upper $300’s and lower $400,000s. They’ve been selling at those prices since ‘04 or so.
WELL, I’ve been priced out. Yup. I’ll be priced out for a while. It’s too bad. The significant other really wants a Chicago bungalow. Too bad all the investors, zero down 100% financing folks clowns and HELOC overspenders drove the price into the clouds.
I’m so sick and tired of the Chicago area mantra of, “We didn’t appreciate as much as California, Florida, Arizona etc…so we don’t have to correct.”
When those states correct our homes will cost as much if not more than theirs. Chicago RE can’t be at the same levels as those states because we don’t have the weather and natural scenery to justify it. WE WILL HAVE TO CORRECT!!!
That’s the same horseshit the TX hucksters pitch to stupid out of state “investors.”
Locals know better.
The US is f—ed. We moved all our industry overseas, we cut funding to education and wreck our military in Iraq. We also allowed our economy to become currupt through deregulation. This curruption will lead to further stagnation. The idea now that we are losing our productive capacity is to sell everything that is not nailed down. Housing is likely to turn out to be the least of Chicagos problems. I predict that unless we change course, Detroit will turn out to be the leading edge of were the country is headed instead of an exception.
Will: If most of the domestic D2.5 production capacity in NA is lost but replaced by new production capacity in NA operated by Toyota, Honda, Hyundai, is that a bad thing? (I know there will be imports from China, but they will only get the “Yugo” market of throw-away garbage products, and some will argue there is a need for this “Yugo” market. Also, there will be some imports from Mexico, but the D2.5 are already doing that.)
I know there will be imports from China, but they will only get the “Yugo” market of throw-away garbage products
The same could have been said about Japan 30 years ago.
Japan was doing better than the Yugo market 30 years ago…Toyota Celica and Datsun Z series come to mind…
Ken - i think i understand where you are coming from. But i think it only stands to reason that some areas will correct more steeply than other areas. And the natural place to look for steep corrections is where the market appreciated the most. So while i think chicago is due for a correction, i don’t think it will be as severe as, say, the phoenix correction.
to me, it’s more a matter of the degree of the correction rather than whether or not there is going to be a correction. 5%? 15%? 25%?
I am in the Phoenix area. I bought my first home (3/2 1600sf) here in 1998 for $130,000. I saw a similar one (not to hard to find as all the house here are cookie cutters) in the same neighborhood going for $379,000 in August ‘05, which I called as the top of the market here. I bought my second home for (4/3 3000sf) for $280,000 in 2002. Similar houses were going for $650,000 in August of ‘05. I have a conventional 30 year fixed mortgage at 5.37% and put 20% down. Flippers in Phoenix are going to be in a world of hurt, if they’re not already, in the not to distant future.
I never said Chicago’s correction will be as severe. It’s apppreciation wasn’t as severe so obviously the correction need not be. I just stated that a correction MUST happen and that people here don’t believe it will just because the appreciation wasn’t as severe as other areas
Chicago Guy and Ken,
I have no vested interest in Chicago per se, but for some reason I keep coming back to this for 4Q, 2006:
http://www.dqnews.com/ZIPIL.shtm
I must like looking at the large percentage drops in sales volume. Chicago in particular seems to have some really steep drops. Price will follow. Simply a matter of when.
I have a friend there that has been trying to sell since July. I think his house is in the 2000 block of Ohio St(?). At that time his realtor said there was 6 months of inventory…..tick tock, tick tock….
PS - I think he paid $300-ish in 2002-ish and is now asking $650 (-ish). Maybe $20K worth of updating.
Your friend lives in the eastern edge of the area that’s close to Bucktown/Wicker Park/Ukranian Village, all of the “hot” areas for yuppies to live. Prices went up because the locals that lived there for years were pushed out by rising taxes/5-story condonomiums(intentional misspelling)/greedy developers/flippers, you name it, it came in and screwed up the neighborhood.
