Post Local Housing Market Observations Here!
What do you see in your housing market this weekend? Builder incentives? Auctions? Statistics? “According to statistics compiled by the Intermountain MLS, in the Treasure Valley, the 834 transactions posted in January were 27 percent fewer than the 1,149 sales in January 2006. Ada County saw a 40 percent decline in sales in January.”
“One real estate agent still worries that most homes coming onto the market are beyond the financial reach of the typical buyer. George Tallabas, a Realtor in Nampa, pointed out that on Dec. 3 there were 274 active listings in Nampa priced between $200,000 and $300,000. As of earlier this week, there were 387 listings in that range.”
Economic predictions? “The economy isn’t headed down the tubes this year. That’s the word from Memphis investment gurus. ‘There has been some air that has come out of the housing market,’ said David Waddell, CEO of Waddell & Associates. ‘The contraction in housing to date hasn’t affected consumers,’ Waddell said. ‘Never bet against the American consumer. We spend our way through everything.’”
New legislation? ” Mortgage fraud is on the rise, and the Texas Legislature may take a giant step to squash it. A pending bill would establish specific punishments for mortgage fraud, including imprisonment for up to 20 years and fines of up to $10,000 for knowingly making false statements.”
“Two state lawmakers plan to introduce bills on Monday that would require mortgage lenders in Colorado to be licensed, as well as other requirements designed to ‘put some teeth’ into measures to help stem the foreclosure tide sweeping the state.”
“‘I’ve been calling for the licensing of mortgage brokers for more than 10 years,’ mortgage lender Jim Spray said. ‘It is just stupid for a lender to be making loans when they know the borrower can’t pay it back.’”
“Existing law, the California Residential Mortgage Lending Act, provides for the licensure and regulation by the Commissioner of Corporations of persons engaged in the business of making residential mortgage loans or servicing those loans.”
“This bill would require a person engaged in the business of making or servicing residential mortgage loans who advertises option adjustable rate mortgage loans and references a payment rate with a negative amortization feature to include a specified disclosure in the advertisements.”
Or foreclosures? “With a historic increase in foreclosure cases Jacksonville (Florida) Legal Aid is now turning people away. ‘About 60 days ago we realized we reached capacity, despite foreclosures coming in the door 20 to 30 a week,’ said Jacksonville Legal Aid Director Michael Figgins.”
“With just four lawyers working foreclosure cases he says his office is overwhelmed, and can’t take new cases.”
“‘Never bet against the American consumer. We spend our way through everything.’””
#1 debtor nation, with a bullet! Where are we going and why are we in this basket?
In other news, I’m actually growing a hair to get a RE broker’s license so I can be a mortgage broker later this decade. I figure it takes 2-3 years to get the broker’s license which would be good timing to start looking for a house.
As a Georgist I’m philosophically opposed to the amassing of SFHs as rentals, but I figure RE might not be a bad backup career for a technerd in the Santa Clara Valley (plus the education would be useful and interesting).
I have been working on my Real Estate brokers license as well. Not so I can become a REALTOR but rather to get the inside scoop and an extra 3% off the properties I will buy for me personally and for some rentals I plan on purchasing in the future. It will cost me about $500 total I expect but will pay a return on investment of several thousand percent. It is really pretty easy. Most of the information is just a review if you have been following RE for a while.
oh, as for market observations, my co-worker closed escrow & sold off his below-median (but still pushing $1M) house in Aptos, with reasonable (2-3 minute walk) beach access basically instantly this month. Not much on the market in his area, and the LLL mantra applies I guess. Friend in San Leandro apparently sold his at-median 1930s 2bed scraper this month without much difficult either (he’s going to Colorado Springs to homeschool his kids in a more supportive environment).
Uh yeah and why exactly are you posting here??
“Post Local Housing Market Observations Here!” ?
Prices in the SF South Bay make absolutely no sense for me to buy right now, but sellers seem to be holding steady, until their voodoo loans reset and/or the REO man comes. But until then, transactions are still happening; the market here is slowing but it is not stopped yet.
My buddy sold his 3/2 in Warm Springs (Fremont, CA) 2 weeks ago, basically 1 day on mls, 3 offers over asking, 2 asian couples, 1 indian, 20% down, 30 yr fixed. north 800k. So not only is South Bay doing ok, at least some people doing it right. I was a little bummed, but happy for him.
I too have thought about getting a mortgage broker’s license in a few years.
Well, with a couple hear posting from the bay area, maybe its time for my update for Santa Clara…My last post on this was December 06….
We are a community of roughly 100K people….Over the course of 06 our single family housing inventory ranged from a low of 5 or so to a high of 120 in September….Since that high we fell back to fifty or so in December….The current inventory is @ 60……A balanced inventory would likely be around two hundred….Just as a comparison, in the 1992-3 downturn, their was around 600….
I would characterize the market as still very strong….Low inventory and lots of demand even with our crazy prices…Still seeing multiple offers on some deals…..Softening has not hit us yet and I will not venture to guess when that may occur….I think it will take a major “Event” that would adversely effect out employment center for any correction to happen….Its happened before…It can happen again but at these prices and the leverage in the system if it happens it could dwarf the downturn in 1981-82 & 1991-93…..
In Sacramento, 1.5 hours to the east of Santa Clara, the housing route seems to be accelerating. This web site http://flippersintrouble.blogspot.com/ documents people taking a loss (even before sales and carrying costs are figured in). It is up about 25% in volume over the last couple of months.
The Sacramento Bee classified adds tell a similar story. About 18 months ago, every submarket section had 40-60 adds in the “for sale” column. Today, that is down to about 15-20 adds. The Realtors won’t waste their money on advertising any more. Yet when you go to the “for rent” section, that is really expanding. It has gone from 10-20 listings on Sunday, to easily double that number. Rents have definitely dropped in the newer outlying subdivisions, some areas by 10-15% (3500 sf home, purchased for $750,000 in April 06, goes begging for renters months at $1895/mon, still unoccupied. The asking rent dropped from $2300 a couple of months ago).
Thanks Dave. I am disappointed to hear this though since I sold my house in Saratoga in Oct ‘05 convinced that the big crash was only a few months away. I’m not complaining about the price that I got but to be honest, if I had known that values would be holding up I wouldn’t have sold. At the time I felt too much of my financial portfolio was tied up in that house (even though my mortgage was low and I never took out any equity loans or had any other debt). I just remembered too clearly what happened in the early 90s when the housing market seemingly disappeared in a day.
Well I am enjoying the Ozarks although I despertely miss my CA native plant garden
The San Fran Bay area has a large number of ethnic Chinese, some cites are 25%+ Chinese. China is going gangbusters, with hundreds of billions of dollars in export to the U.S and growing. They are buying property in the bay area, they have so much money they can’t spend it fast enough.
Saratoga ark;….I hear ya pal…Who would have thunk it….I have been shaking my head about this current run up for four years now…..I got out of a lot of residential in the year 2003….If I wanted to look back, it would be painful to think about how much money I could have made just by holding on….But, I NEVER look back…I made decisions, reallocated assets more into commercial and I am perfectly happy with my decision….
From the LATimes.
“Weighing restraints on loans”
“U.S. officials are mulling over proposals that would curb abuses in the ’sub-prime’ market.”
Check out the graphic of the largest sub-prime lenders and their market share.
I like the chart. Use this chart and take a look at the percentage of expose to subprime in each lenders portfolio. That’s how I picked FMT for short sale this week. Some of these lenders haven’t had their day of reckoning yet, but it’s coming.
I like this…
“These measures include requiring that such loans be granted only to those who have the ability to make payments for the entire mortgage, rather than just an initial period that has a “teaser” rate that is guaranteed to shoot up, typically adding hundreds of dollars to the monthly payment.”
Gee…What a novel idea! Lend money to people who can pay it back.
“What a novel idea! Lend money to people who can pay it back.”
Unless they are black or Hispanic. Screw the most minority of the minorities, the responsible self-sufficient savers. I am so sick of these government phonies.
I suspect the market will be learning a new definition of sub-prime over the next few years.
Even someone with sterling credit and a fixed-rate mortgage is going to do some serious thinking about walking away from the mortgage if market forces put him underwater by 25% or more as things continue to unravel. Even more so if he had to stretch hard to buy the place and is spending 2-3 times per month what it would cost to rent a comparable place.
So a lot of so-called “prime” mortgages are likely to go sour as well, in my opinion.
Banks That Took Greenspan’s Advice Pay the Price
http://www.bloomberg.com/apps/news?pid=20601039&sid=aMEfUsHA556w&refer=columnist_baum
I know people with an otherwise excellent financial record who did precisely that during the last CA downturn. I don’t know if it was widespread, but it did happen.