Basically your friend overpaid when he bought in 2002, and is assuming he’s going to get another sucker to over pay and give him a $300k paycheck for nothing other than living in an overhyped neighborhood.
The loop is 2 miles to the west and wicker park is a little less than 2 miles to the north. As the crow files, it’s in the center of things. But on the street level, it truly is a gentrified ghetto. Like I said, the gangbangers/crack whores/drug dealers haven’t been displaced from the neighborhood, they’ve merely moved a few blocks to the west. The city’s south side residents don’t call it ‘the wild west’ for nuthin’.
2000 W. Ohio is considered the outer fringes of the west loop. Still a rough area. Near the United Center. Lots of abandoned housing accross the street from new lofts. Absolute craziness. They’re still building out there too. Land is cheap and there are a ton of yuppies looking to cash in on the ‘real estate only goes up’ ideal. They buy in the ghetto thinking they’re urban pioneers and all. The ghetto will reclaim that housing stock just as fast as it went up. The former residents haven’t been pushed out - they’ve merely moved a few blocks to the west, waiting for the right moment to take over the stainless steel granite condo new lofts the yuppies mistakenly built in their ‘hood.
I think my favorite example of stupidity is a 5 story condo building with multiple units on Western near Madison. $300k+ units surrounded by empty, weed and trash filled lots, abandoned buildings. What businesses are there have bars across the windows and security gates on the doors. Oh yeah, there’s a Walgreen’s and a McD’s, so it makes the neighborhood much safer.
CG and Michelle,
I just did a search in Cook County records for his place. It is where I said it was in my other post in 60612 zip code with these stats:
Bought in 4/2002 for $375K.
Built in 1890.
1600 sf. ($234/sf)
Your comment about them still building there confirms something he told me and was the basis of his wishing price. At the time he listed it for sale, he stated that new homes directly across the street from his house were going in and wishing prices on those was about $1M!!!! (if memory serves).
So yes, relative to those he looks cheap. In his defense he told me he knew he wasn’t going to sell at $650K. Has he reduced? I don’t know, but the county records still show the house in his name……
BTW, he fits the metrosexual tag to a T, so your description of it being yuppie-ville is confirmed as well!
Just went back to that DQNews stat page for Chicago. Median at end of 2006 was $285K and $269/sf in 60612.
Sounds like he paid a little premium on that.
The “When”, is what keeps these blogs going. I hope it is for many more years to come. As the entertainment value of these blogs, far exceed that of the 24/7 news coverage of Britny and Anna.
Chicago guy,
I am out there too looking at this crap. Staggering to see what they ask for these homes, you can’t even get modern furniture in the rooms they are so small. My wife and I just laugh right in the realtors faces when they ask us what we think, I no longer care about insulting anyone on this. If its any consolation, you can rent some really nice stuff here for 60% of owning it.
Come to Rogers Park. PLENTY of affordable condos for sale over here. Better hurry, they’re reverting back to rentals FAST.
Rogers Park? No thanks.
I would rather rent them for half the price of purchasing, than own them and lose money. In the mean time I can wait until the price of SFHs drop and save a down payment, instead of losing money on a Condo. I figure if I make 2.5X the median household income for Chicago, I should be able to afford something nice when crazy loans go away. Till then I will rent.
Oh come on. Even now that it’s always called “Hot Rogers Park” or “North Lincoln Park”. Also, “SOHO”. Truthfully, it seems much of the bad element has been evicted…..for now.
“The mortgage industry, responding to criticism of lax lending standards feeding a growing foreclosure rate, has begun tightening its criteria.”
Responding to criticism? Its a responce to declaring banckruptcy and closing up shop.
LOL, so true.
I keep hearing this talk about “tightening standards” but wonder how much of the lending problem is actually standards related. It seems that at least in some cases there was nothing wrong with the standards. It seems that a significant part of the problem was/is corrupt mortgage brokers and corrupt appraisors outright lying about the facts of a transaction. Standards don’t count for much if your intermediaries are going to distort reality in order to fit the standards.