This happened a lot in Austin in the late 80s into the early 1990s. This also drives prices further down then one would think on two counts:
1. Foreclosures and negative psychology keep going on and on longer than one would estimate, and
2. Takes more people out of the game
18 months in and it looks like we are down 15-20% in many bubble areas…perhaps flat to minus 10% in other areas. The 15%-20% down with huge inventory and foreclosure areas are not half way “home” yet in terms of price. This driven by the rolling waves of foreclosures yet to come as well as ongoing building (!).
Absolutely. There’s no guarantee these “prime” borrowers are in any better a position to pay a mortgage that is 25%+ higher once the loan resets.
I am learning Spanish and Chinese. The Spanish will be useful if I stay here another 20 years. The Chinese will be useful in case I have to flee to Asia.
America - stick a fork in her. There’s no doubt this is becoming a third world country. Educational levels are dropping and literacy rates are falling for the first time in history. We are actually regressing. Instead of us assimilating the immigrants into our culture, they are turning us into their wrecked home country that they fled.
and neither one of those languages will hurt you in Richardson either. Is there an American left there?
I believe you are right, but you may find American Ex Patriots are not at all welcome in Asia (unless bringing Gold or other worthy assetts). I am looking at places like New Zealand, although once the US Govt splinters they may be out like the Romans taking what they need by force. Of course our government has not resorted to these kinds of means yet, but there may not be many safe places in the world for “free individuals”
Good luck. Every country in this part of the world actually enforce immigration laws.
You can use your Chinese if you just STAY here another 40, because that’s probably who’ll be running things around here, at this rate.
We have a Spanish and Chinese tutor for our 14 month old.
Hedging your bets, are you
Yeah except I think by the time the chid is old enough to benefit from it they will have a wireless headset thingy that translates for you.
Wahoo, as a Chinese language teacher I can tell you that “a wireless headset thingy that translates for you” is no substitute for actually knowing a thing or 2 about the language yourself.
lol. Maybe i’m biased.
And I agree with TXchick, those languages could come in handy, no matter where you live.
Hey SPD, any chance we could email on the side for some pointers?
Yes. Leave me your email and I’ll respond.
I have a spanish tutor, too, it’s called my housekeeper, LOL
In the 1980s we were told that we had better learn Japanese for the same reason. Asian languages are frightfully hard to learn - so forgive me if I choose to wait until one of them becomes our official language before going down that path.
JB, not housing related but lanquages - any lanquage - are easy for children to learn.
A lot of Japanese kids seem to pick up Japanese pretty quickly.
OT
I retired from what was then a highly effective state police agency back east. In the 70’s, a consent agreement was signed with the feds , re affirmative action and hiring. Prior to that a test would be given about every three years and the list exhausted. Post affirmative action ,a list would be exhausted with one test to get the “number”. A non minority male or female would have to be in the top two hundred to get a call. The list went down to approx 16,000 for minorities. They went so far as to establish remedial reading and writing courses at the SP academy(a little late wouldn’t you say). What I personnaly saw as a suprevisor was that the sheer numbers of manay non qualified or marginal people being hired in such a short time that it was impossible bring these up to the established level of performance, but rather the organization went down to a lower level to function which created serious and chronic problems within the oraganization,. We are now seeing that played out as a nation.
Because of Affirmative Action, I hope for the destruction of the US. There is no redemption for discriminating against your own children, only well-derserved suffering. This is why I am for open borders and the war in Iraq; both will lead to the collapse.
Cutting off your nose to spite your face?
“Because of Affirmative Action, I hope for the destruction of the US.”
How special. Too bad this blog has gathered so many aluminum foil beanie wearers.
You and I both support Bush, but for different reasons. I support him because he is destroying the US, and you like him because you think he is doing a fine job. And who is the irrational one?
“And who is the irrational one?”
You are, Mark, although I confess to feeling much as you do on occasion. For those who voted for Bush (and God help me, I did, the first time, but not the second time around and I didn’t vote for Kerry, either), forgive them, for they know not what they do.
But shame on those of us who are otherwise sane, as you are, and yet come to hate ourselves and our country because of Bush. In doing so, he wins. And he is probably as low a life form as you’ll ever find on this planet, maybe in the entire universe.
“you like him because you think he is doing a fine job”
Uh, no I don’t.
An analogy can be made to the housing market where for the past several years with subprime, I/O, ARMs, unqualified and marginal buyers have been sold homes i such sheer numbers to render the same results in real estate with years to unwind which we already here know the results and shortly will become evident to those who only follow MSM. Again it is not the margianl buyer ,but the sheer numbers of overbuilt housing and subprime/ exotic loan market.
I am going to digress here but i hope you will see my vantage point.
As a DJ i refuse to play any song with the word “Ni**er” in it, and you know today that leaves out a lot of “music”
It had been my view that rap and hip hop was heavily promoted in the last 10 years, as an alternative to the Ku Klux Klan……the pupose was to keep Ni**ers in their place. The illiteracy, social promotion, remeidal classes, the ghettoization of america, was all designed for this purpose.
Imagine the alternative and very radical position of educating black people in america, by keeping them in school 12 months a year, and teaching them to read write and speak English, and to communicate without swearing…..
Oh the horror, and what if they stop committing crimes because they had jobs? Can you imagine empty jails, and 100,000 police officers with no one to arrest, would you want to be the first to say it publically we need to lay off that many police officers because of the lack of crime?
PS, not to mention the collapse of the rap hip hop music business.
I wish some of that education had to do with questioning the culture of Bling. Mortgage brokers and credit card issuers alike have played minority communities like a violin on this score — encouraging them to spend far beyond their means and accumulate huge debts.
So many conspiracys, so little time. I remember watching Farrakhan’s speech on the mall during the “Million Man March”, when his wierd descent into numerology blew his chace to become the mainsream go-to “black leader.”
http://www-cgi.cnn.com/US/9510/megamarch/10-16/transcript/index.html
Does seem like we have lots of “End o time” people posting now. Wish for the destruction of the U.S.? –Sigh–
I love it. Hates immigrants…is planning to emmigrate to Asia. What makes you think they’ll want you?
Also, have you ever been to a third world country? I don’t think you have.
China is not the third world.
It probably depends on one’s definition, and I haven’t been there in a number of years so I certainly could be wrong, but I would think that 80% or more of China remains “the third world.”
Some of the cities? Not so much.
The Third World concept is so misunderstood that it has turned into a complete joke. The Third World is a French construct from the middle part of the 20th Century. Here’s how it worked.
1st World - The U.S., Europe and any of the capitalist colonial nations
2nd World - The Soviet Union, China and the rest of the communist nations of the time
3rd World - The collection of nations that were exiting the Colonial Age. The term “Third World” was actually developed as a compliment. These were the nations that would show the world a different way. They would show the nations of the 1st World and the 2nd World a better world. Quickly, the former colonies of Africa and Asia fell into civil war, political chaos and economic ruin. The term 3rd World then became a derogatory term. Now it is used to describe a state of under-development.
Today it is all muddle. I love whenever I have heard people call Russia, Cuba and China 3rd world countries. This was very popular 10 years ago. All I could say was, “h’uhhhhhh????”
CityBoy says:
“Now it is used to describe a state of under-development.”
*********
Hence my statement:
“… but I would think that 80% or more of China remains ‘the third world.’
Some of the cities? Not so much.”
LOL! The homogeneous societies of Asia are really looking for another gaijin.
“Also, have you ever been to a third world country? ”
You don,t actually have to travel overseas to go to a third world country. We have a genuine third-world sewer right here in Los Angeles, AKA Tijuana El Norte.
My local observation is about this blog. It seems to have been taken over by wacky talk radio listeners with too much free time on their hands!
Check out the story in the L.A. Weekly titled “The town the law forgot”. It is on the internet and it is frightening. I fear that this is soon to be all of California’s future, except for the occassional oasis of gated communities.
jerry, I understand how you feel. Please, stay and fight with me and others. The US IS worth saving, with our blood, if necessary. There is no where to run to. I really, truly love the US. It is like a person to me and I’m watching that person sicken and die. I fully agree with you regarding the illegal immigrants. They bring with them their unspeakable crimes and their diseased way of life. I see it all around me. I was talking to a lady today who had to take her son out of school and home school him because he had been beaten to a pulp one too many times. Not to mention I have a buddy whose wife was murdered (of course, the police call it an “accident”) by a drunk illegal immigrant construction worker (thanks, you a**hat Florida developers and your freakin’ “Bubble”) on Hwy 301 here.