IMO, a lot of subprime lenders were operating like boiler-rooms pumping up mortgagor housing price appreciation expectation while shackling them with high interest prepayment penalty suicide loans: http://tinyurl.com/2kz4uu
Like this?
Feb. 23 (Bloomberg) — ResMae Mortgage Corp. may be on the cutting edge of a trend in the U.S. subprime-loan industry. It’s bankrupt and selling assets for pennies on the dollar.
ResMae, which made home loans to people with bad credit, will be auctioned off next week. The opening bid, by Credit Suisse Group, is $19.1 million, less than half the size of an offer received by ResMae before it went bankrupt Feb. 13.
More than 100 other lenders will go out of business this year, said Doug Duncan, chief economist of the Mortgage Bankers Association in Washington. Many will be subprime lenders, victims of loans to borderline borrowers last year.
“Loans in 2006 will be the worst we have ever seen in the business,” said Matthew Howlett, an analyst who covers the subprime market in New York for Fox-Pitt, Kelton Ltd., an investment bank. “The underwriting quality was disastrous.”
At least 20 subprime lenders have shut down, scaled back or sold themselves to larger companies since the start of 2006, according to data compiled by Bloomberg.
ResMae, based in Brea, California, is the third to file for bankruptcy protection in the past two months. Ownit Mortgage Solutions Inc., based in Agoura Hills, California, declared bankruptcy Dec. 28, saying it didn’t have enough cash to make a required buyback of $166 million of bad loans it had sold to Merrill Lynch & Co. and other financial firms.
Only 100 subprime lenders with “underwriting quality was disasterous”?
Pennies on the dollar could be too much.
“More than 100 other lenders will go out of business this year, said Doug Duncan, chief economist of the Mortgage Bankers Association in Washington. Many will be subprime lenders, victims of loans to borderline borrowers last year.”
OMG! VICTIMS! It’s more like co-conspirators.
In the meantime I’m gettng tons of calls from lenders per week wanting to refinance my purchase loan . Some of the sale pitches are about getting out of a adjustable into a fixed . I already have a low rate fixed loan ,but I’m sure that what these lenders are offering are not true 15 or 30 year fixed loans . I have also noticed that the ads on TV are leaning toward a fixed rate campaign . I think they just get people to called than they switch them to a 3 or 5 year fixed or some kind of a adjustable that looks like a fixed because very few people can qualify for a real fixed these days .
Anyway , I won’t answer the phone anymore .
> Anyway , I won’t answer the phone anymore .
That’s sounds radical. Can’t you block those calls by the federal do-not-call-list?
What I mean is I just screen the calls, but I should go for a block like you suggest . I can’t believe how many calls I get on a weekly basis .
Today is the second Friday in a row that I received a heavy, 130-page glossy card-stock magazine with my New York Times. The “Halstead Property Portfolio”. They are really kicking the hype machine in to high gear here to squeeze the last few buyers out of the market.
We had the “Greatest generation” . . . all of these FBs will go down as the “Most Prolapsed Generation”.
The magazine is going to double in size over the coming months as sellers turn up the volume in their attempts to grab buyer attention: http://en.wikipedia.org/wiki/AIDA
For me, the working AIDA would be: Current_Price = 10% * Price_in_2005
You are one hell of a low-baller!
Memo to realtors and sellers: Today’s buyer is a lot different from yesteryear’s. If you want to make a sale, ignore the past and identify the needs of today’s buyer. Otherwise, you are going to starve.
P.S. Grocers are running low on the Ramens. Buy now!
You are one hell of a low-baller!
But that would definitely grab my Attention, raise my Interest, make the offer Desirable, and may eventually lead to Action on my part.
Between Neil and the popcorn and FBs and the ramen, the grocery stors will have trouble keeping up with demand. Perhaps that’s the “next bubble” people have been speculating about.