“The US IS worth saving, with our blood, if necessary”
Amen
cashedin05, just your simple “Amen” made my day. My deepest thanks.
“The US IS worth saving, with our blood, if necessary”
Exactly what the fat-cat bosses and politicians want you to say!
And those parasites in N.Y.C. and Washington D.C. are saying:
“The US IS worth saving, with YOUR blood, if necessary”
Well, they ARE enemy, why would they want me to say that?
Those of us with kids, won’t run and are doing what we must to give them a future. If Jerry wants to run, good riddance - one less coward in the gene pool.
Yup. Pretty soon the Canadians will start arming their border.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/02/23/MNGCAO9NSB1.DTL&hw=canada+border&sn=001&sc=1000
D-bob,
That’s scary, if it’s real.
I’ve been wondering if the time to get out is now, as opposed to later. Just as we don’t want “illegal immigrants” overrunning our borders, I’m sure other countries don’t want us coming over their borders — especially since US citizens will likely be in a panic & coming with nothing.
Yikes!
That’s scary, if it’s real.
You Damm right it is real !!!! EVERYONE should read Dbob’s post….
My brother & his wife just went on a driving vacation and wanted to enter Canada….He has prior DUI in the 70’s….
He has been sober for 28 years, is a very active member in AA and has sponsered hundreds of people including judges & politicians…
They did not let him cross the border because of that DUI conviction in the 70’s
Seriously, that scares me. Wonder if they’re trying to keep us out of Canada or keep us trapped in the U.S.
Lots of people making noise about leaving the U.S. I’m hearing it all over the place. Hmmmm…
Diplomatbob: Bob I suppose that Canadian Customs figures they can be as tough as the American.
Palmetto: I agree that America is worth fighting for - that drastic action is now needed but perserverence is needed more than blood! Take an interest in your own local government, it can stop, slow down or change the form of new construction that undermines the housing market. I am the secretary on my local community organization
http://tinyurl.com/2edgah
God bless
Diplomatbob: I guess that Canadian Customs figures that it can be as tough as the American.
Palmetto: America is worth fighting for but perservance is what is needed now! Take an interest in your local government, it can stop, slow or change the form of new construction that threatens the housing market.
I am secretary on my local community organization
http://hunt-club.ncf.ca/hunt-club-ncfca/index.htm
Ben: I first posted this with a tinyurl but it never made it, is there a problem with tinyurls?
I mean perseverance
One real estate agent still worries that most homes coming onto the market are beyond the financial reach of the typical buyer.
I would not be too concerned about this. Think happy thoughts and know the market will self correct.
“One real estate agent still worries that most homes coming onto the market are beyond the financial reach of the typical buyer.”
Well then, maybe she, and her fellow realtors, should stop encouraging pie in the sky listings. In all of the areas I watch, wishing prices are still at the peak, and beyond. I firmly believe, that the REIC is doing this intentionally, in an effort to control prices. They want to create the illusion that the market is much stronger than it really is. Many people confuse listing prices with market value. The problem is, these prices were never affordable, and the REIC is not only doing the sellers a disservice, but shooting themselves in the foot as transactions are plummeting.
I am seeing this in OC. Collusion amongst realtors. Only problem, sales are down 50,60,70% from 2004. These people have to eat, I would think that you would drop prices to get some transactions going. Why try to protect market prices?
These realtors are morons.
Oh, I suspect the realtors know that prices have to go down. It’s the people listing that need convincing. I’m sure that the hope of many realtors is that after a couple of months they can persuade them to drop the listing price. Problem is, many FBs convince themselves the the problem is the realtor, not the price. Last year, or maybe year before, somebody posted a realtor saying from the last downturn. “It is better to be the second wife and the third listing agent.”
What you fail to understand is that many realtors have a vested interest in house prices remaining high. 1) They participated in buying homes an flipping them. They are stuck with homes too. 2) The more the house sells for the bigger the commision and if you’re only selling a few houses a year you want the check to be as large as possible.
Am I the only one who is ok with this collusion continuing another 3 to 6 months? Why? Simple, this house of cards is going to fall apart. The more they artificially prop up the prices, the more jobs that leave the state. Thus, the sharper the drop.
I care about what the price is in Fall of 2008, not summer 2007. This strategy assures a lower price in my time frame of interest, so it only makes me smirk. Yes, I’m looking in the south bay, not OC…
But soon… soon..
Got popcorn?
Neil
Bob, of course they have a vested interest in high prices. But if a house doesn’t sell they get let’s see.. 3% of nothin’, carry the nothin’…bumkis. Their vested interest is in getting the house to SELL for the highest price possible. Listing a house at a price that won’t sell just costs them advertising and time.
Ex-realtor, lol
http://dallas.craigslist.org/lgl/283741700.html
Even during the boom times, why would a lawyer quit practicing law and be a real estate agent?
Even during the boom times, why would a lawyer quit practicing law and be a real estate agent?
I sense a lawyer with a RE license who wants to buy on the cheap from FBs. Lot’s of FBs are so dumb they don’t even know that they are FBs. Might go to a lawyer for help with the little problem. When lawyer explains they paid $400K for a $150K house and that they need to sell, lawyer will be happy to buy for pennies on the ($150K) dollar.
I had a friend who worked at a bancruptcy firm that did exactly that on a regular basis. Their “clients” revealed their financial condition to them and they would find “buyers” for the assests for pennies on the dollar.
lawyers do not need a RE license… as long as they passed their bar and certified for doing law in that state they can be RE brokers…
Not true in every state, but more lawyers I know become developers. On the other hand, maybe they’re taking both ends; sell to the FBs and then buy back from the FBs?
Not true in every state, but more lawyers I know become developers. On the other hand, maybe they’re taking both ends; sell to the FBs and then buy back from the FBs?
That depends on state law. If an attorney was settling an estate, for example, he would not need a real estate license in Arizona to sell someone’s house. But to simply act as an agent or broker for an ordinary property sale requires a real estate license. I would say that anyone who has passed a bar exam could easily pass a real estate exam with little preparation, but he would still have to do it and pay related fees. Also, full MLS access requires a real estate license.
Even during the boom times, why would a lawyer quit practicing law and be a real estate agent?
I see it all the time….MBA’s also….
” Mortgage fraud is on the rise, and the Texas Legislature may take a giant step to squash it. A pending bill would establish specific punishments for mortgage fraud, including imprisonment for up to 20 years and fines of up to $10,000 for knowingly making false statements.”
Better start preparing those bond issues for new prisons then. The current ones wouldn’t even hold the perps in DFW alone.
Think about it though, Mortgage Fraud = Grand Theft, often in the hundreds of thousands or millions. These people belong in prison for the damage they have done. If we relaxed a bit on our (not working) war on drugs and let most of the druggies go, we would have plenty of room for mortgage criminals.
“… let most of the druggies go, we would have plenty of room for mortgage criminals…”
I agree. Outpatient treatment with drug testing for addicts convicted of possession. That way, they pay their own room and board. Make better use of the prison beds.
Nevermind the incredible amount of crime committed by druggies in order to support their habits, or the innocent lives they take while driving under the influence. Yeah, lets let them all out of jail. Capital idea!
You are confusing violent crime or DUI with drug possession, and yes by all means take those convicted out back of the court house, tie them to a post and whip them like they do in Singapore, but those who have de-stabilized our economy and created the terrible state of affairs we see today definitely need to be jailed even if it means releasing “non violent” drug offenders. Keep in mind too that Alcohol is a legal drug, and is predominantly the reason behind loss of life at the wheel. Possession of Alcahol is not illegal. DUI is and if you kill or injure another while driving DUI you can be charged with murder or attempted murder as well as DUI, so we have clear laws in place already in these regards. The reality though is that 75 % of those encarcerated in our country are drug possession offences or mentally ill persons.
I think Singapore has a better approach to the drug problem. “If you are caught in possession of drugs you will be jailed and most likely killed”.
Does your plan apply for drugs pushed down our throats by Merck, Pfizer, etc?
I’m not into this “release the non-violent types”. I lived in LA when they were doing just that (because of overcrowding)- and guess what - crime went through the roof. The only solution that seems to work is to jail lawbreakers (I know, old paradigm, like 20% down). Having been to Amsterdam, I also don’t buy into the Libertarian view that druggies can just shoot-up and not hurt society. One should look at Rudy’s results in NYC, before they support opening the jail gates for ANYONE.
I’d arrest anyone who supports the government-the biggest criminal enterprise in the world.
A drug dealer is more honest than a politician. The drug dealer doesn’t force anyone to take drugs but politicians use force for everything they do. Government should be a voluntary charity.
They might have to go back to being landmen.
I saw something weird in my neighborhood - (Old Town, Alexandria, Va.) - what seemed to me like a sanely priced house — or at least one that was listed for less than I thought it would be when I saw the sign. It’s a 3 br, 1 ba, basement very nice condition/layout on a quiet street - for $680k. Over the last two years, I’ve seen a lot of houses of this calibre in my neighborhood listed for $750-800k.
I don’t think it’s a great deal - but it’s the first somewhat realistic sounding asking price I’ve seen in my area in a while. For that reason alone, it kind of suprised me. It also might suprise and scare some folks who have bought 2 bdr condos in the area for about the same price. They’re nice condos and all …. but they can’t compare with a 3 bd townhouse like this, unless you’re dead-set against having to paint every 10 years and care for a small backyard.
In Nova, I’m seeing list prices for Town and SF homes similar to the 2005 condo list prices.
Example: Until recently, $479,000 would only get you a condo:
http://washingtondc.craigslist.org/nva/rfs/283814198.html
That looks pretty nice. Funny thing about those pictures is that you don’t see neighboring houses on the front-view pics (like you actually have some space), but on interior shots, it looks like other houses are just on the other side of all the windows (totally surrounded by potentially nosey neighbors).
It worries me that you think that 680K is “somewhat realistic” price for a 3 bed/1ba. home, with or without a basement!
This is why we’ll see people killing themselves to buy all the way to the bottom. Prices went so far into the stratosphere that stuff that would have seemed absolutely ridiculous 10 years ago now seems “somewhat realistic”.
I agree that it’s a crazy price in the greater scheme of things — even for a traditionally pretty affluent area like this. But — it’s one of the first listings in my neighborhood that isn’t trying to get last year’s prices — that’s what I meant by “somewhat realistic”. I’m not saying prices won’t go lower here — I am pretty sure they will — but this is at least a sane effort at an asking price compared to others.
lol. Glad you cleared that up zeropoint. I know that for sure there are those out there who will indeed this is a realistic/reasonable price.
But it was heartbreaking to think that somebody who’s been following the info on this blog might be included in that group!
“there are those out there who will indeed this is a realistic/reasonable price.”
Indeed, but buyers should have a gross income over $200k for a home purchase of $680k make sense. That’s a lot of dough.
93552 showed the first break downward in wishing prices since March ‘06 this week. Median wishing price for 4+3+ in 93552 was down 1.25% for the week. I wouldn’t even mention it, but those asking prices have been sooo sticky on the way down that I think this is significant in that it may show FBs finally willing to break even or take a small loss. It could also indicate a higher percentage of “must sells” in the market.
January NODs set a new record last month and Feb is looking to beat that. With the parabolic increase in NODs I expect to see a much larger number of REOs just about the time spring selling season kicks into gear. With the numbers I’m seeing we could very well see a market where the only sales are REO. If they aren’t there yet that should drive the FBs to despondency.
There are still theoretical GFs out there though. Last night wifey and I spoke to 2 separate individuals in the market for a new home because, “prices are so low”. The only thing I could tell them is, “they’re going much lower”.
Thanks all.
93552 palmdale zip. Saw 26 foreclosures and 126 NOD’s just in that zip. If gas prices keep on climbing(currently $2.59/gal for reg in cheap-gas areas of LA ), there will be more and more hi-desert fb’ers going into NOD and foreclosures throughout 2007. By end of this year there should be some REO’s available at 50% off, at least in the less-desirable areas of Palmcaster. Or prices per sq ft coming down to around $100/sq ft in all hi-desert areas.
If gas prices skyrocket above $3.00 gal reg/$3.50 premium(they are already there in some exurbs), we are talking RE catastrophic meltdown in the hi-desert/IE exurbs and a wave of foreclosures and NOD’s, of which the current levels are just a trickle.
I drive over to the SAC area (Roseville, Lincoln, Auburn, etc.)several times a year and just returned from another trip.
Now this past Thanksgiving, buidlers didn’t seem to be selling but were still going the incentive route. There were signs like, “buy a house, we’ll give you a free BMW” all over the place. But that didn’t work.
Now it’s a different story. It looked to me like prices were beginning to be slashed. I saw several new homes with 20% reductions and ads in the paper saying things like “was 554K, now 454K. The biggest spread I saw was for a nice looking new 3500sf home….”was 649K, now 489K”. By my numbers that’s almost a 25% reduction. I guess that’s the market “stabilizing”.
I also happened to be in Naples FL last week. Went to several open houses for existing townhomes in established areas and visited a few large, new construction sites of condos, carriage homes and townhomes. This was over the weekend in both the Naples and Fort Myers area.
In every single instance, we were the only ones there the entire time we visited. And in each and every case, the first words out of the agent/salespersons’ mouths were a version of, “this has been reduced about 20% and the current price is just a suggestion to start discussion.”
Two of the new developments in Ft. Myers are very large and the builder is from the UK (well-known I’m told but seems to be a little late to the party). The first and most expensive development has current prices starting in high 300’s. This community is almost finished and they claim is 1/3 sold and occupied. We drove around and I do not believe that is near to being true. There is still construction activity, the pool and clubhouse are done (very nice I have to say) and much of the landscaping is complete. Maybe two more buildings to go but it looks like a ghost town.
The 2nd development is literally around the corner about 1/2 mile but they are using the same sales center. They haven’t broken ground yet and are taking pre-sale revervations. Prices here for the same units start in the high 200’s…not quite as prestigious an address I guess.
There is a huge parking lot at the sales office and ours was the only car in it on Saturday afternoon for an hour as we toured all the models. We were encouraged to negotiate and told several times this was the best time to buy because things are starting to pick up.
I kept having 2 thoughts: What is going to happen when the builder gives up and goes home? And at some time down the road, maybe say 3 or 4+ years from now, there might be some real bargains.
“I kept having 2 thoughts: What is going to happen when the builder gives up and goes home? And at some time down the road, maybe say 3 or 4+ years from now, there might be some real bargains.”
If you consider a “bargain” to be a house caving in from shoddy and dangerous construction, you are probably right. I wouldn’t give a dime for anything constructed in Florida during the past five or six years, especially in a HOA.
If you want to know what happens in Florida when a builder gives up and goes home, just google the past history of Lennar Homes.
I live in the 94062 area of Redwood City, CA. There are three houses on my street for around $2M - that seems to be the “wish” price. It will be interesting to see how long they remain on the market.
There are at least some sales occuring around here at around the $1M price point, so it is not dead. I’m not sure about the larger / newer homes though. My general impression is that it’s still possible to sell at high prices in this area.
As someone who grew up around here, I still have trouble with the idea that Redwood City homes can go for >$1M.
I grew up in Redwood City too - friends of the family sold the first house in RC for more than a million bucks. Quite a while ago…
I am re-posting this data as a response to the NY Times latest market observation b.s. :
When Renters Reach the Breaking Point
http://www.nytimes.com/2007/02/25/realestate/25cov.html?_r=2&ref=realestate&oref=slogin&oref=slogin
02-24 09:07:35
Sigh, they just can’t stop pushing people to buy, can they? Why not a study on why NYC is the least affordable place to live –both in terms of owning and renting, but how, according to the math, it is still far cheaper to rent than own here:
affordability nyc in owning:
http://money.cnn.com/2006/08/22/real_estate/most_affordable_metro_areas/index.htm?postversion=2006082217
And renting:
http://www.forbes.com/2006/08/14/expensive-homes-apartments_cx_lr_0815rental.html
Now let’s look at furman study - in 2005, median rent for NYC as a whole was $900 - whereas price to buy a condo -$400,000 — median market rent for NYC was only slightly bigger - $1000 per month (see housing vacancy survey link - 2nd from bottom).
nyc median prices to rent/own:
http://furmancenter.nyu.edu/publications/documents/SOC2005_RecentTrends_000.pdf
Now look at Manhattan - about 1,200 median rent in 2005 - (median market rent for 2Br was $2300 in 2003 — see link at bottom- assuming a hefty 10 percent hike a year-that’s only $2800 as of 2005 figures) median market rent– cost to buy condo — close to 700K:
median manhattan prices to rent/own
http://furmancenter.nyu.edu/publications/documents/SOC2005_Manhattan_000.pdf
median market rent figures (table 12)
http://www.nyc.gov/html/hpd/downloads/pdf/2005-Housing-and-vacancy-survey-initial-findings.pdf
nyt times market rent chart from 2003:
http://209.85.165.104/search?q=cache:UMiYww0UJMAJ:www.wirednewyork.com/forum/showthread.php%3Ft%3D4251+%22median+market+rent%22+AND+manhattan+AND+2005&hl=en&ct=clnk&cd=1&gl=us
One of the most important NYC housing stories of 2007-2008 (though the Times is too much a shill to RE industry to report it) will be how many folks living in rent-stabilized housing left the relative safety of their apartments for the siren song of easy money loans to buy a house.