Some realtors are going to starve.
I read today in this article (below) that there are 514,000 realtors in the SF Bay Area. Sure, some are not “active”, but note that’s among around 7 million or so residents.
1 realtor for every 14 residents? And that’s before excluding minors.
http://www.examiner.com/a-581250~Geoffrey_Craighead__Sees_decline_in_Samcar_members.html
Working on comission and not making any sales. I’ve been trying to popularize the term “self unemployed.”
Brooklynite-BS on the greatest generation. They have left us with huge obligations with Medicare and Social Security and many trillions more in social obligations.
Thank you, we boomers were very liberal in the 1960’s, joining with seniors to create systems that were supposed to take care of everyone in old age. Too many seniors now, can’t all be taken care of in the style to which the greatest generation aspired.
Social security worked fine until somebody invented the pill so that the boomers could rut to their “hearts” content and still not have enough kids to pay for their retirement.
they must be hiding the for sale signs
where i live in queens there is around 200 single family homes among the apartment buildings. walked through the area earlier this week and only a few for sale signs visible
Maybe this will help the paper & forest products industry that has suffered due to the housing downturn
I wonder how long it will take the builders to start offering this incentive - or are they already? Anyone know? In the UK in the last housing downturn, a builder would offer to buy someones old property if they bought one of the builder’s new ones. Of course, they would decide how much to offer for the older property and then they would have their crews go in and revamp the old house to get top dollar for it.
“However, he said several factors could slow housing’s recovery: uncertainty over the size of the inventory of unsold homes…”
Check.
“potential tightening of mortgage lending standards…”
Check.
“and affordability.”
And check.
Looks like a soft landing!
“A condo clearance sale got results in Burnsville’s Heart of the City. Buyers signed purchase agreements for almost half of the 34 condominiums, discounted by up to $100,000 off their original price.”
And I’m sure they are telling their friends that they already made a $100K profit when the market turns around later this year. Like to see what they have to say this time next year!
Burnsville is aptly named.
‘The common phrase that you hear on buyers’ lips is, ‘What are you giving away?’
Ummm…if you think about it really hard, they are not giving anything away.
You are so right! I don’t understand the whole incentives/upgrade mindset. Basically the same house now is just selling for less. And if it is not fully complete, you would be better off having the builder not put in those “upgrades” because you could have an independent contractor do it for MUCH less. What the builder calls a $20K upgrade is probably more like a $5-10K upgrade. A long time architect told me this, and I’m more apt to believe him than the KB Homes sales slut.
“…he said several factors could slow housing’s recovery…”
Housing is still near the beginning of a long downhill slide. It will be a long time before the “recovery” begins.
I just shake my head when I hear the so called “experts” mention a “recovery” or a “bottom”. It’s a cycle, and at times a vicious one on the downside. Why is that so hard to acknowledge?
Prices are beginning to recover their sanity!
CHICAGO GUY.. I hear Ya! I am the female significant other in this house and I really want a chicago bungalow out in Arlington Heights.. same story $500,000 or more for somewhat updated only. We are waiting it out… at this point… very impatiently now with a toddler! OY!
I sometimes work out in Arl. Hts. and my parents live in the next town over. Prices have shot into the stratosphere out there. I work with a guy who owns a small ranch in Arl. Hts. w/finished basement that he bought in 1997/8ish. IIRC he paid in the mid-high 100’s. He said that a simiar house accross the street just sold, as a tear down, for over $400,000. The exact numbers aren’t important. What is important is that he started his family in Arl. Hts. and will send his kids to Hersey High school (a real gem for a public high school). Me, if I want to raise a family in Arl. Hts., I will have to pay over $400,000 to live on his block. This much change in 9 year! How did this happen? My mother moved to Arl. Hts. in the 1960’s when it was cornfields. I saw the original deed to their house which they bought for $15,000. Now Arl. Hts. is fancy and nice and desirable and prices are in outer space.