“lived in a rent-stabilized apartment on the Upper West Side that measured about 150 square feet if you count the sleeping loft she had built over her refrigerator and desk.”
How can people live like this? It’s just bizarre.
Taken from an interview in 2003 for cnn
Adds Lereah: “While baby boomers have been trading up for more expensive homes, their children are now 18- to 26-years old and entering the market” on their own. This younger generation is actually larger than its parents’ generation.
At the same time, lenders are also more willing than ever to lend money to low-income buyers, extending credit to households that weren’t previously eligible to purchase homes.
“You take all of these factors together and you’ve got a very healthy housing market,” said Lereah.
Adds Lereah: “While baby boomers have been trading up for more expensive homes, their children are now 18- to 26-years old and entering the market” on their own. This younger generation is actually larger than its parents’ generation.
At the same time, lenders are also more willing than ever to lend money to low-income buyers, extending credit to households that weren’t previously eligible to purchase homes.
“You take all of these factors together and you’ve got a very healthy housing market,” said Lereah.
Adds Lereah: “While baby boomers have been trading up for more expensive homes, their children are now 18- to 26-years old and entering the market” on their own. This younger generation is actually larger than its parents’ generation.
At the same time, lenders are also more willing than ever to lend money to low-income buyers, extending credit to households that weren’t previously eligible to purchase homes.
“You take all of these factors together and you’ve got a very healthy housing market,” said Lereah.
Or the recipe for a housing bubble
“Adds Lereah: “While baby boomers have been trading up for more expensive homes, their children are now 18- to 26-years old and entering the market” on their own.”
Baby boom generation started in 1946. That means their children are well on their way to 40 years old. And in some cases their GRANDchildren may be 18…
Mr Lereah, to add to his expertise in ecomonic prediction, should study sociology and history.
“Baby boom generation started in 1946. That means their children are well on their way to 40 years old. And in some cases their GRANDchildren may be 18—”
Ronin, I am not a Lereah defender but Boomers on the average had their kids late and Lereah is about right on the age of their kids. However, I think we are in for a major RE price adjustment.
“We spend our way through everything.’”
Unbelievable…..
I kept having 2 thoughts: What is going to happen when the builder gives up and goes home?
What does happen when some of these builders give up and go home? What about all the half-finished subdivisions, their legal commitments to the local governments, their home warranty work, and infrastructure maintenance. How many happy homeowners will be stuck with unfinished work or the responsibility to finish it themselves? I did some work for some homeowners and their lawyers in a HOA that was still more than 50% developer controlled. Said developer failed to get insurance on the common area playground in an attempt to save money and keep the HOA dues looking reasonable to potential buyers. There was an unfortunate accident and subsequent lawsuit involving medical bills and emotional damage. The HOA was seriously underfunded and ended up making a special assessment to each property for their share of the award. There are so many of these minefields out there. Will they get worse?
‘William Wade’s letter to the editor (”Home sales great; let’s worry about foreclosures,” Feb. 13) was spot on. Much of the responsibility for our huge number of home foreclosures rests with builders, developers, lenders and the Department of Housing and Urban Development. However, homebuyers who do not educate themselves about the responsibilities of ownership are also to blame.’
‘Homebuyers need to understand the true cost of homeownership before accepting that responsibility. In addition to the mortgage payment, taxes, insurance and maintenance costs, most newer communities have mandatory assessments. Builders typically set the assessments at an unrealistically low amount to attract buyers. It is then up to subsequent association boards to increase the assessments to maintain the neighborhood and provide promised services.
Foreclosures and unpaid assessments result in the inability to provide these services, which results in deteriorating neighborhoods and/or increased assessments to owners who do pay.’
AND, by making the streets in a development substandard (say, too narrow or pavement too thin) they save money but insure that the local government will never do maintenance. All the streets are simply “private driveways.”
REOs in Stockton CA are proliferating like rabbits. An appraiser client of mine told me about a former model home in a gated community in the “nice” part of town which sold for 600k in the summer of ‘05. Its now foreclosed and bank is trying to get 469k out of it. They’ll be lucky to get 400k.
When the Bay Area speculators realize what financial fools they’ve made of themselves, this market will be pummeled.
Random look at recently listed homes in NOVA (taken from Alexandria, Reston, Annandale, Falls Church…)
While some things are dropping, still see mostly things like these:
Reston VA, listed 2/21@ $365k, last sold in 04 for $265… but i’m sure there’s 100k of improvements!
Annandale, VA TH, listed 2/21 @ 400k… last sold in 04 for $340k… only a modest 60k profit this one is looking for…
Don’t know if this thing will “pop” or not, but it’s going to be one long…slow fart until these “investors” realize folks like me sitting on the sidelines aren’t going to cover their butts for buying frothy in 04.
Condos inside the beltway (DC, inner suburbs of Md and VA) seem to have wishing prices 20% - 25% less than a year ago
Rats. This morning http://www.fairfaxrealty.com took away ALL my saved searches and e-mail alerts. I guess they re-designed their website.
Does anyone use a good Northern Virginia mls search engine? I know there’s Zip, but fairfaxrealty had more data.
poop, i had 6 or so saved searches there….
No. Va is a strange area because of its size. Loudoun is starting to look like it is in a freeze. Nothing really moving but no huge price drops yet…yes drops but nothing amazing. Foreclosures are rising at a steady 1 or 2 a day rate.
Fairfax county dosent have a lot of signs out - at least in my area. The house prices may have dropped a little but most people are asking 200K profit for 3 to 4 years ownership.
A fair number of lots are starting to show up for sale. Specc home lots???? My neighbor the mortgage broker says sales are happening.
What if our grandchildren are born into homes that they later will be expected to continue to live in, and contribute to, for life?
Bigger households, smaller houses…
I’ve been in Hawaii for almost 20 years and because land has always been expensive alot of families already do this. It’s not a good thing.
N VA 22151 selling at 05 prices- inventory turning over faster than last fall/summer
The January sales numbers for Ashland Oregon are out.
YOY Median Sale Price was down 15% in January. I also track average price per square foot, which was down 12% YOY to $245.
Have a link?
A local realtor publishes the sales figures for Ashland in a monthly free magazine. I’ve been putting that data into a spreadsheet since July of 2005. Here’s the full dump:
Ashland, Oregon real estate stats
Month # Houses sold AVG Ask AVG Sell AVG $/SF MED Sell
July 2005 39 $488,949 $477,049 $260 $420,000
Aug 2005 40 $470,455 $460,057 $263 $425,000
Sep 2005 34 $504,371 $484,262 $266 $430,000
Oct 2005 36 $449,383 $442,688 $293 $369,000
Nov 2005 24 $489,025 $480,643 $261 $451,000
Dec 2005 26 $460,576 $446,384 $265 $385,000
Jan 2006 14 $543,082 $542,973 $279 $469,000
Feb 2006 13 $588,585 $580,176 $311 $405,000
Mar 2006 21 $484,433 $475,615 $245 $434,000
Apr 2006 22 $485,445 $475,132 $257 $440,000
May 2006 28 $535,729 $519,054 $257 $512,000
Jun 2006 39 $572,594 $557,257 $272 $465,000
July 2006 30 $490,993 $476,918 $256 $466,000
Aug 2006 24 $561,925 $541,448 $288 (Inv: 453)
Sep 2006 30 $457,597 $443,373 $271 $385,000 (Inv: 430)
Oct 2006 24 $573,129 $550,113 $265 $510,000 (Inv: 388)
NoV 2006 29 $441,510 $422.007 $285 $399,000 (Inv: 276)
Dec 2006 26 $486,209 $468,727 $247 $415,000 (Inv: 240)
Jan 2007 21 $472,080 $452,904 $245 $398,000 (Inv: 258)
There is also a nice Jackson County wide website that does a three-month trailing average here:
http://www.jacstats.com
these are the numbers that convinced me to move to the “depressed and uncool” town of Roseburg, Price per sqr ft still less then $100. roughly one year ago today.
Ashland Renter– I have a link to the Southern Oregon MLS, in looking at properties less than $450K, it seems nothing is selling. Properties sit and sit, tiny silly price reductions and they sit some more. Are you seeing the same on the ground there?