Another issue which is bothering me is the income divide going on right now.
I was speaking with someone in my industry on Wednesday and he said that he and the wife signed a contract to buy a SFH in Lincoln Park. First time homebuyer. In Lincoln Park. You can’t touch a SFH in the LP for less than $750K so and that’s a shack, at best.
I don’t know this guy’s income but I do know that he and wife are 30 years old and the both work at large law firms. Based upon the firm’s salary structure (posted all over the internet) I’ve estimated that they earn a combined income of over $300,000K per year. (But they sure do work long hours for that cash!)
But my point is this: a rich young couple with extraordinarily high incomes can buy homes in the best neighborhoods on a whim. My significant other and I are also 30 and there is no way we can afford a dilapidated bungalow on the NW side for $400K. The income divide in this country is getting wider and wider, it’s scary. I’ll never make as much money as this guy does and he’s only 30 years old. There are a lot of people like him too. It’s freaking me out, man.
Is she a Trixie ?
http://en.wikipedia.org/wiki/Trixie_(woman)
I don’t know if she is trixie but she snagged herself a man with a high-paying job. She also has a high paying job. I have a fairly decent job but I”m not in the top 10% of all graduting lawyers so I don’t earn $150K a year.
It’s funny, I grew up in Arlington Heights in the 1970’s and 80’s when it was still a lower-middle class, mostly blue collar town. My dad drove a taxi in Arlington Heights and the nearby suburbs for most of his life. I myself graduated from Hersey HS in 1989. No one in my graduating class got into an ivy league college, but that was ok — the football team won the state championship, so the community was pleased. I cannot begin to imagine the AH of today, it has completely changed.
The reason why AH gentrified is because a lot of businesses moved from the city to the suburbs. In the 70’s and 80’s, most white collar workers had to commute to Chicago. AH is pretty far from downtown Chicago, even with express trains most people are looking at at a 2 1/2 - 3 hour daily commute.
But in the early 1990’s, a lot of businesses started moving to the suburbs. Arlington Heights is only about 20 minutes away from Schaumburg and Hoffman Estates. Suddenly, the commutes were a lot shorter.
Arlington Heights was is a very nice place, an all-American suburban community with zero crime, better than average public schools (and they’ve gotten better still in recent years), well-manicured lawns, etc. So naturally, once commuting distances shortened, AH property values went up.
I’m very sorry to hear that AH has been McMansionized. The housing stock in AH was okay before. The old 1 and 2-story middle class homes were fairly well made and more than big enough for the average family. They didn’t have hardwood floors or granite countertops but they were prefectly servicable. I don’t know why anyone would want to go to the expense of tearing one down and putting up a McMansion in its stead. One tries not to be judgmental but it sounds like wasteful ostentation to me.
” I don’t know why anyone would want to go to the expense of tearing one down and putting up a McMansion in its stead. One tries not to be judgmental but it sounds like wasteful ostentation to me. ”
Arl. Hts. isn’t as bad as other suburbs like Hinsdale or Elmhurst. It’s had some teardowns but generally the lots are too expensive to build SFH’s. Arl. Hts. does have its fair share, don’t get me wrong, but it’s not as bad as many other places around the country.
NW Chicago is in need of a correction - the only homes for $200,000 are 50’s-era shacks in Carpentersville, with well water and shoddy electricty service. Oh, sign me up!
Socialism once again the wonder drug for the shackup/have kids-first0 marriage-optional crowd
The state will provide
The “income divide” is often a brain divide
TX chick,
I hope you read this as I need your advice. Im just a small timer but i just got a check for $ 60,000. is it OK at this time to invest in mutual funds.
A very close friend of mine took me to meet a mutal fund advisor. I figured that I would ask you as you seem to have tremendous knowledge of investing. Thanks.
Emmigrant Direct is your freind !
HSBC savings account, 6% through April.