That’s definitely the sense you get on the ground as well. I know of many houses that have been listed for over a year. Some have had several price reductions but have remained above market value, chasing the market down. I’ve also seen some 20% reductions, especially in new construction, but they aren’t moving either.
I think sellers are taking false comfort in the fact that our market is lagging behind California in the downturn. The fact that we haven’t seen large drops here yet allows them to hold on to their “wishing prices” for a few months more. It’s also interesting to note that most of the houses that were taken off the market in the fall haven’t been put back on yet. My guess is that there’s a lot of testing of the waters going on.
This fall should be interesting…
Lisa….Things are very soft there…I have family in the construction business there…Be paitient if you are looking to buy….
Ashland Renter and SCDave: Thanks! I am looking to buy in Ashland, will wait until 2008 though. It seems that market is very, very dependent on “outside” money, as local jobs don’t pay enough to keep it propped up. With investors gone & tighter lending standards for first time buyers, I’m hoping for lower prices in 2008. Retirees alone can’t keep it going.
You can bet on it….
Many many large loft buildings coming online in Portland, OR. to go along with the ones that are already empty.
Once the investors/flippers realize it’s over we should see a lot of auctions. Portland is a small city built on low paying service jobs and these lofts are way out of line with incomes.
Does anybody even live in the Strand?
Three condo buildings and every night that I go past there on the bridge, two buildings are pitch black and the third has maybe 10 lights on.
Report from Santa Barbara, Ca:
Some typical comps from south Santa Barbara County:
Home sale- 2/21/07. 316 N.Voluntario. 3/1 detached home 1,274 sq feet. $537,000 ($421/sq ft).
Home sale- 10/30/03. 114 Juana St (two blocks west of 316 N. Voluntario). 3/1 detached home, 1,393 sq feet $595,000 ($427/sq ft).
In south Santa Barbara county detached home values have dropped to 2003-2004 prices. A typical detached home sells for -15% off the peak 2005 selling price.
Condos are taking a worst hit:
Condo sale- 2/8/07. 25 Ocean view #A2. 2/1.5 condo, ~1,000 sq feet. $575,000.
Condo sale- 11/3/05. 1322 Harmon Ave (two blocks south west of 25 Ocean View). 2/1 condo 940 sq feet. $734,000.
North Santa Barbara County is a train wreck. For every 1.2 closed escrows there is one home that enters into the foreclosure process.
Its the comps that tell the story.
In my SB neighborhood near Goleta, asking prices down about 15% from a year ago ($1M+ to ~$900K). Of the 8 or 9 that have been on the market in the past year, approximately 2 have sold and 3 were taken off the market. Those that sold had the lowest asking, and sold below that (no hard numbers yet, sorry).
What’ll destroy the comps for flippers are the large number of older folks who have owned here since the 60s and 70s. Most of these could sell for half the current prices, and still come out ahead.
Ben,
“Vancouver Housing Market Blog” (http://van-housing.blogspot.com) shut down suddenly.
It was a very informative site about the Vancouver, BC housing situation.
There are various theories why that blog was shut down such as:
-bought a place
-developers putting pressure on blogger
Did you experience pressure from the industry to possible shut down or be a bit more positive?
I doubt “the industry” has the power to control a blogger. I suggest it’s nothing more than burnout. A lot of bubble blogs will flame out in the near future. They served their purpose, but now anyone with half a brain cell left knows the housing market is a catastrophe.
Lou -
I think you’re giving those with half a brain cell way too much credit.
As well, there appears to be someone who’s truly not happy about the elucidation of the bubble.
As evidenced by a death threat to marinite of the Marin Real Estate Bubble blog, which has effectively made it inactive:
http://marinrealestatebubble.blogspot.com/
I wonder if the threat maker is in “the industry”?
Who on the internet *hasn’t* gotten at least one death threat? You guys are way, _way_ over-reacting.
What should make one conclude the threat is serious? It almost never is. It almost certainly isn’t a RE cartel or someone with a serious intent to shut a blogger up.
Do you paranoid guys believe the boogeyman is after you, too?
Lou -
I think this could be an example of the “half brain cell” crowd I was talking about…
SF Jack, if the guys and gals at the Vancouver blog received death threats, it’s reasonably easy to contact the RCMP and turn over the server logs and/or message headers. That’s what I’d do.
Well the person making the threats apparently couln’t find the apostrophe key (”your dead”) so…
This is getting spooky.
First it was “overvalued”, then “realestatehaircuts”, now this. The last two were run by regular comment posters to this site. Heck, VHB’s been here longer than most. WTH is happening???
So it’s been a long time since I posted (I read this blog on my Blackberry usually) and I wanted to post my observations from the past few months:
1) My girlfriend’s apartment building in Victoria Park (Ft. Lauderdale) was sold 9 months ago to a condo converter. This character has another building 3 blocks away that in the past year appears to have sold 2 out of 15 units. She keeps paying rent ($1k/mo) in her half-empty building as nobody seems to want to pay $250k+ for these units. A jog through her neighborhood will show at least 2 for sale signs per BLOCK with tons of new construction still coming online. Across the street from her are some 4 yr old townhouses. Two have been for sale for over a year with no bites.
2) Colorado. I went to Denver for work and my salesperson told me her friend that does muni bonds has been busy doing deals with little prarie towns east of the airport. Apparently these little towns are doing bond deals to raise money for big-box retail centers that they hope will convince home builders to come out to their particular patch of prarie to build tract housing. I see tumbleweed blowing through empty parking lots in the near future…..
3) Ft. Myers. We drove through Ft. Myers a few weeks ago. What a joke…makes lauderdale look like a healthy market! I think EVERY property we drove by was for sale.
4) Manhattan. I’m very frustrated as I live here in NYC now and this market is still hot. My friends that live in decent buildings had 15%+ rent increases pushed through this year (no joke). While the inventory was building, I’ve read reports on curbed.com (far from a bull blog) that things are really picking up so far this year. Furthermore, co-op and even condo rules have stopped people from taking out exotic loans, so I’m not expecting the avalanche of forclosures as I see happening in FL. So, I guess I’m going to have to stick with my 350sq ft of the city for the forseeable future.
If the real estate markets always balance out, I wonder if the intensity of NY increases will actually encourage people to leave NY for more affordable areas? Of course many people enjoy all the city has to offer, but at some point there must be a threshold. I suppose if the financial markets melt down, then you would see a change.
On a different note, a friend is an industrial engineering employment recruiter in San Diego. She says they keep getting job requests to fill. I find it interesting the SD housing market is so upside down, while the job market seems to be holding, at least for industrial engineering (software applications, drafting, production managers, etc.) I don’t even think of SD as a big industrial area, but perhaps I am wrong.
This is an fascinating time in the real estate cycle. It just shows you how overblown the real estate market is, when the economy is good for jobs, yet housing continues to struggle. If a few other economic foundations start showing cracks, it could get uglier for real estate. If jobs hold up, then it may be a “soft landing” where real estate continues to drop slowly in nomical value for a decade or so, with actual price drops after inflation adding another 2-3%/year. Either way, I don’t think there is any upward pressure on housing prices now.
co-ops don’t prevent toxic loans, they prevent people who can’t afford to buy from buying because unlike a bank they verify income and have requirements to have money in the bank after you close.
you can get any toxic loan you want with no income verification, but a co-op board will check your finances and make sure you can afford to pay your bills after you buy. And most boards didn’t lower their standards in the last few years unlike lenders.
And unlike 1981 and 1990 most owners now own to live. in the 1980’s most apartments went co-op and the original owners tried to flip and this caused the crash. Right now there is nothing left to flip since any potential buyer has to get board approval where in the 1980’s the buyers didn’t need board approval.
look at this in my area…and it still can’t sell. so sad
http://www.ziprealty.com/buy_a_home/logged_in/search/home_detail.jsp?listing_num=60071850&page=6&property_type=SFR&mls=mls_sacramento&cKey=192z2hm5&source=MFMLS
click the value link… looks like they paid 100k more than the current list price. oops!
I rent in neighborhood in Costa Mesa Ca known as South Coast Metro, just east of South Coast Plaza (we sold our house in Newport in the fall of ’05, thanks to the HBB!). I believe there is approx. 300 homes in the neighborhood. Most of the houses were built in the late 70’s. In the early 2000’s most of these homes were selling in a range of $300k – 400k.
I keep track of the transactions in the neighborhood as I consider it to be an excellent microcosm of the OC in general. Last year homes sold in a range of $650k to $1.12 million. Most homes range in size from 1,500 to 2,500 square feet.
In the last year some 30+ homes have sold, which was surprising to me, given the softness in the overall housing market. However, most of those sales involved significant discounting of as much as $250,000.
Seven of the transactions involved 100% financing and seven had also been sold in the previous 2 years as well.
One of the local brokers publishes a periodic Real Estate Outlook specifically for the South Coast Metro community stated in his newsletter last fall:
“the news media has predicting a “Burst in the Bubble” so often and long now, that buyers are beginning to believe it! But if they are waiting for prices to drop 20 to 30% as they did in the early 80’s and 90’s, they could be making a big mistake!” This is the same broker whose listing of a house for sale for $1.120 mil languished on the market all year last year and finally sold in Jan for $880k with what appears to be some very creative financing from the seller.
In the past week at least 5 new listings have popped up, bringing the total to at least 21 currently on the market. Within a month I would expect there to be more than 30 homes for sale. I am expecting to see prices fall significantly this year, with transactions in the $500k’s on the low end and $700k on the high end. Even with prices moving down that far, IMO there is much more to go.
Wait until the spring “buying season.” A lot more houses will be available for sale.
Inventory, per Zip Realty:
TAMPA
01/21/07 59,865
02/17/07 62,274
02/24/07 62,658
MIAMI/FTL
01/21/07 103,131
02/17/07 108,591
02/24/07 109,638
ORLANDO
01/21/07 32,341
02/17/07 34,093
02/24/07 34,398
PHILA
01/21/07 32,698
02/17/07 32,611
02/24/07 32,552
ATLANTA
01/21/07 57,620
02/17/07 60,844
02/24/07 61,895
BOSTON
01/21/07 42,170
02/17/07 42,828
02/24/07 42,870
BALT.
01/21/07 46,025
02/17/07 45,708
02/24/07 45,877
I’m noticing that inventory in the cold weather cities (Pittsburgh included) has been relatively flat since the beginning of the year, unlike the warmer weather cities.
Per Zip, Phoenix inventory is now over 54K; looks as if they’ll break last year’s record fairly soon.
TAMPA
01/21/07 59,865
02/17/07 62,274
02/24/07 62,658
Oopsie! In theory, Tampa inventory should be going down, because the traditional realtorthink is that homes sell during The Season (snowbird season), as it is fondly called down here in these parts.
Way to go, Tampa! Except prices really haven’t dived yet. They will, though. This area was one of the last areas to “go bubble”. Probably be one of the first to go bust. LIFO. Last In, First Out, for those not familiar with accountantese.
Update from WA:
The market continues it’s slow downward grind. Homes staying on much longer than 2 years ago. Price per square foot is dropping and , unfortunately for some, they see that as an indication of a good deal so are still stretching to buy.
Subprime loan ads still very big here.
The spring inventory pile up has not yet begun, we’re not out of the winter season yet so I’m not expecting that for a while. As everyone knows, buyers in WA. are extremely weather sensitive. LOL.
In lower Fairfield, CT, new listings are suddenly shooting up. Wonder if the news about the sub-prime market has had an impact on the folks who were waiting for wall street bonus boys to buy their houses.
Test
House in Loleta, near Eureka, North Coast California. Just reduced from 2.5 million to 1.2 million. 7,000 sq ft 8 bed, 6.50 bath, DOM 228.
In Simi Valley, CA there are several listings of 3+2 houses around $500K, which means they might sell for $475K. In Westlake Village, 15 miles away but with similar climate crappy 900 sq foot two bedroom condos in my complex are still priced at 405K and selling for $395K. The areas are qualitatively different, but not THAT different. I predict 50% of condo sales in 2006 to go into foreclosure in this area by 2008.
In LA. Pretty much the same story as last week in my area (90024). Inventory is climbing. Open houses all over the place, McMansions, houses, new condos, old condos, you name it. Wishing prices still ridiculous, but you do see lots in offer around 900K. For those of you not familiar with LA, six months ago nothing came on the market for under 1M wishing price. Houses are sitting longer and longer in the market. Some progress, but I regret to say we are not there yet. This blog made me understand the whole thing has little to do with the houses themselves and all to do with the mortgage market, which is just beginning to show some cracks. Patience.
I lived in a 90024 as a student in the back of a nice-ish house (attached studio basically) in Westwood. Lady been there since the beginning, ca. 1930. Died, house sold in 1993 for $435k, 2001 for $695K, zillow says $1.1 now.
Today I only had time to drive around a little bit my area. No time to look carefully. Just off the bat, in the 10500 block of Wellworth there are THREE houses for sale on the same sidewalk. One is in escrow with an asking price of 1.295M (don’t know the final sale price), another has been sitting forever at 1.899M, the other didn’t have a flyer, so I don’t know the asking price.
Did get to see one just around the corner from me. Just to give non angelenos an idea:
Nice traditional 3/2 with good quality, tasteful upgrades on a nice corner lot, but small backyard.
Sold in 2000 for 603,000
Asking price now: 1.699
WTF????
North County San Diego (some zips in Carlsbad, Oceanside, Escondido & Encinitas):
Much of the same here. Inventory was rising a bit through January (a very little bit), but seems to have gone down a bit in February (I’ve seen that in past years as well).
Most houses on the market have been there for a while. Not too much new stuff coming on. Foreclosures growing, and I anticipate this is what will lead the market as we head into the mid-late summer season (need a critical mass).
BTW… I was going through some foreclosure sites and tried to cross-reference some active foreclosures with the MLS. It seems as though there are some homes which are active foreclosures, but they are not being listed on the MLS.
Not sure about the procedure, as homes move from NODs to auction to REO, but could there be an actual conspiracy to hold foreclosure inventory off the MLS?
I will post this on other threads, as it would be good to get a broad perspective on this (is it just SD, CA or nationwide?).
It would be good if posters would check the areas they’re familiar with, and see if you find the same thing.
Oh, and Carlsbad Jim seems to have sold his rental house within a week.
There are still buyers out there. I wonder how the subprime situation will affect that as we move forward.
Exactly, no matter how “strong” the real estate market is, if it’s foundation is I/O and option-arms, it is by definition unsustainable and will crash at some point.
>>>>>>>>Not sure about the procedure, as homes move from NODs to auction to REO, but could there be an actual conspiracy to hold foreclosure inventory off the MLS?>>>>>>>>>>>>
Many people in forclosure do not face the problem at hand, instead they put there head in the sand and pretend its not happening.
You would think they would try to sell, but many do not.
There is no consipacy here either.
Was this posted yesterday, or am I losing my mind? It’s like deja vu or something.
Got more info on my San Leandro friend.
Realtor said comps suggested $550K, he listed at $575, under contract with backup for $590 with a 2-day DOM.
He said his large lot and lack of other listings right now helped him out.
Santa Monica, CA (90401-90405) per DQ via the LA Times.
23 SFHs changed hands in January in these five zip codes. As I have mentioned before, the market is almost completely frozen up, but obviously not quite. The condo market is only slightly more liquid, with 32 condos changing hands. The sales numbers are so low that the averages are skewed all over the place.
Lets’s take 90402 as an example: Five houses were sold at a median price of $4,287,000. This is a 77% YOY increase in the median price. Three condos were sold in 90402, at a median price of $1,785,000, for a 171.9% YOY increase in the median price.
Looking at SFH price per sq ft, homes in 90402 went for $663/sq ft, while homes in 90403 (all six of them) went for $1,083/sq ft. Median prices for SFHs in 90403 were up 61.5% YOY.
This is a perfect illustration of how meaningless average numbers can be. when only a few properties are moving. Did the price of homes skyrocket in Santa Monica? No, of course not. My interpretation is that the low end and middle sections of the market are frozen up, but a few high-end properties did move.
The sales in the high end are impossible to interpret without looking at each property individually. Unfortunately, I don’t have that information. But I suspect that some of the buyers had a armored car full of money and boatload of stupid.
Of course, I could be wrong. Maybe it was rich Iraqis buying mansions at fifty cents on the dollar. Only their Realtors know for sure
Wow! 1,083 per sq.ft.
My house in Michigan is worth 2.8 million !!!
Watching TNT this morning, I saw one Realtor “It’s a great time to buy a house” commercial and one Barrett “It’s a great time to buy a Barrett house” commercial in the same commercial break. I was wondering when they’d start showing up.
Oh, and the movie I was watching? “Desperado.”
Speaking of desperation. Have you seen the commercial where the husband and wife cover their eyes while they stroll though the Lowes store because they can’t afford to remodel? The helpful Lowes clerk tells them “you don’t have to spend a lot of money to make a big difference”
Arizona:
http://www.azcentral.com/arizonarepublic/news/articles/0225mortgageshutdown0225.html
In California’s Inland Empire, the greed persists by many who over-paid for 3 bedroom-2 bath homes on small lots for over $400K. The beginning signs of the downturn was actually the advertising of RE brokers claiming they could do the whole transaction for 1% of sales and itemized cost of title. Then came the “No-Closing” cost and now the blocks are littered with “For Sale” signs after a stint of homes on the MLS without interest. The homes not for sale are those who are thinking that they can actually put their homes on the market in May, June and July frame with sales by late August. Only problem is that they are adamant about selling their homes at a profit from their purchase price…very unreasonable.
Why? Because the population of the soon-to-be qualified first time buyers are diminished to a small percentage of the population. What the NAR is not publishing is the aging of America’s baby boomers who were speculators and are now considering their retirement that will not be saddled with debt and cost of living in California.
My recent drive around from Ontario, Mira Loma, Corona, Rancho Cucamonga, Beaumont, Redlands, Riverside, Lake Elsinore, Canyon Lake, Perris Lake, Murrietta, Temecula, Etiwanda, Fontana, Hemet… have solidified my views and opinions about the health of the economy in the Inland Empire.
People are either holed-up and bracing themselves for the eventual adjustment in their ARMs they could not refinanced because they could not find a crooked appraiser and because now they truly are upside-down. Or they have bit the bullet and refinanced into a 30 or 40 year fixed and are living in a 3 bedroom 2 bath home at $500K prices that are typically overvalued. That same house’s utility to a future home buyer at 6.5% is only worth $190K max. That is an internal struggle of being the last fool to overpay and I won’t get into that.
The last group are the one’s who are actively seeking the required 3 month credit counseling prior to BK. This group has either gotten their Tax refund and cashed it. Are planning to not pay credit cards that were maxed out 3 months ago, are living on a cash basis…carefully planning their exit strategy of dissolution of all debts. They are fully aware of their financial position and have decided to not be held responsible for debts and want to maintain their money regardless of the inquisition that will be subjected to them. Credit worthiness doesn’t seem to bother this type who come into my satellite offices in the Hummers, Escalades and MBZs.
The boom is beginning to be in my legal side of the business.
Here’s an editorial from today’s U-T:
“UNION-TRIBUNE EDITORIAL
Rickety market
Home values face new pressures
February 25, 2007
We’ve been hearing from so-called experts for at least five years now that the San Diego County housing market was going to crash any day, perhaps sending the economy into recession. They were wrong, and property owners have enjoyed the greatest, most widely shared expansion of wealth in the region’s history.
But recently a genuine threat has emerged. Lenders around the world have been burned by rising numbers of Americans who can’t make their mortgage payments.
Several particularly aggressive mortgage companies in Southern California have gone broke. So far, the damage is limited to the “sub-prime” sector of the market comprised of the riskiest loans.
If it spreads through the $10 trillion U.S. mortgage market, banks and their financial backers may turn overly cautious, causing interest rates to rise and credit to dry up. This would chase more buyers from the housing market, deepening the downturn that began last year.
Economists note that every national recession but one since World War II has been preceded by weakness in the housing sector. Last week, Federal Reserve Chairman Ben Bernanke warned that slow housing activity could cut overall growth into next year.
At the same time, Bernanke sees signs that the national housing market may be stabilizing. The economy is remarkably strong, powered by low unemployment and robust consumer spending.
So what should ordinary homeowners make of this one-hand, other-hand prognosticating?
For openers, most can safely ignore the scary headlines.
Mortgage defaults normally rise after a housing boom, because some lenders and clients agree to excessive payments in hopes that ever-rising values will cover any financial stumbles. With prices slipping, some families face the sort of forced sales that can push everybody’s values down.
However, most homeowners in San Diego County are sitting on plenty of equity. Home prices have tripled in a decade; housing assets have more than doubled in inflation-adjusted terms. Resale houses have given back just 3.6 percent of their value in the last year – far from a crisis.
And breathless reports of percentage jumps in defaults mean little; absolute numbers remain small. Locally, a scant 0.3 percent of homes went into foreclosure last year, well below historic peaks, says the DataQuick information clearinghouse.
Absent widespread job losses, few prominent economists foresee a market collapse.
In fact, the chief economic threat may emanate from Sacramento and Washington, where lawmakers are talking about regulations to limit sales of “risky” loans. This could abolish some forms of computer-aided underwriting that has reduced risk and put millions into homes.
Without question, the boom created some reckless lenders. The days of no down payment and no proof of income may be over. But the shakeout under way is ample evidence that the market is purging risk. The last thing we need is politicians piling on.”
Unbelievable! Excellent 180 degree spin job, though. Blaming the market weakness on those seeking to rein in reckless lending.
Good find.
This could abolish some forms of computer-aided underwriting that has reduced risk and put millions into homes.
—————————–
Hmmm, I wonder how those automated underwriting programs have reduced risk.
I do believe the bears (even those of us who’ve been bearish since 2001 or so) will be exonerated.
BTW, I’m all for the “regulators” not doing anything, as long as they guarantee that those of us who did not participate in this mess don’t have to pay for it.
The primary cause of real estate collapses is real estate booms - and few can doubt that this was a super-boom in probably 20 major markets in the USA
If it can per chance hold at an average 30% drop off the peak 2005 prices in these major markets - that would be some kind of miracle -probably the best balance between collapsing the entire economy and correcting long term
More than that and the entire economy is going with it
Uneducated buyers and a credit bubble fueled this rocket - and unwinding it will be very difficult
As for socialist-style governmental fixes, no doubt they will soon be proposed
FYI: In today’s Milwaukee Journal Sentinel there was an ad by a builder for the same floor plan of a 2 bdrm cottage as they built when they first went into business 40 yrs ago. Price: $49,000 plus lot.
http://yochicago.com/today/market-conditions/city-new-home-sales-have-slowed-but-no-bubble-on-horizon_4127/
Riding the maket down on Capitol Hill, Washington, DC
http://washingtondc.craigslist.org/doc/rfs/283825563.html
This very cute condo started with the pie in the sky price of ($425K if I remember right) about a year ago. Is now down to $319K.
Still overpriced in my opinion by $50K - $75K. The discounts continue here in Wash, DC. Other observation: inventory does not seem to have gone up post superbowl at least in the NW DC neighborhoods, I track. Also open houses are now either much longer or shorter. Example: 1 - 5 PM or 12 - 1:30 PM. Some open houses are even 1 hr. Are the short ones where agents have multiple locations to cover and/or want to get only the most dedicated shoppers or have an open to appease seller even though open attendance is down?
Other: anytime I see someone looking at the listing in the windows of the many RE offices here - go and engage them and say are you looking to buy? Then tell them don’t and give my quick two minute bubble tutorial. Seems like everyone has alreadly heard what’s going. The people I have talked with fit a wide spectrum of demographics.
‘Never bet against the American consumer. We spend our way through everything.’”
That is quite possibly the stupidest thing I’ve ever read.
http://put.elpasoco.com/NR/rdonlyres/3BE6A35A-85BE-441F-9D01-EB8DCED68F2F/0/ptstatistics.htm
Foreclosures in Colorado Springs up 50% YOY compared to last January (158 to 238). But fear not, friends and neighbors, it’s different here - my realtor said so.
Checking out the local neighborhood. It seems that we have had 2 recent sales at 2% below asking in short times after going to market. Right now just in the last week two have come on the market, with a third that had “sale pending” coming back on the market. It seems that the rush has begun, and buyers may be having a tough time with financing.
All this has not stopped the price increases. The latest listing is showing at a 15% increase over Zillow valuation and 25% over last year.
Ahh, this is all funny. I do get the feeling that pool of money available to drive prices up is only coming from overseas. The folks here look tapped out.
My prediction is that real estate agents will begin trolling Beijing, Hanoi, and various other exotic foreign capitals in search of fools and their money to invest in safe, secure real estate. The buyers will probably dump aunty and uncle in their investment while aunty and uncle collect US social security to help with the payments.
Snarl
Still seeing a lot of dummies buying at 2005+ prices around the million dollar mark. I just can’t believe the stupidity, the realtor spin must be fantastic to make these deals, or the buyers are dumber than rocks.
In a few cases, you have a $1M house on them market for 6 months, ripe for a lowball, and another $1M house on the market 1 week, and these suckers are making offers on the house listed for a week.
There is simply no shortage of Greater Fools yet.
CA new law would require interesting disclosures on the advertising itself. Will this work?
“If the borrower chooses to pay this advertised
rate, the principal balance of the loan WILL increase.”